AGREEMENT AND PLAN OF MERGER by and among MERCK & CO., INC., SCHERING-PLOUGH CORPORATION, BLUE, INC., and PURPLE, INC. March 8, 2009
Exhibit
2.1
EXECUTION
COPY
by and
among
MERCK
& CO., INC.,
SCHERING-PLOUGH
CORPORATION,
BLUE,
INC.,
and
PURPLE,
INC.
March 8,
2009
TABLE
OF CONTENTS
Page
ARTICLE
I
THE
MERGERS
|
1.1
|
The
Mergers
|
2
|
|
1.2
|
Closing
|
3
|
|
1.3
|
Certificates
of Incorporation and Bylaws
|
3
|
|
1.4
|
Directors
and Officers
|
4
|
ARTICLE
II
EFFECT
ON THE CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS
|
2.1
|
Conversion
of Securities
|
4
|
|
2.2
|
Exchange
of Certificates
|
7
|
|
2.3
|
Stock
Transfer Books
|
10
|
|
2.4
|
Saturn
Options and Other Equity Awards
|
10
|
|
2.5
|
Mercury
Options and Other Equity Awards
|
12
|
|
2.6
|
Reservation
of Shares; Registration
|
12
|
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF SATURN AND MERGER SUB 1 AND MERGER SUB 2
|
3.1
|
Organization
and Qualification
|
13
|
|
3.2
|
Significant
Subsidiaries
|
13
|
|
3.3
|
Authorization;
Validity of Agreement; Necessary Action
|
14
|
|
3.4
|
Governmental
Filings; No Violations; Consents and Waivers
|
15
|
|
3.5
|
Capital
Stock
|
16
|
|
3.6
|
Saturn
SEC Reports
|
18
|
|
3.7
|
Absence
of Certain Changes or Events
|
20
|
|
3.8
|
Material
Contracts
|
20
|
|
3.9
|
Intellectual
Property
|
21
|
|
3.10
|
Litigation
|
22
|
|
3.11
|
Permits;
Compliance with Laws
|
22
|
|
3.12
|
Regulatory
Compliance
|
22
|
|
3.13
|
Saturn
Employee Benefit Plans
|
23
|
|
3.14
|
Labor
and Employment Matters
|
26
|
|
3.15
|
Taxes
|
26
|
|
3.16
|
Tax
Matters
|
27
|
|
3.17
|
Insurance
|
27
|
|
3.18
|
Environmental
Liability
|
27
|
|
3.19
|
Affiliated
Transactions
|
28
|
|
3.20
|
Brokerage
|
28
|
|
3.21
|
Opinion
of Saturn’s Financial Advisor
|
28
|
|
3.22
|
Interested
Stockholder
|
29
|
|
3.23
|
Ownership
and Operations of Merger Sub 1 and Merger Sub 2
|
29
|
|
3.24
|
Rights
Agreement; Takeover Statutes
|
29
|
|
3.25
|
Intercompany
Notes
|
29
|
|
3.26
|
No
Additional Representations
|
29
|
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF MERCURY
|
4.1
|
Organization
and Qualification
|
30
|
|
4.2
|
Significant
Subsidiaries
|
31
|
|
4.3
|
Authorization;
Validity of Agreement; Necessary Action
|
31
|
|
4.4
|
Governmental
Filings; No Violations; Consents and Waivers
|
32
|
|
4.5
|
Capital
Stock
|
33
|
|
4.6
|
Mercury
SEC Reports
|
34
|
|
4.7
|
Absence
of Certain Changes or Events
|
36
|
|
4.8
|
Material
Contracts
|
36
|
|
4.9
|
Intellectual
Property
|
36
|
|
4.10
|
Litigation
|
37
|
|
4.11
|
Permits;
Compliance with Laws
|
37
|
|
4.12
|
Regulatory
Compliance
|
38
|
|
4.13
|
Mercury
Employee Benefit Plans
|
39
|
|
4.14
|
Taxes
|
39
|
|
4.15
|
Tax
Matters
|
40
|
|
4.16
|
Insurance
|
40
|
|
4.17
|
Opinion
of Mercury’s Financial Advisor
|
40
|
|
4.18
|
Interested
Stockholder
|
40
|
|
4.19
|
Rights
Agreement; Takeover Statutes
|
40
|
|
4.20
|
Financing
|
40
|
|
4.21
|
No
Additional Representations
|
41
|
ARTICLE
V
CERTAIN
PRE-CLOSING COVENANTS
|
5.1
|
Conduct
of the Business of Saturn
|
42
|
|
5.2
|
Conduct
of the Business of Mercury
|
47
|
|
5.3
|
No
Control of Other Party’s Business
|
49
|
ARTICLE
VI
ADDITIONAL
AGREEMENTS
|
6.1
|
Preparation
of the Joint Proxy Statement and the Registration
Statement
|
49
|
|
6.2
|
Shareholders
Meetings; Recommendations
|
50
|
|
6.3
|
Access
to Information; Confidentiality
|
51
|
|
6.4
|
No
Solicitation
|
52
|
|
6.5
|
Efforts
to Consummate; Notification
|
60
|
|
6.6
|
Certain
Notices
|
63
|
|
6.7
|
Public
Announcements
|
63
|
|
6.8
|
Indemnification
of Directors and Officers
|
64
|
|
6.9
|
Employee
Benefits
|
65
|
|
6.10
|
Financing
|
71
|
|
6.11
|
Takeover
Statutes
|
75
|
|
6.12
|
Transaction
Litigation
|
75
|
|
6.13
|
NYSE
Listing
|
75
|
|
6.14
|
Overseas
Financing
|
75
|
|
6.15
|
Convertible
Preferred Stock Conversion
|
75
|
|
6.16
|
Dividends
|
76
|
|
6.17
|
Tax-Free
Qualification
|
76
|
|
6.18
|
Tax
Treatment of Specified Subsidiaries
|
76
|
|
6.19
|
Tax
Representation Letters
|
76
|
|
6.20
|
Environmental
Matters
|
76
|
ARTICLE
VII
CONDITIONS
|
7.1
|
Conditions
to Obligations of Each Party under this Agreement
|
77
|
|
7.2
|
Conditions
to Mercury’s Obligations
|
78
|
|
7.3
|
Conditions
to Saturn’s, Merger Sub 1’s and Merger Sub 2’s Obligations
|
79
|
ARTICLE
VIII
TERMINATION
AND EXPENSES
|
8.1
|
Termination
|
80
|
|
8.2
|
Notice
of Termination; Effect of Termination
|
82
|
|
8.3
|
Expenses
and Other Payments
|
82
|
ARTICLE
IX
DEFINITIONS
|
9.1
|
Definitions
|
85
|
|
9.2
|
Construction
|
99
|
ARTICLE
X
MISCELLANEOUS
|
10.1
|
Non-Survival
of Representations and Warranties
|
99
|
|
10.2
|
Notices
|
99
|
|
10.3
|
Severability
|
100
|
|
10.4
|
Entire
Agreement
|
101
|
|
10.5
|
Assignment;
Merger Subs
|
101
|
|
10.6
|
Extension;
Waiver
|
101
|
|
10.7
|
Third
Party Beneficiaries
|
101
|
|
10.8
|
No
Strict Construction
|
101
|
|
10.9
|
Governing
Law; Consent to Jurisdiction
|
101
|
|
10.10
|
Disclosure
Letters
|
102
|
|
10.11
|
Specific
Performance
|
102
|
|
10.12
|
WAIVER
OF TRIAL BY JURY
|
103
|
|
10.13
|
Counterparts
|
103
|
|
10.14
|
Amendment
|
103
|
Exhibit
A Restated
Certificate of Incorporation of Saturn Merger Surviving Corporation
Exhibit
B Bylaws
of Saturn Merger Surviving Corporation
Exhibit
C Certificate
of Incorporation of Mercury Merger Surviving Corporation
Exhibit
D Bylaws
of Mercury Merger Surviving Corporation
THIS
AGREEMENT AND PLAN OF MERGER is made as of March 8, 2009, by and among Merck
& Co., Inc., a New Jersey corporation (“Mercury”),
Schering-Plough Corporation, a New Jersey corporation (“Saturn”), Blue, Inc.,
a New Jersey corporation and a wholly owned subsidiary of Saturn (“Merger Sub 1”),
and Purple, Inc., a New Jersey corporation and a wholly owned subsidiary of
Saturn (“Merger Sub 2”). Capitalized
terms used and not otherwise defined in this Agreement have the meanings set
forth in Article IX.
RECITALS
WHEREAS,
the respective Boards of Directors of Mercury, Saturn, Merger Sub 1
and Merger Sub 2 have approved this Agreement, the merger of
Merger Sub 1 with and into Saturn (the “Saturn Merger”) and
the merger of Merger Sub 2 with and into Mercury (the “Mercury Merger”) and
the other transactions contemplated by this Agreement, upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS,
the Boards of Directors of Saturn and Merger Sub 1 have unanimously
determined to recommend to their respective shareholders the approval of this
Agreement and the transactions contemplated hereby, including the Saturn Merger,
subject to the terms and conditions hereof and in accordance with the provisions
of the New Jersey Business Corporation Act (as amended, the “NJBCA”);
WHEREAS,
the Boards of Directors of Mercury and Merger Sub 2 have unanimously
determined to recommend to their respective shareholders the approval of this
Agreement and the transactions contemplated hereby, including the Mercury
Merger, subject to the terms and conditions hereof and in accordance with the
provisions of the NJBCA;
WHEREAS,
the Board of Directors of Saturn has unanimously determined to recommend to its
shareholders the approval of the Saturn Share Issuance in accordance with the
rules and regulations of the NYSE and the NJBCA; and
WHEREAS,
it is intended that, for United States federal income tax purposes, (a) the
Mercury Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the “Code”), and the rules
and regulations promulgated thereunder, and (b) this Agreement will be, and
hereby is, adopted as a plan of reorganization.
NOW,
THEREFORE, in consideration of the premises, representations and warranties and
mutual covenants contained in this Agreement and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, do hereby agree as follows:
ARTICLE
I
THE
MERGERS
1.1
The
Mergers.
(a)
The Saturn
Merger. (i) Upon the terms and subject to
satisfaction or waiver of the conditions set forth in this Agreement, and in
accordance with the NJBCA, at the Initial Effective Time, Merger Sub 1
shall be merged with and into Saturn. As a result of the Saturn
Merger, the separate corporate existence of Merger Sub 1 shall cease and
Saturn shall continue as the surviving corporation after the Saturn Merger (the
“Saturn Merger
Surviving Corporation”).
(ii)
As soon
as practicable on the Closing Date, the parties shall cause the Saturn Merger to
be consummated by filing a certificate of merger relating to the Saturn Merger
(the “Certificate of
Saturn Merger”) with the Department of the Treasury of the State of New
Jersey, in such form as required by, and executed in accordance with the
relevant provisions of, the NJBCA. The Saturn Merger shall become
effective at such time at which the Certificate of Saturn Merger is filed with
the Department of Treasury of the State of New Jersey or at such subsequent time
as Mercury and Saturn shall agree and as shall be specified in the Certificate
of Saturn Merger (the date and time the Saturn Merger becomes effective being
the “Initial Effective
Time”).
(iii)
At the
Initial Effective Time, the effect of the Saturn Merger shall be as provided in
the applicable provisions of the NJBCA. Without limiting the
generality of the foregoing, at the Initial Effective Time, all the property,
rights, privileges, powers and franchises of Saturn and Merger Sub 1
shall vest in the Saturn Merger Surviving Corporation, and all debts,
liabilities and duties of Saturn and Merger Sub 1 shall become the debts,
liabilities and duties of the Saturn Merger Surviving Corporation.
(b)
The Mercury
Merger. (i) Upon the terms and subject to satisfaction or
waiver of the conditions set forth in this Agreement, and in accordance with the
NJBCA, at the Subsequent Effective Time, Merger Sub 2 shall be merged
with and into Mercury. As a result of the Mercury Merger, the
separate corporate existence of Merger Sub 2 shall cease and Mercury shall
continue as the surviving corporation after the Mercury Merger (the “Mercury Merger Surviving
Corporation”).
(ii)
As soon
as practicable on the Closing Date, the parties shall cause the Mercury Merger
to be consummated by filing a certificate of merger relating to the Mercury
Merger (the “Certificate of Mercury
Merger” and together with the Certificate of Saturn Merger, the “Certificates of
Merger”) with the Department of the Treasury of the State of New Jersey,
in such form as required by, and executed in accordance with the relevant
provisions of, the NJBCA. The Mercury Merger shall become effective
at such time at which the Certificate of Mercury Merger is filed with
the Department of the Treasury of the State of New Jersey or at such subsequent
time as Mercury and Saturn shall agree and as shall be specified in the
Certificate of Mercury Merger, but in any event immediately after the Initial
Effective Time (the date and time the Mercury Merger is effective being the
“Subsequent Effective
Time”).
(iii)
At the
Subsequent Effective Time, the effect of the Mercury Merger shall be as provided
in the applicable provisions of the NJBCA. Without limiting the
generality of the foregoing, at the Subsequent Effective Time, all the property,
rights, privileges, powers and franchises of Mercury and Merger Sub 2
shall vest in the Mercury Merger Surviving Corporation, and all debts,
liabilities and duties of Mercury and Merger Sub 2 shall become the
debts, liabilities and duties of the Mercury Merger Surviving
Corporation.
1.2
Closing. The
closing of the Mergers (the “Closing”) shall take
place at 10:00 a.m. New York time on the fifth Business Day after the
satisfaction or waiver of the conditions (excluding conditions that, by their
nature, cannot be satisfied until the Closing, but subject to the satisfaction
or waiver of those conditions as of the Closing) set forth in Article VII,
unless this Agreement shall have been theretofore terminated pursuant to its
terms; provided, however, that
notwithstanding the satisfaction or waiver of the conditions set forth in
Article VII, if the proceeds of the Financing are not then available in full
pursuant to the Commitment Letter (or if Financing Definitive Agreements have
been entered into, pursuant to such Financing Definitive Agreements) on the date
that would otherwise be the Closing Date, Mercury shall not be required to
effect the Closing until such date on which the proceeds of the Financing are
available in full pursuant to the Commitment Letter (or if Financing Definitive
Agreements have been entered into, pursuant to such Financing Definitive
Agreements) (subject to the satisfaction or waiver of the conditions set forth
in Article VII as of such date). Notwithstanding the foregoing, the
Closing may be consummated at such other time or date as Mercury and Saturn may
agree to in writing. The date and time of the Closing is referred to
in this Agreement as the “Closing
Date.” The Closing shall be held at the offices of Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000, unless another place is agreed to in writing by Mercury and
Saturn.
1.3
Certificates of
Incorporation and Bylaws.
(a)
At the
Initial Effective Time, by virtue of the Saturn Merger, the certificate of
incorporation of Saturn shall be amended to read in its entirety as set forth in
Exhibit A and, as so amended, shall be the certificate of incorporation of the
Saturn Merger Surviving Corporation, from and after the Initial Effective Time,
until thereafter changed or amended as provided therein and/or in accordance
with applicable Law. The Saturn Board shall take all action necessary
so that, at the Initial Effective Time, the bylaws of Saturn shall be amended to
read in their entirety as set forth in Exhibit B, and as so amended, such bylaws
shall be the bylaws of the Saturn Merger Surviving Corporation, from and after
the Initial Effective Time, until thereafter changed or amended as provided
therein, in the certificate of incorporation of the Saturn Merger Surviving
Corporation and/or in accordance with applicable Law.
(b)
At the
Subsequent Effective Time, by virtue of the Mercury Merger, the certificate of
incorporation of Mercury shall be amended to read in its entirety as set forth
in Exhibit C and, as so amended, shall be the certificate of incorporation of
the Mercury Merger Surviving Corporation, from and after the Subsequent
Effective Time, until thereafter changed or amended as provided therein and/or
in accordance with applicable Law. The Mercury Board shall take all
actions necessary so that at the Subsequent Effective Time, the bylaws of
Mercury shall be amended to read in their entirety as set forth in Exhibit D,
and as so amended, such bylaws shall be the bylaws of the Mercury Merger
Surviving Corporation, from and after the Subsequent Effective Time, until
thereafter changed or amended as provided therein, in the certificate of
incorporation of the Mercury Merger Surviving Corporation and/or in accordance
with applicable Law.
1.4
Directors and
Officers.
(a)
Prior to
the Closing, the Saturn Board shall take all action necessary to (i) cause all
of the directors of Saturn immediately prior to the Initial Effective Time
(other than three (3) directors designated by Saturn and reasonably satisfactory
to Mercury) to resign as directors effective as of the Initial Effective Time,
(ii) elect as directors of the Saturn Merger Surviving Corporation effective as
of the Initial Effective Time the persons who are members of the Board of
Directors of Mercury immediately prior to the Initial Effective Time and such
other persons as Mercury shall designate in writing to Saturn prior to the
Closing (who, together with the Saturn directors not resigning in accordance
with clause (i) above, shall be the sole directors of Saturn Merger Surviving
Corporation immediately after the Initial Effective Time), each to hold office
in accordance with the certificate of incorporation and bylaws of the Saturn
Merger Surviving Corporation, (iii) except as otherwise indicated by Mercury in
writing to Saturn prior to the Closing, appoint the persons who are the officers
of Mercury immediately prior to the Initial Effective Time as officers holding
the same offices of the Saturn Merger Surviving Corporation effective as of the
Initial Effective Time, each such person to hold office in accordance with the
certificate of incorporation and bylaws of the Saturn Merger Surviving
Corporation, and (iv) except as otherwise indicated by Mercury in writing to
Saturn prior to the Closing, remove the persons who are officers of Saturn
immediately prior to the Initial Effective Time as officers of Saturn effective
as of the Initial Effective Time.
(b)
The
directors of Mercury immediately prior to the Subsequent Effective Time shall be
the directors of the Mercury Merger Surviving Corporation from and after the
Subsequent Effective Time, each to hold office in accordance with the
certificate of incorporation and the bylaws of the Mercury Merger Surviving
Corporation. The officers of Mercury immediately prior to the
Subsequent Effective Time shall be the officers of the Mercury Merger Surviving
Corporation from and after the Subsequent Effective Time, each to hold office in
accordance with the certificate of incorporation and bylaws of the Mercury
Merger Surviving Corporation.
ARTICLE
II
EFFECT ON THE CAPITAL STOCK
OF THE CONSTITUENT CORPORATIONS
2.1
Conversion of
Securities.
(a)
Saturn and Merger Sub
1. At the Initial Effective Time, by virtue of the Saturn
Merger and without any action on the part of Saturn, Merger Sub 1 or the holders
of any securities of Saturn or Merger Sub 1:
(i)
Conversion
Generally. Each share of Saturn Common Stock issued and
outstanding immediately prior to the Initial Effective Time (other than any
shares of Saturn Common Stock to be cancelled pursuant to Section 2.1(a)(ii) or
Section 2.1(a)(iv), or shares to be converted pursuant to Section 2.1(a)(v))
shall be converted into the right to receive (x) 0.5767 of a validly issued,
fully paid and nonassessable share of Saturn Merger Surviving Corporation Common
Stock (the “Stock
Consideration”); and (y) $10.50 in cash, without
interest (the “Cash
Consideration” and, together with the Stock Consideration and any cash in
lieu of fractional shares of Saturn Common Stock to be paid pursuant to Section
2.2(e), the “Saturn
Merger Consideration”). All such shares of Saturn Common Stock
that were issued and outstanding immediately prior to the Initial Effective Time
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist and each holder of a certificate or certificates which
immediately prior to the Initial Effective Time represented any such shares of
Saturn Common Stock (“Saturn Certificates”)
or book-entry shares which immediately prior to the Initial Effective Time
represented shares of Saturn Common Stock (“Saturn Book-Entry
Shares”) shall thereafter cease to have any rights with respect to such
shares of Saturn Common Stock, except the right to receive the Saturn Merger
Consideration and as provided by Law. Each share of Convertible
Preferred Stock issued and outstanding immediately prior to the Initial
Effective Time shall remain outstanding from and after the Initial Effective
Time as one share of Convertible Preferred Stock of the Saturn Merger Surviving
Corporation in accordance with the terms of Annex A of the certificate of
incorporation of the Saturn Merger Surviving Corporation (“Saturn Surviving Corporation
Convertible Preferred Stock”). Without any action on the part
of the holders of the Convertible Preferred Stock, all outstanding certificates
which immediately prior to the Subsequent Effective Time represented such shares
of Convertible Preferred Stock and book-entry shares which immediately prior to
the Initial Effective Time represented such shares of Convertible Preferred
Stock shall, from and after the Initial Effective Time continue to represent a
number of shares of Saturn Surviving Corporation Convertible Preferred Stock
equal to the number of shares of Convertible Preferred Stock represented thereby
immediately prior to the Initial Effective Time.
(ii)
Mercury, Merger Sub 1 and
Merger Sub 2 Owned Shares. All shares of Saturn Common Stock
owned by Mercury, Merger Sub 1 or Merger Sub 2 or any of their respective wholly
owned Subsidiaries shall be cancelled and shall cease to exist and no Saturn
Merger Consideration or other consideration shall be delivered in exchange
therefor.
(iii)
Merger Sub 1 Common
Stock. Each share of common stock of Merger Sub 1 issued and
outstanding immediately prior to the Initial Effective Time shall no longer be
outstanding and shall automatically be cancelled and retired and shall cease to
exist.
(iv)
Cancellation of Treasury
Shares. Each share of Saturn Common Stock held in the Saturn
treasury and each share of Saturn Common Stock, if any, owned by any wholly
owned Subsidiary of Saturn immediately prior to the Initial Effective Time
(other than any shares of Saturn Common Stock to be converted
pursuant to Section 2.1(a)(v)) shall be cancelled and extinguished without any
conversion thereof.
(v)
Specified Subsidiary Owned
Shares. Each share of Saturn Common Stock owned by DJT
Partners, LP, a wholly-owned Subsidiary of Saturn (unless such shares of Saturn
Common Stock are cancelled pursuant to Section 6.18) shall be converted into the
number of shares of Saturn Merger Surviving Corporation Common Stock equal to
(x) the Stock Consideration, expressed as a decimal, plus (y) the fraction
resulting from dividing the Cash Consideration by the closing price per share of
the Mercury Common Stock on the last trading day immediately preceding the
Closing Date.
(b)
Mercury and Merger Sub
2. At the Subsequent Effective Time, by virtue of the Mercury
Merger and without any action on the part of Mercury, Merger Sub 2 or the
holders of any securities of Mercury or Merger Sub 2:
(i)
Conversion
Generally. Each share of Mercury Common Stock issued and
outstanding immediately prior to the Subsequent Effective Time (other than any
shares of Mercury Common Stock to be cancelled pursuant to Section 2.1(b)(ii) or
Section 2.1(b)(iv)) shall be converted into one (1) validly issued, fully paid
and nonassessable share of Saturn Merger Surviving Corporation Common Stock (the
“Mercury Merger
Consideration”). All such shares of Mercury Common Stock that
were issued and outstanding immediately prior to the Subsequent Effective Time
shall no longer be outstanding and shall automatically be cancelled and retired
and shall cease to exist and each holder of a certificate or certificates which
immediately prior to the Subsequent Effective Time represented any such shares
of Mercury Common Stock (“Mercury
Certificates”) or book-entry shares which immediately prior to the
Subsequent Effective Time represented shares of Mercury Common Stock (“Mercury Book-Entry
Shares”) shall thereafter cease to have any rights with respect to such
shares of Mercury Common Stock. Without any action on the part of
holders of Mercury Common Stock, all outstanding Mercury Certificates and
Mercury Book-Entry Shares shall, from and after the Subsequent Effective Time,
represent a number of shares of Saturn Merger Surviving Corporation
Common Stock equal to the number of shares of Mercury Common Stock represented
thereby immediately prior to the Subsequent Effective Time.
(ii)
Saturn, Merger Sub 1 and
Merger Sub 2 Owned Shares. All shares of Mercury Common Stock
owned by Saturn, Merger Sub 1 or Merger Sub 2 or any of their respective wholly
owned Subsidiaries shall be cancelled and shall cease to exist and no Mercury
Merger Consideration or other consideration shall be delivered in exchange
therefor.
(iii)
Merger Sub 2 Common
Stock. Each share of common stock of Merger Sub 2 issued and
outstanding immediately prior to the Subsequent Effective Time shall continue as
one share of common stock of the Mercury Merger Surviving Corporation, which
shall constitute the only outstanding shares of common stock of the Mercury
Merger Surviving Corporation.
(iv)
Cancellation of Treasury
Shares. Each share of Mercury Common Stock held in the Mercury
treasury and each share of Mercury Common Stock, if any, owned by any wholly
owned Subsidiary of Mercury immediately prior to the Subsequent Effective Time
shall be cancelled and extinguished without any conversion thereof.
(c)
Change in
Shares. If, between the date of this Agreement and the Initial
Effective Time or Subsequent Effective Time, as applicable, the outstanding
shares of Saturn Common Stock or Mercury Common Stock shall have been changed
into, or exchanged for, a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification, reorganization,
recapitalization, split, combination, contribution or exchange of shares, the
Saturn Merger Consideration and the Mercury Merger Consideration and any
adjustments or payments to be made under Section 2.4 and any other number or
amount contained in this Agreement which is based upon the price of the Mercury
Common Stock or the Saturn Common Stock or the number of shares of Saturn Common
Stock or Mercury Common Stock, as the case may be, shall be correspondingly
adjusted to provide the holders of Mercury Common Stock and Saturn Common Stock
the same economic effect as contemplated by this Agreement prior to such
event.
2.2
Exchange of
Certificates.
(a)
Exchange
Agent. At or prior to the Initial Effective Time, (i) Saturn
shall deposit, or shall cause to be deposited, with a commercial bank or trust
company designated by Mercury and reasonably satisfactory to Saturn (the “Exchange Agent”), for
the benefit of the holders of shares of Saturn Common Stock (x) book-entry
shares (which, to the extent subsequently requested, shall be exchanged for
certificates) representing the total number of shares of Saturn Merger Surviving
Corporation Common Stock issuable as Stock Consideration pursuant to the Saturn
Merger and (y) the Repayment Amount to the extent provided by the Mercury
Overseas Subsidiaries in accordance with Section 6.14, in cash, in United States
dollars, and (ii) Mercury shall, with the cooperation of Saturn to the extent
that Saturn is the borrower under the Financing, cause to be deposited with the
Exchange Agent, for the benefit of the holders of shares of Saturn Common Stock,
proceeds of the Financing, in cash, in United States dollars, which, together
with the Repayment Amount, shall be an amount sufficient to pay the aggregate
cash amount payable as Cash Consideration (and cash in lieu of fractional shares
payable pursuant to Section 2.2(e) in the Saturn Merger) (such shares and cash
shall constitute the “Exchange
Fund”). Any portion of the Exchange Fund that remains
unclaimed by shareholders of Saturn entitled thereto one hundred and eighty
(180) days after the Initial Effective Time shall be returned to the Saturn
Merger Surviving Corporation and such shareholders shall thereafter look only to
the Saturn Merger Surviving Corporation for payment of the Saturn Merger
Consideration, without any interest thereon. Any such portion of the
Exchange Fund remaining unclaimed by such shareholders five (5) years after the
Initial Effective Time (or such earlier date immediately prior to such time as
such amounts would otherwise escheat to or become property of any Governmental
Entity) shall, to the extent permitted by Law, become the property of the Saturn
Merger Surviving Corporation free and clear of any claims or interest of any
Person previously entitled thereto.
(b)
Exchange
Procedures. The Saturn Merger Surviving Corporation shall
instruct the Exchange Agent to promptly (and in any event no more than five (5)
Business Days) after the Initial Effective Time, mail to each holder of record
of a Saturn Certificate (i) a letter of transmittal (which shall be in customary
form and shall specify that delivery shall be effected, and risk of loss and
title to the Saturn Certificates shall pass, only upon proper delivery of the
Saturn Certificates to the Exchange Agent) and (ii) instructions for use in
effecting the surrender of the Saturn Certificates in exchange for the Saturn
Merger Consideration payable in respect of the shares of Saturn Common Stock
formerly represented by such Saturn Certificates. Upon surrender of a
Saturn Certificate for cancellation to the Exchange Agent, together with such
letter of transmittal, properly completed and duly executed, and such other
documents as may be reasonably required pursuant to such instructions, the
Exchange Agent shall issue and deliver to the holder of such Saturn Certificate
the number of whole shares of Saturn Merger Surviving Corporation Common Stock
(in the form of book-entry shares, unless the holder of such Saturn Certificate
expressly requests that such shares be delivered in certificated form of Saturn
Merger Surviving Corporation Common Stock) and a check or wire transfer for the
amount of cash that such holder is entitled to receive pursuant to Sections
2.1(a)(i), 2.2(e) and 2.2(i) of this Agreement in respect of the shares of
Saturn Common Stock formerly represented by such Saturn Certificate, and the
Saturn Certificate so surrendered shall forthwith be cancelled. In
the event of a transfer of ownership of shares of Saturn Common Stock that is
not registered in the transfer records of Saturn, the Saturn Merger
Consideration payable in respect of such shares of Saturn Common Stock may be
paid to a transferee if the Saturn Certificate formerly representing such shares
of Saturn Common Stock is presented to the Exchange Agent, accompanied by all
documents required to evidence and effect such transfer and by evidence that any
applicable stock transfer Taxes have been paid. Until surrendered as
contemplated by this Section 2.2, each Saturn Certificate shall be deemed at any
time after the Initial Effective Time to represent only the right to receive
upon such surrender the Saturn Merger Consideration payable in respect of the
shares of Saturn Common Stock formerly represented by such Saturn Certificate
and any dividends or other distributions to which such holder is entitled
pursuant to Section 2.2(c), in each case, without any interest
thereon. Promptly (and in any event no more than five (5) Business
Days) after the Initial Effective Time, the Exchange Agent shall issue and
deliver to each holder of Saturn Book-Entry Shares the number of whole shares of
Saturn Merger Surviving Corporation Common Stock (in the form of book-entry
shares, unless the holder of such Saturn Book-Entry Shares expressly requests
that such shares of Saturn Merger Surviving Corporation Common Stock be
delivered in certificated form) and a check or wire transfer for the amount of
cash that such holder is entitled to receive pursuant to Section 2.1(a)(i),
2.2(e) and 2.2(i) of this Agreement in respect of such Mercury Book-Entry
Shares, without such holder being required to deliver a Saturn Certificate or an
executed letter of transmittal to the Exchange Agent.
(c)
Distributions with Respect
to Unexchanged Shares of Saturn Common Stock. No dividends or
other distributions declared or made with respect to shares of Saturn Merger
Surviving Corporation Common Stock, with a record date after the Initial
Effective Time, shall be paid to the holder of any unsurrendered Saturn
Certificate, unless and until the holder of such Saturn Certificate shall
surrender such Saturn Certificate. Subject to the effect of abandoned
property, escheat or other applicable Laws, following surrender of any such
Saturn Certificate, there shall be paid to the holder of whole shares of Saturn
Merger Surviving Corporation Common Stock issuable in exchange therefor, without
interest, (i) promptly, the amount of dividends or other distributions with a
record date after the Initial Effective Time theretofore paid with respect to
such whole shares of Saturn Merger Surviving Corporation Common Stock and (ii)
at the appropriate payment date, the amount of dividends or other distributions,
with a record date after the Initial Effective Time but prior to such surrender
and a payment date subsequent to such surrender, payable with respect to such
whole shares of Saturn Merger Surviving Corporation Common Stock.
(d)
Further Rights in Saturn
Common Stock and Mercury Common Stock. The Saturn Merger
Consideration issued and paid upon conversion of a share of Saturn Common Stock
in accordance with the terms of this Agreement shall be deemed to have been
issued and paid in full satisfaction of all rights pertaining to such share of
Saturn Common Stock (other than the right to receive dividends or other
distributions, if any, in accordance with Section 2.2(c)). The
Mercury Merger Consideration issued upon conversion of a share of Mercury Common
Stock in accordance with the terms of this Agreement shall be deemed to have
been issued and paid in full satisfaction of all rights pertaining to such share
of Mercury Common Stock.
(e)
Fractional
Shares. No certificates or scrip representing fractional
shares of Saturn Merger Surviving Corporation Common Stock or book-entry credit
of the same will be issued upon the surrender for exchange of shares of Saturn
Common Stock, but in lieu thereof each holder of Saturn Common Stock who would
otherwise be entitled to a fraction of a share of Saturn Merger Surviving
Corporation Common Stock upon surrender for exchange of Saturn Common Stock
(after aggregating all fractional shares of Saturn Merger Surviving Corporation
Common Stock to be received by such holder) shall receive an amount of cash
(rounded up to the nearest whole cent), without interest, equal to the product
of such fraction multiplied by the Mercury Stock Measurement
Price. Such payment shall occur as soon as practicable after the
determination of the amount of cash, if any, to be paid to each former holder of
Saturn Common Stock with respect to any fractional shares and, in the case of a
holder of Saturn Certificates, following compliance by such holder with the
exchange procedures set forth in Section 2.2(b) and in the letter of
transmittal. No dividend or distribution with respect to Saturn
Merger Surviving Corporation Common Stock shall be payable on or with respect to
any fractional share and such fractional share interests shall not entitle the
owner thereof to any rights of a shareholder of the Saturn Merger Surviving
Corporation.
(f)
Investment of the Exchange
Fund. The Exchange Agent shall invest any cash included in the
Exchange Fund as directed by the Saturn Merger Surviving Corporation on a daily
basis in (i) short term direct obligations of the United States of America with
maturities of no more than thirty (30) days, (ii) short term obligations for
which the full faith and credit of the United States of America is pledged to
provide for payment of all principal and interest or (iii) commercial paper
obligations receiving the highest rating from either Xxxxx’x Investor Services,
Inc. or Standard & Poor’s; provided, that no
gain or loss thereon shall affect the amounts payable to former holders of
Saturn Common Stock pursuant to the provisions of this Article II. If
for any reason (including losses) the cash in the Exchange Fund shall be
insufficient to fully satisfy all of the payment obligations to be made in cash
by the Exchange Agent hereunder, the Saturn Merger Surviving Corporation shall
promptly deposit cash into the Exchange Fund in an amount which is equal to the
deficiency in the amount of cash required to fully satisfy such cash payment
obligations. Any interest and other income resulting from such
investments shall promptly be paid to the Saturn Merger Surviving
Corporation.
(g)
No
Liability. The Saturn Merger Surviving Corporation shall not
be liable to any former holder of shares of Saturn Common Stock, for the Saturn
Merger Consideration from the Exchange Fund delivered to a public official
pursuant to any abandoned property, escheat or other applicable
Law.
(h)
Lost
Certificates. If any Saturn Certificate shall have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the Person
claiming such Saturn Certificate to be lost, stolen or destroyed and, if
required by the Saturn Merger Surviving Corporation, the posting by such Person
of a bond, in such reasonable amount as the Saturn Merger Surviving Corporation
may direct, as indemnity against any claim that may be made against it with
respect to such Saturn Certificate, the Exchange Agent shall pay in exchange for
such lost, stolen or destroyed Saturn Certificate the Saturn Merger
Consideration payable in respect of the shares of Saturn Common Stock formerly
represented by such Saturn Certificate and any dividend or other distribution to
which the holder thereof is entitled pursuant to Section 2.2(c), in each case
without any interest thereon.
(i)
Withholding. Each
of Saturn, the Saturn Merger Surviving Corporation and the Exchange Agent shall
be entitled to deduct and withhold from the consideration otherwise payable to
any Person pursuant to this Agreement such amounts as it is required to deduct
and withhold with respect to the making of such payment under any provision of
local, state, federal, or foreign Tax Law. To the extent that amounts
are so deducted or withheld by Saturn, the Saturn Merger Surviving Corporation
or the Exchange Agent, as the case may be, and paid over to the applicable
Governmental Entity, such deducted or withheld amounts shall be treated for all
purposes of this Agreement as having been paid to the Person in respect of which
such deduction and withholding was made by Saturn, the Saturn Merger Surviving
Corporation or the Exchange Agent, as the case may be.
2.3
Stock Transfer
Books.
(a)
At the
Initial Effective Time, the stock transfer books of Saturn shall be closed with
respect to shares of Saturn Common Stock and thereafter there shall be no
further registration of transfers of shares of Saturn Common Stock theretofore
outstanding on the records of Saturn.
(b)
At the
Subsequent Effective Time, the stock transfer books of Mercury shall be closed
and thereafter there shall be no further registration of transfers of shares of
Mercury Common Stock theretofore outstanding on the records of
Saturn.
2.4
Saturn Options and Other
Equity Awards.
(a)
Saturn
Options. As of the Initial Effective Time, each
then-outstanding Saturn Option, whether vested or unvested, will be converted
into an option entitling its holders to acquire, upon exercise, a number of
shares of Saturn Merger Surviving Corporation Common Stock equal to the product
of the (x) Saturn Award Exchange Ratio and (y) the number of shares of Saturn
Common Stock subject to such converted Saturn Option immediately prior to the
Initial Effective Time (rounded down to the nearest whole share), at an exercise
price per share of Saturn Merger Surviving Corporation Common Stock equal to the
quotient obtained by dividing (x) the exercise price per share of Saturn Common
Stock to which such Saturn Option was subject immediately prior to the Initial
Effective Time by (y) the Saturn Award Exchange Ratio (rounded up to the nearest
whole cent). Except as specifically provided in the preceding
sentence, each converted Saturn Option will continue to be governed by the same
terms and conditions as were applicable to the Saturn Option immediately prior
to the Initial Effective Time. “Saturn Award Exchange
Ratio” means the sum of (A) the number of shares of Saturn Merger
Surviving Corporation Common Stock equal to the Stock Consideration, expressed
as a decimal plus (B) the fraction resulting from dividing the Cash
Consideration by the closing price per share of the Mercury Common Stock on the
last trading day immediately preceding the Closing Date.
(b)
Saturn Deferred Stock
Units/Saturn Restricted Stock Units. As of the Initial
Effective Time, each then-outstanding Saturn Deferred Stock Unit and Saturn
Restricted Stock Unit will be adjusted so that its holder will be entitled to
receive, upon settlement thereof, a number of shares of Saturn Merger Surviving
Corporation Common Stock equal to the product of the (x) Saturn Award Exchange
Ratio and (y) the number of shares of Saturn Common Stock subject to such Saturn
Deferred Stock Unit or Saturn Restricted Stock Unit, as applicable, immediately
prior to the Initial Effective Time. Except as specifically provided
in the preceding sentence, each Saturn Deferred Stock Unit or Saturn Restricted
Stock Unit, as applicable, will continue to be governed by the same terms and
conditions as were applicable to the Saturn Deferred Stock Unit or Saturn
Restricted Stock Unit, as applicable, immediately prior to the Initial Effective
Time.
(c)
Saturn Performance
Awards. As of the Initial Effective Time, each then-outstanding Saturn
performance-based award or Saturn performance-based share unit award granted
under any of the Saturn Equity Plans (each, a “Saturn Performance
Award”) will vest in accordance with the final sentence of this paragraph
and be adjusted (each, an “Adjusted Saturn Performance
Award”) into the number of shares of Saturn Merger Surviving Corporation
Common Stock determined by multiplying (i) the number of shares subject to such
Saturn Performance Award that vest pursuant to this paragraph by (ii) the Saturn
Award Exchange Ratio. Except as specifically provided in the
preceding sentence, each Adjusted Saturn Performance Award will continue to be
governed by the same terms and conditions as were applicable to the Saturn
Performance Award immediately prior to the Initial Effective Time.
(d)
Miscellaneous; Fractional
Shares. No fractional shares of Saturn Merger Surviving
Corporation Common Stock will be issued upon exercise or settlement of any
Saturn Options, Saturn Deferred Stock Units, Saturn Restricted Stock Units and
Saturn Performance Awards, as applicable, after the Initial Effective Time, but
in lieu thereof each holder of Saturn Options, Saturn Deferred Stock Units,
Saturn Restricted Stock Units and Saturn Performance Awards who would otherwise
be entitled to a fraction of a share of Saturn Merger Surviving Corporation
Common Stock in connection with any such exercise or settlement (after
aggregating all fractional shares of Saturn Merger Surviving Corporation Common
Stock to be received by such holder in connection with such exercise or
settlement) shall receive an amount of cash (rounded up to the nearest whole
cent), without interest, equal to the product of such fraction multiplied by the
closing price for the shares of Saturn Merger Surviving Corporation Common Stock
on the NYSE on the trading day immediately prior to such exercise or
settlement.
(e)
Further
Actions. Prior to the Initial Effective Time, Saturn and its
Subsidiaries shall pass such resolutions as may be necessary to effectuate the
provisions of this Section 2.4. As soon as practicable after the
Initial Effective Time, the Saturn Merger Surviving Corporation will deliver to
the holders of the Saturn Options, Saturn Deferred Stock Units, Saturn
Restricted Stock Units and Saturn Performance Awards appropriate notices setting
out the terms applicable to such Saturn Options, Saturn Deferred Stock Units,
Saturn Restricted Stock Units and Saturn Performance Awards.
2.5
Mercury Options and Other
Equity Awards.
(a)
At the
Subsequent Effective Time (i) each then outstanding equity-based award
including, without limitation, any stock options, performance share units and
restricted stock units, granted pursuant to any Mercury Stock Incentive Plan
that provide for settlement in, or the holder thereof to receive upon exercise
thereof, shares of Mercury Common Stock (collectively, the “Mercury Equity
Awards”), whether or not fully vested and exercisable, and (ii) each of
the Mercury Stock Incentive Plans and all agreements thereunder, shall be
assumed by the Saturn Merger Surviving Corporation. Each Mercury
Equity Award so assumed by the Saturn Merger Surviving Corporation shall
continue to have, and be subject to, the same terms and conditions as were
applicable to such Mercury Equity Award immediately before the Subsequent
Effective Time under the Mercury Stock Incentive Plans and the agreements
thereunder pursuant to which such Mercury Equity Award was granted, except that
each Mercury Equity Award will be exercisable, or settled upon vesting, as
applicable, for shares of Saturn Merger Surviving Corporation Common Stock in
lieu of shares of Mercury Common Stock.
(b)
Further
Actions. Prior to the Subsequent Effective Time, Mercury and
its Subsidiaries shall pass such resolutions as may be necessary to effectuate
the provisions of this Section 2.5. As soon as practicable after the
Subsequent Effective Time, Mercury will deliver to the holders of the Mercury
Equity Awards appropriate notices, setting out the terms applicable to such
Mercury Equity Awards.
2.6
Reservation of Shares;
Registration. The Saturn Merger Surviving Corporation shall
take all corporate action necessary to reserve for issuance a sufficient number
of shares of Saturn Merger Surviving Corporation Common Stock for delivery upon
exercise or settlement of the Saturn Options, Saturn Deferred Stock Units,
Saturn Restricted Stock Units and Saturn Performance Awards under Section 2.4
and Mercury Equity Awards under Section 2.5, as applicable. Promptly after the
Initial Effective Time, the Saturn Merger Surviving Corporation shall file with
the SEC a registration statement on Form S-8 (or any successor or other
appropriate forms) or shall file an amendment to an existing registration
statement, as necessary, with respect to the shares of Saturn Merger Surviving
Corporation Common Stock subject to the Saturn Options, Saturn Deferred Stock
Units, Saturn Restricted Stock Units, Saturn Performance Awards and Mercury
Equity Awards and shall use reasonable best efforts to maintain the
effectiveness of such registration statement (and maintain the current status of
the prospectus contained therein) for so long as such Saturn Options, Saturn
Deferred Stock Units, Saturn Restricted Stock Units, Saturn Performance Awards
and Mercury Equity Awards, as applicable, remain outstanding.
ARTICLE
III
REPRESENTATIONS AND
WARRANTIES OF SATURN AND
MERGER SUB 1 AND MERGER SUB
2
Saturn,
Merger Sub 1 and Merger Sub 2 hereby, jointly and
severally, represent and warrant to Mercury that (a) except as
set forth on the disclosure letter delivered to Mercury by Saturn, Merger Sub 1
and Merger Sub 2 on the date of the execution of this Agreement (the “Saturn Disclosure
Letter”), which identifies items of disclosure by reference to a
particular section or subsection of this Agreement (it being understood that any
matter disclosed pursuant to any section or subsection of the Saturn Disclosure
Letter shall be deemed to be disclosed for all purposes of this Agreement and
the Saturn Disclosure Letter, as long as the relevance of such disclosure is
reasonably apparent) and (b) other than with respect to Sections 3.5,
3.6(a), and 3.6(f), except as disclosed in the Annual Report on Form
10-K of Saturn for the year ended December 31, 2008 (the “Saturn Form 10-K”)
(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):
3.1
Organization and
Qualification. Each of Saturn, Merger Sub 1 and Merger Sub 2
is a corporation duly organized, validly existing and in good standing under the
Laws of New Jersey, and each of Saturn, Merger Sub 1 and Merger Sub 2 has all
requisite corporate power and authority to own and operate its properties and to
carry on its businesses as now conducted. Each of Saturn, Merger Sub
1 and Merger Sub 2 is duly qualified or licensed to do business, and is in good
standing (with respect to jurisdictions that recognize the concept of good
standing), in every jurisdiction in which its ownership of property or the
conduct of its businesses as now conducted requires it to so qualify or be
licensed, except where the failure to be so qualified has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Saturn Material Adverse Effect. Saturn has made available to Mercury
a complete and correct copy of the certificate of incorporation and bylaws, each
as amended to date, of Saturn, Merger Sub 1 and Merger Sub 2. Saturn
is not in violation of any of the provisions of its certificate of incorporation
or bylaws.
3.2
Significant
Subsidiaries. Section 3.2 of the Saturn Disclosure Letter sets
forth the name, jurisdiction of incorporation or formation and the authorized
and outstanding capital stock of, and/or other Equity Interests in, each
Significant Subsidiary of Saturn. Except as set forth in Section 3.2
of the Saturn Disclosure Letter, to the Knowledge of Saturn, neither Saturn nor
any of its Significant Subsidiaries owns any publicly listed or registered
shares of stock, or other publicly listed or registered Equity Interest in any
other Person other than Saturn or any of its Subsidiaries. Except as
set forth in Section 3.2 of the Saturn Disclosure Letter, there are no
contractual obligations of Saturn or any of its Significant Subsidiaries to make
any loan to, or any investment (in the form of a capital contribution or
otherwise) in, any Significant Subsidiary of Saturn or any other
Person. Each Significant Subsidiary of Saturn is either wholly owned
by Saturn or by one or more wholly-owned Subsidiaries of Saturn as indicated in
Section 3.2 of the Saturn Disclosure Letter. Each outstanding share
of capital stock of or other Equity Interest in each of Saturn’s Significant
Subsidiaries is owned by Saturn or by a wholly owned Subsidiary of Saturn free
and clear of any Liens other than Permitted Liens. Each of Saturn’s
Significant Subsidiaries is duly organized, validly existing and in good
standing (with respect to jurisdictions that recognize the concept of good
standing) under the Laws of the jurisdiction of its incorporation or
organization, has all requisite corporate power and authority to own its
properties and to carry on its businesses as now conducted and is qualified or
licensed to do business, and is in good standing (with respect to jurisdictions
that recognize the concept of good standing) in every jurisdiction in which its
ownership of property or the conduct of its businesses as now conducted requires
it to qualify or be licensed, except where the failure to be so organized,
qualified or licensed has not had, and would not reasonably be expected to have,
either individually or in the aggregate, a Saturn Material Adverse
Effect. The Significant Subsidiaries of Saturn are not in violation,
in any material respect, of any of the provisions of their respective
certificates or articles of incorporation or bylaws (or equivalent
organizational documents).
3.3
Authorization; Validity of
Agreement; Necessary Action.
(a)
Each of
Saturn, Merger Sub1 and Merger Sub 2 have all requisite corporate power and
authority to execute and deliver, and to perform their respective obligations
under this Agreement. The execution, delivery and the performance by Saturn,
Merger Sub 1 and Merger Sub 2 of this Agreement and the consummation by each of
them of the transactions contemplated hereby, including the Mergers and the
Saturn Share Issuance, have been duly authorized by all necessary corporate
action on the part of Saturn, Merger Sub 1 and Merger Sub 2 and their respective officers,
directors and shareholders (i) except that the Saturn Share Issuance and the
consummation of the Saturn Merger is subject to the receipt of the Saturn
Shareholder Approval, and (ii) other than the approval of this Agreement by
Saturn as the sole shareholder of Merger Sub 1 and Merger Sub
2. Assuming the accuracy of the representations and warranties of
Mercury set forth in Section 4.18, except for the Saturn Shareholder Approval
that is necessary for the Saturn Share Issuance and Saturn Merger, approval of
this Agreement by Saturn as the sole shareholder of Merger Sub 1 and Merger Sub
2, and the filing and recording of the Certificates of Merger under the
provisions of the NJBCA, no other corporate action on the part of Saturn, its
officers, directors or shareholders is necessary to authorize the transactions
contemplated hereby. This Agreement has been duly executed and
delivered by Saturn, Merger Sub 1 and Merger Sub 2 and constitutes (assuming the
due authorization, execution and delivery by Mercury) the valid and binding
obligation of Saturn, Merger Sub 1 and Merger Sub 2, enforceable against each of
them in accordance with its terms, except to the extent that enforceability may
be limited by applicable bankruptcy, insolvency, moratorium or other similar
Laws affecting the enforcement of creditors’ rights generally and subject to
general principles of equity (whether considered in a proceeding in equity or in
law) (the “Bankruptcy
and Equity Exception”).
(b)
The
Saturn Board, at a meeting duly called and held prior to execution of this
Agreement, unanimously (i) approved this Agreement and the transactions
contemplated hereby, including the Mergers and the Saturn Share Issuance, (ii)
determined that this Agreement and the transactions contemplated hereby are fair
to and in the best interests of Saturn and its shareholders, (iii) resolved to
recommend that the holders of the Saturn Common Stock grant the Saturn
Shareholder Approval and (iv) directed that this Agreement and the transactions
contemplated hereby, including the Mergers and the Saturn Share Issuance be
submitted to the holders of the Saturn Common Stock for their approval at a
meeting duly called and held for such purpose.
(c)
The only
vote of holders of Saturn capital stock necessary to approve this Agreement and
the transactions contemplated by this Agreement is the approval of this
Agreement and the transactions contemplated hereby, including the Mergers and
the Saturn Share Issuance, by the affirmative vote, at a meeting at which a
quorum is present, of the holders of a majority of votes cast by the holders of
Saturn Common Stock at the Saturn Shareholder Meeting, provided that the total
votes cast on the proposal represent over 50% in interest of all securities
entitled to vote at the Saturn Shareholder Meeting (the “Saturn Shareholder
Approval”).
(d)
Immediately
following the execution and delivery of this Agreement, Saturn, in its capacity
as the sole shareholder of Merger Sub 1 and Merger Sub 2, will approve and adopt
this Agreement and the Mergers, and such adoption is the only vote or approval
of the holders of any class or series of the capital stock of Merger Sub 1 and
Merger Sub 2 which is necessary to adopt this Agreement and consummate the
Mergers and the other transactions contemplated hereby.
3.4
Governmental Filings; No
Violations; Consents and Waivers.
(a) Except
as set forth in Section 3.4(a) of the Saturn Disclosure Letter and for (i) the
applicable requirements, if any, of state securities or “blue sky” laws (“Blue Sky Laws”), (ii)
the applicable requirements of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended, and the rules and regulations thereunder (the “HSR Act”), the EC
Merger Regulation and other applicable Antitrust Laws including but not limited
to those listed in Section 3.4(a) of the Saturn Disclosure Letter, (iii)
required filings under the Exchange Act and the Securities Act, (iv) any filings
required under the rules and regulations of the NYSE, (v) the filing of the
Certificates of Merger pursuant to the NJBCA, and (vi) any consents, approvals,
authorizations, permits, notices, actions or filings, the failure of which to
obtain, take or make, has not had and would not reasonably be expected to have,
either individually or in the aggregate, a Saturn Material Adverse Effect, the
execution and delivery of this Agreement by Saturn, Merger Sub 1 and Merger Sub
2, the performance by them of their obligations under this Agreement and the
consummation of the transactions contemplated by this Agreement, will not (A)
require any authorization, consent, approval, exemption or other action by or
notice to any court or Governmental Entity or (B) directly or indirectly
conflict with or result in a breach of any Law to which Saturn or any of its
Subsidiaries may be subject.
(b) Except
as set forth in Section 3.4(b) of the Saturn Disclosure Letter, neither the
execution or delivery of this Agreement by Saturn, Merger Sub 1 and Merger Sub 2
and the performance by them of their obligations under this Agreement nor the
consummation of the transactions contemplated hereby will, subject to obtaining
the Saturn Shareholder Approval, directly or indirectly (with or without the
giving of notice or the passage of time or both), (i) except as has not had and
would not reasonably be expected to have, either individually or in the
aggregate, a Saturn Material Adverse Effect, (A) violate, result in a
breach of, require consent under, conflict with or entitle any other Person to
accelerate the maturity or performance under, amend, call a default under,
exercise any remedy under, modify, rescind, suspend or terminate any term of any
Contract to which Saturn or any of its Subsidiaries is a party or to which any
of their assets or properties are bound, (B) entitle any Person to any
right or privilege to which such Person was not entitled immediately before this
Agreement or any other agreement or document contemplated by this Agreement was
executed under any term of any Contract to which Saturn or any of its
Subsidiaries is a party or to which any of their assets or properties are bound
or (C) create any obligation on the part of Saturn or any of its Subsidiaries
that it was not obligated to perform immediately before this Agreement or any
other agreement or document contemplated by this Agreement was executed under
any term of any Contract to which Saturn or any of its Subsidiaries is a party
or to which any of their assets or properties are bound, (ii) violate or result
in the breach of any term of the certificate of incorporation or bylaws (or
comparable governing documents) of Saturn, or except as has not had and would
not reasonably be expected to have, either individually or in the aggregate a
Saturn Material Adverse Effect, any of its Significant Subsidiaries or (iii)
except as has not had and would not reasonably be expected to have, either
individually or in the aggregate, a Saturn Material Adverse Effect, result in
the amendment, creation, imposition or modification of any Lien other than a
Permitted Lien upon or with respect to any of the assets or properties that
Saturn or any of its Significant Subsidiaries owns, uses or purports to own or
use.
3.5
Capital
Stock.
(a)
As of the
close of business on March 3, 2009 (the “Capitalization
Date”), the authorized capital stock of Saturn consists of (i)
2,400,000,000 shares of Saturn Common Stock, of which 1,696,767,572 shares were
outstanding (70,171,320 of which were held by DJT Partners, LP, a wholly-owned
subsidiary of Saturn) and 421,643,944 shares were held in the treasury of Saturn
and (ii) 50,000,000 shares of preferred stock par value $1.00 per share, of
which 11,500,000 shares have been designated as 6% Mandatory
Convertible Preferred Stock (the “Convertible Preferred
Stock”), of which 10,000,000 shares were outstanding. There
are no other classes of capital stock of Saturn designated, authorized or
outstanding. All issued and outstanding shares of the capital stock
of Saturn are and when shares of Saturn Merger Surviving Corporation Common
Stock are issued in connection with the Mergers, such shares will be, duly
authorized, validly issued, fully paid and non-assessable, and no class of
capital stock is entitled to preemptive rights.
(b)
From the
close of business on February 28, 2009 through the date of this Agreement, there
have been no issuances of shares of the capital stock or other Equity Interests
of Saturn or any other securities of Saturn other than issuances of shares of
Saturn Common Stock pursuant to the exercise of outstanding Saturn Options or
the settlement of outstanding Saturn Deferred Stock Units, Saturn Restricted
Stock Units and Saturn Performance Awards outstanding as of February 28, 2009.
There were outstanding as of February 28, 2009, no options, warrants, calls,
commitments, agreements, arrangements, undertakings or any other rights to
acquire capital stock from Saturn other than the right to acquire Saturn Common
Stock pursuant to the exercise of outstanding Saturn Options, and the settlement
of outstanding Saturn Deferred Stock Units, Saturn Restricted Stock Units and
Saturn Performance Awards as set forth in Section 3.5(b) of the Saturn
Disclosure Letter and the right to convert shares of the Convertible Preferred
Stock into shares of Saturn Common Stock in accordance with the terms of Annex A
of Saturn’s certificate of incorporation. The information about
Saturn Options, Deferred Stock Units, Saturn Restricted Stock Units and Saturn
Performance Awards as of December 31, 2008 set forth in Note 6 to the
consolidated financial statements included in Saturn Form 10-K is true and
correct as of such date. The numbers of Saturn Options, Saturn
Deferred Stock Units, Saturn Restricted Stock Units, and units of Saturn
Performance Awards granted from December 31, 2008 through the date of this
Agreement are set forth in Section 3.5(b) of the Saturn Disclosure
Letter. Section 3.5(b) of the Saturn Disclosure Letter sets forth a
complete and correct list as of the February 28, 2009, of the total number of
outstanding Saturn Options; the total number of outstanding Saturn Deferred
Stock Units and Saturn Restricted Stock Units, the total number of outstanding
units of Saturn Performance Award and any other rights to purchase or receive
the Saturn Common Stock granted under the Saturn Equity Plans or otherwise.
Immediately prior to the Closing, Saturn will provide to Mercury a complete and
correct list, as of the Closing Date, of the number of shares of Saturn Common
Stock subject to each outstanding Saturn Option, the name of the holder, the
exercise price, the grant date, and the general terms and conditions including
vesting provisions and exercise period of Saturn Options and the Saturn Equity
Plan under which Saturn Options were granted; the number of shares of Saturn
Common Stock subject to each outstanding Saturn Deferred Stock Unit and Saturn
Restricted Stock Units, the name of the holder, the grant date, and the general
terms and conditions including the vesting schedule and the other material terms
of Saturn Deferred Stock Units and Saturn Restricted Stock Units, as applicable,
and the Saturn Equity Plan under which Saturn Deferred Stock Units and the
Saturn Restricted Stock Units, as applicable, were granted; the number of
outstanding units granted pursuant to each Saturn Performance Award, the name of
the holder, the grant date, and the general terms and conditions including the
vesting schedule and other material terms of such Saturn Performance Award and
the Saturn Equity Plan under which Saturn Performance Awards were granted; and
any other rights to purchase or receive Saturn Common Stock granted under the
Saturn Equity Plans or otherwise and the names and positions of the holders, the
grant date and the terms thereof and the Saturn Equity Plan under which such
rights were granted. No options, warrants, Saturn Deferred Stock
Units, Saturn Restricted Stock Units, Saturn Performance Awards, calls,
commitments, agreements, arrangements, undertakings or other rights to acquire
capital stock from Saturn, or other equity-based awards, have been issued or
granted on or after February 28, 2009 through the date of this
Agreement.
(c)
No bonds,
debentures, notes or other Indebtedness of Saturn having the right to vote (or
convertible into or exercisable for securities having the right to vote) on any
matters on which holders of capital stock of Saturn may vote are issued or
outstanding.
(d)
Except as
otherwise set forth in this Section 3.5 or in Section 3.5(d) of the Saturn
Disclosure Letter, as of the date of this Agreement, (i) there are no
outstanding obligations of Saturn or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock or other Equity
Interests of Saturn or any of its Subsidiaries except for purchases, redemptions
or other acquisitions of shares of Saturn Common Stock (A) required by the terms
of the Saturn Plans, (B) in order to pay Taxes or satisfy withholding
obligations in respect of such Taxes in connection with the exercise of Saturn
Options or (C) as required by the terms of, or necessary for the administration
of, any plans, arrangements or agreements existing on the date hereof between
Saturn or any of its Subsidiaries and any director or employee of Saturn or any
of its Subsidiaries and (ii) there are no outstanding stock-appreciation rights,
security-based performance units, “phantom” stock or other security rights or
other agreements, arrangements or commitments of any character (contingent or
otherwise) pursuant to which any Person is or may be entitled to receive from
Saturn or any of its Subsidiaries any payment or other value based on the stock
price performance of Saturn or any of its Subsidiaries (other than under the
Saturn Equity Plans) or to cause Saturn or any of its Subsidiaries to file a
registration statement under the Securities Act.
(e)
Except as
set forth in this Section 3.5 or in Section 3.5(e) of the Saturn Disclosure
Letter and with respect to awards granted under the Saturn Equity Plans, as of
the date of this Agreement, there are no outstanding obligations of Saturn or
any of its Subsidiaries (other than immaterial Subsidiaries) (i) restricting the
transfer of, (ii) affecting the voting rights of, (iii) requiring the sales,
issuance, repurchase, redemption or disposition of, or containing any right of
first refusal with respect to, (iv) requiring the registration for sale of or
(v) granting any preemptive or antidilutive rights with respect to any shares of
Saturn Common Stock, Convertible Preferred Stock or other Equity Interests in
Saturn or any of its Subsidiaries.
(f)
Following
the Initial Effective Time, the shares of Convertible Preferred Stock will
remain subject to the terms set forth in the certificate of incorporation of the
Saturn Merger Surviving Corporation. Since the issuance date of the
Convertible Preferred Stock, (i) there has not been an adjustment to the Fixed
Conversion Rates or Make-Whole Acquisition Conversion Rate (both as defined in
Annex A of the certificate of incorporation of Saturn) pursuant to Section 14 of
Annex A of the certificate of incorporation of Saturn or otherwise and (ii)
Saturn has paid all regular quarterly dividends payable through the date hereof
in respect of the Convertible Preferred Stock in accordance with Annex A of the
certificate of incorporation of Saturn.
3.6
Saturn SEC
Reports.
(a)
Saturn
has timely filed with or otherwise furnished to the SEC all forms, reports,
schedules, statements and other documents required to be filed or furnished by
it under the Securities Act or the Exchange Act since January 1, 2007 together
with all certifications required pursuant to the Xxxxxxxx-Xxxxx Act of 2002 (the
“Xxxxxxxx-Xxxxx
Act”) (these documents, as supplemented or amended since the time of
filing, and together with all information incorporated by reference therein and
schedules and exhibits thereto, the “Saturn SEC
Reports”). No Subsidiary of Saturn is required to file with or
furnish to the SEC any forms, reports, schedules, statements or other
documents. As of their respective dates, the Saturn SEC Reports at
the time filed (or, if amended or superseded by a filing prior to the date of
this Agreement, as of the date of such filing) (i) complied in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the Xxxxxxxx-Xxxxx Act, and the rules and regulations of the SEC
promulgated thereunder applicable to the Saturn SEC Reports and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(b)
Saturn’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act), as required by Rules 13a-15(a) and 15d-15(a) of the
Exchange Act, are designed to ensure that all information required to be
disclosed by Saturn in the reports it files or submits under the Exchange Act is
made known to the chief executive officer and the chief financial officer of
Saturn by others within Saturn to allow timely decisions regarding required
disclosure as required under the Exchange Act and is recorded, processed,
summarized and reported within the time periods specified by the SEC’s rules and
forms. Saturn has evaluated the effectiveness of Saturn’s disclosure controls
and procedures and, to the extent required by applicable Law, presented in any
applicable Saturn SEC Report that is a report on Form 10-K or Form 10-Q, or any
amendment thereto, its conclusions about the effectiveness of the disclosure
controls and procedures as of the end of the period covered by such report or
amendment based on such evaluation. Based on its most recently completed
evaluation of its system of internal control over financial reporting prior to
the date of this Agreement, (i) to the Knowledge of Saturn, Saturn had no
significant deficiencies or material weaknesses in the design or operation of
its internal control over financial reporting that would reasonably be expected
to adversely affect Saturn’s ability to record, process, summarize and report
financial information and (ii) Saturn does not have Knowledge of any fraud,
whether or not material, that involves management or other employees who have a
significant role in Saturn’s internal control over financial
reporting.
(c)
No
attorney representing Saturn or any of its Subsidiaries, whether or not employed
by Saturn or any Subsidiary of Saturn, has reported to Saturn’s chief legal
counsel or chief executive officer evidence of a material violation of
securities Laws, breach of fiduciary duty or similar violation by Saturn or any
of its officers, directors, employees or agents pursuant to Section 307 of the
Xxxxxxxx-Xxxxx Act.
(d)
Saturn
has provided or made available to Mercury copies of all material written
correspondence sent to or received from the SEC by Saturn or its Subsidiaries or
their respective counsel or accountants since January 1, 2007. As of
the date hereof, there are no outstanding or unresolved comments in comment
letters received from the SEC staff with respect to Saturn SEC
Reports. To the Knowledge of Saturn, none of the Saturn SEC Reports
is the subject of ongoing SEC review. To the Knowledge of Saturn,
there are no SEC inquiries or investigations, other governmental inquiries or
investigations or internal investigations pending or threatened, in each case
regarding any accounting practice of Saturn.
(e)
The
audited consolidated financial statements included in the Saturn Form 10-K and
the other financial statements included in the Saturn SEC Reports (including in
each case any related notes and schedules) fairly present, in all material
respects, the consolidated financial position of Saturn and its consolidated
Subsidiaries as of the dates set forth therein and the consolidated results of
their operations and their consolidated cash flows for the periods set forth
therein, and in each case (A) were prepared from, and in accordance with, the
books and records of Saturn and its Subsidiaries in all material respects, and
(B) were prepared in conformity with GAAP consistently applied during the
periods involved (except as otherwise disclosed in the notes thereto and
subject, in the case of financial statements for quarterly periods, to normal
and recurring year-end adjustments).
(f)
There is
no liability, commitment or obligation of Saturn or any of its Subsidiaries
(whether matured or unmatured, known or unknown, asserted or unasserted,
absolute or contingent, whether or not accrued) that would be required by GAAP
to be reflected on a consolidated balance sheet of Saturn or its
Subsidiaries (or described in the notes thereto), other than
(i) liabilities or obligations reflected, accrued or reserved against in
the audited consolidated balance sheet of Saturn as of December 31, 2008
included in the Saturn Form 10-K or disclosed in the notes thereto (the “Saturn Current Balance
Sheet”), (ii) incurred since December 31, 2008 in the ordinary course of
business consistent with past practice and (iii) other liabilities or
obligations which have not had and would not reasonably be expected to have,
either individually or in the aggregate, a Saturn Material Adverse
Effect.
(g)
Saturn is
in compliance in all material respects with (i) the applicable provisions of the
Xxxxxxxx-Xxxxx Act and (ii) the applicable listing and corporate governance
rules and regulations of the NYSE. Except as permitted by the
Exchange Act, including Sections 13(k)(2) and (3) thereof, since the enactment
of the Xxxxxxxx-Xxxxx Act, neither Saturn nor any of its Affiliates has made,
arranged, modified (in any material way), or forgiven personal loans to any
executive officer or director of Saturn.
3.7
Absence of Certain Changes
or Events. Since December 31, 2008 and prior to the date of
this Agreement, the business of Saturn and its Subsidiaries has been conducted
in all material respects in the ordinary course consistent with past
practice. Since December 31, 2008, there has not been any Event or
Events that has had or would be reasonably expected to have, either individually
or in the aggregate, a Saturn Material Adverse Effect.
3.8
Material
Contracts.
(a)
As of the
date hereof, except as set forth as an exhibit to the Saturn SEC Reports or in
Section 3.8(a) of the Saturn Disclosure Letter, neither Saturn nor any of its
Subsidiaries is a party to or bound by any:
(i) Contract
relating to third-party indebtedness for borrowed money or any third party
financial guaranty in excess of $250,000,000;
(ii) (A)
non-competition Contracts or any other Contract containing terms that expressly
(x) limit or otherwise restrict Saturn or its Subsidiaries or (y) to the
Knowledge of Saturn, would, after the Subsequent Effective Time, by its terms
expressly limit or otherwise restrict the Saturn Merger Surviving Corporation or
its Subsidiaries from, in the case of either (x) or (y), engaging or competing
in any line of business or in any geographic area or from developing or
commercializing any compounds, any therapeutic area, class of drugs or mechanism
of action, in a manner that would be reasonably likely to be material, in the
case of (x), to Saturn and its Subsidiaries, taken as a whole, or in the case of
(y), to the Saturn Merger Surviving Corporation and its Subsidiaries, taken as a
whole, and (B) any Contract pursuant to which a third party supplies Saturn or
its Subsidiaries with active ingredients for any of the Key Saturn Products and
which Contract is material to Saturn and its Subsidiaries, taken as a
whole;
(iii) Contract
that by its terms materially limits the payment of dividends or other
distributions by Saturn or any of its Significant Subsidiaries;
or
(iv) Contract
required to be filed as an exhibit to Saturn’s Annual Report on Form 10 K
pursuant to Items 601(b)(2) or (10) of Regulation SK under the Securities
Act.
(b)
All
Contracts of the type described in clauses (a)(i), (ii), (iii) and (iv) above to
which Saturn or any of its Subsidiaries is a party to or bound by as of the date
of this Agreement are referred to herein as the “Saturn Material
Contracts”. Except, in each case, as has not, and would not
reasonably be expected to have, individually or in the aggregate, a Saturn
Material Adverse Effect, each of the Saturn Material Contracts is a valid and
binding obligation of Saturn (or the Subsidiaries of Saturn party thereto), and
to Saturn’s Knowledge, the other parties thereto, enforceable against Saturn and
its Subsidiaries and, to Saturn’s Knowledge, the other parties thereto in
accordance with its terms, except as enforcement may be limited by the
Bankruptcy and Equity Exception.
(c)
Neither
Saturn nor any of its Subsidiaries is, nor to Saturn’s Knowledge is any other
party, in breach, default or violation (and no event has occurred or not
occurred through Saturn’s or any of its Subsidiaries’ action or inaction or, to
Saturn’s Knowledge, through the action or inaction of any third party, that with
notice or the lapse of time or both would constitute a breach, default or
violation) of any term, condition or provision of any Saturn Material Contract
to which Saturn or any of its Subsidiaries is now a party, or by which any of
them or any of their respective properties or assets may be bound, except for
breaches, defaults or violations that have not had and would not reasonably be
expected to have, either individually or in the aggregate, a Saturn Material
Adverse Effect.
3.9
Intellectual
Property.
(a)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Saturn Material Adverse Effect, to the Knowledge of Saturn,
either Saturn or one of its Subsidiaries owns, or is licensed or otherwise
possesses legally enforceable rights to use, subject to any existing licenses or
other grants of rights to third parties, all Intellectual Property used in their
respective businesses as currently conducted (collectively, the “Saturn Intellectual
Property”). Except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Saturn Material
Adverse Effect and except as set forth in Section 3.9(a) of the Saturn
Disclosure Letter, (i) there are no pending or, to the Knowledge of Saturn,
threatened claims by any Person alleging infringement of any Intellectual
Property rights of any Person by Saturn or any of its Subsidiaries, (ii) to the
Knowledge of Saturn, the conduct of the business of Saturn and its Subsidiaries
does not infringe any Intellectual Property rights of any Person, (iii) to the
Knowledge of Saturn, neither Saturn nor any of its Subsidiaries has made any
claim of a violation or infringement by others of its rights to or in connection
with the Saturn Intellectual Property, (iv) to the Knowledge of Saturn, no
Person is infringing any Saturn Intellectual Property and (v) to the Knowledge
of Saturn, there are no ongoing interferences, oppositions, reissues, or
reexaminations or other inter
partes proceedings which could reasonably be expected to result in a loss
or limitation of a patent right or claim involving any Saturn Intellectual
Property. Except as has not had and would not reasonably be expected
to have, either individually or in the aggregate, a Saturn Material Adverse
Effect, to the Knowledge of Saturn, all Intellectual Property owned by Saturn
and its Subsidiaries is valid and enforceable and in full force and
effect.
(b)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Saturn Material Adverse Effect and except as set forth in
Section 3.9(b) of the Saturn Disclosure Letter, to the Knowledge of Saturn, the
consummation of the transactions contemplated by this Agreement will not (i)
result in the loss of, or otherwise adversely affect, any rights of Saturn or
its Subsidiaries in any Intellectual Property, (ii) grant or require Saturn or
its Subsidiaries to grant to any Person any rights with respect to any
Intellectual Property of Saturn or its Subsidiaries, (iii) subject Saturn or any
of its Subsidiaries to any increase in royalties or other payments in respect of
any Intellectual Property, (iv) by the terms of any Contract to which Saturn or
a Subsidiary of Saturn is a party, diminish any royalties or other payments
Saturn or a Subsidiary of Saturn would otherwise be entitled to in respect of
any Intellectual Property or (v) result in the breach or, by the terms of such
Contract, termination of any agreement relating to Saturn Intellectual
Property.
(c)
Except as set forth in Section 3.9(c) of the Saturn Disclosure Letter, neither
Saturn nor any of its Subsidiaries is a party to or bound by any Contract
providing a license to Intellectual Property that specifically claims the active
ingredient of any Key Saturn Product.
3.10
Litigation. Except
as set forth in Section 3.10 of the Saturn Disclosure Letter, there is no
action, suit, hearing, claim, investigation, arbitration or proceeding (“Proceeding”)
pending or, to Saturn’s Knowledge, threatened against Saturn or any of its
Subsidiaries or their respective assets or properties, or their respective
officers and directors, in their capacity as such, before or by any court,
arbitrator or Governmental Entity that, if adversely determined, would have, or
reasonably be expected to have, a Saturn Material Adverse Effect or which
challenges this Agreement or the transactions contemplated by this
Agreement. There is no unsatisfied judgment or award, decision,
decree, injunction, rule or Order of any Governmental Entity, court or
arbitrator outstanding against Saturn or any of its Subsidiaries that would
reasonably be expected to have, individually or in the aggregate, a Saturn
Material Adverse Effect.
3.11
Permits; Compliance with
Laws.
(a)
Except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Saturn Material Adverse Effect, Saturn and each of its
Subsidiaries are in possession of all franchises, grants, authorizations,
licenses, permits, consents, certificates, variances, registrations, exemptions,
clearances, approvals and orders from any Governmental Entity necessary for them
to own, lease and operate their properties or to carry on their business as it
is now being conducted (collectively, the “Saturn Permits”),
and, to the Knowledge of Saturn, all Saturn Permits are valid and in full force
and effect.
(b)
Except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Saturn Material Adverse Effect, Saturn and each of its
Subsidiaries is (and since January 1, 2007 Saturn and each of its Subsidiaries
has been) in compliance with all Laws, Orders or Saturn Permits applicable to
Saturn or any of its Subsidiaries, or by which any property or asset of Saturn
or any of its Subsidiaries is bound and in compliance with all Contracts entered
into with any Governmental Entity as part of the resolution of a regulatory or
enforcement action.
3.12
Regulatory
Compliance.
(a)
Except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Saturn Material Adverse Effect, each of Saturn and its
Subsidiaries holds all Saturn Permits, including all authorizations under the
Federal Food, Drug and Cosmetic Act of 1938, as amended (the “FDCA”), the Public
Health Service Act of 1944, as amended (the “PHSA”), and the
regulations of the FDA promulgated thereunder, and any other Governmental Entity
that is concerned with the quality, identity, strength, purity, safety,
efficacy, manufacturing or distribution of the Saturn Products (any such
Governmental Entity, a “Saturn Regulatory
Agency”) necessary for the lawful operating of the businesses of Saturn
or any of its Subsidiaries (the “Saturn Regulatory
Permits”), and all such Saturn Regulatory Permits are valid, and in full
force and effect. Since January 1, 2007, there has not occurred any violation
of, default (with or without notice or lapse of time or both) under, or event
giving to others any right of termination, amendment or cancellation of, with or
without notice or lapse of time or both, any Saturn Regulatory Permit except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Saturn Material Adverse Effect. Saturn and each of
its Subsidiaries are in compliance in all material respects with the terms of
all Saturn Regulatory Permits, and no event has occurred that, to the Knowledge
of Saturn, would reasonably be expected to result in the revocation,
cancellation, non-renewal or adverse modification of any Saturn Regulatory
Permit, except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Saturn Material Adverse Effect.
(b)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Saturn Material Adverse Effect, since January 1, 2007, all
applications, submissions, information and data utilized by Saturn or Saturn’s
Subsidiaries as the basis for, or submitted by or, to the Knowledge of Saturn,
on behalf of Saturn or Saturn’s Subsidiaries in connection with, any and all
requests for a Saturn Regulatory Permit relating to Saturn or any of its
Subsidiaries, and its respective business and Saturn Products, when submitted to
the FDA or other Saturn Regulatory Agency, were true and correct in all material
respects as of the date of submission, and any updates, changes, corrections or
modification to such applications, submissions, information and data required
under applicable Laws have been submitted to the FDA or other Saturn Regulatory
Agency.
(c)
Since
January 1, 2007, neither Saturn, nor any of its Subsidiaries, has committed any
act, made any statement or failed to make any statement that would reasonably be
expected to provide a basis for the FDA or any other Saturn Regulatory Agency to
invoke its policy with respect to “Fraud, Untrue Statements of Material Facts,
Bribery, and Illegal Gratuities”, or similar policies, set forth in any
applicable Laws, except as has not had, and would not reasonably be expected to
have, either individually or in the aggregate, a Saturn Material Adverse
Effect.
(d)
For the
avoidance of doubt, the provisions of this Section 3.12 do not apply to
Environmental Laws or Environmental Permits.
3.13
Saturn Employee Benefit
Plans.
(a)
Section
3.13(a) of the Saturn Disclosure Letter sets forth a list of each Saturn Plan
and Saturn Employment Agreement. “Saturn Plan” means
(i) other than any Saturn Foreign Plan (as defined below), all material
“employee benefit plans” within the meaning of Section 3(3) of ERISA, equity
(including the Saturn Equity Plans), bonus (sales incentive, short and long
term) or other incentive compensation, disability, salary continuation,
severance, change in control, retention, retirement, pension, retiree medical or
life insurance, deferred compensation, relocation and expatriate policies, and
any other plans, agreements (other than an individual employment agreement,
change in control agreement or offer letter), policies, trust funds or
arrangements (whether written or unwritten, funded or unfunded, insured or
self-insured) either (A) established, maintained, sponsored or contributed
to (or with respect to which any obligation to contribute has been undertaken)
by Saturn or its Subsidiaries or any of their respective ERISA Affiliates on
behalf of any employee, officer, director, shareholder or other service provider
of Saturn or its Subsidiaries (whether current, former or retired) or their
beneficiaries, or (B) with respect to which Saturn or its Subsidiaries or any of
their respective ERISA Affiliates has any obligation, contingent or otherwise,
on behalf of any such employee, officer, director, shareholder or other service
provider or beneficiary. “Saturn Employment
Agreement” means each employment agreement, change in control agreement
and offer letter with or to any member of Saturn’s executive management team
(“EMT”) or any
member of the operations management team (“OMT”) (the members of
EMT and OMT, the “Senior Employees”) to
which Saturn, its Subsidiaries or ERISA Affiliates is a party. Within
thirty (30) Business Days after the date hereof, Saturn shall provide a list of
all material employee benefit plans, policies, agreements or arrangements (other
than those mandated by a government other than the United States) that are
maintained primarily for the benefit of employees in a jurisdiction outside of
the United States (each, a “Saturn Foreign Plan,”
and collectively, the “Saturn Foreign
Plans”).
(b)
Saturn
has made available to Mercury (i) copies of all documents setting forth the
terms of each Saturn Plan and Saturn Employment Agreement, including all
amendments thereto and all related trust documents, (ii) the 2007 annual report
(Form Series 5500) with all applicable schedules, (iii) the most recent
actuarial reports (if applicable) for all Saturn Plans, (iv) the most recent
summary plan description, if any, required under ERISA with respect to each
Saturn Plan and any material modifications thereto, and (v) the most recent IRS
determination or opinion letter issued with respect to each Saturn Plan intended
to be qualified under Section 401(a) of the Code.
(c)
Each
Saturn Plan, each Saturn Foreign Plan and each Saturn Employment Agreement was
established and has been operated in all respects in accordance with its terms
and the requirements of all applicable Laws, including the Worker Adjustment and
Retraining Notification Act, ERISA and the Code and any applicable Laws in a
foreign jurisdiction, except for such noncompliance that has not had and would
not reasonably be expected to have, either individually or in the aggregate, a
Saturn Material Adverse Effect. Except as has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Saturn Material Adverse Effect, (i) each Saturn Plan that is intended to be
qualified under Section 401(a) of the Code or Section 401(k) of the Code has
received a favorable determination letter from the IRS, or is entitled to rely
on a favorable opinion issued by the IRS, and, to the Knowledge of Saturn, no
fact or event has occurred since the date of such determination letter or
letters from the IRS to adversely affect the qualified status of any such Saturn
Plan or the exempt status of any such trust, (ii) no action or failure to
act and no transaction or holding of any asset by, or with respect to, any
Saturn Plan, Saturn Foreign Plan or Saturn Employment Agreement has or may
subject Saturn, its Subsidiaries or any ERISA Affiliate or any fiduciary to any
tax, penalty or interest, whether by way of indemnity or otherwise under Chapter
43 of Subtitle D of the Code, (iii) there are no Proceedings pending, or to the
Knowledge of Saturn or its Subsidiaries or any ERISA Affiliate, threatened or
anticipated (other than routine claims for benefits) against Saturn or its
Subsidiaries or any ERISA Affiliate or any administrator, trustee or other
fiduciary of any Saturn Plan or Saturn Foreign Plan with respect to any Saturn
Plan, Saturn Foreign Plan or Saturn Employment Agreement, or against any Saturn
Plan or Saturn Foreign Plan or against the assets of any Saturn Plan or Saturn
Foreign Plan, and (iv) no Saturn Plan or Saturn Foreign Plan is under audit or
investigation by the IRS or any other governmental agency and to the Knowledge
of Saturn and its Subsidiaries, no such audit or investigation is pending or
threatened in writing, except with respect to matters contested in good faith
through appropriate proceedings. Each Saturn Plan can be amended, terminated, or
otherwise discontinued without material liability to Saturn, its Subsidiaries or
any ERISA Affiliate.
(d)
With
respect to each Saturn Plan which is an “employee pension benefit plan” within
the meaning of Section 3(2) of ERISA (other than a “multiemployer
plan,” within the meaning of Section 3(37) of ERISA) (a “Saturn Pension
Plan”), except as has not had and would not reasonably be expected to
have, either individually or in the aggregate, a Saturn Material Adverse Effect,
as of the date hereof, (i) no steps have been taken to terminate any Saturn
Pension Plan now maintained or contributed to, no termination of any Saturn
Pension Plan has occurred pursuant to which all liabilities have not been
satisfied in full, no liability under Title IV of ERISA has been incurred by
Saturn, its Subsidiaries or any ERISA Affiliate which has not been satisfied in
full, and no event has occurred and, to the Knowledge of Saturn, no condition
exists that could reasonably be expected to result in Saturn, its Subsidiaries
or any ERISA Affiliate incurring a liability under Title IV of ERISA or could
constitute grounds for terminating any Saturn Pension Plan; (ii) no proceeding
has been initiated by the Pension Benefit Guaranty Corporation to terminate any
Saturn Pension Plan or to appoint a trustee to administer any Saturn Pension
Plan; (iii) each Saturn Pension Plan which is subject to Part 3 of Subtitle B of
Title I of ERISA or Section 412 of the Code, has been maintained in compliance
with the minimum funding standards of ERISA and the Code; (iv) neither Saturn,
its Subsidiaries nor any ERISA Affiliate has sought nor received a waiver of its
funding requirements with respect to any Saturn Pension Plan and all
contributions payable with respect to each Saturn Pension Plan have been timely
made; and (v) no reportable event, within the meaning of Section 4043 of ERISA,
and no event described in Section 4062 or 4063 of ERISA, has occurred with
respect to any Saturn Pension Plan.
(e)
With
respect to any Saturn Foreign Plan which would be considered an “employee
pension benefit plan” within the meaning of Section 3(2) of ERISA (other than
a “multiemployer plan,” within the meaning of Section 3(37) of ERISA)
if such plan were maintained in the United States (a “Saturn Foreign Pension
Plan”), except as has not had and would not reasonably be expected to
have, either individually or in the aggregate, a Saturn Material Adverse Effect,
(i) each Saturn Foreign Pension Plan required to be registered has been
registered and has been maintained in good standing with the applicable
regulatory authorities, and (ii) if such Saturn Foreign Pension Plan is
intended to be funded and/or book reserved it has been so funded and/or book
reserved, as appropriate, based upon reasonable actuarial
assumptions.
(f)
None of
Saturn, its Subsidiaries, any of their respective ERISA Affiliates or any of
their respective predecessors has ever during the past six years contributed to,
contributes to, has ever during the past six (6) years been required to
contribute to, or otherwise participated in or participates in or in any way,
directly or indirectly, has any liability with respect to any “multiemployer
plan” (within the meaning of Section 3(37) or 4001(a)(3) of ERISA or Section
414(f) of the Code).
(g)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Saturn Material Adverse Effect or, except as set forth in
Section 3.13(g) of the Saturn Disclosure Letter, neither Saturn, its
Subsidiaries, nor any of its ERISA Affiliates sponsors or has sponsored any
Saturn Plan that provides, or has liability to provide, for any post employment
or post retirement health or medical or life insurance benefits for retired,
former, or current employees of Saturn or its Subsidiaries, except as required
by Section 4980B of the Code.
(h)
Except as
set forth in Section 3.13(h) of the Saturn Disclosure Letter, the execution of
this Agreement and the performance of the transactions contemplated in this
Agreement will not (either alone or upon the occurrence of any additional or
subsequent events) (i) constitute an event under any Saturn Plan, Saturn
Foreign Plan or Saturn Employment Agreement, trust or loan that will or may
result in any payment (whether of severance pay, termination indemnities or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any
employee, (ii) result in the triggering or imposition of any restrictions
or limitations on the right of Saturn or Mercury to amend or terminate any
Saturn Plan, Saturn Foreign Plan or Saturn Employment Agreement and receive the
full amount of any excess assets remaining or resulting from such amendment or
termination, subject to applicable taxes or (iii) provide for any payment by
Saturn or its Subsidiaries that would constitute a “parachute payment” within
the meaning of Section 280G of the Code.
(i)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Saturn Material Adverse Effect, none of Saturn or its
Subsidiaries has made any legally binding promises or commitments to create any
additional, or to modify or terminate, any Saturn Plan, Saturn Foreign Plan or
Saturn Employment Agreement, except to the extent required by Law, in connection
with the Integration Process or as contemplated by this Agreement.
3.14
Labor and Employment
Matters. Since January 1, 2007, except as has not had and
would not reasonably be expected to have, either individually or in the
aggregate, a Saturn Material Adverse Effect, there has not been, and there
currently is not pending or, to the Knowledge of Saturn, threatened, any work
stoppage or labor strike against Saturn or its Subsidiaries by
employees. With respect to employees based in the United States, to
the Knowledge of Saturn, and except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Saturn Material
Adverse Effect, no employees are currently represented by any labor union for
purposes of collective bargaining and no activities the purpose of which is to
achieve such representation of all or some of such employees are threatened or
ongoing or have resulted in any petition for a representation election filed
with the National Labor Relations Board in the past three months.
3.15
Taxes. Except
as has not had and would not reasonably be expected to have, either individually
or in the aggregate, a Saturn Material Adverse Effect, Saturn and each of its
Subsidiaries (a) have duly and timely filed, or have caused to be duly and
timely filed, all Tax Returns required to be filed by any of them (taking into
account any extension of time within which to file) and all such Tax Returns are
complete and accurate in all respects and were prepared in compliance with all
applicable Laws; (b) have paid all Taxes that are required to be paid (whether
or not shown on any Tax Return) or that Saturn or any of its Subsidiaries are
obligated to deduct or withhold from amounts owing to any employee, creditor or
other third party, except with respect to matters contested in good faith
through appropriate proceedings or for which adequate reserves have been
established on the Saturn Current Balance Sheet; and (c) have not waived any
statute of limitations with respect to United States federal income Taxes or
agreed to any extension of time with respect to a United States federal income
Tax assessment or deficiency. Except as has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Saturn Material Adverse Effect, there are no audits, examinations,
investigations, deficiencies, claims or other proceedings in respect of Taxes or
Tax matters pending or, to the Knowledge of Saturn, threatened in writing,
except with respect to matters contested in good faith through appropriate
proceedings. Except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Saturn Material
Adverse Effect, neither Saturn nor any of its Subsidiaries has received notice
in writing of any claim made by any Governmental Entity in a jurisdiction where
Saturn or such Subsidiary does not file Tax Returns that Saturn or such
Subsidiary is or may be subject to taxation by that
jurisdiction. Except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Saturn Material
Adverse Effect, neither Saturn nor any of its Subsidiaries has participated, or
is currently participating, in a “listed transaction” as defined in Treasury
Regulation Section 1.6011-4(b)(2). All copies of United States federal and state
income or franchise Tax Returns, examination reports, and statements of
deficiencies assessed against or agreed to by Saturn or any of its Subsidiaries
that Saturn has made available to Mercury are true and complete
copies. Neither Saturn nor any of its Subsidiaries has been a member
of a group filing Tax Returns on a consolidated, combined, unitary or similar
basis (other than a consolidated group of which Saturn was the common
parent). Except as has not had and would not reasonably be expected
to have, either individually or in the aggregate, a Saturn Material Adverse
Effect, neither Saturn nor any of its Subsidiaries (x) has any liability for
Taxes of any Person (other than Saturn or any of its Subsidiaries) under
Treasury Regulation Section 1.1502-6 (or any comparable provision of local,
state or foreign Law), as a transferee or successor, by Contract, or otherwise
or (y) is a party to, bound by or has any liability under any Tax sharing,
allocation or indemnification agreement or arrangement.
3.16
Tax
Matters. As of the date of this Agreement, neither Saturn nor
any of its Affiliates has taken or agreed to take any action, nor does Saturn
have any Knowledge of any fact or circumstance, that would prevent the Mercury
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
3.17
Insurance. Except
as set forth in Section 3.17 of the Saturn Disclosure Letter, since January 1,
2007, Saturn and its Subsidiaries have maintained continuous insurance coverage,
in each case, in those amounts and covering those risks as are in accordance, in
all material respects, with normal industry practice for companies or the size
and financial condition of Saturn engaged in businesses similar to those of
Saturn and its Subsidiaries.
3.18
Environmental
Liability. Except as has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Saturn Material Adverse Effect and except as set forth in Section 3.18 of the
Saturn Disclosure Letter, (a) Saturn and each of its Subsidiaries are and
have been in compliance in all respects with all applicable Environmental Laws
and have obtained or applied for all Environmental Permits necessary for their
operations as currently conducted, (b) there have been no Releases of any
Hazardous Materials at the Facilities or, to the Knowledge of Saturn, at any
Former Facilities that are reasonably likely to form the basis of any
Environmental Claim against Saturn or any of its Subsidiaries or impose
liability or other obligations on Saturn or any Subsidiary of Saturn under any
Environmental Laws for any investigation, corrective action, remediation or
monitoring of Hazardous Materials, (c) there are no Environmental Claims pending
or, to the Knowledge of Saturn, threatened against Saturn or any of its
Subsidiaries, (d) neither Saturn nor any of its Subsidiaries is party to any
agreement, order, judgment, or decree by or with any Governmental Entity or
third party imposing any liability or obligation on Saturn or any Subsidiary of
Saturn under any Environmental Law, (e) neither Saturn nor any of its
Subsidiaries has retained or assumed, either contractually or by operation of
Law, any liability or obligation that could reasonably be expected to form
the basis of any Environmental Claim against, or any liability under any
Environmental Law on, Saturn or any of its Subsidiaries, (f) neither
the execution of this Agreement nor the consummation of the transactions
contemplated herein will require any investigation or remediation activities or
notice to or consent of any Governmental Entity or third parties pursuant to any
Environmental Law, including without limitation, with respect to the New Jersey
Industrial Site Recovery Act and (g) to the Knowledge of Saturn, there are no
past or present conditions, events, circumstances, facts, activities, practices,
incidents, actions, omissions or plans that may (i) interfere with or
prevent continued compliance by Saturn or its Subsidiaries with
Environmental Laws and the requirements of Environmental Permits or (ii) give
rise to any liability or other obligation under any Environmental
Laws. Saturn has delivered, or made available to Mercury, copies of
any material environmental
assessments, reports, audits, studies, analyses, tests or monitoring possessed
by, or reasonably available to, Saturn or its Subsidiaries pertaining to
compliance with, or liability under, Environmental Laws relating to the
Facilities, the Former Facilities, or Saturn or its Subsidiaries.
3.19
Affiliated
Transactions. No executive officer or director of Saturn or
any of its Subsidiaries or any Person owning 5% or more of the Saturn Common
Stock (or any of such Person’s immediate family members or affiliates or
associates) (a) is a party to any Contract with or binding upon Saturn or any of
its Subsidiaries or any of their respective assets, rights or properties, (b)
has any interest in any property owned by Saturn or any of its Subsidiaries or
(c) has engaged in any transaction involving Saturn, any of its Subsidiaries, or
any of their respective assets, rights or properties within the last twelve (12)
months, in each case, that is of the type that would be required to be disclosed
under Item 404 of Regulation S-K under the Securities Act (an “Affiliate
Transaction”).
3.20
Brokerage. Except
for Xxxxxxx Xxxxx & Co. and Xxxxxx Xxxxxxx & Co., no Person is entitled
to any brokerage, investment banking, success, finder’s or similar compensation
in connection with the transactions contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of Saturn or any of its
Subsidiaries.
3.21
Opinion of Saturn’s
Financial Advisor. The Saturn Board has received an opinion
from each of its financial advisors, Xxxxxxx Sachs & Co. and Xxxxxx Xxxxxxx
& Co., Incorporated (the “Saturn Financial
Advisors”) to the effect that, as of the date of this Agreement, and
based upon and subject to the assumptions, qualifications and limitations set
forth in such opinion, the Saturn Merger Consideration to be received by the
holders (other than Mercury and any direct or indirect subsidiary of Mercury) of
Saturn Common Stock pursuant to this Agreement is fair, from a financial point
of view, to such holders.
3.22
Interested
Stockholder. Neither Saturn nor any of its Subsidiaries is or
has been at any time an “interested stockholder” (as such term is defined in
Section 14A: 10A-3 of the NJBCA) of Mercury.
3.23
Ownership and Operations of
Merger Sub 1 and Merger Sub 2. Merger Sub 1 and Merger Sub 2
were formed solely for the purpose of engaging in the transactions contemplated
by this Agreement, have engaged in no other business activities, have not and
will not have incurred, directly or indirectly, any obligations or liabilities
(other than obligations or liabilities incurred in connection with the
transactions contemplated by this Agreement) and have conducted and will conduct
their operations prior to the Initial Effective Time, in the case of Merger Sub
1, and the Subsequent Effective Time, in the case of Merger Sub 2, only as
contemplated by this Agreement. All shares of capital stock of Merger
Sub 1 and Merger Sub 2 are owned directly by Saturn.
3.24
Rights Agreement; Takeover
Statutes. Saturn has no “rights plan,” “rights agreement” or
“poison pill” in effect. The Saturn Board has taken all actions so
that the restrictions contained in Section 14A of the NJBCA applicable to a
“business combination” with “interested stockholders” (as defined in Section
14A:10A-3 of the NJBCA) or any other similar Law (each, a “Takeover Statute”)
will not apply to (a) Mercury in connection with the execution and delivery of
this Agreement and (b) the consummation of the Mergers and the other
transactions contemplated by this Agreement. No anti-takeover
provision contained in Saturn’s certificate of incorporation or bylaws is
applicable to the Mergers and no anti-takeover provision, whether in a Law,
agreement or otherwise is, or would be, applicable to this Agreement or the
consummation of the transactions contemplated by this Agreement.
3.25
Intercompany
Notes. Section 3.25 of the Saturn Disclosure Letter lists each
of the outstanding promissory notes between (i) Saturn, as lender, and Saturn
Holdings BV or Saturn Intl CV, as borrower, and (ii) Saturn Sub, as lender, and
Saturn Intl CV as borrower (collectively, the “Intercompany Notes”)
and the principal amount outstanding thereunder as of the date
hereof. Saturn has provided Mercury with a true and complete copy of
each of the Intercompany Notes. Each of the representations set forth
in Section 3.25 of the Saturn Disclosure Letter with respect to the Intercompany
Notes are true, correct and complete in all material respects.
3.26
No Additional
Representations.
(a)
Except
for the representations and warranties made by Saturn and Merger Sub 1 and
Merger Sub 2 in this Article III, none of Saturn, Merger Sub 1 or Merger Sub 2
or any other Person makes any express or implied representation or warranty with
respect to Saturn, Merger Sub 1 or Merger Sub 2 or their respective Subsidiaries
or their respective businesses, operations, assets, liabilities, conditions
(financial or otherwise) or prospects, and Saturn hereby disclaims any such
other representations or warranties. In particular, without limiting
the foregoing disclaimer, none of Saturn, Merger Sub 1 or Merger Sub 2 or any
other Person makes or has made any representation or warranty to Mercury or any
of its Affiliates or Representatives with respect to (i) any financial
projection, forecast, estimate, budget or prospect information relating to
Saturn, Merger Sub 1 or Merger Sub 2, any of their respective Subsidiaries or
their respective businesses or (ii) except for the representations and
warranties made by Saturn, Merger Sub 1 and Merger Sub 2 in this Article III,
any oral or written information presented to Mercury or any of its Affiliates or
Representatives in the course of their due diligence investigation of Saturn,
Merger Sub 1 and Merger Sub 2, the negotiation of this Agreement or in the
course of the transactions contemplated hereby.
(b)
Saturn,
Merger Sub 1 and Merger Sub 2 each acknowledge and agree that it (i) has had the
opportunity to meet with the management of Mercury and to discuss the business,
assets and liabilities of Mercury and its Subsidiaries, (ii) has been afforded
the opportunity to ask questions of and receive answers from officers of Mercury
and (iii) has conducted its own independent investigation of Mercury and its
Subsidiaries, their respective businesses, assets, liabilities and the
transactions contemplated by this Agreement.
(c)
Notwithstanding
anything contained in this Agreement to the contrary, Saturn acknowledges and
agrees that neither Mercury nor any other Person has made or is making any
representations or warranties relating to Mercury whatsoever, express or
implied, beyond those expressly given by Mercury in Article IV hereof, including
any implied representation or warranty as to the accuracy or completeness of any
information regarding Mercury furnished or made available to Saturn, Merger Sub
1, Merger Sub 2, or any of their respective Representatives. Without
limiting the generality of the foregoing, each of Saturn, Merger Sub 1 and
Merger Sub 2 acknowledges that no representations or warranties are made with
respect to any projections, forecasts, estimates, budgets or prospect
information that may have been made available to Saturn, Merger Sub 1, Merger
Sub 2 or any of their respective Representatives.
ARTICLE
IV
REPRESENTATIONS
AND WARRANTIES OF MERCURY
Mercury
hereby represents and warrants to Saturn, Merger Sub 1 and Merger Sub 2 that (a)
except as set forth on the disclosure letter delivered to Saturn, Merger Sub 1
and Merger Sub 2 by Mercury on the date of the execution of this
Agreement (the “Mercury Disclosure
Letter”) which identifies items of disclosure by reference to a
particular section or subsection of this Agreement (it being understood that any
matter disclosed pursuant to any section or subsection of the Mercury Disclosure
Letter shall be deemed to be disclosed for all purposes of this Agreement and
the Mercury Disclosure Letter, as long as the relevance of such disclosure is
reasonably apparent) and (b) other than with respect to Sections 4.5, 4.6(a),
and 4.6(f), except as disclosed in the Annual Report on Form 10-K of Mercury for
the year ended December 31, 2008 (the “Mercury Form 10-K”)
(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):
4.1
Organization and
Qualification. Mercury is a corporation duly organized,
validly existing and in good standing under the Laws of New
Jersey. Mercury has all requisite corporate power and authority to
own and operate its properties and to carry on its businesses as now
conducted. Mercury is duly qualified or licensed to do business, and
is in good standing (with respect to jurisdictions that recognize the concept of
good standing), in every jurisdiction in which its ownership of property or the
conduct of its businesses as now conducted requires it to so qualify or be
licensed, except where the failure to be so qualified has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Mercury Material Adverse Effect. Mercury has made available to Saturn
a complete and correct copy of the certificate of incorporation and bylaws, each
as amended to date, of Mercury. Mercury is not in violation of any of
the provisions of its certificate of incorporation or bylaws.
4.2
Significant
Subsidiaries. Each of Mercury’s Significant Subsidiaries is
duly organized, validly existing and in good standing (with respect to
jurisdictions that recognize the concept of good standing) under the Laws of the
jurisdiction of its incorporation or organization, has all requisite corporate
power and authority to own its properties and to carry on its businesses as now
conducted and is qualified or licensed to do business, and is in good standing
(with respect to jurisdictions that recognize the concept of good standing), in
every jurisdiction in which its ownership of property or the conduct of its
businesses as now conducted requires it to qualify or be licensed, except where
the failure to be so organized, qualified or licensed has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Mercury Material Adverse Effect. The Significant Subsidiaries of
Mercury are not in violation, in any material respect, of any of the provisions
of their respective certificates or articles of incorporation or bylaws (or
equivalent organizational documents).
4.3
Authorization; Validity of Agreement;
Necessary Action.
(a)
Mercury
has all requisite corporate power and authority to execute and deliver, and to
perform its obligations under, this Agreement. The execution,
delivery and the performance by Mercury of this Agreement and the consummation
by Mercury of the transactions contemplated hereby, including the Mercury
Merger, have been duly authorized by all necessary corporate action on the part
of Mercury and its officers, directors and shareholders, except that the
consummation of the Mercury Merger is subject to the receipt of the Mercury
Shareholder Approval. Assuming the accuracy of the representations
and warranties of Saturn set forth in Section 3.22, except for the Mercury
Shareholder Approval that is necessary for the consummation of the Mercury
Merger, and filing and recording of the Certificates of Merger under the
provisions of the NJBCA, no corporate action on the part of Mercury or its
respective officers, directors or shareholders is necessary to authorize the
transactions contemplated hereby. This Agreement has been duly
executed and delivered by Mercury and constitutes (assuming the due
authorization, execution and delivery by Saturn, Merger Sub 1 and Merger Sub 2)
the valid and binding obligation of Mercury, enforceable against Mercury in
accordance with its terms, except to the extent that enforceability may be
limited by the Bankruptcy and Equity Exception.
(b)
The
Mercury Board, at a meeting duly called and held prior to execution of this
Agreement, unanimously (i) approved this Agreement and the
transactions contemplated hereby, (ii) determined that this Agreement and the
transactions contemplated hereby are fair to and in the best interests of
Mercury and its shareholders, (iii) resolved to recommend that the holders of
the Mercury Common Stock grant the Mercury Shareholder Approval and (iv)
directed that this Agreement be submitted to the holders of the Mercury Common
Stock for their approval at a meeting duly called and held for such
purpose.
(c)
The only
vote of holders of the Mercury capital stock necessary to approve this Agreement
and the transactions contemplated by this Agreement is the approval of this
Agreement by the affirmative vote of the holders of a majority of the votes cast
by the holders of the Mercury Common Stock at the Mercury Shareholder Meeting
(the “Mercury
Shareholder Approval”).
4.4
Governmental Filings; No
Violations; Consents and Waivers.
(a)
Except as
set forth in Section 4.4(a) of the Mercury Disclosure Letter and for (i) the
applicable requirements, if any, of Blue Sky Laws, (ii) the applicable
requirements of the HSR Act, the EC Merger Regulation and other applicable
Antitrust Laws including but not limited to those listed in Section 4.4(a) of
the Mercury Disclosure Letter, (iii) required filings under the Exchange Act and
the Securities Act, (iv) any filings required under the rules and regulations of
the NYSE, (v) the filing of the Certificates of Merger pursuant to the NJBCA and
(vi) any consents, approvals, authorizations, permits, notices, actions or
filings, the failure of which to obtain, take or make, has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Mercury Material Adverse Effect, the execution and delivery of this Agreement by
Mercury, the performance by Mercury of its obligations under this Agreement and
the consummation of the transactions contemplated by this Agreement will not (A)
require any authorization, consent, approval, exemption or other action by or
notice to any court or Governmental Entity or (B) directly or indirectly
conflict with or result in a breach of any Law to which Mercury or any of its
Subsidiaries may be subject.
(b)
Except as
set forth in Section 4.4(b) of the Mercury Disclosure Letter, neither the
execution or delivery of this Agreement by Mercury and the performance by
Mercury of its obligations under this Agreement nor the consummation of the
transactions contemplated hereby, including the Mergers, will, subject to
obtaining Mercury Shareholder Approval, directly or indirectly (with or without
the giving of notice or the passage of time or both) (i) except as has not had
and would not reasonably be expected to have, either individually or in the
aggregate, a Mercury Material Adverse Effect, (A) violate, result in a
breach of, require consent under, conflict with or entitle any other Person to
accelerate the maturity or performance under, amend, call a default under,
exercise any remedy under, modify, rescind, suspend or terminate any term of any
Contract to which Mercury or any of its Subsidiaries is a party or to which any
of their assets or properties are bound, (B) entitle any Person to any
right or privilege to which such Person was not entitled immediately before this
Agreement or any other agreement or document contemplated by this Agreement was
executed under any term of any Contract to which Mercury or any of its
Subsidiaries is a party or to which any of their assets or properties are bound
or (C) create any obligation on the part of Mercury or any of its Subsidiaries
that it was not obligated to perform immediately before this Agreement or any
other agreement or document contemplated by this Agreement was executed under
any term of any Contract to which Mercury or any of its Subsidiaries is a party
or to which any of their assets or properties are bound, (ii) violate or result
in the breach of any term of the certificate of incorporation or bylaws (or
comparable governing documents) of Mercury, or except as has not had and would
not be reasonably be expected to have, either individually or in the aggregate a
Mercury Material Adverse Effect, any of its Significant Subsidiaries or (iii)
except as has not had and would not reasonably be expected to have, either
individually or in the aggregate, a Mercury Material Adverse Effect, result in
the amendment, creation, imposition or modification of any Lien other than a
Permitted Lien upon or with respect to any of the assets or properties that
Mercury or any of its Significant Subsidiaries owns, uses or purports to own or
use.
4.5
Capital
Stock.
(a)
As of the
close of business on the Capitalization Date, the authorized capital stock of
Mercury consists of (i) 5,400,000,000 shares of Mercury Common Stock, of which
2,983,508,675 shares were outstanding and 875,818,333 shares were held in the
treasury of Mercury and (ii) 10,000,000 shares of preferred stock, of which no
shares were designated or outstanding. There are no other classes of capital
stock of Mercury designated, authorized or outstanding. All issued and
outstanding shares of the capital stock of Mercury are duly authorized, validly
issued, fully paid and non-assessable, and no class of capital stock is entitled
to any preemptive rights.
(b)
From the
close of business on the Capitalization Date through the date of this Agreement,
there have been no issuances of shares of the capital stock or other Equity
Interests of Mercury or any other securities of Mercury other than issuances of
shares of Mercury Common Stock in respect of equity-based awards outstanding
under Mercury Plans. There were outstanding as of February 28, 2009,
no options, warrants, calls, commitments, agreements, arrangements, undertakings
or any other rights to acquire capital stock from Mercury other than options and
other equity-based awards under the Mercury Plans entitling the holders thereof
to acquire or receive up to 270,529,837 shares of Mercury Common Stock from
Mercury. No options, warrants, restricted stock units, calls,
commitments, agreements, arrangements, undertakings or other rights to acquire
capital stock from Mercury, or other equity-based awards, have been issued or
granted on or after the Capitalization Date through the date of this
Agreement.
(c)
No bonds,
debentures, notes or other Indebtedness of Mercury having the right to vote (or
convertible into or exercisable for securities having the right to vote) on any
matters on which holders of capital stock of Mercury may vote are issued or
outstanding.
(d)
Except as
otherwise set forth in this Section 4.5 or in Section 4.5(d) of the Mercury
Disclosure Letter, as of the date of this Agreement, (i) there are no
outstanding obligations of Mercury or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any shares of capital stock or other Equity
Interests of Mercury or any of its Subsidiaries except for purchases,
redemptions or other acquisitions of shares of Mercury Common Stock (A) required
by the terms of the Mercury Plans, (B) in order to pay Taxes or satisfy
withholding obligations in respect of such Taxes in connection with the exercise
of options to purchase Mercury Common Stock or (C) as required by the terms of,
or necessary for the administration of, any plan, arrangement or agreements
existing on the date hereof between Mercury or any of its Subsidiaries and any
director or employee of Mercury or any of its Subsidiaries and (ii) there are no
outstanding stock-appreciation rights, security-based performance units,
“phantom” stock or other security rights or other agreements, arrangements or
commitments of any character (contingent or otherwise) pursuant to which any
Person is or may be entitled to receive from Mercury or any of its Subsidiaries
any payment or other value based on the stock price performance of Mercury or
any of its Subsidiaries (other than under the Mercury Plans) or to cause Mercury
or any of its Subsidiaries to file a registration statement under the Securities
Act.
(e)
Except as
set forth in Section 4.5(e) of the Mercury Disclosure Letter and with respect to
awards granted under the Mercury Plans, as of the date of this Agreement, there
are no outstanding obligations of Mercury or any of its Subsidiaries (other than
immaterial Subsidiaries) (i) restricting the transfer of, (ii) affecting the
voting rights of, (iii) requiring the sales, issuance, repurchase, redemption or
disposition of, or containing any right of first refusal with respect to, (iv)
requiring the registration for sale of or (v) granting any preemptive or
antidilutive rights with respect to any shares of Mercury Common Stock or other
Equity Interests in Mercury or any of its Subsidiaries.
4.6
Mercury SEC
Reports.
(a)
Mercury
has timely filed with or otherwise furnished to the SEC all forms, reports,
schedules, statements and other documents required to be filed or furnished by
it under the Securities Act or the Exchange Act since January 1, 2007 together
with all certifications required pursuant to the Xxxxxxxx-Xxxxx Act (these
documents, as supplemented or amended since the time of filing, and together
with all information incorporated by reference therein and schedules and
exhibits thereto, the “Mercury SEC
Reports”). No Subsidiary of Mercury is required to file with
or furnish to the SEC any forms, reports, schedules, statements or other
documents. As of their respective dates, the Mercury SEC Reports at
the time filed (or, if amended or superseded by a filing prior to the date of
this Agreement, as of the date of such filing) (i) complied in all material
respects with the applicable requirements of the Securities Act, the Exchange
Act and the Xxxxxxxx-Xxxxx Act, and the rules and regulations of the SEC
promulgated thereunder applicable to the Mercury SEC Reports and (ii) did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(b)
Mercury’s
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
of the Exchange Act), as required by Rules 13a-15(a) and 15d-15(a) of the
Exchange Act, are designed to ensure that all information required to be
disclosed by Mercury in the reports it files or submits under the Exchange Act
is made known to the chief executive officer and the chief financial officer of
Mercury by others within Mercury to allow timely decisions regarding required
disclosure as required under the Exchange Act and is recorded, processed,
summarized and reported within the time periods specified by the SEC’s rules and
forms. Mercury has evaluated the effectiveness of Mercury’s disclosure controls
and procedures and, to the extent required by applicable Law, presented in any
applicable Mercury SEC Report that is a report on Form 10-K or Form 10-Q, or any
amendment thereto, its conclusions about the effectiveness of the disclosure
controls and procedures as of the end of the period covered by such report or
amendment based on such evaluation. Based on its most recently completed
evaluation of its system of internal control over financial reporting prior to
the date of this Agreement, (i) to the Knowledge of Mercury, Mercury had no
significant deficiencies or material weaknesses in the design or operation of
its internal control over financial reporting that would reasonably be expected
to adversely affect Mercury’s ability to record, process, summarize and report
financial information and (ii) Mercury does not have Knowledge of any fraud,
whether or not material, that involves management or other employees who have a
significant role in Mercury’s internal control over financial
reporting.
(c)
No
attorney representing Mercury or any of its Subsidiaries, whether or not
employed by Mercury or any Subsidiary of Mercury, has reported to Mercury’s
chief legal counsel or chief executive officer evidence of a material violation
of securities Laws, breach of fiduciary duty or similar violation by Mercury or
any of its officers, directors, employees or agents pursuant to Section 307 of
the Xxxxxxxx-Xxxxx Act.
(d)
Mercury
has provided or made available to Saturn copies of all material written
correspondence sent to or received from the SEC by Mercury or its Subsidiaries
or their respective counsel or accountants since January 1, 2007. As
of the date hereof, there are no outstanding or unresolved comments in comment
letters received from the SEC staff with respect to the Mercury SEC
Reports. To the Knowledge of Mercury, none of the Mercury SEC Reports
is the subject of ongoing SEC review. To the Knowledge of Mercury,
there are no SEC inquiries or investigations, other governmental inquiries or
investigations or internal investigations pending or threatened, in each case
regarding any accounting practice of Mercury.
(e)
The
audited consolidated financial statements included in the Mercury Form 10-K and
the other financial statements included in the Mercury SEC Reports (including in
each case any related notes and schedules) fairly present, in all material
respects, the consolidated financial position of Mercury and its consolidated
Subsidiaries as of the dates set forth therein and the consolidated results of
their operations and their consolidated cash flows for the periods set forth
therein, and in each case (A) were prepared from, and in accordance with, the
books and records of Mercury and its Subsidiaries in all material respects, and
(B) were prepared in conformity with GAAP consistently applied during the
periods involved (except as otherwise disclosed in the notes thereto and
subject, in the case of financial statements for quarterly periods, to normal
and recurring year-end adjustments).
(f)
There is
no liability, commitment or obligation of Mercury or any of its Subsidiaries
(whether matured or unmatured, known or unknown, asserted or unasserted,
absolute or contingent, whether or not accrued) that would be required by GAAP
to be reflected on a consolidated balance sheet of Mercury or its Subsidiaries
(or described in the notes thereto), other than (i) liabilities or obligations
reflected, accrued or reserved against in the audited consolidated balance sheet
of Mercury as of December 31, 2008 included in the Mercury Form 10-K or
disclosed in the notes thereto (the “Mercury Current Balance
Sheet”), (ii) incurred since December 31, 2008 in the ordinary course of
business consistent with past practice and (iii) other liabilities or
obligations which have not had and would not reasonably be expected to have,
either individually or in the aggregate, a Mercury Material Adverse
Effect.
(g)
Mercury
is in compliance in all material respects with (i) the applicable provisions of
the Xxxxxxxx-Xxxxx Act and (ii) the applicable listing and corporate governance
rules and regulations of the NYSE. Except as permitted by the
Exchange Act, including Sections 13(k)(2) and (3) thereof, since the enactment
of the Xxxxxxxx-Xxxxx Act, neither Mercury nor any of its Affiliates has made,
arranged, modified (in any material way), or forgiven personal loans to any
executive officer or director of Mercury.
4.7
Absence of Certain Changes
or Events. Since December 31, 2008 and prior to the date of
this Agreement, the business of Mercury and its Subsidiaries has been conducted
in all material respects in the ordinary course consistent with past
practice. Since December 31, 2008, there has not been any Event or
Events that has had or would be reasonably expected to have, either individually
or in the aggregate, a Mercury Material Adverse Effect.
4.8
Material
Contracts.
(a)
As of the
date hereof, except as set forth as an exhibit to the Mercury SEC Reports or in
Section 4.8(a) of the Mercury Disclosure Letter, neither Mercury nor any of its
Subsidiaries is a party to or bound by any Contract required to be filed as an
exhibit to Mercury’s Annual Report on Form 10-K pursuant to Item 601(b)(2) or
(10) of Regulation S-K under the Exchange Act (all such Contracts to which
Mercury or any of its Subsidiaries is a party to or bound by as of the date of
this Agreement are referred to herein as the “Mercury Material
Contracts”).
(b)
Except,
in each case, as has not, and would not reasonably be expected to have,
individually or in the aggregate, a Mercury Material Adverse Effect, each of the
Mercury Material Contracts is a valid and binding obligation of Mercury (or the
Subsidiaries of Mercury party thereto), and to Mercury’s Knowledge, the other
parties thereto, enforceable against Mercury and its Subsidiaries and, to
Mercury’s Knowledge, the other parties thereto in accordance with its terms,
except as enforcement may be limited by the Bankruptcy and Equity
Exception.
(c)
Neither
Mercury nor any of its Subsidiaries is, nor to Mercury’s Knowledge is any other
party, in breach, default or violation (and no event has occurred or not
occurred through Mercury’s or any of its Subsidiaries’ action or inaction or, to
Mercury’s Knowledge, through the action or inaction of any third party, that
with notice or the lapse of time or both would constitute a breach, default or
violation) of any term, condition or provision of any Mercury Material Contract
to which Mercury or any of its Subsidiaries is now a party, or by which any of
them or any of their respective properties or assets may be bound, except for
breaches, defaults or violations that have not had and would not reasonably be
expected to have, either individually or in the aggregate, a Mercury Material
Adverse Effect.
4.9
Intellectual
Property.
(a)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Mercury Material Adverse Effect, to the Knowledge of
Mercury, either Mercury or one of its Subsidiaries owns, or is
licensed or otherwise possesses legally enforceable rights to use, subject to
any existing licenses or other grants of rights to third parties, all
Intellectual Property used in their respective businesses as currently conducted
(collectively, the “Mercury Intellectual
Property”). Except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Mercury Material
Adverse Effect, (i) there are no pending or, to the Knowledge of Mercury,
threatened claims by any Person alleging infringement of any Intellectual
Property rights of any Person by Mercury or any of its Subsidiaries,
(ii) to the Knowledge of Mercury, the conduct of the business of
Mercury and its Subsidiaries does not infringe any Intellectual Property rights
of any Person, (iii) to the Knowledge of Mercury, neither Mercury nor
any of its Subsidiaries has made any claim of a violation or infringement by
others of its rights to or in connection with the Mercury Intellectual Property,
(iv) to the Knowledge of Mercury, no Person is infringing any Mercury
Intellectual Property and (v) to the Knowledge of Mercury, there are no ongoing
interferences, oppositions, reissues, or reexaminations or other inter partes proceedings
which could reasonably be expected to result in a loss or limitation of a patent
right or claim involving any Mercury Intellectual Property. Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Mercury Material Adverse Effect, to the Knowledge of
Mercury, all Intellectual Property owned by Mercury and its Subsidiaries is
valid and enforceable and in full force and effect.
(b)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Mercury Material Adverse Effect, to the Knowledge of
Mercury, the consummation of the transactions contemplated by this Agreement
will not (i) result in the loss of, or otherwise adversely affect, any rights of
Mercury or its Subsidiaries in any Intellectual Property, (ii) grant or require
Mercury or its Subsidiaries to grant to any Person any rights with respect to
any Intellectual Property of Mercury or its Subsidiaries, (iii) subject Mercury
or any of its Subsidiaries to any increase in royalties or other payments in
respect of any Intellectual Property, (iv) by the terms of any Contract to which
Mercury or a Subsidiary of Mercury is a party, diminish any royalties or other
payments Mercury or a Subsidiary of Mercury would otherwise be entitled to in
respect of any Intellectual Property or (v) result in the breach or, by the
terms of such Contract, termination of any agreement relating to Mercury
Intellectual Property.
4.10
Litigation. Except
as set forth in Section 4.10 of the Mercury Disclosure Letter, there is no
Proceeding pending or, to Mercury’s Knowledge, threatened against Mercury or any
of its Subsidiaries or their respective assets or properties, or their
respective officers and directors, in their capacity as such, before or by any
court, arbitrator or Governmental Entity that, if adversely determined, would
have, or reasonably be expected to have, a Mercury Material Adverse Effect or
which challenges this Agreement or the transactions contemplated by this
Agreement. There is no unsatisfied judgment or award, decision,
decree, injunction, rule or Order of any Governmental Entity, court or
arbitrator outstanding against Mercury or any of its Subsidiaries that would
reasonably be expected to have, individually or in the aggregate, a Mercury
Material Adverse Effect.
4.11
Permits; Compliance with
Laws.
(a)
Except as
has not had, and will not reasonably be expected to have, individually or in the
aggregate, a Mercury Material Adverse Effect, Mercury and each of its
Subsidiaries are in possession of all franchises, grants, authorizations,
licenses, permits, consents, certificates, variances, registrations, exemptions,
clearances, approvals and orders from any Governmental Entity necessary for them
to own, lease and operate their properties or to carry on their business as it
is now being conducted (collectively, the “Mercury Permits”),
and to the Knowledge of Mercury, all Mercury Permits are valid and in
full force and effect.
(b)
Except as
has not had, and would not reasonably be expected to have individually or in the
aggregate, a Mercury Material Adverse Effect, Mercury and each of its
Subsidiaries is (and since January 1, 2007, Mercury and each of its
Subsidiaries has been) in compliance with all Laws, Orders or Mercury Permits
applicable to Mercury or any of its Subsidiaries, or by which any property or
asset of Mercury or any of its Subsidiaries is bound and in compliance with all
Contracts entered into with any Governmental Entity as part of the resolution of
a regulatory or enforcement action.
4.12
Regulatory
Compliance.
(a)
Except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Mercury Material Adverse Effect, each of Mercury and its
Subsidiaries holds all Mercury Permits, including all authorizations under the
FDCA, the PHSA, and the regulations of the FDA promulgated thereunder, and any
other Governmental Entity that is concerned with the quality, identity,
strength, purity, safety, efficacy, manufacturing or distribution of the Mercury
Products (any such Governmental Entity, a “Mercury Regulatory
Agency”) necessary for the lawful operating of the businesses of Mercury
or any of its Subsidiaries (the “Mercury Regulatory
Permits”), and all such Mercury Regulatory Permits are valid, and in full
force and effect. Since January 1, 2007, there has not occurred any violation
of, default (with or without notice or lapse of time or both) under, or event
giving to others any right of termination, amendment or cancellation of, with or
without notice or lapse of time or both, any Mercury Regulatory Permit except as
has not had, and would not reasonably be expected to have, individually or in
the aggregate, a Mercury Material Adverse Effect. Mercury and each of
its Subsidiaries are in compliance in all material respects with the terms of
all Mercury Regulatory Permits, and no event has occurred that, to the Knowledge
of Mercury, would reasonably be expected to result in the revocation,
cancellation, non-renewal or adverse modification of any Mercury Regulatory
Permit, except as has not had, and would not reasonably be expected to have,
individually or in the aggregate, a Mercury Material Adverse
Effect.
(b)
Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Mercury Material Adverse Effect, since January 1, 2007, all
applications, submissions, information and data utilized by Mercury or Mercury’s
Subsidiaries as the basis for, or submitted by or, to the Knowledge of Mercury,
on behalf of Mercury or Mercury’s Subsidiaries in connection with, any and all
requests for a Mercury Regulatory Permit relating to Mercury or any of its
Subsidiaries, and its respective business and Mercury Products, when submitted
to the FDA or other Mercury Regulatory Agency, were true and correct in all
material respects as of the date of submission, and any updates, changes,
corrections or modification to such applications, submissions, information and
data required under applicable Laws have been submitted to the FDA or other
Mercury Regulatory Agency.
(c)
Since
January 1, 2007, neither Mercury, nor any of its Subsidiaries, has committed any
act, made any statement or failed to make any statement that would reasonably be
expected to provide a basis for the FDA or any other Mercury Regulatory Agency
to invoke its policy with respect to “Fraud, Untrue Statements of Material
Facts, Bribery, and Illegal Gratuities”, or similar policies, set forth in any
applicable Laws, except as has not had, and would not reasonably be expected to
have, individually or in the aggregate, a Mercury Material Adverse
Effect.
(d)
For the
avoidance of doubt, the provisions of this Section 4.12 do not apply to
Environmental Laws or Environmental Permits.
4.13
Mercury Employee Benefit
Plans. Except as set forth in Section 4.13 of the Mercury
Disclosure Letter, the execution of this Agreement and performance of the
transactions contemplated in this Agreement will not (either alone or upon the
occurrence of any additional or subsequent events) (i) constitute an event
under any Mercury Plan, trust or loan that will or may result in any payment
(whether of severance pay, termination indemnities or otherwise), acceleration,
forgiveness of indebtedness, vesting, distribution, increase in benefits or
obligation to fund benefits with respect to any employee, (ii) result in
the triggering or imposition of any restrictions or limitations on the right of
Saturn or Mercury to amend or terminate any Mercury Plan and receive the full
amount of any excess assets remaining or resulting from such amendment or
termination, subject to applicable taxes or (iii) provide for any payment by
Mercury or its Subsidiaries that would constitute a “parachute payment” within
the meaning of Section 280G of the Code.
4.14
Taxes. Except
as has not had and would not reasonably be expected to have, either individually
or in the aggregate, a Mercury Material Adverse Effect, Mercury and each of its
Subsidiaries (a) have duly and timely filed, or have caused to be duly and
timely filed, all Tax Returns required to be filed by any of them (taking into
account any extension of time within which to file) and all such Tax Returns are
complete and accurate in all respects and were prepared in compliance with all
applicable Laws; (b) have paid all Taxes that are required to be paid (whether
or not shown on any Tax Return) or that Mercury or any of its Subsidiaries are
obligated to deduct or withhold from amounts owing to any employee, creditor or
other third party except with respect to matters contested in good faith through
appropriate proceedings or for which adequate reserves have been established on
the Mercury Current Balance Sheet and (c) have not waived any statute of
limitations with respect to United States federal income Taxes or agreed to any
extension of time with respect to a United States federal income Tax assessment
or deficiency. Except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Mercury Material
Adverse Effect, there are no audits, examinations, investigations, deficiencies,
claims or other proceedings in respect of Taxes or Tax matters pending or, to
the Knowledge of Mercury, threatened in writing, except with respect to matters
contested in good faith through appropriate proceedings. Except as
has not had and would not reasonably be expected to have, either individually or
in the aggregate, a Mercury Material Adverse Effect, neither Mercury nor any of
its Subsidiaries has received notice in writing of any claim made by any
Governmental Entity in a jurisdiction where Mercury or such Subsidiary does not
file Tax Returns that Mercury or such Subsidiary is or may be subject to
taxation by that jurisdiction. Except as has not had and would not
reasonably be expected to have, either individually or in the aggregate, a
Mercury Material Adverse Effect, neither Mercury nor any of its Subsidiaries has
participated, or is currently participating, in a “listed transaction” as
defined in Treasury Regulation Section 1.6011-4(b)(2). All copies of
United States federal and state income or franchise Tax Returns, examination
reports, and statements of deficiencies assessed against or agreed to by Mercury
or any of its Subsidiaries that Mercury has made available to Saturn are true
and complete copies. Neither Mercury nor any of its Subsidiaries has
been a member of a group filing Tax Returns on a consolidated, combined, unitary
or similar basis (other than a consolidated group of which Mercury was the
common parent). Except as has not had and would not reasonably be
expected to have, either individually or in the aggregate, a Mercury Material
Adverse Effect, neither Mercury nor any of its Subsidiaries (x) has any
liability for Taxes of any Person (other than Mercury or any of its
Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any comparable
provision of local, state or foreign Law), as a transferee or successor, by
Contract, or otherwise or (y) is a party to, bound by or has any liability under
any Tax sharing, allocation or indemnification agreement or
arrangement.
4.15
Tax
Matters. As of the date of this Agreement, neither Mercury nor
any of its Affiliates has taken or agreed to take any action, nor does Mercury
have any Knowledge of any fact or circumstance, that would prevent the Mercury
Merger from qualifying as a reorganization within the meaning of Section 368(a)
of the Code.
4.16
Insurance. Except
as set forth in Section 4.16 if the Mercury Disclosure Letter, since January 1,
2007, Mercury and its Subsidiaries have maintained continuous insurance
coverage, in each case, in those amounts and covering those risks as are in
accordance, in all material respects, with normal industry practice for
companies or the size and financial condition of Mercury engaged in businesses
similar to those of Mercury and its Subsidiaries.
4.17
Opinion of Mercury’s
Financial Advisor. The Mercury Board has received an opinion
from X.X. Xxxxxx Securities Inc. (the “Mercury Financial
Advisor”) to the effect that, as of the date of this Agreement, and based
upon and subject to the assumptions, qualifications and limitations set forth
therein, the Mercury Merger Consideration to be received by the holders of
Mercury Common Stock pursuant to this Agreement is fair, from a financial point
of view, to such holders.
4.18
Interested
Stockholder. Neither Mercury nor any of its Subsidiaries is or
has been at any time an “interested stockholder” (as such term is defined in
Section 14A: 10A-3 of the NJBCA) of Saturn.
4.19
Rights Agreement; Takeover
Statutes. Mercury has no “rights plan,” “rights agreement” or
“poison pill” in effect. The Mercury Board has taken all actions so
that no Takeover Statute will apply to (a) Saturn or (b) Merger Sub 2 in
connection with the execution and delivery of this Agreement and the
consummation of the Mercury Merger and the other transactions contemplated by
this Agreement. No anti-takeover provision contained in Mercury’s
certificate of incorporation or bylaws is applicable to the Mercury Merger and
no anti-takeover provision, whether in a Law, agreement or otherwise is, or
would be, applicable to this Agreement or the consummation of the transactions
contemplated by this Agreement.
4.20
Financing. Mercury
has delivered to Saturn true and complete fully executed copies of the
commitment letter, dated as of March 8, 2009 among Mercury, X.X. Xxxxxx
Securities, Inc. and JPMorgan Chase Bank, N.A., and including all exhibits,
schedules, annexes and amendments to such agreement in effect as of the date of
this Agreement (the “Commitment Letter”),
pursuant to which and subject to the terms and conditions thereof each of the
parties thereto (other than Mercury), have severally agreed and committed to
provide the debt financing set forth therein (the “Financing”). The
Commitment Letter has not been amended, restated or otherwise modified or waived
(except as contemplated thereby) prior to the date of this Agreement and the
respective commitments contained in the Commitment Letter have not been
withdrawn, modified or rescinded in any respect prior to the date of this
Agreement. As of the date of this Agreement, the Commitment Letter is
in full force and effect and constitutes the legal, valid and binding obligation
of each of Mercury and, to the Knowledge of Mercury, the other parties thereto,
subject to the Bankruptcy and Equity Exception. There are no
conditions precedent to the funding of the full amount of the Financing, other
than as expressly set forth in the Commitment Letter. Subject to the
terms and conditions of the Commitment Letter and assuming the accuracy in all
material respects of Saturn’s representations and warranties with respect to
Saturn and its Subsidiaries, taken as a whole, in Article III of this Agreement,
the net proceeds contemplated from the Financing, together with other financial
resources of Mercury including cash on hand, the Repayment Amount, and
marketable securities of Mercury on the Closing Date, will, in the aggregate, be
sufficient for the satisfaction of all of Mercury obligations under this
Agreement, including the payment of any amounts required to be paid pursuant to
Article I and Article II, and the payment of any debt required to be repaid in
connection with the Mergers and of all fees and expenses reasonably expected to
be incurred in connection herewith. As of the date of this Agreement,
(a) (assuming the accuracy in all material respects of Saturn’s representations
and warranties contained in Section 3.7 hereof), no event has occurred which
would constitute a breach or default (or an event which with notice or lapse of
time or both would constitute a default), in each case, on the part of Mercury
under the Commitment Letter or, to the Knowledge of Mercury, any other party to
the Commitment Letter and (b) subject to the satisfaction of the conditions
contained in Sections 7.1 and 7.2 hereof, Mercury does not have Knowledge that
the conditions to the Financing will not be satisfied or that the Financing or
any other funds necessary for the satisfaction of all of Mercury’s obligations
under this Agreement and the payment of any debt required to be repaid in
connection with the Mergers and of all fees and expenses reasonably expected to
be incurred in connection herewith will not be available to Mercury or the
Saturn Merger Surviving Corporation on the Closing Date. Mercury has
fully paid all fees required to be paid prior to the date of this Agreement
pursuant to the Commitment Letter.
4.21
No Additional
Representations.
(a)
Except
for the representations and warranties made by Mercury in this Article IV,
neither Mercury nor any other Person makes any express or implied representation
or warranty with respect to Mercury or its Subsidiaries or their respective
businesses, operations, assets, liabilities, conditions (financial or otherwise)
or prospects, and Mercury hereby disclaims any such other representations or
warranties. In particular, without limiting the foregoing disclaimer,
neither Mercury nor any other Person makes or has made any
representation or warranty to Saturn, Merger Sub 1 or Merger Sub 2 or any of
their respective Affiliates or Representatives with respect to (i) any financial
projection, forecast, estimate, budget or prospect information relating to
Mercury, any of its Subsidiaries or their respective businesses or (ii) except
for the representations and warranties made by Mercury in this Article IV, any
oral or written information presented to Saturn, Merger Sub 1 or Merger Sub 2 or
any of their Affiliates or Representatives in the course of their due diligence
investigation of Mercury, the negotiation of this Agreement or in the course of
the transactions contemplated hereby.
(b)
Mercury
acknowledges and agrees that it (i) has had the opportunity to meet with the
management of Saturn and to discuss the business, assets and liabilities of
Saturn and its Subsidiaries, (ii) has been afforded the opportunity to ask
questions of and receive answers from officers of Saturn and (iii) has conducted
its own independent investigation of Saturn and its Subsidiaries, their
respective businesses, assets, liabilities and the transactions contemplated by
this Agreement.
(c)
Notwithstanding
anything contained in this Agreement to the contrary, Mercury acknowledges and
agrees that none of Saturn, Merger Sub 1, Merger Sub 2 or any Person has made or
is making any representations or warranties relating to Saturn, Merger Sub 1,
Merger Sub 2 or their respective Subsidiaries whatsoever, express or implied,
beyond those expressly given by Saturn, Merger Sub 1 and Merger Sub 2 in Article
III hereof, including any implied representation or warranty as to the accuracy
or completeness of any information regarding Saturn furnished or made available
to Mercury or any of its Representatives. Without limiting the
generality of the foregoing, Mercury acknowledges that no representations or
warranties are made with respect to any projections, forecasts, estimates,
budgets or prospect information that may have been made available to Mercury or
any of its Representatives.
ARTICLE
V
CERTAIN PRE-CLOSING
COVENANTS
5.1
Conduct of the Business of
Saturn. Saturn covenants and agrees as to itself and its
Subsidiaries that, from the date of this Agreement and continuing until the
earlier of the Subsequent Effective Time and the termination of this Agreement,
except as expressly permitted by this Agreement, as set forth in Section 5.1 of
the Saturn Disclosure Letter, as required by Law or the regulations or
requirements of any stock exchange or regulatory organization applicable to
Saturn or any of its Subsidiaries, or to the extent Mercury shall otherwise
consent in writing (which consent shall not be unreasonably withheld,
conditioned or delayed), Saturn shall conduct, and shall cause its Subsidiaries
to conduct, their businesses in all material respects in the ordinary and usual
course, consistent with past practice, and, to the extent consistent therewith,
Saturn and each of its Subsidiaries shall use their respective reasonable best
efforts to (a) preserve its existing assets, (b) preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, distributors, creditors, lessors, clinical trial
investigators and managers of its clinical trials, and (c) comply in all
material respects with applicable Laws. In addition, and without
limiting the generality of the foregoing, from the date of this Agreement to the
earlier of the Initial Effective Time and the termination of this Agreement,
except as expressly permitted by this Agreement, as set forth in Section 5.1 of
the Saturn Disclosure Letter, as required by Law or the regulations or
requirements of any stock exchange or regulatory organization applicable to
Saturn or the terms of any Contract binding upon Saturn or any of its
Subsidiaries, or to the extent Mercury shall otherwise consent in writing (which
consent shall not be unreasonably withheld, conditioned or delayed),
Saturn shall not (directly or indirectly), and shall cause each of its
Subsidiaries not to (directly or indirectly):
(i)
propose
or adopt any changes to the certificate of incorporation or bylaws (or other
comparable governing documents) of Saturn or any of its
Subsidiaries;
(ii)
make,
declare, set aside, or pay any dividend or distribution on any shares of its
capital stock or other Equity Interests other than (A) except as set forth in
Section 5.1(ii)(A) of the Saturn Disclosure Letter, dividends paid by a direct
or indirect wholly owned Subsidiary of Saturn to its parent corporation in the
ordinary and usual course of business consistent with past practice, (B) regular
quarterly dividends declared and paid by Saturn in respect of the shares of
Saturn Common Stock, in each case not to exceed $0.065 per share, consistent
with past practice as to timing of declaration, record date and payment date or
(C) regular quarterly dividends paid on the Convertible Preferred Stock in
accordance with Annex A of the certificate of incorporation of Saturn,
consistent with past practice as to timing of declaration, record date and
payment date;
(iii)
(A)
adjust, split, combine or reclassify or otherwise amend the terms of its capital
stock or other Equity Interests, (B) issue, grant, deliver, sell, repurchase,
redeem, purchase, acquire, encumber, pledge, dispose of or otherwise transfer,
directly or indirectly, any shares of its capital stock or Equity Interests or
securities convertible into or exchangeable or exercisable for, or options,
warrants, calls, commitments or rights of any kind to acquire, or based on the
value of, any shares of its capital stock or other Equity Interests, or offer to
do the same, other than the issuance of shares of Saturn Common Stock pursuant
to the exercise of Saturn Options and settlement of Saturn Deferred Stock Units,
Saturn Restricted Stock Units and Saturn Performance Awards in accordance with
the terms of the applicable award or plan as in effect on the date of this
Agreement or pursuant to the conversion of outstanding Convertible Preferred
Stock; provided, however, that equity
awards under the Saturn Equity Plans may be granted in the ordinary course of
business consistent with past practice to directors, officers and employees of
Saturn or its Subsidiaries;
(iv)
(A)
increase the compensation to directors, officers or employees except for (x)
with respect to Senior Employees, any such increases approved by the
Compensation Committee of the Saturn Board or the Saturn Chief Executive Officer
prior to the date hereof (it being understood that no increase to annual base
salary was so approved for EMT and OMT members) and (y) with respect to officers
or employees who are not Senior Employees, increases made in the ordinary and
usual course of business consistent with past practice in timing and amount and
increases made in connection with the completion of Saturn’s integration of
global compensation and benefits (the “Integration
Process”), (B) increase benefits payable or to become payable to any of
its past or present directors, officers or employees, other service providers
who provide services exclusively to Saturn and its Subsidiaries, except for
increases made in the ordinary and usual course of business consistent with past
practice and increases in benefits to officers and employees in connection with
the completion of the Integration Process; provided, however, that with
respect to any changes in connection with the completion of the Integration
Process, such benefits provided shall not exceed the most favorable benefits in
the aggregate in place for similarly situated officers and employees immediately
prior to the Initial Effective Time, (C) grant any severance or termination pay
to any of its past or present directors, officers, employees, or other service
providers, other than (x) severance payments in accordance with the severance
plans or arrangements of Saturn or any of its Subsidiaries set forth in Section
3.13 of the Saturn Disclosure Letter as in effect as of the date of this
Agreement or any Saturn Foreign Plan, or (y) severance payments in the ordinary
and usual course of business consistent with past practice in timing and amount
to officers and employees who are not Senior Employees, if any, (D) enter into,
or amend or modify any employment, severance, consulting or change-in control
agreement with any Person (other than as permitted by Section 5.1(iv)(C)(y) or
with respect to any non-US employee in the ordinary course of business
consistent with past practice), (E) establish, adopt, enter into, amend or take
any action to accelerate rights under any Saturn Plans or any plan, agreement,
program, policy, trust, fund or other arrangement that would be a Saturn Plan if
it were in existence as of the date of this Agreement except (w) for the
adoption and submission to shareholders of Saturn a new annual bonus and stock
incentive plan in compliance with Section 162(m) of the Code, (x) if immaterial
or technical in nature, (y) for such changes in connection with the completion
of the Integration Process; provided, however, that with
respect to any changes in connection with the completion of the Integration
Process, such benefits provided shall not exceed the most favorable benefits in
the aggregate in place for similarly situated officers and employees immediately
prior to the Initial Effective Time, or (z) to the extent required by this
Agreement or any other currently existing agreement, including any collective
bargaining or works council agreement, or to the extent permitted under Section
5.1(iv)(C)(y), (F) except as contemplated by this Agreement or as
required by any other agreement, (x) pay, accrue or certify performance level
achievements on an aggregate basis for all employees participating in a
particular plan, program, policy or arrangement at levels in excess of actually
achieved performance in respect of any component of an incentive-based award
that requires achievement at a specified level, or (y) take any affirmative
action (1) to amend or waive any performance or vesting criteria or (2) to
accelerate vesting, exercisability, distribution, settlement or funding under
any Saturn Plan, (G) take any action with respect to salary, compensation,
benefits or other terms and conditions of employment that would result in a
Senior Employee having “good reason” to terminate employment and collect
severance payments and benefits pursuant to any change in control or similar
agreement or (H) without consulting with Mercury, terminate the employment of a
Senior Employee in a manner that would cause the Senior Employee to collect
severance payments pursuant to any change in control or similar
agreement;
(v)
merge or
consolidate Saturn with any Person or effect any share exchange involving any
class of the capital stock of Saturn, other than any such transaction between or
among direct or indirect Subsidiaries of Saturn;
(vi)
sell,
pledge, dispose of, transfer, lease, license, guarantee or encumber, or
authorize the sale, pledge, disposition, transfer, lease, license, guarantee or
encumbrance of, any property or assets (including Saturn Intellectual Property)
of Saturn or any of its Subsidiaries, except (A) as listed in Section 5.1(vi) of
the Saturn Disclosure Letter, (B) for the sale of goods and services in the
ordinary and usual course of business, (C) transactions involving property or
assets of Saturn or any of its Subsidiaries having a value no greater than
$100,000,000 in the aggregate for all such transfers (with the valuation of any
contingent consideration being determined in accordance with the valuation
methodology used by Saturn in connection with determining the need to make a
notification under the HSR Act (without regard to whether payments are being
made with respect to assets within or outside the United States)), (D) in
connection with any waiver, release, assignment, settlement, compromise of
litigation otherwise permitted under this Section 5.1, (E) in connection with
cash management or investment portfolio activities in the ordinary course of
business, (F) in connection with the sale or pledge of accounts receivable for
factoring purposes in the ordinary course of business or (G) in connection with
the pledge of cash for letters of credit purposes in the ordinary course of
business;
(vii)
other
than acquisitions (a) listed in Section 5.1(vii) of the Saturn Disclosure Letter
or (b) not in excess of $25,000,000 individually or $50,000,000 in the
aggregate, make any acquisitions, by purchase or other acquisition of assets,
stock or other Equity Interests, or by merger, consolidation or other business
combination (including formation of any joint venture) (with the valuation of
any contingent consideration being determined in accordance with the valuation
methodology used by Saturn in connection with determining the need to make a
notification under the HSR Act (without regard to whether payments are being
made with respect to assets within or outside the United States)) (for the
avoidance of doubt, this Section 5.1(vii) shall not apply to licenses for
Intellectual Property);
(viii)
enter
into any strategic licensing, joint venture, collaboration, alliance,
co-promotion or similar Contract or Contracts, except for any such Contract or
Contracts that do not involve non-contingent consideration which is valued in
excess of $50,000,000 individually or $100,000,000 in the aggregate for all such
Contracts;
(ix)
with
respect to Saturn’s corporate cash investment portfolio and not to its pension
plan or similar benefit plans which, in each case, are plans that have fiduciary
trustees, (A) purchase material financial instruments that at the time of
purchase qualify as Level III assets (as defined in Financial Accounting
Standards Board Statement No. 157), (B) change in a material manner the average
duration to more than 6 months of Saturn’s investment portfolio or the average
credit quality of such portfolio, except for changes that would reduce
investment risk in such portfolios, (C) materially change investment guidelines
with respect to Saturn’s investment portfolio except for changes that would
reasonably be expected to reduce investment risk of Saturn’s investment
portfolio, (D) hypothecate, enter into repurchase agreements with respect to,
encumber or otherwise pledge assets in Saturn’s investment portfolio or (E)
invest new surplus cash from operations in securities other than short term
(average duration of no more than 6 months) liquid securities in accordance with
past practice;
(x)
enter
into material interest rate swaps, foreign exchange or commodity agreements and
other similar hedging arrangements other than in the ordinary and usual course
of business consistent with past practice for purposes of offsetting a bona fide
exposure (including counterparty risk);
(xi)
(1)
renew, extend, materially amend, terminate (other than as terminated in
accordance with their terms) or cancel, or grant material waivers under, any
Saturn Material Contract (including the Saturn Revolving Credit Facility and the
Saturn Euronote Facility) or (2) other than with respect to any transaction or
activity otherwise expressly permitted by this Section 5.1, enter into any other
Contract that, if it had been entered into prior to the date hereof, would
constitute a Saturn Material Contract;
(xii)
other
than (1) pursuant to the Financing Arrangements pursuant to Section 6.10, (2)
pursuant to Section 6.14 of this Agreement, or (3) as otherwise permitted under
Section 5.1(xiv), incur any Indebtedness or issue any debt securities or
warrants or other rights to acquire debt securities or Indebtedness of Saturn or
any of its Subsidiaries or assume, guarantee or endorse, as an accommodation or
otherwise, the obligations of any other Person for borrowed money, in each case
in excess of $200 million in the aggregate, other than the issuance by Saturn of
commercial paper or the borrowing by Saturn or its Subsidiaries under the Saturn
Revolving Credit Facility and its lines of credit facilities overseas, in each
case, in the ordinary course of business;
(xiii)
prepay
any long-term Indebtedness or change the terms or extend the maturity thereof,
other than repayment of borrowings by Saturn and its Subsidiaries under the
Saturn Revolving Credit Facility and its lines of credit facilities
overseas;
(xiv)
make any
loans, capital contributions to, or investments in, any Person, other than (A)
cash management or investment portfolio activities in the ordinary course of
business and consistent with Saturn’s obligations under Section 5.1(x), (B) in
connection with a transaction permitted under Section 5.1(viii) or (ix), (C) in
Saturn or its Subsidiaries, (D) as otherwise permitted by this Section 5.1 or
(E) as listed on Section 5.1(xiv) of the Saturn Disclosure Letter;
(xv)
other
than as reasonably necessary to maintain compliance with applicable laws,
regulations or Saturn quality standards, (A) make capital expenditures in excess
of $750 million in the aggregate during fiscal year 2009 (as contemplated by
Saturn’s 2009 capital expenditure plan and budget, a copy of which 2009 capital
expenditure plan and budget has been provided or made available to Mercury, the
“2009 Plan”), (B) make capital expenditures in excess of $200 million in the
aggregate during any quarter of 2010, or (C) undertake or enter into commitments
in 2009 (or any quarter of 2010, as the case may be) that will require capital
expenditures beyond 2009 (or such quarter of 2010, as the case may be) in excess
of $25 million, in the aggregate, for any one capital project, whether or not
contemplated by the 2009 Plan (it being understood that any excess over any
threshold amount in this Section 5.1(xv) attributable solely to foreign exchange
fluctuation shall not be deemed to violate this clause);
(xvi)
change
its financial accounting policies or procedures in effect as of December 31,
2008, other than as required by Law or GAAP, or write up, write down or write
off the book value of any material assets of Saturn and its Subsidiaries, other
than (A) in the ordinary and usual course of business consistent with past
practice or (B) as may be required by Law or GAAP;
(xvii)
other
than matters set forth on Section 5.1(xvii) of the Saturn Disclosure Letter or
other than matters involving Mercury, its Subsidiaries, affiliates or joint
ventures, waive, release, assign, settle or compromise (A) any Proceeding, the
resolution of which (x) would involve the payment by, on behalf of or to a third
party for the benefit of Saturn or any of its Subsidiaries, whether or not
covered or reimbursed by insurance, of an amount in excess of $250 million in
the aggregate or
(y) would involve the imposition of injunctive relief or other similar
restraints on activity that would materially limit or restrict the business of
(1) Saturn and its Subsidiaries, taken as whole, or (2) to the Knowledge of
Saturn, the Saturn Merger Surviving Corporation and its Subsidiaries, taken as a
whole following the Effective Time or (B) any patent infringement claim brought
by Saturn or any of its Subsidiaries against a generic manufacturer if (i) such
settlement involves a payment or any consideration other than as set forth in
clause (ii) below from Saturn or any of its Subsidiaries to such generic
manufacturer, unless Saturn receives the opinion of independent antitrust
counsel that such settlement is not likely to result in an investigation by the
DOJ or FTC, (ii) such settlement involves a diminution of patent term of greater
than two (2) years, or (iii) it is not in substantial accordance with
settlements previously reached with other defendants on such
litigation;
(xviii)
adopt a
plan of complete or partial liquidation or resolutions providing for a complete
or partial liquidation, dissolution, or recapitalization of the shares of
Saturn;
(xix)
make or
change any material Tax election (except in the ordinary course of business
consistent with past practice), file any material amendment to a material Tax
Return, settle or compromise any material Tax audit or enter into any material
closing agreement, change any annual Tax accounting period, adopt or change any
Tax accounting method, surrender any right to claim a material refund of Taxes
or consent to any extension or waiver of the limitation period applicable to any
material Tax claim or assessment relating to Saturn or its
Subsidiaries;
(xx)
enter
into, renew, extend, amend, grant a waiver under or terminate (other than
terminations in accordance with their terms) any Affiliate
Transaction;
(xxi)
enter
into, modify, amend or terminate any Contract or waive, release or assign any
rights or claims thereunder, which if so entered into, modified, amended,
terminated, waived, released or assigned would be reasonably likely to (i)
impair the ability of Saturn to perform its obligations under this Agreement in
any material respect or (ii) prevent or materially delay the consummation of the
Mergers; or take any other action intended to or that would reasonably be
expected to, individually or in the aggregate, impede, interfere with, prevent,
or materially delay the consummation of the Mergers or the other transactions
contemplated by this Agreement;
(xxii)
amend,
modify, terminate, prepay, repay or satisfy any portion of the Intercompany
Notes, except required interest payments pursuant to and in accordance with the
terms of the Intercompany Notes or except in accordance with Section
6.14;
(xxiii)
enter
into any Contract that would be a Saturn Material Contract under Section
3.8(a)(ii)(A); provided that for
purposes of this clause (xxiii) the definition of such Saturn Material Contract
shall not include the words “to the Knowledge of Saturn”; or
(xxiv)
authorize
any of, or commit or agree to take any of, the foregoing actions.
5.2
Conduct of the Business of
Mercury. Mercury covenants and agrees as to itself and its
Subsidiaries that, from the date of this Agreement and continuing until the
earlier of the Subsequent Effective Time and the termination of this Agreement,
except as expressly permitted by this Agreement, as set forth in Section 5.2 of
the Mercury Disclosure Letter, as required by Law or the regulations or
requirements of any stock exchange or regulatory organization applicable to
Mercury or any of its Subsidiaries, or to the extent Saturn shall otherwise
consent in writing (which consent shall not be unreasonably withheld,
conditioned or delayed), Mercury shall, and shall cause its Subsidiaries to,
conduct their businesses in all material respects in the ordinary and usual
course consistent with past practice, and, to the extent consistent therewith,
Mercury and each of its Subsidiaries shall use their respective reasonable best
efforts to (a) preserve its existing assets, (b) preserve its business
organization intact and maintain its existing relations and goodwill with
customers, suppliers, distributors, creditors, lessors, clinical trial
investigators and managers of its clinical trials and (c) comply in all material
respects with applicable Laws. In addition, and without limiting the
generality of the foregoing, from the date of this Agreement to the earlier of
the Subsequent Effective Time and the termination of this Agreement, except as
expressly permitted by this Agreement, as set forth in Section 5.2 of the
Mercury Disclosure Letter, as required by Law or the regulations or requirements
of any stock exchange or regulatory organization applicable to Mercury or any of
its Subsidiaries, or to the extent Saturn shall otherwise consent in writing
(which consent shall not be unreasonably withheld, conditioned or delayed),
Mercury shall not (directly or indirectly), and shall cause each of its
Subsidiaries not to (directly or indirectly):
(i)
propose
or adopt any changes to the certificate of incorporation or bylaws (or other
comparable governing documents) of Mercury that would be reasonably expected to
prevent or materially delay or materially impede the consummation of the
Mergers;
(ii)
make,
declare, set aside, or pay any dividend or distribution on any shares of its
capital stock or other Equity Interests, other than (A) dividends paid by a
direct or indirect wholly owned Subsidiary of Mercury to its parent and (B)
regular quarterly dividends declared and paid by Mercury in respect of the
shares of Mercury Common Stock, in each case not to exceed $0.38 per share,
consistent with past practice as to timing of declaration, record date and
payment date;
(iii)
(A)
adjust, split, combine or reclassify or otherwise amend the terms of the capital
stock of Mercury or its other Equity Interests or (B) issue, grant, deliver,
sell, repurchase, redeem, purchase, acquire, encumber, pledge, dispose of or
otherwise transfer, directly or indirectly, any shares of capital stock of
Mercury or securities convertible into or exchangeable or exercisable for, or
options, warrants, calls, commitments or rights of any kind to acquire, or based
on the value of, any shares of the capital stock of Mercury or its other Equity
Interests, or offer to do the same, other than issuances of shares of Mercury
Common Stock upon exercise of options and settlement of other equity awards of
Mercury; provided, however, that awards
under Mercury equity compensation plans may be granted in the ordinary course of
business consistent with past practice to officers and employees of Mercury and
its Subsidiaries;
(iv)
merge or
consolidate Mercury with, or sell substantially all of its assets to, any Person
or effect any share exchange involving any class of the capital stock of
Mercury, other than any such transaction between or among direct or indirect
Subsidiaries of Mercury;
(v)
enter
into, modify, amend or terminate any Contract or waive, release or assign any
rights or claims thereunder, which if so entered into, modified, amended,
terminated, waived, released or assigned would be reasonably likely to (i)
impair the ability of Mercury to perform its obligations under this Agreement in
any material respect or (ii) prevent or materially delay the consummation of the
Mergers; or take any other action intended to or that would reasonably be
expected to, individually or in the aggregate, impede, interfere with, prevent,
or materially delay the consummation of the Mergers or the other transactions
contemplated by this Agreement;
(vi)
adopt a
plan of complete or partial liquidation or resolutions providing for a complete
or partial liquidation, dissolution or recapitalization of the shares of
Mercury; or
(vii)
authorize
any of, or commit or agree to take any of, the foregoing actions.
5.3
No Control of Other Party’s
Business. Nothing contained in this Agreement shall give
Mercury, directly or indirectly, the right to control or direct Saturn’s or its
Subsidiaries’ operations prior to the Subsequent Effective Time, and nothing
contained in this Agreement shall give Saturn, directly or indirectly, the right
to control or direct Mercury’s or its Subsidiaries’ operations prior to the
Subsequent Effective Time. Prior to the Subsequent Effective Time,
each of Saturn and Mercury shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision over its and its
Subsidiaries’ respective operations.
ARTICLE
VI
ADDITIONAL
AGREEMENTS
6.1
Preparation of the Joint
Proxy Statement and the Registration Statement.
(a)
As
promptly as is reasonably practicable following the date of this Agreement,
Saturn and Mercury shall cooperate in preparing, and prepare, (i) a joint proxy
statement (together with any amendments thereof or supplements thereto, the
“Joint Proxy
Statement”) in order to seek the Saturn Shareholder Approval and the
Mercury Shareholder Approval and (ii) a registration statement on Form S-4,
which Saturn shall file with the SEC (together with all amendments thereto, the
“Registration
Statement”), and in which the Joint Proxy Statement will be included as a
prospectus. The Registration Statement and the Joint Proxy Statement
shall comply as to form in all material respects with the applicable provisions
of the Securities Act and the Exchange Act and the rules and regulations
thereunder and other applicable Law. Each of Saturn and Mercury also
agrees to use reasonable best efforts to obtain all necessary state securities
Law or “Blue Sky” permits and approvals required to carry out the transactions
contemplated hereby. Each of Saturn and Mercury will use its
reasonable best efforts to have the Registration Statement become effective and
the Joint Proxy Statement cleared by the SEC as promptly as is practicable after
such filing and keep the Registration Statement effective for so long as
necessary to consummate the Mergers, and each of Saturn and Mercury shall use
its respective reasonable best efforts to cause the Joint Proxy Statement to be
mailed to the holders of Saturn Common Stock and the holders of Mercury Common
Stock as promptly as practicable after the Registration Statement shall have
become effective and the Joint Proxy Statement shall have been cleared by the
SEC. Saturn shall also take any action required to be taken under any
applicable state securities Laws in connection with the issuance of shares of
Saturn Merger Surviving Corporation Common Stock in the Mergers and Mercury
shall furnish all information concerning Mercury and the Mercury shareholders as
may be reasonably requested by Saturn in connection with any such
action.
(b)
No filing
of, or amendment or supplement to, the Registration Statement will be made by
Saturn, and no filing of or amendment or supplement to the Joint Proxy Statement
will made by Mercury or Saturn, in each case without providing the other party a
reasonable opportunity to review and comment thereon. Saturn and
Mercury each agrees, as to itself and its Subsidiaries, that none of the
information supplied or to be supplied by it for inclusion or incorporation by
reference in (i) the Registration Statement will, at the time the Registration
Statement and each amendment or supplement thereto, if any, becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (ii) the Joint Proxy Statement
and any amendment or supplement thereto will, at the date of mailing to
shareholders and at the time of the Saturn Shareholder Meeting or the Mercury
Shareholder Meeting, as the case may be, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which such statement was made, not misleading. If at any time
prior to the Subsequent Effective Time, any information relating to Saturn or
Mercury, or any of their respective Affiliates, directors or officers, should be
discovered by Saturn or Mercury which should be set forth in an amendment or
supplement to either the Registration Statement or the Joint Proxy Statement, so
that either such document would not include any misstatement of a material fact
or omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, the party
which discovers such information shall promptly notify the other party and an
appropriate amendment or supplement describing such information shall be
promptly filed with the SEC and, to the extent required by Law, disseminated to
the shareholders of each of Saturn and Mercury. The parties shall
notify each other promptly of the receipt of any comments from the SEC or the
staff of the SEC and of any request by the SEC or the staff of the SEC for
amendments or supplements to the Joint Proxy Statement or the Registration
Statement or for additional information and shall supply each other with (i)
copies of all correspondence and a description of all material oral discussions
between it or any of its respective Representatives, on the one hand, and the
SEC or the staff of the SEC, on the other hand, with respect to the Joint Proxy
Statement, the Registration Statement or the Mergers and (ii) copies of all
orders of the SEC relating to the Joint Proxy Statement or the Registration
Statement.
6.2
Shareholders Meetings;
Recommendations.
(a)
Mercury
shall duly take all lawful actions to call, give notice of, convene and hold a
meeting of its shareholders (the “Mercury Shareholder
Meeting”) as soon as reasonably practicable following the date of this
Agreement for the purpose of securing the Mercury Shareholder
Approval. The Joint Proxy Statement shall (i) state that the Mercury
Board has unanimously (x) approved this Agreement and the transactions
contemplated hereby, (y) determined that this Agreement and the transactions
contemplated hereby are fair to and in the best interests of Mercury and its
shareholders, and (z) include the recommendation of the Mercury Board that the
holders of the Mercury Common Stock vote to approve this Agreement (such
recommendation described in this clause (z), the “Mercury
Recommendation”) (except to the extent that Mercury effects a Change in
the Mercury Recommendation in accordance with Section 6.4 of this Agreement) and
(ii) include the written opinion of the Mercury Financial Advisor, that, as of
the date of this Agreement, the Mercury Merger Consideration to be received by
the holders of Mercury Common Stock pursuant to this Agreement is
fair, from a financial point of view, to such holders. Mercury shall
use all reasonable best efforts to solicit from shareholders of Mercury votes in
favor of the Mercury Shareholder Approval. The Mercury Board shall
not effect a Change in the Mercury Recommendation except pursuant to and solely
as permitted by Section 6.4. Notwithstanding any Change in the
Mercury Recommendation, unless this Agreement has been terminated pursuant to
the terms hereof, this Agreement shall be submitted to the shareholders of
Mercury at the Mercury Shareholder Meeting and nothing contained herein shall be
deemed to relieve Mercury of such obligation. In addition to the
foregoing, Mercury shall not submit to the vote of its shareholders any
Acquisition Proposal other than the Mergers.
(b)
Saturn
shall duly take all lawful actions to call, give notice of, convene and hold a
meeting of its shareholders (the “Saturn Shareholder
Meeting”) as soon as reasonably practicable following the date of this
Agreement for the purpose of securing the Saturn Shareholder
Approval. The Joint Proxy Statement shall (i) state that the Saturn
Board has unanimously (x) approved this Agreement and the transactions
contemplated hereby, including the Saturn Share Issuance, (y) determined that
this Agreement and the transactions contemplated hereby are fair to and in the
best interests of Saturn and its shareholders and (z) include the recommendation
of the Saturn Board that the holders of Saturn Common Stock vote to approve this
Agreement and the Saturn Share Issuance (such recommendation described in clause
(z), the “Saturn
Recommendation”) (except to the extent that Saturn effects a Change in
the Saturn Recommendation in accordance with Section 6.4) and (ii) subject to
the consent of the Saturn Financial Advisors, include the written opinions of
the Saturn Financial Advisors, that as of the date of this Agreement, and based
upon and subject to the assumptions, qualifications and limitations set forth in
such opinion, the Saturn Merger Consideration to be received by the holders
(other than Mercury and any direct or indirect subsidiary of Mercury) of Saturn
Common Stock pursuant to this Agreement is fair, from a financial point of view,
to such holders. Saturn shall use all reasonable best efforts to
solicit from shareholders of Saturn votes in favor of the Saturn Shareholder
Approval. The Saturn Board shall not effect a Change in the Saturn
Recommendation, except pursuant to and solely as permitted by Section
6.4. Notwithstanding any Change in the Saturn Recommendation, unless
this Agreement has been terminated pursuant to the terms hereof, this Agreement
shall be submitted to the shareholders of Saturn at the Saturn Shareholder
Meeting and nothing contained herein shall be deemed to relieve Saturn of such
obligation. In addition to the foregoing, Saturn shall not submit to
the vote of its shareholders any Acquisition Proposal other than the
Mergers.
(c)
Mercury
and Saturn shall each use reasonable best efforts to cause the Mercury
Shareholder Meeting and the Saturn Shareholder Meeting to be held on the same
date and as soon as practicable after the date hereof.
6.3
Access to Information;
Confidentiality. Subject to applicable Law, Saturn, Merger Sub
1 and Merger Sub 2, will provide and will cause Saturn’s Subsidiaries and its
and their respective directors, officers, employees, accountants, consultants,
legal counsel, investment bankers, advisors, and agents and other
representatives (collectively, “Representatives”) to
provide Mercury and its authorized Representatives, during normal business hours
and upon reasonable advance notice access to the offices, employees, customers,
suppliers, properties, books and records of Saturn, Merger Sub 1 and Merger Sub
2 (so long as such access does not unreasonably interfere with the operations of
Saturn) as Mercury may reasonably request. Subject to applicable Law,
Mercury will provide and will cause Mercury’s Subsidiaries and its and their
respective Representatives to provide Saturn and its authorized Representatives,
during normal business hours and upon reasonable advance notice, commercially
reasonable access to the offices, employees, properties, books and records of
Mercury (so long as such access does not unreasonably interfere with the
operations of Mercury) as Saturn may reasonably request. With respect
to any information disclosed pursuant to this Section 6.3, each of the parties
shall comply with, and shall cause each of its Representatives to comply with,
all of its obligations under the confidentiality agreement, dated January 15,
2009, previously executed by Saturn and Mercury (the “Confidentiality
Agreement”). No party shall be required to provide access to
or disclose any information where such access or disclosure would jeopardize any
attorney-client privilege of such party or any Subsidiary of such party or
contravene any Contract, Law or Order (it being agreed that the parties shall
use their respective reasonable best efforts to cause such information to be
provided in a manner that would not result in such jeopardy or
contravention).
6.4
No
Solicitation.
(a)
General
Prohibitions.
(i)
Subject
to Section 6.4(b)(i), Saturn shall not, nor shall it authorize or permit any of
its Subsidiaries or any of its or their respective Representatives to, directly
or indirectly, (A) solicit, initiate, encourage or knowingly facilitate,
any inquiries or the making of any proposal or offer that constitutes, or could
reasonably be expected to lead to, an Acquisition Proposal for Saturn,
(B) enter into or engage in any discussions or negotiations regarding, or
that could reasonably be expected to lead to, any Acquisition Proposal for
Saturn, furnish to any third party (or any Representative of any third party)
any information (whether orally or in writing) in connection with, or in
furtherance of, any Acquisition Proposal for Saturn, or afford access to the
business, properties, assets, books or records of Saturn or any of its
Subsidiaries, otherwise cooperate in any way with, or knowingly assist,
participate in, facilitate or encourage any effort by, any third party (or any
Representative of any third party) that has made, is seeking to make or has
informed Saturn of any intention to make, or has publicly announced an intention
to make, an Acquisition Proposal for Saturn, (C) fail to make, withdraw,
qualify, amend or modify or publicly propose to withdraw, qualify, amend or
modify the Saturn Recommendation (it being understood that, subject to and
without limitation of Section 6.4(g)(i), taking a neutral position or no
position with respect to any Acquisition Proposal for Saturn shall be considered
an amendment or modification), or recommend, adopt or approve, or publicly
propose to recommend, adopt or approve, an Acquisition Proposal for Saturn, or
take any action or make any statement inconsistent with the Saturn
Recommendation (any of the foregoing in this clause (C), a “Change in the Saturn
Recommendation”), (D) take any action to make the provisions of any “fair
price,” “moratorium,” “control share acquisition,” “business combination” or
other similar anti-takeover statute or regulation (including approving any
transaction under, or a third party becoming an “interested stockholder” under,
Section 14A of the NJBCA), or any restrictive provision of any applicable
anti-takeover provision in Saturn’s articles of incorporation or bylaws,
inapplicable to any transactions contemplated by an Acquisition Proposal for
Saturn, (E) enter into any agreement in principle, letter of intent, term sheet,
merger agreement, acquisition agreement, option agreement, joint venture
agreement, partnership agreement or other Contract or instrument constituting or
relating to an Acquisition Proposal for Saturn (other than a confidentiality
agreement of the type referred to in Section 6.4(b)(i)), or any Contract or
agreement in principle compelling Saturn to abandon, terminate or breach any of
its obligations hereunder, or fail to consummate the transactions contemplated
hereby (any of the foregoing agreements in this clause (E), a “Saturn Acquisition
Contract”), (F) enter into any confidentiality or similar agreement
with any third party which prohibits Saturn from providing or making available
to Mercury pursuant to Section 6.4(b)(i) any of the information to be provided
to such third party in the time periods provided in Section 6.4(b)(i), (G) grant
or permit any third party waiver or release under, or fail to enforce any
provision of, any confidentiality, “standstill” or similar agreement with
respect to any class of securities of Saturn or any of its Subsidiaries or (H)
resolve, propose or agree to do any of the foregoing. Without
limiting the foregoing, it is agreed that any violation of the restrictions on
Saturn set forth in the preceding sentence by any Representative of Saturn or
any of its Subsidiaries shall be a breach of this Section 6.4 by
Saturn.
(ii)
Subject
to Section 6.4(b)(ii), Mercury shall not, nor shall it authorize or permit any
of its Subsidiaries or any of its or their respective Representatives to,
directly or indirectly, (A) solicit, initiate, encourage or knowingly
facilitate, any inquiries or the making of any proposal or offer that
constitutes, or could reasonably be expected to lead to, an Acquisition Proposal
for Mercury, (B) enter into or engage in any discussions or negotiations
regarding, or that could reasonably be expected to lead to, any Acquisition
Proposal for Mercury, furnish to any third party (or any Representative of any
third party) any information (whether orally or in writing) in connection with,
or in furtherance of, any Acquisition Proposal for Mercury, or afford access to
the business, properties, assets, books or records of Mercury or any of its
Subsidiaries, otherwise cooperate in any way with, or knowingly assist,
participate in, facilitate or encourage any effort by, any third party (or any
Representative of any third party) that has made, is seeking to make or has
informed Mercury of any intention to make, or has publicly announced an
intention to make, an Acquisition Proposal for Mercury, (C) fail to make,
withdraw, qualify, amend or modify or publicly propose to withdraw, qualify,
amend or modify the Mercury Recommendation (it being understood that, subject to
and without limitation of Section 6.4(g)(ii), taking a neutral position or no
position with respect to any Acquisition Proposal for Mercury shall be
considered an amendment or modification), or recommend, adopt or approve, or
publicly propose to recommend, adopt or approve, an Acquisition Proposal for
Mercury, or take any action or make any statement inconsistent with the Mercury
Recommendation (any of the foregoing in this clause (C), a “Change in the Mercury
Recommendation”), (D) take any action to make the provisions of any
“fair price,” “moratorium,” “control share acquisition,” “business combination”
or other similar anti-takeover statute or regulation (including approving any
transaction under, or a third party becoming an “interested stockholder” under,
Section 14A of the NJBCA), or any restrictive provision of any applicable
anti-takeover provision in Mercury’s articles of incorporation or bylaws,
inapplicable to any transactions contemplated by an Acquisition Proposal, (E)
enter into any agreement in principle, letter of intent, term sheet, merger
agreement, acquisition agreement, option agreement, joint venture agreement,
partnership agreement or other Contract or instrument constituting or relating
to an Acquisition Proposal for Mercury (other than a confidentiality agreement
of the type referred to in Section 6.4(b)(ii), or any Contract or agreement in
principle compelling Mercury to abandon, terminate or breach any of its
obligations hereunder, or fail to consummate the transactions contemplated
hereby (any of the foregoing agreements in this clause (E), a “Mercury Acquisition
Contract”), (F) enter into any confidentiality or similar agreement with
any third party which prohibits Mercury from providing or making available to
Saturn pursuant to Section 6.4(b)(ii) any of the information to be provided to
such third party in the time periods provided in Section 6.4(b)(ii),
(G) grant or permit any third party any waiver or release under, or fail to
enforce any provision of, any confidentiality, “standstill” or similar agreement
with respect to any class of securities of Mercury or any of its Subsidiaries or
(H) resolve, propose or agree to do any of the foregoing. Without
limiting the foregoing, it is agreed that any violation of the restrictions on
Mercury set forth in the preceding sentence by any Representative of Mercury or
any of its Subsidiaries shall be a breach of this Section 6.4 by
Mercury.
(b)
Exceptions after Receipt of
Certain Proposals.
(i)
Notwithstanding
anything that may be to the contrary herein, at any time prior to obtaining the
Saturn Shareholder Approval (and in no event after obtaining the Saturn
Shareholder Approval), the Saturn Board, directly or indirectly through
advisors, agents or other intermediaries, may, subject to compliance with
Section 6.4(c)(i), (A) if there has been no material breach or failure to
comply with Section 6.4(a)(i), engage in negotiations or discussions with any
third party that the Saturn Board determines in good faith is credible and
reasonably capable of consummating a Superior Proposal for Saturn, and that has
made after the date of this Agreement a Superior Proposal for Saturn or a bona
fide written Acquisition Proposal for Saturn that the Saturn Board determines in
good faith (after considering the advice of a financial advisor of nationally
recognized reputation and outside legal counsel) could reasonably lead to the
receipt of a Superior Proposal for Saturn, (B) thereafter, furnish to such
third party nonpublic information relating to Saturn or any of its Subsidiaries
pursuant to a confidentiality agreement with terms no less materially favorable
to Saturn than those contained in the Confidentiality Agreement and
which contains a “standstill” or similar provision on terms no more
materially favorable to such third party than the terms of any “standstill” or
similar agreement, or provision in any agreement, applicable to Mercury with
respect to Saturn; provided, that the
terms of such “standstill” or similar provision may allow such third party to
make Acquisition Proposals to Saturn in connection with the negotiations or
discussions permitted by this Section 6.4(b)(1) (a copy of such confidentiality
agreement shall, subject to Section 6.4(c)(i), be provided, promptly after its
execution, and which copy and the terms and existence thereof shall be subject
to the confidentiality obligations imposed on Mercury pursuant to the
Confidentiality Agreement), provided, that,
subject to Section 6.4(c)(i), all such nonpublic information (to the extent that
such nonpublic information has not been previously provided or made available to
Mercury) is provided or made available to Mercury, as the case may be, prior to
or substantially concurrently with the time it is provided or made available to
such third party, and provided, further, that, if
such Superior Proposal for Saturn or Acquisition Proposal for Saturn is made by
a third party who or which, on the date hereof, is party to a confidentiality
agreement with Saturn which would prohibit Saturn from complying with any of the
terms of this Section 6.4(b)(i) or Section 6.4(c)(i) requiring the provision by
Saturn of information, agreements or the documents to Mercury, then Saturn may
take the actions described in clauses (A) and (B) of this Section
6.4(b)(i) only if such confidentiality agreement with such third party has been
amended to (x) allow Saturn to fully comply with such terms of this Section
6.4(b)(i) and Section 6.4(c)(i) without violating such confidentiality agreement
and (y) include, if not already included, a “standstill” or similar provision on
terms no more materially favorable to such third party than the terms of any
“standstill” or similar agreement, or provision in any agreement, applicable to
Mercury with respect to Saturn; provided, that the
terms of such “standstill” or similar provision may allow such third party to
make Acquisition Proposals to Saturn in connection with the negotiations or
discussions permitted by this Section 6.4, (C) in response to an
Acquisition Proposal for Saturn received by Saturn after the date of this
Agreement that constitutes a Superior Proposal for Saturn or in response to an
Intervening Event, and subject to compliance with Section 6.4(d)(i), make a
Change in the Saturn Recommendation, and (D) subject to compliance with Section
6.4(d)(i), in response to an Acquisition Proposal which the Saturn Board
determines in good faith, after considering advice from outside legal counsel to
Saturn and Saturn’s financial advisor, constitutes a Superior Proposal,
terminate this Agreement pursuant to Section 8.1(f) to enter into a definitive
agreement with respect to such Superior Proposal; but in each case referred to
in the foregoing clauses (A) through (D) only if the Saturn Board
determines in good faith, after considering advice from outside legal counsel to
Saturn, that its failure to take such action would likely constitute a breach of
its fiduciary duties under applicable Law.
(ii)
Notwithstanding
anything that may be to the contrary herein, at any time prior to obtaining the
Mercury Shareholder Approval (and in no event after obtaining the Mercury
Shareholder Approval), the Mercury Board, directly or indirectly through
advisors, agents or other intermediaries, may, subject to compliance with
Section 6.4(c)(ii), (A) if there has been no material breach or failure to
comply with Section 6.4(a)(ii), engage in negotiations or discussions with any
third party that the Mercury Board determines in good faith is credible and
reasonably capable of consummating a Superior Proposal for Mercury, and that has
made after the date of this Agreement a Superior Proposal for Mercury or a bona
fide written Acquisition Proposal for Mercury that the Mercury Board determines
in good faith (after considering the advice of a financial advisor of nationally
recognized reputation and outside legal counsel) could reasonably lead to the
receipt of a Superior Proposal for Mercury, (B) thereafter, furnish to such
third party nonpublic information relating to Mercury or any of its Subsidiaries
pursuant to a confidentiality agreement with terms no less materially favorable
to Mercury than those contained in the Confidentiality Agreement and which
contains a “standstill” or similar provision on terms no more materially
favorable to such third party than the terms of any “standstill” or similar
agreement, or provision in any agreement, applicable to Saturn with respect to
Mercury; provided, that the
terms of such “standstill” or similar provision may allow such third party to
make Acquisition Proposals to Mercury in connection with the negotiations or
discussions permitted by this Section 6.4(b)(ii) (a copy of such confidentiality
agreement shall, subject to Section 6.4(c)(ii), be provided, promptly after its
execution, and which copy and the terms and existence thereof shall be subject
to the confidentiality obligations imposed on Mercury pursuant to the
Confidentiality Agreement), provided, that,
subject to Section 6.4(c)(ii), all such nonpublic information (to the extent
that such nonpublic information has not been previously provided or made
available to Saturn) is provided or made available to Saturn, as the case may
be, prior to or substantially concurrently with the time it is provided or made
available to such third party), and provided, further, that, if
such Superior Proposal for Mercury or Acquisition Proposal for Mercury is made
by a third party who or which, on the date hereof, is party to a confidentiality
agreement with Mercury which would prohibit Mercury from complying with any of
the terms of this Section 6.4(b)(ii) or Section 6.4(c)(ii) requiring the
provision by Mercury of information, agreements or the documents to Saturn, then
Saturn may take the actions described in clauses (A) and (B) of this
Section 6.4(b)(ii) only if such confidentiality agreement with such third party
has been amended to (x) allow Mercury to fully comply with such terms of this
Section 6.4(b)(ii) and Section 6.4(c)(ii) without violating such confidentiality
agreement and (y) include, if not already included, a “standstill” or similar
provision on terms no more materially favorable to such third party than the
terms of any “standstill” or similar agreement, or provision in any agreement
applicable to Saturn with respect to Mercury; provided, that the
terms of such “standstill” or similar provision may allow such third party to
make Acquisition Proposals to Mercury in connection with the negotiations or
discussions permitted by this Section 6.4 and (C) in response to an
Acquisition Proposal for Mercury received by Mercury after the date of this
Agreement that constitutes a Superior Proposal for Mercury or in response to an
Intervening Event, and subject to compliance with Section 6.4(d)(ii), make a
Change in the Mercury Recommendation, but in each case referred to in the
foregoing clauses (A) through (C) only if the Mercury Board determines
in good faith, after considering advice from outside legal counsel to Mercury,
that its failure to take such action would likely constitute a breach of its
fiduciary duties under applicable Law.
(c)
Required
Notices.
(i)
Saturn
shall not take any of the actions referred to in Section 6.4(b)(i) unless Saturn
shall have delivered to Mercury one (1) Business Day’s prior written notice
advising Mercury that it intends to take such action, and Saturn shall continue
to advise Mercury after taking such action, on a reasonably current basis, of
the status and terms of any discussions and negotiations with the third
party. In addition, Saturn shall notify Mercury promptly (but in no
event later than one (1) Business Day) after receipt by Saturn (or any of its
Representatives) of any Acquisition Proposal for Saturn or of any request for
information relating to Saturn or any of its Subsidiaries or for access to the
business, properties, assets, books or records of Saturn or any of its
Subsidiaries by any third party that, to the Knowledge of Saturn, is considering
making, or has made, an Acquisition Proposal for Saturn, which notice shall be
provided orally and in writing and shall identify the third party making, and
the terms and conditions of, any such Acquisition Proposal for Saturn,
indication or request (including any changes thereto). Saturn shall
keep Mercury reasonably informed, on a reasonably current basis, of the status
and details of any such Acquisition Proposal for Saturn, indication or request
(including any changes thereto) and shall promptly (but in no event later than
one (1) Business Day after receipt) provide to Mercury copies of all
correspondence and written materials sent or provided to Saturn or any of its
Subsidiaries that describe the material terms and conditions of any Acquisition
Proposal for Saturn.
(ii)
Mercury
shall not take any of the actions referred to in Section 6.4(b)(ii) unless
Mercury shall have delivered to Saturn one (1) Business Day’s prior written
notice advising Saturn that it intends to take such action, and Mercury shall
continue to advise Saturn after taking such action, on a reasonably current
basis, of the status and terms of any discussions and negotiations with the
third party. In addition, Mercury shall notify Saturn promptly (but
in no event later than one (1) Business Day) after receipt by Mercury (or any of
its Representatives) of any Acquisition Proposal for Mercury or of any request
for information relating to Mercury or any of its Subsidiaries or for access to
the business, properties, assets, books or records of Mercury or any of its
Subsidiaries by any third party that, to the Knowledge of Mercury, is
considering making, or has made, an Acquisition Proposal for Mercury, which
notice shall be provided orally and in writing and shall identify the third
party making, and the terms and conditions of, any such Acquisition Proposal for
Mercury, indication or request (including any changes
thereto). Mercury shall keep Saturn reasonably informed, on a
reasonably current basis, of the status and details of any such Acquisition
Proposal for Mercury, indication or request (including any changes thereto) and
shall promptly (but in no event later than one (1) Business Day after receipt)
provide to Saturn copies of all correspondence and written materials sent or
provided to Mercury or any of its Subsidiaries that describe the material terms
and conditions of any Acquisition Proposal for Mercury.
(d)
Limitations on Ability to
Change Recommendation or Terminate the Agreement.
(i)
Notwithstanding
Section 6.4(b)(i), the Saturn Board shall not take any action described in
clause (C) or (D) of Section 6.4(b)(i) unless (A) Saturn promptly notifies
Mercury, in writing, at least three (3) Business Days before taking that action,
of its intention to do so in response to an Acquisition Proposal for Saturn that
constitutes a Superior Proposal for Saturn (in which case such notification
shall have attached thereto the most current version of any proposed agreement
or a detailed summary of the material terms of any such proposal and the
identity of the offeror) or in respect to an Intervening Event (in which case
such notification shall describe such Intervening Event and the reasons for the
proposed Change in the Saturn Recommendation), (B) if requested by Mercury,
during the three-Business-Day period, Saturn shall negotiate in good faith with
Mercury with respect to any revised proposal from Mercury in respect of the
terms of the transactions contemplated by this Agreement) and (C) if the Change
in the Saturn Recommendation is in response to an Acquisition Proposal for
Saturn that constitutes a Superior Proposal for Saturn, Mercury does not make,
within such three-Business-Day period, an offer that is at least as favorable to
the shareholders of Saturn, as determined by the Saturn Board in good faith
(after considering the advice of a financial advisor of nationally recognized
reputation), as such Superior Proposal (it being understood that Saturn shall
not take any action described in clause (C) or (D) of Section 6.4(b)(i) during
such three-Business-Day period, and that any amendment to the financial terms or
other material terms of such Superior Proposal shall require a new written
notification from Saturn and an additional three-Business-Day period that
satisfies this Section 6.4(d)(i)).
(ii)
Notwithstanding
Section 6.4(b)(ii), the Mercury Board shall not take any action described in
clause (C) of Section 6.4(b)(ii) unless (A) Mercury promptly notifies Saturn, in
writing, at least three (3) Business Days before taking that action, of its
intention to do so in response to an Acquisition Proposal for Mercury that
constitutes a Superior Proposal for Mercury (in which case such notification
shall have attached thereto the most current version of any proposed agreement
or a detailed summary of the material terms of any such proposal and the
identity of the offeror) or in respect to an Intervening Event (in which case
such notification shall describe such Intervening Event and the reasons for the
proposed Change in Mercury Recommendation), (B) if requested by Saturn, during
the three-Business-Day period, Mercury shall negotiate in good faith with Saturn
with respect to any revised proposal from Saturn in respect of the terms of the
transactions contemplated by this Agreement) and (C) if the Change in Mercury
Recommendation is in response to an Acquisition Proposal for Mercury that
constitutes a Superior Proposal for Mercury, Saturn does not make, within such
three-Business-Day period, an offer that is at least as favorable to the
shareholders of Mercury, as determined by the Mercury Board in good faith (after
considering the advice of a financial advisor of nationally recognized
reputation), as such Superior Proposal (it being understood that Mercury shall
not take any action described in clause (C) of Section 6.4(b)(ii) during such
three-Business-Day period, and that any amendment to the financial terms or
other material terms of such Superior Proposal shall require a new written
notification from Mercury and an additional three-Business-Day period that
satisfies this Section 6.4(d)(ii)).
(e)
Definitions of Acquisition
Proposal, Intervening Event and Superior Proposal. For
purposes of this Agreement:
“Acquisition Proposal”
means any offer or proposal by any third party concerning any (i) merger,
consolidation, other business combination or similar transaction involving
Saturn or Mercury, as applicable, or any of its Subsidiaries, pursuant to which
such Person would own 15% or more of the consolidated assets, revenues or net
income of Saturn or Mercury, as applicable, and its Subsidiaries, taken as a
whole, (ii) sale, lease, license or other disposition directly or indirectly by
merger, consolidation, business combination, share exchange, joint venture or
otherwise, of assets of Saturn or Mercury, as applicable, (including Equity
Interests of any of its Subsidiaries) or any Subsidiary of Saturn or Mercury, as
applicable, representing 15% or more of the consolidated assets, revenues or net
income of Saturn or Mercury, as applicable, and its Subsidiaries, taken as a
whole, (iii) issuance or sale or other disposition (including by way of merger,
consolidation, business combination, share exchange, joint venture or similar
transaction) of Equity Interests representing 15% or more of the voting power of
Saturn or Mercury, as applicable, (iv) transaction or series of transactions in
which any Person would acquire beneficial ownership or the right to acquire
beneficial ownership of Equity Interests representing 15% or more of the voting
power of Saturn or Mercury, as applicable, or (v) any combination of the
foregoing.
“Intervening Event”
means, with respect to Saturn or Mercury, as applicable, a material Event that
was not known or reasonably foreseeable to the Saturn Board or Mercury Board, as
applicable, on the date of this Agreement, which Event becomes known to the
Saturn Board or Mercury Board, as applicable, before the Saturn Shareholder
Approval or Mercury Shareholder Approval, as applicable; provided, that (i) in
no event shall any action taken by either party pursuant to and in compliance
with the affirmative covenants set forth in Section 6.5 of this Agreement, and
the consequences of any such action, constitute an Intervening Event, (ii) in no
event shall the receipt, existence of or terms of an Acquisition Proposal for a
party or any inquiry relating thereto or the consequences thereof constitute an
Intervening Event with respect to such party and (iii) in no event shall any
Event or Events that has or have an adverse effect on the business, financial
condition, assets, liabilities, results of operations, or the market price of
the securities of, a party or any of its Subsidiaries constitute an Intervening
Event with respect to the other party unless such Event or Events has had or
would reasonably be expected to have a Saturn Material Adverse Effect (if such
other party is Mercury) or a Mercury Material Adverse Effect (if such other
party is Saturn).
“Superior Proposal”
means, with respect to Saturn or Mercury, as applicable, a bona fide written
Acquisition Proposal for such party, on its most recently amended or modified
terms, if amended or modified (except that references in the definition of
“Acquisition Proposal” to “15%” shall be replaced by 50%) made by a third party,
which with respect to an Acquisition Proposal for Saturn, if financing is
required, such third party shall have entered into binding agreements with its
financing sources which commit such third party’s financing sources to
materially the same extent as Mercury’s financing sources are committed pursuant
to the Commitment Letter and which with respect to an Acquisition Proposal for
Mercury, if financing is required, such third party shall have entered into
binding commitments for such financing, and that the Saturn Board or the Mercury
Board, as applicable, determines in its good faith business judgment (after
consultation with Saturn’s or Mercury’s, as applicable, financial advisor and
outside legal counsel) to be (i) more favorable to Saturn’s or Mercury’s
shareholders, as applicable, from a financial point of view than the Mergers
(taking into account all of the terms and conditions of such proposal and this
Agreement (including any changes to the terms of this Agreement proposed by
Mercury or Saturn, as applicable, in response to such offer or otherwise)) and
relevant legal, financial and regulatory aspects of the proposal, the identity
of the third party making such proposal and the conditions for completion of
such proposal and (ii) reasonably expected to be consummated, taking into
account the financial, legal, regulatory and other aspects of such
proposal.
(f)
Obligation to Terminate
Existing Discussions.
(i)
Saturn
shall, and shall cause its Subsidiaries and its and their respective
Representatives to, cease immediately and cause to be terminated any and all
existing soliciting activities, discussions or negotiations and access to
nonpublic information, if any, with, to or by any third party conducted prior to
the date hereof with respect to any Acquisition Proposal for
Saturn. Saturn shall promptly request that each third party, if any,
in possession of Confidential Information about Saturn or any of its
Subsidiaries that was furnished by or on behalf of Saturn or any of its
Subsidiaries in connection with its consideration of any potential Acquisition
Proposal for Saturn return or destroy all Confidential Information heretofore
furnished to such third party.
(ii)
Mercury
shall, and shall cause its Subsidiaries and its and their respective
Representatives to, cease immediately and cause to be terminated any and all
existing soliciting activities, discussions or negotiations and access to
nonpublic information, if any, with, to or by any third party conducted prior to
the date hereof with respect to any Acquisition Proposal for
Mercury. Mercury shall promptly request that each third party, if
any, in possession of Confidential Information about Mercury or any of its
Subsidiaries that was furnished by or on behalf of Mercury or any of its
Subsidiaries in connection with its consideration of any potential Acquisition
Proposal for Mercury return or destroy all Confidential Information heretofore
furnished to such third party.
(g)
Certain
Exceptions.
(i)
Nothing
in this Section 6.4 shall prohibit the Saturn Board from (A) taking and
disclosing to Saturn’s shareholders a position contemplated by Rule 14e-2(a),
Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange
Act, or other applicable Law, or (B) making any disclosure to Saturn’s
shareholders if the Saturn Board determines, after consultation with outside
counsel, that failure to so disclose such position would be reasonably likely to
give rise to a violation of applicable Law; provided, however, that any
such disclosure of a position contemplated by Rule 14e-2(a) or Rule 14d-9
promulgated under the Exchange Act other than (x) a “stop, look and listen”
or similar communication of the type contemplated by Rule 14d-9(f) promulgated
under the Exchange Act, (y) an express rejection of an applicable
Acquisition Proposal or (z) an express reaffirmation of its Saturn
Recommendation, shall be deemed a Change in the Saturn
Recommendation. In addition, it is understood and agreed that, for
purposes of this Agreement (including this Article VI), a factually and
materially accurate public statement by Saturn that describes Saturn’s receipt
of an Acquisition Proposal for Saturn and the operation of this Agreement with
respect thereto shall not be deemed a Change in the Saturn Recommendation if
Saturn affirmatively reaffirms in such disclosure the Saturn
Recommendation.
(ii)
Nothing
in this Section 6.4 shall prohibit the Mercury Board from (A) taking and
disclosing to Mercury’s shareholders a position contemplated by Rule 14e-2(a),
Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange
Act, or other applicable Law, or (B) making any disclosure to Mercury’s
shareholders if the Mercury Board determines, after consultation with outside
counsel, that failure to so disclose such position would be reasonably likely to
give rise to a violation of applicable Law; provided, however, that any
such disclosure of a position contemplated by Rule 14e-2(a) or Rule 14d-9
promulgated under the Exchange Act, other than (x) a “stop, look and
listen” or similar communication of the type contemplated by Rule 14d-9(f)
promulgated under the Exchange Act, (y) an express rejection of an
applicable Acquisition Proposal or (z) an express reaffirmation of its
Mercury Recommendation, shall be deemed a Change in the Mercury
Recommendation. In addition, it is understood and agreed that, for
purposes of this Agreement (including this Article VI), a factually and
materially accurate public statement by Mercury that describes Mercury’s receipt
of an Acquisition Proposal for Mercury and the operation of this Agreement with
respect thereto shall not be deemed a Change in the Mercury Recommendation if
Mercury affirmatively reaffirms in such disclosure the Mercury
Recommendation.
6.5
Efforts to Consummate;
Notification.
(a)
Subject
to the terms and conditions of this Agreement, each of Mercury and Saturn will
use its reasonable best efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things necessary, proper or advisable under
applicable Law to consummate the Mergers and the other transactions contemplated
by this Agreement including using reasonable best efforts to (i) cause the
conditions precedent set forth in Article VII to be satisfied, (ii) obtain all
necessary waivers, consents, approvals, permits, Orders or authorizations
(including the expiration or termination of any waiting periods) from
Governmental Entities and the making of all necessary registrations,
declarations and filings (including registrations, declarations and filings with
Governmental Entities, if any) and take all steps as may be necessary to avoid,
or to have terminated, if begun, any Proceeding by any Governmental Entity,
(iii) obtain all necessary waivers, consents, approvals, permits, Orders or
authorizations from third parties, (iv) defend any investigations or
Proceedings, whether judicial or administrative, challenging this Agreement or
the consummation of the transactions contemplated hereby, including seeking to
avoid the entry of, or to have reversed, terminated, lifted or vacated, any
stay, temporary restraining order or other injunctive relief or Order entered by
any Governmental Entity which could prevent or delay the Mergers or the
consummation of the transactions contemplated hereby and (v) execute and deliver
additional instruments necessary to consummate the transactions contemplated by,
and to fully carry out the purposes of, this Agreement. In
furtherance and not in limitation of the foregoing, Mercury and Saturn agree not
to extend any waiting period under HSR Act or enter into any agreement with any
Governmental Entity not to consummate the transaction contemplated by this
Agreement, except with the prior written consent of the other party not to be
unreasonably withheld or delayed.
(b)
In
furtherance and not in limitation of the foregoing, Mercury and where
applicable, Saturn shall (i) make or cause to be made the registrations,
declarations and filings required of such party under the HSR Act, the EC Merger
Regulation and any other Antitrust Laws listed in Section 7.1(b) of the Mercury
Disclosure Letter with respect to the transactions contemplated by this
Agreement as promptly as reasonably practicable and advisable after the date of
this Agreement (and, in the case of any filings required under the HSR Act, in
no event later than 30 Business Days from the execution of this Agreement), (ii)
furnish to the other party as promptly as reasonably practicable all information
required for any application or other filing to be made by the other party
pursuant to any applicable Law in connection with the transactions contemplated
by this Agreement, (iii) respond as promptly as reasonably practicable to
any inquiries received from, and supply as promptly as reasonably practicable
any additional information or documentation that may be requested by, the
Antitrust Division of the U.S. Department of Justice (the “DOJ”), the Federal
Trade Commission (“FTC”), the European
Commission (“EC”) or by any other
Governmental Entity in respect of such registrations, declarations and filings
or such transactions, (iv) promptly notify the other party of any material
communication between that party and the FTC, the DOJ, the EC or any other
Governmental Entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby (including, without limitation, any
communication relating to the antitrust merits, any potential remedies,
commitments or undertakings, the timing of any waivers, consents, approvals,
Permits, Orders or authorizations (including the expiration or termination of
any waiting periods), or any agreement regarding the timing of consummation of
the Mergers), (v) subject to applicable Law, discuss with and permit the other
party (and its counsel) to review in advance, and consider in good faith the
other party’s reasonable comments in connection with, any proposed filing or
communication to the FTC, the DOJ, the EC or any other Governmental Entity or,
in connection with any proceeding by a private party to any other Person,
relating to any Antitrust Law or any investigation or other Proceeding pursuant
to any Antitrust Law in connection with the Mergers or the other transactions
contemplated by this Agreement, (vi) not participate or agree to participate in
any substantive meeting, telephone call or discussion (including, without
limitation, any meeting, telephone call or discussion relating to the antitrust
merits, any potential remedies, commitments or undertakings, the timing of any
waivers, consents, approvals, Permits, Orders or authorizations (including the
expiration or termination of any waiting periods), and any agreement regarding
the timing of consummation of the Mergers) with the FTC, the DOJ, the EC or any
other Governmental Entity in respect of any filings, investigation or inquiry
relating to any Antitrust Law or any investigation or other Proceeding pursuant
to any Antitrust Law in connection with this Agreement or the Mergers unless it
consults with the other party in advance and, to the extent permitted by such
Governmental Entity, gives the other party the opportunity to attend and
participate in such meeting, telephone call or discussion, (vii) furnish the
other party promptly with copies of all correspondence, filings and
communications relating to any Antitrust Law or any investigation or other
Proceeding pursuant to any Antitrust Law between them and their Affiliates and
their respective Representatives on the one hand, and the FTC, the DOJ, the EC
or any other Governmental Entity or members of their respective staffs on the
other hand, with respect to this Agreement and the Mergers and (viii) act in
good faith and reasonably cooperate with the other party in connection with any
such registrations, declarations and filings and in connection with resolving
any investigation or other inquiry of any such agency or other Governmental
Entity under the HSR Act or any other Antitrust Law with respect to any such
registration, declaration and filing or any such transaction. Mercury
and Saturn may, as each deems advisable and necessary, reasonably designate any
competitively sensitive material provided to the other under this Section 6.5(b)
as “Antitrust Counsel Only Material.” Such materials and the
information contained therein shall be given only to the outside antitrust
counsel of the recipient and will not be disclosed by such outside counsel to
employees, officers or directors of the recipient unless express permission is
obtained in advance from the source of the materials (Mercury or Saturn, as the
case may be) or its legal counsel. Notwithstanding anything to the
contrary in this Section 6.5(b), materials provided to the other party or its
outside counsel may be redacted to remove references concerning the valuation of
Saturn and its Subsidiaries.
(c)
Nothing
in this Agreement shall require Mercury or any of its Subsidiaries to agree to
or take any action that would result in, or be reasonably likely to result in,
any Burdensome Condition. For purposes of this Agreement, a “Burdensome Condition”
shall mean making proposals, offering remedies, commitments or undertakings,
executing or carrying out agreements (including consent decrees) or submitting
to Laws or Orders (i) providing for the license, sale, divestiture or other
disposition or holding separate (through the establishment of trust or
otherwise) of any capital stock or other Equity Interests of a Subsidiary of
Saturn or Mercury, business, assets, categories of assets, or products of
Mercury, Saturn or their respective Subsidiaries or the holding separate of the
capital stock or other Equity Interests of a Subsidiary of Saturn or Mercury or
(ii) otherwise imposing or seeking to impose any limitation on Mercury, Saturn
or any of their respective Subsidiaries’ freedom of action with respect to, or
their ability to retain, any of the businesses, assets, categories of assets, or
products of Mercury, Saturn, the Saturn Merger Surviving Corporation or any of
their respective Subsidiaries (any matter referenced in the foregoing clause (i)
or (ii) being a “Regulatory
Divestiture”) that, in the case of clause (i) and/or (ii), individually
or in the aggregate would result in, or be reasonably likely to result in, in
the one year loss of net sales revenues (as measured by 2008 net sales revenues)
in excess of $1,000,000,000, but excluding any loss of net sales revenues
related to the license, sale, divestiture or other disposition or holding
separate (through the establishment of trust or otherwise) of any capital stock
or other Equity Interests or any business, assets, categories of assets, or
products listed in Section 6.5(c) of the Mercury Disclosure
Letter. For purposes of calculating the loss of net sales revenue in
the preceding sentence, (x) the least amount of lost revenues (as measured by
2008 net sales revenue) as may be required to obtain all necessary waivers,
consents, approvals, permits, Orders or authorizations from any Governmental
Entity necessary to consummate the Mergers and the other transactions
contemplated by this Agreement, or to avoid entry of, or to effect the
dissolution of, any Order, shall be used in the event that Mercury elects to
offer any license, sale, divestiture or other disposition, holding separate, or
limitation on freedom of action that would result in a higher loss of net sales
revenue (as measured by net 2008 sales revenue) than reasonably required to
achieve such result and (y) lost net sales revenue attributable to the license,
sale, divestiture or other disposition or holding separate (through the
establishment of trust or otherwise) of any capital stock or other Equity
Interests( or any business, assets, categories of assets, or products, as
applicable) of an entity the financial results of which were reported on the
consolidated financial statements of Mercury or Saturn included in the Mercury
Form 10-K or the Saturn Form 10-K, as the case may be, using the equity method
of accounting shall be calculated by (1) multiplying the net 2008 sales revenue
of such entity (or of such business, assets, categories of assets or products of
such entity, as applicable), by (2) the percentage of the total outstanding
capital stock or other Equity Interests of such entity to be licensed, sold,
divested or otherwise disposed or held separate by Mercury or Saturn or any of
their respective Subsidiary, as the case may be (or in the case of the license,
sale, divestiture or other disposition or holding separate of any business,
assets, categories of assets or products, as applicable, of such entity, the
percentage of the total outstanding capital stock or other Equity Interests of
such entity to be held by Mercury or Saturn or any of their respective
Subsidiaries, as the case may be). Saturn agrees that it (A) shall
not publicly, or before any Governmental Entity or third party, offer, suggest,
propose or negotiate, and shall not commit to, or enter into, consent to or
acquiesce to any Regulatory Divestiture without the prior written consent of
Mercury, which may be withheld in the sole discretion of Mercury and (B) shall
commit to, enter into, consent to or acquiesce to any Regulatory Divestitures as
directed by Mercury. Notwithstanding anything contained in this
Agreement, neither Mercury nor Saturn shall be required by this Section 6.5 to
commit to, enter into, consent to, or acquiesce to any Regulatory Divestiture
that is not conditioned on the consummation of the Mergers.
6.6
Certain
Notices. From and after the date of this Agreement until the
earlier to occur of (a) the Closing Date and (b) the termination of this
Agreement pursuant to Section 8.1, each of Saturn and Mercury shall promptly
notify the other party of (i) the occurrence, or non-occurrence, of any event
that would be likely to cause any condition to the obligations of the other
party to effect the Mergers and the other transactions contemplated by this
Agreement not to be satisfied, or (ii) the failure of Saturn or Mercury, as the
case may be, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it pursuant to this Agreement that would
reasonably be expected to result in any condition to the obligations of the
other party to effect the Mergers and the other transactions contemplated by
this Agreement not to be satisfied; provided, however, that the
delivery of any notice pursuant to this Section 6.6 shall not cure the
inaccuracy of any representation or warranty, the failure to comply with any
covenant, the failure to meet any condition or otherwise limit or affect the
remedies available hereunder to the party receiving such notice.
6.7
Public
Announcements. The initial press release with respect to this
Agreement and the transactions contemplated hereby shall be a
release mutually agreed upon by Mercury and Saturn. Thereafter,
Mercury and Saturn shall consult with and obtain the approval of the other party
(such approval not to be unreasonably withheld or delayed) before issuing any
other press release or other public announcement with respect to the Mergers or
this Agreement and shall not issue any such other press release prior to such
consultation and approval, except as may be required by applicable Law or any
listing agreement related to the trading of the shares of either party on any
securities exchange, in which case the party proposing to issue such press
release or make such public announcement shall use reasonable best efforts to
consult in good faith with the other party before issuing any such press release
or making any such public announcement; provided, however, that each of
Mercury and Saturn may make any public statement in response to specific
questions by the press, analysts, investors or those attending industry
conferences or financial analyst conference calls, so long as any such
statements are not inconsistent with previous press releases, public disclosures
or public statements made jointly by Mercury and Saturn and do not reveal
material, nonpublic information regarding the other party.
6.8
Indemnification of Directors
and Officers.
(a)
From and
after the Subsequent Effective Time, the Saturn Merger Surviving Corporation
shall indemnify and hold harmless (and advance funds in respect of each of the
foregoing), in the same manner as provided by Saturn immediately prior to the
date of this Agreement, each present and former director, officer and employee
of Saturn and its Subsidiaries (in all of their capacities) and all fiduciaries
under any Saturn Plan, including any person who becomes a director, officer or
employee or fiduciary under any Saturn Plan prior to the Subsequent Effective
Time (collectively, the “Indemnified
Parties”), against any costs or expenses (including reasonable attorneys’
fees and expenses and disbursements), judgments, fines, losses, claims, damages
or liabilities incurred in connection with any Proceeding, whether civil,
criminal, administrative or investigative, arising out of or pertaining to the
fact that such Indemnified Party is or was a director, officer, employee or
fiduciary of Saturn or any of its Subsidiaries or a fiduciary under any Saturn
Plan or is or was serving at the request of Saturn or any of its Subsidiaries as
a director, officer or employee of any other corporation, limited liability
company, partnership, joint venture, trust or other business or non-profit
enterprise (including any employee benefit plan), whether asserted or claimed
prior to, at or after the Subsequent Effective Time (including with respect to
acts or omissions by directors or officers of Saturn or its Subsidiaries in
their capacities as such arising in connection with the transactions
contemplated by this Agreement), and shall provide advancement of expenses to
the Indemnified Parties, in all such cases to the same extent that such persons
are indemnified or have the right to advancement of expenses as of the date of
this Agreement by Saturn pursuant to Saturn’s certificate of incorporation,
bylaws and indemnification agreements, if any, or by any one of Saturn’s
Subsidiaries pursuant to such Subsidiary’s certificate of incorporation, bylaws
and indemnification agreements of any Subsidiary of Saturn, if any, in existence
on the date of this Agreement.
(b)
For six
(6) years after the Subsequent Effective Time, the Saturn Merger Surviving
Corporation shall maintain in effect for the benefit of the Indemnified Parties
an insurance and indemnification policy with an insurer with the same or better
credit rating as the current carrier for Saturn that provides coverage for acts
or omissions occurring prior to the Subsequent Effective Time (the “D&O Insurance”)
covering each such person covered by the officers’ and directors’ liability
insurance policy of Saturn on terms with respect to coverage and in amounts no
less favorable than those of Saturn’s directors’ and officers’ insurance policy
in effect on the date of this Agreement; provided, however, that the
Saturn Merger Surviving Corporation shall not be required to pay an annual
premium for the D&O Insurance in excess of 250% of the annual premium
currently paid by Saturn for such coverage; and provided, further, that if any
annual premium for such insurance coverage exceeds 250% of such annual premium,
the Saturn Merger Surviving Corporation shall obtain as much coverage as
reasonably practicable for a cost not exceeding such amount. Saturn
Merger Surviving Corporation’s obligations under this Section 6.8(b) may be
satisfied by Mercury, or, with the approval, such approval not to be
unreasonably withheld, of Mercury, Saturn, purchasing a “tail” policy from an
insurer with substantially the same or better credit rating as the current
carrier for Saturn’s existing directors’ and officers’ insurance policy, which
(i) has an effective term of six (6) years from the Subsequent Effective Time,
(ii) covers each person covered by Saturn’s directors’ and officers’ insurance
policy in effect on the date of this Agreement or at the Subsequent Effective
Time for actions and omissions occurring prior to the Subsequent Effective Time,
and (iii) contains terms that are no less favorable than those of Saturn’s
directors’ and officers’ insurance policy in effect on the date of this
Agreement. If such “tail” policy has been obtained by Saturn prior to
the Initial Effective Time, the Saturn Merger Surviving Corporation shall cause
such policy to be maintained in full force and effect, for its full term, and
cause all obligations thereunder to be honored by the Saturn Merger Surviving
Corporation.
(c)
The
Saturn Merger Surviving Corporation shall maintain in effect for six (6) years
after the Subsequent Effective Time in the Saturn Merger Surviving Corporation’s
(or any successor’s) certificate of incorporation and bylaws provisions with
respect to indemnification, exculpation and advancement of expenses that are at
least as favorable to the intended beneficiaries as those contained in the
Saturn Merger Surviving Corporation’s certificate of incorporation and bylaws as
in effect as of the Initial Effective Time or in any indemnification agreements
of Saturn or its Subsidiaries with any of their respective directors, officers
or employees as in effect immediately prior to the Initial Effective Time; provided, however, that all
rights to indemnification in respect of any Proceeding pending or asserted or
any claim made within such period shall continue until the disposition of such
Proceeding or resolution of such claim.
(d)
The
provisions of this Section 6.8 are (i) intended to be for the benefit of, and
will be enforceable by, each Indemnified Party and (ii) in addition to, and not
in substitution for, any other rights to indemnification or contribution that
any such person may have by Contract or otherwise. The Saturn Merger
Surviving Corporation shall pay all reasonable out-of-pocket expenses, including
reasonable attorneys’ fees, that may be incurred by any Indemnified Party in
enforcing the indemnity obligations provided in this Section 6.8 unless it is
ultimately determined that such Indemnified Party is not entitled to such
indemnity.
(e)
If the
Saturn Merger Surviving Corporation, or any of its successors or assigns (i)
consolidates with or merges into any other Person and shall not be the
continuing or surviving corporation or entity in such consolidation or merger or
(ii) transfers all or substantially all of its properties and assets to any
Person, then, and in each case, proper provision shall be made so that the
successors and assigns of the Saturn Merger Surviving Corporation honor the
indemnification obligations set forth in this Section 6.8.
6.9
Employee
Benefits.
(a)
For a
period from and after the Initial Effective Time through December 31, 2010, (the
“Benefits Continuation
Period”), the Saturn Merger Surviving Corporation shall provide, or shall
cause to be provided, to each employee who is an employee of Saturn or any of
its Subsidiaries at the Initial Effective Time (“Saturn Employees”)
(i) annual base salary no less than the annual base salary as in effect for such
Saturn Employee as of the Initial Effective Time; and (ii) other compensation
and employee benefits that are no less favorable, in the aggregate, than the
other compensation and employee benefits that are provided to Saturn
Employees immediately prior to the Initial Effective Time; provided, however, that (x) for
purposes of determining “other compensation and employee benefits” required to
be provided pursuant to clause (ii) above, change in control or
transaction-based retention, transition, stay or similar bonus arrangements
shall be excluded, (y) so long as the Saturn Merger Surviving Corporation
complies with the provisions of Section 6.9(g) as may be applicable to a given
Saturn Employee, Saturn Merger Surviving Corporation shall be deemed to have
satisfied the portion of the covenant contained in clause (ii) above with
respect to any obligation to provide severance payments and benefits to such
Saturn Employee as may otherwise be required to be provided hereunder, and (z)
so long as the Saturn Merger Surviving Corporation complies with the provisions
of Section 6.9(d) and (e), as may be applicable to a given Saturn Employee,
Saturn Merger Surviving Corporation shall be deemed to have satisfied the
portion of the covenant contained in clause (ii) above with respect to any
obligation to provide short-term incentive compensation and
equity compensation, as applicable, to such Saturn Employee as may
otherwise be required to be provided hereunder for the period during which
Saturn Merger Surviving Corporation has complied with such provisions. The
preceding sentence shall not preclude the Saturn Merger Surviving Corporation or
its Subsidiaries at any time following the Initial Effective Time from
terminating the employment of any Saturn Employee for any reason (or for no
reason). Notwithstanding anything to the contrary, with respect to Saturn
Employees who are subject to collective bargaining agreements, compensation and
benefits shall be provided in accordance with the applicable collective
bargaining agreements. Notwithstanding anything to the contrary, with respect to
any Saturn Employees who became Saturn Employees as a result of an acquisition
by Saturn (“Acquired
Saturn Employees”) and whose compensation and benefits have not been
fully integrated into Saturn Plans as of the Initial Effective Time, such
Acquired Saturn Employees’ compensation and benefits shall continue to be
integrated into the applicable Saturn Plan following the Initial Effective Time;
provided however that at such time as the integration is complete, such Acquired
Saturn Employee’s compensation and benefits shall be continued as described in
the first sentence of this Section 6.9(a). From and after the Initial
Effective Time, the Saturn Merger Surviving Corporation shall honor all Saturn
Plans, Saturn Employment Agreements and Saturn Foreign Plans and compensation
arrangements and agreements in accordance with their terms as in effect
immediately before the Initial Effective Time, including without limitation the
Shining Performance Program.
(b)
Each
Saturn Employee employed in the United States (a “US Employee”) whose
employment is terminated during the Benefits Continuation Period under
circumstances entitling the US Employee to severance benefits under the
applicable plan, program, policy, agreement or arrangement providing severance
benefits to such US Employee will receive additional age and service credit
under the qualified and non-qualified pension and retirement plans and
post-retirement health and welfare plans as if such US Employee had remained
employed through the Benefits Continuation Period for purposes of determining
whether the US Employee has achieved the following age or number of years of
service, as applicable, for the following purposes (but not for purposes of
benefit accrual): (u) Age 50: eligibility for post-retirement health coverage;
(v) Age 55: portability and continued company paid premiums for retiree life
insurance (the “Life
Insurance Benefit”), subject to achievement of 5 years of service; (w)
Age 60: the 35 percent minimum benefit under the supplemental executive
retirement plan (the “SERP Minimum
Benefit”), subject to achievement of 10 years of service, and elimination
of the reduction for early retirement under the qualified pension plan (the
“Qualified Plan
Benefit”), subject to achievement of 40 years of service; (x) 5 years of
Service: the Life Insurance Benefit, subject to attainment of age 55, and
vesting in the qualified pension plan; (y) 10 years of service: the SERP Minimum
Benefit, subject to attainment of age 60; and (z) 40 years of Service: the
Qualified Plan Benefit, subject to attainment of age 60. Saturn may amend the
qualified and non-qualified pension and retirement plans and post-retirement
health and welfare plans in which US Employees participate to reflect and
effectuate the foregoing. Such additional age and service credit
shall not be provided for purposes of determining pension benefits for any US
Employee who actually receives additional age and service credit with respect to
such pension benefits under a Saturn Employment Agreement upon a qualifying
termination of employment under such agreement, other than the two executives
identified on Section 6.9(b) of the Saturn Disclosure Letter.
(c)
Each
Saturn Employee who is a “Chief Financial Officer” or “General Manager” of an
entity based outside of the United States whose employment is terminated during
the two-year period commencing on the Initial Effective Time under circumstances
entitling such Saturn Employee to severance benefits under such applicable plan,
program, policy, agreement or arrangement providing severance benefits to such
Saturn Employee as of the date hereof shall, notwithstanding anything to the
contrary in such plan, program, policy, agreement or arrangement, be entitled to
a minimum cash severance benefit of two times the sum of such Saturn Employee’s
target annual bonus and base salary. Saturn may enter into amendments
of such plans, programs, policies, agreements or arrangements to effectuate the
foregoing. For the avoidance of any doubt, all cash severance
benefits payable under such applicable plan, program, policy, agreement or
arrangement, including but not limited to any statutory termination benefits
provided pursuant to Law in the applicable local jurisdiction, shall be counted
as part of the determination of whether the minimum cash severance benefit of
two times the sum of such Saturn Employee’s target annual bonus and base salary
has been satisfied.
(d)
Saturn
may set and pay short-term incentive bonuses in the ordinary course of business
consistent in all material respects with past practice, provided that, with
respect to performance year 2009, (i) if the Initial Effective Time occurs after
the end of any short-term performance period and prior to the time that
short-term incentive bonuses for such period would be paid in the ordinary
course of business consistent in all material respects with past practice,
Saturn shall pay, immediately prior to the Initial Effective Time, to each
person who is a participant in a short-term incentive program immediately prior
to the Initial Effective Time (a “Bonus Plan
Participant”) a bonus with respect to such performance period based on
actual performance for the performance period, provided to the extent that
actual results are not yet available for such period or any portion thereof,
such bonus shall be based on actual performance for the period for which such
results are available and a good faith estimate of actual performance for the
remainder of such period and (ii) if the Initial Effective Time occurs during
the 2009 calendar year, Saturn Merger Surviving Corporation will pay a full year
bonus to each Bonus Plan Participant who is an employee of Saturn Merger
Surviving Corporation as of December 31, 2009 based on performance measured
through the latest date prior to the Initial Effective Time through which
performance against metrics established by Saturn prior to the date hereof can
be measured as of the Initial Effective Time, such bonus to be paid no later
than March 15, 2010; provided, however that each Bonus Plan Participants whose
employment terminates during 2009 and who satisfies the eligibility requirements
to receive separation pay under the separation benefits plan applicable to him
or her (including, where applicable, signing a valid release of claims) shall
receive a pro rata portion of his/her 2009 target bonus based on the number of
full days such Bonus Plan Participant was employed by Saturn or Saturn Merger
Surviving Corporation or their respective Subsidiaries in
2009. Notwithstanding the foregoing, nothing herein shall adversely
affect the right of any participant in a short-term incentive bonus program to
receive short term incentive bonus payments upon a termination of employment
under the terms of the applicable short-term incentive bonus
program.
(e)
In the
event that the Initial Effective Time occurs on or after January 1, 2010, each
Bonus Plan Participant shall be paid, at the same time as bonuses are paid for
performance year 2010 to Saturn Employees under the plan of the Saturn Merger
Surviving Corporation, a pro rata portion of his/her 2010 target bonus based on
the number of days such Bonus Plan Participant was employed by Saturn or its
Subsidiaries in 2010 through the Initial Effective Time. Beginning
January 1, 2010 or if the Initial Effective Time occurs on or after January 1,
2010, beginning immediately following the Initial Effective Time, Saturn
Employees shall be eligible to participate in any short-term incentive award
plans of the Saturn Merger Surviving Corporation and its Subsidiaries to the
same extent and on the same terms and conditions as similarly situated employees
of the Saturn Merger Surviving Corporation and its Subsidiaries who were not
Saturn Employees, provided that, in addition to the amounts described in the
first sentence of this Section 6.9(e), the amount of the 2010 bonus payable to
such Saturn Employees in respect of the portion of 2010 occurring after the
Initial Effective Time under the short term incentive award plans of the Saturn
Merger Surviving Corporation or its Subsidiaries shall be pro-rated for the
portion of 2010 occurring after the Initial Effective
Time. Notwithstanding the foregoing, with respect to performance year
2010, Saturn Merger Surviving Corporation will pay a pro rata portion of the
target bonus for performance year 2010 to participants who were Saturn Employees
as of the Initial Effective Time whose employment terminates during 2010 who
satisfy the eligibility requirements to receive separation pay under the
separation benefits plan applicable to them (including, where applicable,
signing a valid release of claims) which pro rata portion shall be based on the
number of days the Saturn Employee was employed by Saturn or Saturn Merger
Surviving Corporation or their respective Subsidiaries in
2010. Beginning January 1, 2010, Saturn Employees shall be eligible
to participate in any equity compensation plans of the Saturn merger Surviving
Corporation to the same extent and on the same terms and conditions as similarly
situated employees of the Saturn Merger Surviving Corporation and its
Subsidiaries (or of Mercury and its Subsidiaries to the extent that awards are
granted in 2010 prior to the Initial Effective Time) who were not Saturn
Employees, provided, that in the event that the Initial Effective Time occurs
after the date on which equity compensation grants are made to employees of
Mercury generally, Saturn Employees shall nonetheless receive a grant of equity
compensation awards in 2010 from Saturn Merger Surviving Corporation as soon as
practicable following the Initial Effective Time to the same extent and on the
same terms and conditions as similarly situated employees of the Saturn Merger
Surviving Corporation and its Subsidiaries who were not Saturn
Employees.
(f)
Following
the Initial Effective Time, the Saturn Merger Surviving Corporation shall treat
former employees of Saturn and its Subsidiaries who, as of the Initial Effective
Time, are eligible to receive post-retirement health benefits under the
applicable Saturn Plans, no less favorably than similarly situated former
employees of the Saturn Merger Surviving Corporation and its Subsidiaries who
are not Saturn Employees with respect to post-retirement health
benefits.
(g)
For the
period required under the terms of Saturn’s Severance Benefit Plan (the “Saturn Severance
Plan”), but in no event for shorter than the Benefits Continuation
Period, the Saturn Merger Surviving Corporation shall (i) maintain the Saturn
Severance Plan for the purpose of providing any severance payments to
Saturn Employees and (ii) provide the severance payments and benefits required
thereunder in accordance with the terms of the Saturn Severance Plan to any
Saturn Employee who is a participant in the Saturn Severance Plan immediately
prior to the Initial Effective Time whose employment is terminated during the
Benefits Continuation Period.
(h)
Prior to
the Initial Effective Time, Saturn may establish a retention bonus pool not to
exceed 90 million dollars to provide cash retention arrangements equal to no
more than one times the sum of the applicable Saturn Employee’s base pay and
target bonus to certain Saturn Employees other than (i) Saturn Employees with a
Saturn Employment Agreements providing severance pay of at least two times the
sum of base pay and target bonus, (ii) Saturn Employees employed outside the
U.S. who are eligible to receive guaranteed minimum severance in accordance with
Section 6.9(c), and (iii) Saturn Employees who are otherwise eligible for
separation pay equal to at least two times the sum of base pay and target bonus
under the Saturn Severance Plan; provided, however, that Saturn may provide to
the Saturn Employees described in clauses (i) and (iii) above, a cash retention
arrangement of up to their annual target bonus not to exceed 100% of base
pay. The terms of the retention arrangements provided to Saturn
Employees under this paragraph shall provide that no retention bonuses will be
paid to such Saturn Employees whose employment terminates for any reason prior
to the six (6) month anniversary of the Initial Effective Time other than due to
termination by the Saturn Merger Surviving Corporation other than for
cause.
(i)
Mercury
and the Saturn Merger Surviving Corporation hereby agree to the matter set forth
on Section 6.9(i) of the Saturn Disclosure Schedule.
(j)
For all
purposes (including for purposes of vesting, eligibility to participate, and
benefit accrual) under the Mercury Plans providing benefits to any Saturn
Employees after the Initial Effective Time or any plan adopted by the Saturn
Merger Surviving Corporation or any of its Subsidiaries after the Initial
Effective Time (the “New Plans”), each
Saturn Employee shall, subject to applicable Law and applicable tax
qualification requirements, be credited with his or her years of service with
Saturn and its Subsidiaries and their respective predecessors before the Initial
Effective Time, to the same extent as such Saturn Employee was entitled, before
the Initial Effective Time, to credit for such service under any
similar employee benefit plan of Saturn or any of its Subsidiaries in
which such Saturn Employee participated or was eligible to participate
immediately prior to the Initial Effective Time; provided, that the
foregoing shall not apply to the extent that its application would result in a
duplication of benefits; and provided, further, that,
notwithstanding the foregoing, with respect to retiree health benefit plans
applicable to US-based employees, service credit before age 40 will not be
recognized for any Saturn Employee who was either hired or rehired by Saturn or
its Subsidiaries on or after January 1, 2003 or had not attained age 50 before
January 1, 2003. In addition, and without limiting the generality of
the foregoing and to the extent permissible by any insurance carrier or vendor
applicable to the New Plan, (i) to the extent a Saturn Employee becomes eligible
to participate in a New Plan, such Saturn Employee shall be immediately eligible
to participate, without any waiting time, in any and all New Plans to the extent
coverage under such New Plan is comparable to the Saturn Plan or Saturn Foreign
Plan in which such Saturn Employee participated immediately before the
consummation of the Mergers (such plans, collectively, the “Old Plans”), and (ii)
(x) for purposes of each New Plan providing medical, dental, pharmaceutical or
vision benefits to any Saturn Employee, the Saturn Merger Surviving Corporation
shall cause all pre-existing condition exclusions and actively-at-work
requirements of such New Plan to be waived for such Saturn Employee and his or
her covered dependents, unless such conditions would not have been waived under
Old Plan of Saturn or its Subsidiaries in which such Saturn Employee
participated immediately prior to the Initial Effective Time, and (y) the Saturn
Merger Surviving Corporation shall cause any eligible expenses incurred by such
Saturn Employee and his or her covered dependents during the portion of the plan
year of the Old Plan ending on the date such employee’s participation in the
corresponding New Plan begins to be taken into account under such New Plan for
purposes of satisfying all deductible, coinsurance and maximum out-of-pocket
requirements applicable to such employee and his or her covered dependents for
the applicable plan year as if such amounts had been paid in accordance with
such New Plan.
(k)
Prior to
the Closing, the Saturn Board, or an appropriate committee of non-employee
directors thereof, shall adopt a resolution consistent with the interpretive
guidance of the SEC so that the disposition by any officer or director of Saturn
or acquisition by any person who becomes an officer or director of the Saturn
Merger Surviving Corporation as of the Initial Effective Time, in each case, who
is a covered person of Saturn or will be a covered person of the Saturn Merger
Surviving Corporation for purposes of Section 16 of the Exchange Act and the
rules and regulations thereunder (“Section 16”) of
shares of Saturn Common Stock, Saturn Options or other equity awards of Saturn
or shares of Saturn Merger Surviving Corporation Common Stock, Saturn Merger
Surviving Corporation options or other equity awards of Saturn Merger Surviving
Corporation, as applicable, pursuant to, or in connection with, this Agreement
and the Mergers shall be an exempt transaction for purposes of Section
16. Prior to the Closing, the Mercury Board, or an appropriate
committee of non-employee directors thereof, shall adopt a resolution consistent
with the interpretive guidance of the SEC so that the disposition by any officer
or director of Mercury who is a covered person of Mercury for purposes of
Section 16 of shares of Mercury Common Stock, Mercury options or other Mercury
equity awards pursuant to, or in connection with, this Agreement and the Mergers
shall be an exempt transaction for purposes of Section 16.
(l)
Notwithstanding
anything in this Section 6.9 to the contrary, nothing contained herein, whether
express or implied, shall be treated as an amendment or other modification of
any Saturn Plan or Mercury Plan, or shall limit the right of the Saturn Merger
Surviving Corporation or Mercury to amend, terminate or otherwise modify any
Saturn Plan or Mercury Plan following the Effective Time. If (i) a
Person other than the parties hereto makes a claim or takes other action to
enforce any provision in this Agreement as an amendment to any Saturn Plan or
Mercury Plan, and (ii) such provision is deemed to be an amendment to such
Saturn Plan or Mercury Plan even though not explicitly designated as such in
this Agreement, then, solely with respect to such Saturn Plan or Mercury Plan,
such provision shall lapse retroactively and shall have no amendatory effect
with respect thereto.
(m)
The
parties acknowledge and agree that all provisions contained in this Section 6.9
are included for the sole benefit of the parties hereto, and that nothing in
this Agreement, whether express or implied, shall create any third party
beneficiary or other rights (i) in any other Person, including any employees or
former employees of Saturn or its Subsidiaries, any participant in any Mercury
Plan, or any dependent or beneficiary thereof, or (ii) to continued employment
with the Saturn Merger Surviving Corporation or any of its
Affiliates.
(n)
With
respect to any Saturn Employees based outside of the United States, the Saturn
Merger Surviving Corporation’s obligations under this Section 6.9 shall be
modified to the extent necessary to comply with applicable Laws of the foreign
countries and political subdivisions thereof in which such Saturn Employees are
based.
(o)
Saturn
agrees to consult in good faith with Mercury regarding material communications
to Saturn Employees that describe the impact of the consummation of the
transactions contemplated under this Agreement on Saturn Plans and the
Employment Agreements.
6.10
Financing.
(a)
Mercury
shall use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and obtain the Financing on the terms and conditions described in the
Commitment Letter, including using reasonable best efforts to (i) maintain in
effect the Commitment Letter, (ii) negotiate definitive agreements with respect
thereto on terms and conditions (including the “flex” provisions) contemplated
by the Commitment Letter (any such agreements the “Financing Definitive
Agreements”), and execute and deliver to Saturn a copy thereof as
promptly as practicable (and no later than one (1) Business Day) after such
execution, (iii) satisfy on a timely basis all conditions applicable to the
Financing in the Commitment Letter or the Financing Definitive Agreements that
are within the control of Mercury and comply with its obligations thereunder,
(iv) consummate the Financing at or prior to the Closing; provided, that under
no circumstances shall Mercury or any of its Subsidiaries be required to issue,
or permit Saturn or any of its Subsidiaries to issue, any equity or debt
securities, incur, or permit Saturn or any of its Subsidiaries to incur,
Indebtedness (other than pursuant to the Financing) or sell, dispose or
otherwise transfer, or permit Saturn or any of its Subsidiaries to sell, dispose
or otherwise transfer, any assets in order to satisfy any conditions in the
Commitment Letter or in order to arrange or obtain any Financing and (v) enforce
its rights under the Commitment Letter or the Financing Definitive Agreements in
the event of a breach by the financing sources that impedes or delays the
Closing, including seeking specific performance of the parties
thereunder. In the event that all conditions to the Commitment Letter
or the Financing Definitive Agreements have been satisfied or, upon funding will
be satisfied, Mercury shall use its reasonable best efforts to cause the lenders
and the other Persons providing such Financing to fund on the Closing Date the
Financing required to consummate the Mergers and the other transactions
contemplated by this Agreement (including by taking enforcement action,
including seeking specific performance, to cause such lenders and the other
Persons providing such Financing to fund such Financing). Mercury
shall have the right from time to time to amend, replace, supplement or
otherwise modify, or waive any of its rights under, the Commitment Letter or the
Financing Definitive Agreements and/or substitute other debt or equity financing
for all or any portion of the Financing from the same and/or alternative
financing sources; provided, that any
such amendment, replacement, supplement or other modification to or waiver of
any provision of the Commitment Letter or the Financing Definitive Agreements
that amends the Financing and/or substitution of all or any portion of the
Financing shall not (A) expand upon the conditions precedent or contingencies to
the funding on the Closing Date of the Financing as set forth in the Commitment
Letter or the Financing Definitive Agreements or (B) prevent or impede or
materially delay the consummation of the Mergers and the other transactions
contemplated by this Agreement. Mercury shall be permitted to reduce
the amount of Financing under the Commitment Letter or the Financing Definitive
Agreements in its reasonable discretion; provided, that
Mercury shall not reduce the Financing to an amount committed below the amount
that is required, together with the Repayment Amount and the financial resources
of Mercury, including cash on hand and marketable securities, to consummate the
Mergers; and provided, further, that such
reduction shall not (x) expand upon the conditions precedent or contingencies to
the funding on the Closing Date of the Financing as set forth in the Commitment
Letter or the Financing Definitive Agreements or (y) prevent or materially
impede or materially delay the consummation of the Mergers and the other
transactions contemplated by this Agreement. If any portion of the
Financing becomes unavailable or Mercury becomes aware of any event or
circumstance that makes any portion of the Financing unavailable, in each case,
on the terms and conditions (including the “flex” provisions) contemplated in
the Commitment Letter or the Financing Definitive Agreements and such portion is
reasonably required to fund the aggregate Cash Consideration, Mercury shall use
its reasonable best efforts to arrange and obtain alternative debt financing
from the same and/or alternative financial institutions in an amount sufficient
to consummate the transactions contemplated by this Agreement, upon terms and
conditions not materially less favorable, in the aggregate, to Mercury or the
Saturn Merger Surviving Corporation than those in the Commitment Letter or the
Financing Definitive Agreements as promptly as practicable following the
occurrence of such event. Mercury shall give Saturn prompt oral and
written notice (but in any event not later than one (1) Business Day after the
occurrence) of any material breach by any party to the Commitment Letter or the
Financing Definitive Agreements or of any condition not likely to be satisfied,
in each case, of which Mercury has Knowledge, any termination of the Commitment
Letter or the Financing Definitive Agreements. Mercury shall keep
Saturn informed on a reasonably current basis of the status of its efforts to
consummate the Financing. For the avoidance of doubt, the syndication of the
Financing to the extent permitted by the Commitment Letter shall not be deemed
to violate Mercury's obligations under this Agreement.
(b)
Saturn
shall provide, and shall cause its Subsidiaries, and shall use its reasonable
best efforts to cause each of its and their respective Representatives,
including legal, tax, regulatory and accounting, to provide all cooperation
reasonably requested by Mercury in connection with the Financing or any
alternate debt financing or debt securities issuance in connection with the
financing of the Mergers (collectively the “Financing
Arrangements”) (provided, that such
requested cooperation does not unreasonably interfere with the ongoing
operations of Saturn and its Subsidiaries), including (i) providing financial
and other information relating to Saturn and its Subsidiaries to Mercury and the
lenders and other financial institutions and investors that are or may become
parties to the Financing Arrangements and to any underwriters, initial
purchasers or placement agents in connection with the Financing Arrangements
(the “Financing
Parties”) that is customary for such financing or reasonably necessary
for the completion of the Financing by the Financing Parties, including
information regarding the business, operations, financial projections and
prospects of Saturn and its Subsidiaries that is customary for such financing or
reasonably necessary for the completion of the Financing by the Financing
Parties, (ii) participating and causing senior management of Saturn to
participate in a reasonable number of meetings (including customary one-on-one
meetings) with any Financing Parties and other presentations, road shows,
drafting sessions, due diligence sessions (including accounting due diligence
sessions) and sessions with the rating agencies as are reasonably necessary for
the completion of the Financing by the Financing Parties, (iii) assisting in the
preparation of (A) any customary offering documents, bank information memoranda,
Forms 8-K, registration statements, prospectuses and similar documents
(including all historical and pro forma financial statements and information
regarding Saturn and its Subsidiaries that is required by Regulations S-K and
S-X to be included or incorporated by reference in a registration statement) for
any of the Financing Arrangements or offering of debt securities in connection
therewith, and (B) materials for rating agency presentations, (iv) cooperating
with the marketing efforts for any of the Financing Arrangements (including
consenting to the use of Saturn’s and its Subsidiaries’ logos; provided that such
logos are used solely in a manner that is not intended to or reasonably likely
to harm or disparage Saturn or its Subsidiaries or the reputation or goodwill of
Saturn or any of its Subsidiaries), (v) assisting in the preparation of and
executing and delivering (or using reasonable best efforts to obtain from its
advisors), and causing its Subsidiaries to execute and deliver (or use
reasonable best efforts to obtain from its advisors), (A) credit agreements and
other loan documents, underwriting or note purchase agreements, indentures,
currency or interest hedging agreements and other contracts in connection with
any of the Financing Arrangements (collectively, the “Financing
Documents”), customary certificates (including a certificate of the
principal financial officer of Saturn or any Subsidiary with respect to solvency
matters), legal opinions or other documents and instruments relating to
guarantees and other matters ancillary to the Financing as may be reasonably
requested by Mercury in connection with any of the Financing Arrangements and
other documents required to be delivered under the Financing Documents and (B)
the amendment of any of Saturn’s or its Subsidiaries’ existing credit
agreements, currency or interest hedging agreements, or other agreements, in
each case, on terms satisfactory to Mercury and that are reasonably requested by
Mercury in connection with any of the Financing Arrangements; provided, that no
obligation of Saturn or any of its Subsidiaries under any such agreements or
amendments shall be effective until the Closing and; provided, further, that Saturn
may reasonably deny such request, (vi) using its reasonable best efforts, as
appropriate, to have its independent accountants provide their reasonable
cooperation and assistance, including providing customary comfort letters to the
underwriters in connection with the initial purchase of any securities in
connection with any Financing Arrangements and providing customary consents to
inclusion of their audit reports in registration statements of Mercury or
Saturn, (vii) using its reasonable best efforts to permit any cash and
marketable securities of Saturn and its Subsidiaries to be made available to
Mercury at the Closing, (viii) providing authorization letters to the Financing
Parties authorizing the distribution of information to prospective lenders or
investors and containing a representation to the Financing Parties that the
public side versions of such documents, if any, do not include material
nonpublic information about Saturn or its Affiliates or securities, (ix) using
its reasonable best efforts to ensure that the Financing Parties benefit from
the existing lending relationships of Saturn and its Subsidiaries, (x)
cooperating reasonably with the Financing Parties’ due diligence investigation
of Saturn and its subsidiaries, including due diligence performed by any
Financing Parties and their respective counsel in connection with any of the
Financing Arrangements, to the extent customary and reasonable and to the extent
not unreasonably interfering with the business of Saturn and (xi) at the request
of Mercury, use its reasonable best efforts to file a registration statement on
Form S-3 with respect to a guarantee by Saturn of Indebtedness of Mercury which
becomes automatically effective which registers Saturn’s issuance or guarantee
of the debt securities to be issued in connection with any Financing
Arrangements, which guarantees shall not be effective prior to and only upon the
Closing; provided that in no
event shall Saturn be required to take any actions that would encumber any of
its assets prior to the consummation of the Mergers or that would result in a
breach of any of its Contracts; and provided, further, that until
the Subsequent Effective Time occurs, neither Saturn nor any of its Subsidiaries
shall (x) be required to pay any commitment or other similar fee, (y) have any
liability or any obligation under any credit agreement or any related document
or any other agreement or document related to the Financing (or alternative
financing that Mercury may raise in connection with the transactions
contemplated by this Agreement) or (z) be required to incur any other liability
in connection with the Financing (or any alternative financing that Mercury may
raise in connection with the transactions contemplated by this Agreement) unless
reimbursed or reasonably satisfactorily indemnified by Mercury.
(c)
Mercury
(i) shall promptly, upon request by Saturn, reimburse Saturn for all reasonable
and documented out-of-pocket costs (including reasonable attorneys’ fees) to the
extent incurred by Saturn, any of its Subsidiaries or their respective
Representatives in connection with the cooperation of Saturn and its
Subsidiaries contemplated by this Section 6.10, (ii) acknowledges and agrees
that Saturn, its Subsidiaries and their respective Representatives shall not
have any responsibility for, or incur any liability to any Person under any of
the Financing Arrangements that Mercury may request in connection with the
transactions contemplated by this Agreement and (iii) shall indemnify and hold
harmless Saturn, its Subsidiaries and their respective Representatives from and
against any and all losses, damages, claims, costs or expenses suffered or
incurred by any of them in connection with any of the Financing Arrangements or
Financing Documents and any information used in connection therewith, other than
with respect to any information provided by Saturn or any of its Subsidiaries,
except in the event that such losses, damages, claims, costs or expenses arose
out of or result from the willful misconduct or gross negligence of Saturn, its
Subsidiaries or their respective Representatives.
(d)
In the
event that the Commitment Letter is, or the Financing Definitive Agreements are
amended, replaced, supplemented or otherwise modified, including as a result of
obtaining alternative financing in accordance with Section 6.10(a), or if
Mercury substitutes other financing for all or a portion of the Financing, each
of Mercury and Saturn shall comply with its covenants in Sections 6.10(a) and
(b) with respect to the Commitment Letter or the Financing Definitive
Agreements, as so amended, replaced, supplemented or otherwise modified and with
respect to such other financing to the same extent that Mercury and Saturn would
have been obligated to comply with respect to the Financing and the provisions
in Sections 1.2, 8.1(b)(ii) and 10.11 relating to the Commitment Letter or the
Financing Definitive Agreements and the Financing shall be deemed to refer to
the Commitment Letter or the Financing Definitive Agreements as so amended,
replaced, supplemented or otherwise modified and to such other financing, as
applicable.
6.11
Takeover
Statutes. If any Takeover Statute is or may become applicable
to the Mergers or the other transactions contemplated by this Agreement, Mercury
and the Mercury Board or Saturn and the Saturn Board, as the case may be, shall
grant all such approvals and take all such actions as are necessary or advisable
so that such transactions may be consummated as promptly as practicable on the
terms contemplated by this Agreement and otherwise act to eliminate or minimize
the effects of such statute, regulation or provision in Mercury’s certificate of
incorporation or bylaws or Saturn’s certificate of incorporation or bylaws, as
the case may be on such transactions.
6.12
Transaction
Litigation. Each of Mercury and Saturn shall cooperate with
the other in the defense or settlement of any litigation relating to the
transactions contemplated by this Agreement against (a) Saturn, any of its
Subsidiaries and/or its directors or officers, or (b) Mercury, any of its
Subsidiaries and/or its directors or officers. Neither Saturn nor any
of its Subsidiaries shall agree to any settlement thereof without the prior
written consent of Mercury.
6.13
NYSE
Listing. Saturn shall use reasonable best efforts to cause the
shares of Saturn Merger Surviving Corporation Common Stock issuable to
shareholders of Mercury and Saturn in the Mergers and such other shares of
Saturn Merger Surviving Corporation Common Stock to be reserved for issuance
upon exercise or settlement of options and other equity awards of Mercury or
Saturn to be approved for listing on the NYSE, subject to official
notice of issuance, prior to the Subsequent Effective Time.
6.14
Overseas
Financing. At the Closing, (a) Mercury will cause one or more
non-U.S. Subsidiaries of Mercury (the “Mercury Overseas
Subsidiaries”) to lend up to $9.4 billion, in the aggregate (such amount,
as determined by Mercury in its discretion, the “Repayment Amount”),
to Saturn Holdings BV and Saturn Intl CV and (b) Saturn will cause Saturn
Holdings BV and Saturn Intl CV to pay the Repayment Amount to Saturn and Saturn
Sub in satisfaction of such portion of the Intercompany Notes as equals the
amount of such payment (for these purposes, translating currencies at the spot
rate in effect on the date of such payment); it being understood that, for
administrative convenience, the Mercury Overseas Subsidiaries may advance the
Repayment Amount directly to the Exchange Agent, in which case Saturn, Saturn
Sub, Saturn Holdings BV and Saturn Intl CV will issue appropriate letters of
direction confirming such payments. The lending of the Repayment
Amount from the Mercury Overseas Subsidiaries to Saturn Holdings BV and Saturn
Intl CV shall be evidenced by notes in form and substance reasonably
satisfactory to Mercury.
6.15
Convertible Preferred Stock
Conversion. Promptly
following the date hereof, Saturn shall, or shall cause the transfer agent under
the Convertible Preferred Stock to, send any required notice to each holder of
such stock in accordance with Section 10 of Annex A of the certificate of
incorporation of Saturn and the other applicable provisions of the certificate
of incorporation of Saturn and applicable Law and Saturn shall otherwise comply
with Annex A of the certificate of incorporation of Saturn; provided, that any
such notice shall be subject to the approval of Mercury (which approval shall
not be unreasonably withheld or delayed).
6.16
Dividends. After
the date of this Agreement, each of Mercury and Saturn shall coordinate with the
other the payment of dividends with respect to Mercury Common Stock and Saturn
Common Stock and the record dates and payment dates relating thereto, it being
the intention of the parties that holders of Mercury Common Stock and Saturn
Common Stock shall not receive two dividends, or fail to receive one dividend,
for any single calendar quarter with respect to their shares of Mercury Common
Stock, Saturn Common Stock or any shares of Saturn Merger Surviving Corporation
Common Stock that any such holder receives in exchange for such shares of Saturn
Common Stock or Mercury Common Stock in the Mergers.
6.17
Tax-Free Qualification. Each
of Saturn and Mercury shall (i) use its reasonable best efforts to and to cause
each of its Subsidiaries to cause the Mercury Merger to qualify as a
reorganization within the meaning of Section 368(a) of the Code and (ii) use its
reasonable best efforts not to take any action that will cause the retention by
Saturn shareholders of a portion of each share of Saturn Merger Surviving
Corporation Common Stock to be taxable.
6.18
Tax Treatment of Specified
Subsidiaries. Prior to the Closing, Saturn and Mercury will
take such actions or steps as Saturn and Mercury mutually agree are commercially
reasonable and practicable to cause DJT Partners, LP to be disregarded as an
entity separate from Saturn for United States federal income tax purposes, in
which case, at the Initial Effective Time, all shares of Saturn Common Stock
held by DJT Partners, LP shall be cancelled and extinguished without any
conversion thereof; provided that such steps would not be reasonably likely to
(i) impair the ability of Saturn to perform its obligations under this Agreement
in any material respect or (ii) prevent or materially delay or impair the
consummation of the Mergers or the other transactions contemplated by this
Agreement.
6.19
Tax Representation
Letters. Each of Mercury and Saturn shall use its reasonable
best efforts to deliver to Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
(“Xxxxx Xxxxx”)
a tax representation letter, dated as of the Closing Date and signed by an
officer of Mercury or Saturn, as the case may be, containing representations as
shall be reasonably necessary or appropriate to enable Xxxxx Xxxxx to render the
opinion described in Section 7.2(e) of this Agreement (each a “Xxxxx Xxxxx Tax
Representation Letter”).
6.20
Environmental
Matters. To the extent that ISRA applies to the transactions
contemplated by this Agreement, prior to the Closing, each of Mercury and
Saturn, as the case may be, shall use its reasonable best efforts to take all
actions to achieve Compliance with ISRA with respect to all real property owned,
leased or operated by Mercury or Saturn located in the State of New Jersey that
are considered “industrial establishments” under the New Jersey Industrial Site
Recovery Act, N.J.S.A. 13:1K-6 et seq. (“ISRA” and all such
properties, the “New
Jersey Properties”), or to obtain a Remediation Agreement (as such term
is defined under ISRA) with respect to all New Jersey
Properties. Without limiting the generality of the foregoing, each of
Mercury and Saturn, as the case may be, shall use its reasonable best efforts
to:
(a)
make all
filings required by the NJDEP or ISRA in order to achieve Compliance with ISRA,
including, without limitation, a General Information Notice, Preliminary
Assessment, Site Investigation, Remedial Investigation Workplan or Remedial
Action Workplan; and
(b)
obtain
and post or execute, and thereafter maintain in full force and effect, any
remediation funding source required under ISRA to secure the performance of ISRA
compliance activities. Any such remediation funding source shall be
satisfactory in form and substance to the NJDEP.
For
purposes of this Agreement, “Compliance with ISRA”
shall mean the receipt of a letter or letters from the New Jersey Department of
Environmental Protection (the “NJDEP”) or from such
third party as is authorized by NJDEP to issue the same (a “Site Professional”)
approving a No Further Action Letter and Covenant Not to Xxx (as such terms are
defined under ISRA), or other written determination by the NJDEP or a Site
Professional that (i) that the requirements of ISRA have been satisfied, (ii)
that the requirements of ISRA do not apply or (iii) that compliance with ISRA
has been waived. Such written authorization may include, but not be limited to
any of the expedited compliance options set forth in subchapter 5 of the ISRA
regulations (NJAC 7:26B-5.1 et seq.)
ARTICLE
VII
CONDITIONS
7.1
Conditions to Obligations of
Each Party under this Agreement. The respective obligations of
each party to effect the Mergers shall be subject to the satisfaction or waiver
at or prior to the Closing of the following conditions:
(a)
Shareholder
Approval. The Saturn Shareholder Approval and the Mercury
Shareholder Approval shall have been obtained.
(b)
HSR Act; Foreign
Laws. (i) The waiting period (and any extension thereof)
applicable to the Mergers under the HSR Act shall have been terminated or
expired, (ii) the European Commission shall have approved the Mergers under
the EC Merger Regulation, and (iii) all waiting periods (and any extensions
thereof) set forth in Section 7.1(b) of the Mercury Disclosure Letter that are
required to be terminated or expired prior to the Closing shall have terminated
or expired, and all approvals set forth in Section 7.1(b) of the Mercury
Disclosure Schedule required to be obtained prior to the Closing shall have been
obtained.
(c)
No
Order. No Governmental Entity of competent jurisdiction in the
United States, the European Union or any jurisdiction listed in Section 7.1(c)
of the Mercury Disclosure Letter (each such jurisdiction an “Applicable
Jurisdiction”) shall have enacted, issued, promulgated, enforced or
entered any decision, injunction, decree, ruling, Law or Order (whether
temporary, preliminary or permanent) that is in effect and enjoins or otherwise
prohibits or makes illegal the consummation of either of the
Mergers.
(d)
Effectiveness of the
Registration Statement. The Registration Statement shall have
been declared effective by the SEC under the Securities Act. No stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and be in effect and no Proceeding for that purpose shall be
pending.
(e)
NYSE
Listing. The shares of Saturn Merger Surviving Corporation
Common Stock issuable to the shareholders of Saturn and Mercury in the Mergers
shall have been approved for listing on the NYSE, subject to official notice of
issuance.
7.2
Conditions to Mercury’s
Obligations. The obligations of Mercury to effect the Mergers
are also subject to the satisfaction or waiver by Mercury at or prior to the
Closing of the following conditions:
(a)
Representations and
Warranties. (i) Each of the representations and
warranties of Saturn, Merger Sub 1 and Merger Sub 2 set forth in 3.5(a), (b),
(d) and (e) shall be true and correct other than in de minimis respects (with
respect to the aggregate outstanding shares of Saturn Common Stock on a fully
diluted basis and Convertible Preferred Stock) as of the date hereof and as of
the Closing Date, as if made as of such date (except for representations and
warranties in such Sections made as of a specified date, which shall be measured
only as of such specified date) (ii) the representations and warranties of
Saturn, Merger Sub 1 and Merger Sub 2 set forth in Section 3.1, Section 3.3 and
Section 3.25 shall be true and correct in all material respects as of the date
hereof and (iii) each of the other representations and warranties of
Saturn, Merger Sub 1 and Merger Sub 2 in this Agreement shall be true and
correct (without regard to any qualifications as to materiality or Saturn
Material Adverse Effect (or any correlative term) contained in such
representations and warranties) as of the date hereof and as of the Closing
Date, as if made as of such date, except (x) for representations and
warranties made as of a specified date, which shall be measured only as of such
specified date and (y) where the failure to be true and correct, individually or
in the aggregate, has not had and would not reasonably be expected to have, a
Saturn Material Adverse Effect. Mercury shall have received a
certificate, dated the date of the Closing and signed by a senior executive
officer of Saturn, to the foregoing effect.
(b)
Agreements and
Covenants. Saturn shall have performed or complied in all
material respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the
Closing. Mercury shall have received a certificate, dated the date of
the Closing and signed by a senior executive officer of Saturn, to the foregoing
effect.
(c)
Saturn Material Adverse
Effect. Since the date of this Agreement there shall not have
occurred any Event or Events that have had, or would be reasonably expected to
have, individually or in the aggregate, a Saturn Material Adverse
Effect. Mercury shall have received a certificate, dated the date of
the Closing and signed by a senior executive officer of Saturn, to the foregoing
effect.
(d)
Consents and
Approvals. The Regulatory Divestitures shall not result in a
Burdensome Condition.
(e)
Tax
Opinion. Mercury shall have received the written opinion of
Xxxxx
Xxxxx or other counsel reasonably satisfactory to Mercury, dated the Closing
Date, to the effect that the Mercury Merger will be treated for United States
federal income tax purposes as a reorganization within the meaning of Section
368(a) of the Code. In rendering such opinion, counsel to Mercury
shall be entitled to rely upon assumptions, representations, warranties and
covenants, including those contained in this Agreement and in the Xxxxx Xxxxx
Tax Representation Letters described in Section 6.19 of this
Agreement.
7.3
Conditions to Saturn’s,
Merger Sub 1’s and Merger Sub 2’s Obligations. The obligations
of Saturn, Merger Sub 1 and Merger Sub 2 to effect the Mergers are also subject
to the satisfaction or waiver by Saturn at or prior to the Closing of the
following conditions:
(a)
Representations and
Warranties. (i) Each of the representations and
warranties of Mercury set forth in Section 4.5(a), (b), (d) and (e) shall be
true and correct other than in de minimis respects (with
respect to the aggregate outstanding shares of Mercury Common Stock on a fully
diluted basis) as of the date hereof and as of the Closing Date, as if made as
of such date (except for representations and warranties in such Sections made as
of a specified date, which shall be measured only as of such specified date),
(ii) the representations and warranties of Mercury set forth in Section 4.1 and
Section 4.3 shall be true and correct in all material respects as of the date
hereof and (ii) each of the other representations and warranties of Mercury
in this Agreement shall be true and correct (without regard to any
qualifications as to materiality or Mercury Material Adverse Effect (or any
correlative term) contained in such representations and warranties) as of the
date hereof and as the Closing Date, as if made as of such date, except (x) for
representations and warranties made as of a specified date, which shall be
measured only as of such specified date and (y) where the failure to be true and
correct, individually or in the aggregate, has not had and would not reasonably
be expected to have, a Mercury Material Adverse Effect. Saturn shall
have received a certificate, dated the date of the Closing and signed by a
senior executive officer of Mercury, to the foregoing effect.
(b)
Agreements and
Covenants. Mercury shall have performed or complied in all
material respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Subsequent
Effective Time. Saturn shall have received a certificate, dated the
date of the Closing and signed by a senior executive officer of Mercury, to the
foregoing effect.
(c)
Mercury Material Adverse
Effect. Since the date of this Agreement, there shall not have
occurred any Event or Events that have had, or would reasonably be expected to
have, individually or in the aggregate, a Mercury Material Adverse
Effect. Saturn shall have received a certificate, dated the date of
the Closing and signed by a senior executive officer of Mercury, to the
foregoing effect.
ARTICLE
VIII
TERMINATION AND
EXPENSES
8.1
Termination. Except
as specified herein, this Agreement may be terminated and the Mergers may be
abandoned at any time prior to the Closing, whether before or after the receipt
of the Saturn Shareholder Approval or the Mercury Shareholder
Approval:
(a)
by mutual
written consent of Saturn and Mercury in each case duly authorized by their
respective Boards of Directors;
(b)
by either
Saturn or Mercury:
(i)
if any
Governmental Entity of competent jurisdiction of an Applicable Jurisdiction
shall have issued any order, decree, ruling or injunction or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
consummation of the Mergers and such order, decree, ruling or injunction or
other action shall have become final and, in the United States, nonappealable,
or if there shall be adopted following the date of execution of this Agreement
any Law in the United States, the European Union or any Applicable Jurisdiction
that makes consummations of the Mergers illegal or otherwise prohibited; provided, however, that the
party seeking to terminate this Agreement pursuant to this clause (b)(i) has
fulfilled its obligations under Section 6.5;
(ii)
if the
Mergers shall not have been consummated on or before 5:00 p.m., New York time,
on December 8, 2009 (such date the “Initial End Date”);
provided, that
if on the Initial End Date (x) any of the conditions set forth in Section
7.1(b), 7.1(c) or 7.2(d) shall not have been satisfied but all other conditions
set forth in Article VII shall have been satisfied or waived or shall then be
capable of being satisfied or (y) the proceeds of the Financing are not then
available to Mercury in full pursuant to the Commitment Letter (or if Financing
Definitive Agreements have been entered into, pursuant to such Financing
Definitive Agreements) but all of the conditions set forth in Article VII shall
have been satisfied or waived or shall then be capable of being satisfied, then
the Initial End Date shall be automatically extended to 5:00 p.m., New York
time, on March 8, 2010. As used in this Agreement, the term “End Date” shall mean
the Initial End Date, unless the Initial End Date has been extended pursuant to
the foregoing proviso, in which case, the term “End Date” shall mean the date to
which the Initial End Date has been so extended. Notwithstanding the
foregoing, the right to terminate this Agreement under this Section 8.1(b)(ii)
shall not be available to any party whose failure to fulfill any of its
covenants or agreements under this Agreement has been the principal cause of, or
resulted in, the failure of the Mergers to occur on or before the End Date;
or
(iii)
(A) (x)
in the event that any of the representations or warranties of the other party
(or by Merger Sub 1 or Merger Sub 2 in the case of a termination by Mercury) was
or becomes inaccurate and, as a result of any such inaccuracy or inaccuracies,
the condition set forth in Section 7.2(a) or Section 7.3(a), as applicable,
would not then be capable of being satisfied or (y) in the event of any breach
or breaches by the other party (or by Merger Sub 1 or Merger Sub 2 in the case
of a termination by Mercury) of any covenant or other agreement of the other
party (or by Merger Sub 1 or Merger Sub 2 in the case of a termination by
Mercury) contained in this Agreement and, as a result of such breach or
breaches, the condition set forth in Section 7.2(b) or Section 7.3(b), as
applicable, would not then be capable of being satisfied (in the case of clauses
(x) or (y), such other party, a “Condition Failure
Party”), and (B) any such breaches or inaccuracies are not curable, or,
if curable have not been cured by the End Date; provided, that a
party shall not have the right to terminate this Agreement pursuant to this
Section 8.1(b)(iii) if it is then a Condition Failure Party;
(c)
by
Mercury if (i) a Change in the Saturn Recommendation shall have occurred,
whether or not permitted by Section 6.4, (ii) following the date any bona fide
Acquisition Proposal for Saturn or any material modification thereto is first
publicly announced, disclosed or otherwise made known prior to the time at which
Saturn receives the Saturn Shareholder Approval, Saturn fails to issue a press
release that expressly reaffirms the Saturn Recommendation within ten (10)
Business Days following Mercury’s written request to do so (which request may be
made by Mercury one time following any such Acquisition Proposal or any material
modifications thereto), (iii) any tender offer or exchange offer constituting an
Acquisition Proposal for Saturn is commenced or materially modified by any third
party with respect to the outstanding Saturn Common Stock prior to the time at
which Saturn receives the Saturn Shareholder Approval, and the Saturn Board
shall not have recommended that Saturn’s shareholders reject such tender offer
or exchange offer and not tender their Saturn Common Stock into such tender
offer or exchange offer within ten (10) Business Days after commencement or
material modification of such tender offer or exchange offer, unless Saturn has
issued a press release that expressly reaffirms the Saturn Recommendation within
such ten (10) Business Day period, (iv) Saturn or the Saturn Board approves,
endorses, recommends, adopts or enters into any Acquisition Proposal for Saturn
or any Saturn Acquisition Contract, whether or not permitted by Section 6.4, (v)
Saturn shall have materially breached its obligations under Section 6.4, (vi)
Saturn shall have materially breached its obligations under Section 6.2(b), or
(vii) Saturn or the Saturn Board announces, resolves or proposes to do any of
the foregoing, whether or not permitted by Section 6.4; provided that Mercury
shall no longer be entitled to terminate this Agreement pursuant to this Section
8.1(c) after the earlier of (A) fifteen (15) Business Days after the first day
upon which Mercury is entitled to terminate this Agreement pursuant to this
Section 8.1(c) or (B) the Saturn Shareholder Approval having been obtained at
the Saturn Shareholder Meeting.
(d)
by either
Mercury or Saturn if (i) the Saturn Shareholder Meeting (or any postponement or
adjournment thereof) shall have concluded and the Saturn Shareholder Approval
shall not have been obtained or (ii) the Mercury Shareholder Meeting (or any
postponement or adjournment thereof) shall have concluded and the Mercury
Shareholder Approval shall not have been obtained;
(e)
by Saturn
if (i) a Change in the Mercury Recommendation shall have occurred, whether or
not permitted by Section 6.4, (ii) following the date of any bona fide
Acquisition Proposal for Mercury or any material modification thereto is first
publicly announced, disclosed or otherwise made known prior to the time at which
Mercury receives the Mercury Shareholder Approval, Mercury fails to issue a
press release that expressly reaffirms the Mercury Recommendation within ten
(10) Business Days following Saturn’s written request to do so (which request
may be made by Saturn one time following any such Acquisition Proposal or any
material modifications thereto), (iii) any tender offer or exchange offer
constituting an Acquisition Proposal for Mercury is commenced or materially
modified by any third party with respect to the outstanding Mercury Common Stock
prior to the time at which Mercury receives the Mercury Shareholder Approval,
and the Mercury Board shall not have recommended that Mercury’s shareholders
reject such tender offer or exchange offer and not tender their Mercury Common
Stock into such tender offer or exchange offer within ten (10) Business Days
after commencement or material modification of such tender offer or exchange
offer, unless Mercury has issued a press release that expressly reaffirms the
Mercury Recommendation within such ten (10) Business Day period, (iv) Mercury or
the Mercury Board approves, endorses, recommends, adopts or enters into any
Acquisition Proposal for Mercury or any Mercury Acquisition Contract, whether or
not permitted by Section 6.4, (v) Mercury shall have materially breached its
obligations under Section 6.4, (vi) Mercury shall have materially breached its
obligations under Section 6.2(a), or (vii) Mercury or the Mercury Board
announces, resolves or proposes to do any of the foregoing, whether or not
permitted by Section 6.4; provided that Saturn
shall no longer be entitled to terminate this Agreement pursuant to this Section
8.1(e) after the earlier of (A) fifteen (15) Business Days after the first day
upon which Saturn is entitled to terminate this Agreement pursuant to this
Section 8.1(e) or (B) the Mercury Shareholder Approval having been obtained at
the Mercury Shareholder Meeting; or
(f)
by
Saturn, at any time prior to the time at which Saturn receives the Saturn
Shareholder Approval, if the Saturn Board determines to enter into a definitive
agreement with respect to a Superior Proposal in accordance with Section
6.4(b)(i)(D), provided that it pays to Mercury the Termination Fee concurrently
with such termination pursuant to Section 8.3(i).
8.2
Notice of Termination;
Effect of Termination.
(a)
A
terminating party shall provide written notice of termination to the other party
specifying with particularity the reason for such termination, and any such
termination in accordance with Section 8.1 shall be effective immediately upon
delivery of such written notice to the other party.
(b)
In the
event of termination of this Agreement by any party as provided in Section 8.1,
this Agreement shall forthwith become void and there shall be no liability or
obligation on the part of any party except with respect to this Section 8.2, the
penultimate sentence of Section 6.3, Section 6.10(c), Section 8.3 and Article X
which shall remain in full force and effect; provided, however, that, except
as set forth in Section 8.3(d), a party may seek to recover reliance damages
caused by a Willful and Material Breach of this Agreement by another party of
any of its representations, warranties, covenants or other agreements set forth
in this Agreement.
8.3
Expenses and Other
Payments.
(a)
Except as
otherwise provided in this Agreement, including in this Section 8.3, and
except with respect to costs and expenses of printing and mailing the Joint
Proxy Statement and all filing and other fees paid to the SEC in connection with
the Mergers, which shall be borne equally by Saturn and Mercury, each party
shall pay its own expenses incident to preparing for, entering into and carrying
out this Agreement and the consummation of the transactions contemplated by this
Agreement, whether or not the Mergers shall be consummated.
(b)
If
Mercury terminates this Agreement pursuant to Section 8.1(c), then Saturn shall
(x) pay Mercury the Termination Fee, in cash, by wire transfer of immediately
available funds to an account designated by Mercury, no later than two (2)
Business Days after such termination, and (y) reimburse Mercury, in cash, for
the Mercury Expenses, by wire transfer of immediately available funds to an
account designated by Mercury no later than two (2) Business Days after receipt
by Saturn of an invoice from Mercury for the Mercury Expenses.
(c)
If Saturn
terminates this Agreement pursuant to Section 8.1(e), then Mercury shall (x) pay
Saturn the Termination Fee, in cash, by wire transfer of immediately available
funds to an account designated by Saturn, no later than two (2) Business Days
after such termination, and (y) reimburse Saturn, in cash, for the Saturn
Expenses by wire transfer of immediately available funds to an account
designated by Saturn, no later than two (2) Business Days after receipt by
Mercury of an invoice from Saturn for the Saturn Expenses.
(d)
If (i)
all of the conditions set forth in Sections 7.1 and 7.2 shall have been
satisfied or waived (other than those conditions that by their terms are to be
satisfied at the Closing, provided that such conditions shall have been capable
of being satisfied as of the date of termination of this Agreement), (ii) the
Mergers shall not have been consummated on or prior to the End Date by reason of
the proviso set forth in Section 1.2, and (iii) Saturn or Mercury terminates
this Agreement pursuant to Section 8.1(b)(ii), then Mercury shall (x) pay to
Saturn the Financing Termination Fee, in cash, by wire transfer of immediately
available funds, to an account designated by Saturn, in the case of termination
by Saturn, no later than two (2) Business Days after such termination, and in
the case of termination by Mercury, concurrently with such termination, and (y)
reimburse Saturn in cash for the Saturn Expenses by wire transfer of immediately
available funds to an account designated by Saturn, no later than two (2)
Business Days after receipt by Mercury of an invoice from Saturn for the Saturn
Expenses. Saturn agrees that notwithstanding anything in this
Agreement, the remedy provided for in the prior sentence shall be the sole and
exclusive remedy of Saturn, its Subsidiaries, shareholders, Affiliates,
officers, directors, employees or Representatives against Mercury or any of its
Related Persons, Representatives or Affiliates for, and in no event will Saturn
or any other such Person seek to recover any other money damages or seek any
other remedy based on a claim in law or equity with respect to, (A) any loss
suffered as a result of the failure of the Mergers to be consummated, (B) the
termination of this Agreement, (C) any liabilities or obligations arising under
this Agreement, or (D) any claims or actions arising out of or relating to any
breach, termination or failure of or under this Agreement, in each case, with
respect to or as a result of any failure to seek or obtain the proceeds of the
Financing or any alternative financing and any event related
thereto.
(e)
If either
Mercury or Saturn terminates this Agreement pursuant to Section 8.1(b)(ii) or
Section 8.1(d)(i) or Mercury terminates this Agreement pursuant to Section
8.1(b)(iii), and (i) in the case of a termination pursuant to Section 8.1(d)(i),
there shall have been publicly announced, disclosed or otherwise made known an
Acquisition Proposal for Saturn on or after the date of this Agreement and prior
to the Saturn Shareholder Meeting; or in the case of a termination pursuant to
Section 8.1(b)(ii) or Section 8.1(b)(iii), an Acquisition Proposal shall have
been made for Saturn on or after the date of this Agreement and prior to such
termination, whether or not publicly announced, disclosed or otherwise made
known and (ii) within twelve (12) months after such termination, Saturn enters
into a definitive agreement with respect to or consummates any Acquisition
Proposal (provided, that, for
purposes of this clause (ii), any reference in the definition of Acquisition
Proposal to 15% shall be deemed to be a reference to 50%), then on the earliest
of (A) the date of entering into such definitive agreement or (B) the closing or
other consummation of such Acquisition Proposal, Saturn shall pay Mercury the
Termination Fee, in cash, by wire transfer of immediately available funds to an
account designated by Mercury and, in addition, if no obligation to reimburse
Mercury Expenses has previously arisen under Section 8.3(g), Saturn shall
reimburse Mercury in cash for the Mercury Expenses by wire transfer of
immediately available funds to an account designated by Mercury no later than
two (2) Business Days after receipt by Saturn of an invoice for the Mercury
Expenses. Notwithstanding the foregoing, Saturn shall not be required
to pay the Termination Fee or the Mercury Expenses to Mercury pursuant to this
Section 8.3(e) if this Agreement was terminated pursuant to Section 8.1(b)(ii)
and upon such termination, Mercury paid the Financing Termination Fee to Saturn
pursuant to Section 8.3(d).
(f)
If either
Mercury or Saturn terminates this Agreement pursuant to Section 8.1(b)(ii) or
Section 8.1(d)(ii) or Saturn terminates this Agreement pursuant to Section
8.1(b)(iii), and, in each case, (i) in the case of a termination pursuant to
Section 8.1(d)(ii), there shall have been publicly announced, disclosed or
otherwise made known an Acquisition Proposal for Mercury on or after the date of
this Agreement and prior to the Mercury Shareholder Meeting; or in the case of a
termination pursuant to Section 8.1(b)(ii) or Section 8.1(b)(iii), an
Acquisition Proposal shall have been made for Mercury on or after the date of
this Agreement and prior to such termination, whether or not publicly announced,
disclosed or otherwise made known and (ii) within twelve (12) months after such
termination Mercury enters into a definitive agreement with respect to or
consummates any Acquisition Proposal (provided, that, for
purposes of this clause (ii), any reference in the definition of Acquisition
Proposal to 15% shall be deemed to be a reference to 50%), then on the earliest
of (A) the date of entering into such definitive agreement or (B) the closing or
other consummation of such Acquisition Proposal, Mercury shall pay Saturn the
Termination Fee, in cash, by wire transfer of immediately available funds to an
account designated by Saturn and, in addition, if no obligation to reimburse
Saturn Expenses has previously arisen under Section 8.3(h), Mercury shall
reimburse Saturn in cash for the Saturn Expenses by wire transfer of immediately
available funds to an account designated by Saturn no later than two (2)
Business Days after receipt by Mercury of an invoice for the Saturn
Expenses.
(g)
If (i)
either Mercury or Saturn terminates this Agreement pursuant to Section
8.1(d)(i), (ii) Mercury terminates this Agreement pursuant to Section
8.1(b)(iii), or (iii) Mercury or Saturn terminates this Agreement pursuant to
Section 8.1(b)(ii) and in the case of this clause (iii) any of the conditions
set forth in Section 7.2(a), 7.2(b) or 7.2(c) are not then capable of being
satisfied, then, in addition to any other obligations of Saturn hereunder,
Saturn shall reimburse Mercury in cash for the Mercury Expenses by wire transfer
of immediately available funds to an account designated by Mercury, no later
than two (2) Business Days after receipt by Saturn of an invoice from Mercury
for the Mercury Expenses.
(h)
If (i)
either Mercury or Saturn terminates this Agreement pursuant to Section
8.1(d)(ii), (ii) Saturn terminates this Agreement pursuant to Section
8.1(b)(iii), or (iii) Mercury or Saturn terminates this Agreement pursuant to
Section 8.1(b)(ii) and in the case of this clause (iii) any of the conditions
set forth in Section 7.3(a), 7.3(b) or 7.3(c) are not then capable of being
satisfied and Saturn is not entitled to reimbursement of Saturn Expenses
pursuant to 8.3(d), then, in addition to any other obligations of Mercury
hereunder, Mercury shall reimburse Saturn in cash for the Saturn
Expenses by wire transfer of immediately available funds to an account
designated by Saturn, no later than two (2) Business Days after receipt by
Mercury of an invoice from Saturn for the Saturn Expenses.
(i)
If Saturn
terminates this Agreement pursuant to Section 8.1(f), then, in addition to any
other obligations of Saturn hereunder, Saturn shall pay Mercury the Termination
Fee in cash concurrently with such termination, by wire transfer of immediately
available funds to an account designated by Mercury, and, in addition, Saturn
shall reimburse Mercury, in cash, for the Mercury Expenses by wire transfer of
immediately available funds to an account designated by Mercury no later than
two (2) Business Days after receipt by Saturn of an invoice for the Mercury
Expenses.
(j)
The
parties acknowledge and agree that the agreements contained in this Section 8.3
are an integral part of the transactions contemplated by this Agreement, and
that, without these agreements, the parties would not enter into this
Agreement. If a party fails to promptly pay the amount due by it
pursuant to this Section 8.3, interest shall accrue on such amount from the date
such payment was required to be paid pursuant to the terms of this Agreement
until the date of payment at the rate of 6% per annum. If, in order
to obtain such payment, the other party commences a suit that results in
judgment for such party for such amount, the defaulting party shall pay the
other party its reasonable costs and expenses (including reasonable attorneys’
fees and expenses) incurred in connection with such suit. Each of the
parties further acknowledges that the payment of the amounts by Saturn and
Mercury specified in this Section 8.3 is not a penalty, but in each case is
liquidated damages in a reasonable amount that will compensate Mercury or
Saturn, as the case may be, in the circumstances in which such fees are payable
for the efforts and resources expended and the opportunities foregone while
negotiating this Agreement and in reliance on this Agreement and on the
expectation of the consummation of the transactions contemplated hereby, which
amount would otherwise be impossible to calculate with precision. In
no event shall Saturn or Mercury, as applicable, be required to pay the
Termination Fee more than once.
ARTICLE
IX
DEFINITIONS
9.1
Definitions. For
purposes of this Agreement, the following terms, when used in this Agreement
with initial capital letters, shall have the respective meanings set forth in
this Agreement:
“Acquired Saturn
Employees” has the meaning set forth in Section 6.9(a).
“Acquisition Proposal”
has the meaning set forth in Section 6.4(e).
“Adjusted Saturn Performance
Award” has the meaning set forth in Section 2.4(c).
“Affiliate” of any
particular Person means any other Person controlling, controlled by or under
common control with such particular Person. For the purposes of this
definition, “control” means the possession, directly or indirectly, of the power
to direct the management and policies of a Person whether through the ownership
of voting securities, Contract or otherwise.
“Affiliate
Transaction” has the meaning set forth in Section 3.19.
“Agreement” means this
Agreement, as it may be amended from time to time.
“Antitrust Law” means
The Xxxxxxx Antitrust Act, as amended, The Xxxxxxx Antitrust Act, as amended,
the HSR Act, the Federal Trade Commission Act, as amended, the EC Merger
Regulation, the Canadian Investment Regulations and all other federal, state or
foreign statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines and other Laws that are designed or intended to prohibit,
restrict or regulate (i) foreign investment or (ii) actions having the purpose
or effect of monopolization or restraint of trade or lessening of competition
through merger and acquisition.
“Applicable
Jurisdiction” has the meaning set forth in Section 7.1(c).
“Bankruptcy and Equity
Exception” has the meaning set forth in Section 3.3(a).
“Benefits Continuation
Period” has the meaning set forth in Section 6.9(a).
“Blue Sky Laws” has
the meaning set forth in Section 3.4(a).
“Bonus Plan
Participant” has the meaning set forth in Section 6.9(d).
“Burdensome Condition”
has the meaning set forth in Section 6.5(c).
“Business Day” means
any day on which the principal offices of the SEC in Washington, D.C. are open
to accept filings, or, in the case of determining a date when any payment is
due, any day on which banks are not required or authorized to close in the City
of New York in the United States of America.
“Canadian Investment
Regulations” means the Competition Act (Canada) and the
Investment
Canada Act of 1984 (Canada).
“Capitalization Date”
has the meaning set forth in Section 3.5(a).
“Cash Consideration”
has the meaning set forth in Section 2.1(a).
“Certificate of Mercury
Merger” has the meaning set forth in Section 1.1(b).
“Certificate of Saturn
Merger” has the meaning set forth in Section 1.1(a).
“Certificates of
Merger” has the meaning set forth in Section 1.1(b).
“Change in the Mercury
Recommendation” has the meaning set forth in Section 6.4(a).
“Change in the Saturn
Recommendation” has the meaning set forth in Section 6.4(a).
“Closing” has the
meaning set forth in Section 1.2.
“Closing Date” has the
meaning set forth in Section 1.2.
“Code” has the meaning
set forth in the recitals.
“Commitment Letter”
has the meaning set forth in Section 4.20.
“Compliance with ISRA”
has the meaning set forth in Section 6.20.
“Condition Failure
Party” has the meaning set forth in Section 8.1(b)(iii).
“Confidential
Information” means all confidential or proprietary information, whether
written or oral. Notwithstanding the foregoing, Confidential
Information shall not include information (i) which was publicly known
prior to initial disclosure of such information by a disclosing Person as proven
by prior written records in existence prior to such initial disclosure,
(ii) that has become publicly known, in print or other tangible form,
without any act or omission of any Person other than the disclosing Person,
(iii) received by a receiving party without restriction at any time from a
third party, other than the disclosing party, rightfully
having possession of and the right to disclose such information, (iv) shown
to have been otherwise known by the receiving party prior to disclosure of such
information by the disclosing party to the receiving party as proven by prior
written records in existence prior to such initial disclosure or (v) shown
to have been independently developed by employees or agents of the receiving
party without access to or use of such information of the disclosing party as
proven by the receiving party’s written records.
“Confidentiality
Agreement” has the meaning set forth in Section 6.3.
“Contract” means all
contracts, agreements, arrangements, understandings, guarantees, notes,
mortgages, indentures, leases or licenses.
“Convertible Preferred
Stock” has the meaning set forth in Section 3.5(a).
“D&O Insurance”
has the meaning set forth in Section 6.8(b).
“DOJ” has the meaning
set forth in Section 6.5(b).
“EC” has the meaning
set forth in Section 6.5(b).
“EC Merger Regulation”
means Council Regulation (EC) No. 139/2004 of 20 January 2004 on the control of
concentrations between undertakings.
“EMT” has the meaning
set forth in Section 3.13(a).
“End Date” has the
meaning set forth in Section 8.1(b)(ii).
“Environmental Claims”
means, in respect of any Person, any and all administrative, regulatory or
judicial actions, suits, orders, decrees, demands, directives, claims, Liens,
proceedings or notices of noncompliance or violation by any Governmental
Entity or other third party, alleging (a) liability with respect to the
potential presence or Release of, or exposure to, any Hazardous Materials at any
location, whether or not owned, operated, leased or managed by such Person, (b)
indemnification, cost recovery, compensation or injunctive relief resulting from
the presence or Release of, or exposure to, any Hazardous Materials, or (c) any
other liability arising under Environmental Laws.
“Environmental Laws”
means all applicable federal, state, local and foreign laws (including
international conventions, protocols and treaties), common law, rules,
regulations, published and legally binding guidance documents, ordinances,
orders, decrees, judgments, binding agreements or Environmental Permits issued,
promulgated or entered into, by or with any Governmental Entity, relating to
pollution, contamination, Hazardous Materials, natural resources,
protection of the environment or human health or safety relating to exposure to
Hazardous Materials.
“Environmental
Permits” means all permits, licenses, registrations and other
governmental authorizations required under applicable Environmental
Laws.
“Equity Interest”
means any share, capital stock, partnership, limited liability company,
membership, member or similar interest in any Person, and any option, warrant,
right or security (including debt securities) convertible, exchangeable or
exercisable thereto or therefor.
“ERISA” means the
Employee Retirement Income Security Act of 1974, as amended.
“ERISA Affiliate”
means any entity that would be deemed a “single employer” with another entity
under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of
ERISA.
“Event” means any
event, change, development, effect, condition, circumstance, matter, occurrence
or state of facts.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Exchange Agent” has
the meaning set forth in Section 2.2(a).
“Exchange Fund” has
the meaning set forth in Section 2.2(a).
“Facilities” means all
real property owned, leased, or operated by Saturn or its Subsidiaries and
any buildings, facilities, machinery, equipment, furniture, leasehold and other
improvements, fixtures, vehicles, structures, any related capital items and
other tangible property located on, in, under, or above the real property of
Saturn or its Subsidiaries.
“FDA” means the United
States Food and Drug Administration.
“FDCA” has the meaning
set forth in Section 3.12(a).
“Financing” has the
meaning set forth in Section 4.20.
“Financing
Arrangements” has the meaning set forth in Section 6.10(b).
“Financing Definitive
Agreements” has the meaning set forth in Section 6.10(a).
“Financing Documents”
has the meaning set forth in Section 6.10(b).
“Financing Parties”
has the meaning set forth in Section 6.10(b).
“Financing Termination
Fee” means $2.5 billion.
“Former Facilities”
means all real property formerly owned, leased, or operated by
Saturn or its Subsidiaries and any buildings, facilities, machinery,
equipment, furniture, leasehold and other improvements, fixtures, vehicles,
structures, any related capital items and other tangible property located on,
in, under, or above the real property of Saturn or its
Subsidiaries.
“Xxxxx Xxxxx” has the
meaning set forth in Section 6.19.
“Xxxxx Xxxxx Tax
Representation Letter” has the meaning set forth in Section
6.19.
“FTC” has the meaning
set forth in Section 6.5(b).
“GAAP” means United
States generally accepted accounting principles.
“Governmental Entity”
means any (a) nation, region, state, province, county, city, town, village,
district or other jurisdiction, (b) federal, state, local, municipal, foreign or
other government, (c) governmental or quasi-governmental authority of any nature
(including any governmental agency, branch, department, court or tribunal, or
other entities), (d) multinational organization or body (including the European
Commission) or (e) body entitled to exercise any administrative, executive,
judicial, legislative, police, regulatory or taxing authority or power of any
nature, including, without limitation, the FDA and the United States Drug
Enforcement Administration.
“Hazardous Materials”
means (a) any substance that is listed, classified or regulated under any
Environmental Laws, (b) any petroleum product or by-product, asbestos-containing
material, lead-containing paint or plumbing, polychlorinated biphenyls,
radioactive material, toxic molds, or radon or (c) any other substance that is
the subject of regulatory action, or that could give rise to liability, under
any Environmental Laws.
“HSR Act” has the
meaning set forth in Section 3.4(a).
“Indebtedness” means
(a) indebtedness for borrowed money or guarantees for any indebtedness of
another Person, (b) outstanding debt securities, warrants or other rights to
acquire any debt securities of Saturn or any of its Subsidiaries or guarantees
of any obligations of any other Person for borrowed money, (c) “keep well” or
other agreements to maintain any financial statement condition of another Person
and (d) any arrangements having the economic effect of any of the
foregoing.
“Indemnified Parties”
has the meaning set forth in Section 6.8(a).
“Initial Effective
Time” has the meaning set forth in Section 1.1(a).
“Initial End Date” has
the meaning set forth in Section 8.1(b)(ii).
“Integration Process”
has the meaning set forth in Section 5.1(iv).
“Intellectual
Property” means (a) patents, patent applications and invention
registrations of any type, (b) trademarks, service marks, trade dress, logos,
trade names, corporate names, domain names and other source identifiers, and
registrations and applications for registration thereof, (c) copyrightable
works, copyrights, and registrations and applications for registration thereof
and (d) confidential or proprietary information, including trade secrets,
technology, data (and all rights therein) and know-how.
“Intercompany Notes”
has the meaning set forth in Section 3.25.
“Intervening Event”
has the meaning set forth in Section 6.4(e).
“IRS” means the United
States Internal Revenue Service.
“ISRA” has the meaning
set forth in Section 6.20.
“Joint Proxy
Statement” has the meaning set forth in Section 6.1(a).
“Key Saturn Products”
means ezetimibe, Remicade, Nasonex, Pegintron, Temodar, Clarinex, Claritin OTC,
boceprevir, SCH 900518, golimumab, HCV IRES, TRA, sugammadex, asenapine, BACE,
FSH-CTP, MFF 258, QMF 149 and Nuvaring.
“Knowledge” of a party
means as of the date hereof the reasonable knowledge of the persons listed in
Section 9.1(a) of the Saturn Disclosure Letter with respect to Saturn or its
Subsidiaries, or the persons listed in Section 9.1(a) of the Mercury Disclosure
Letter with respect to Mercury or its Subsidiaries.
“Law” means any
statutes, laws (including common law), rules, ordinances, regulations, codes,
orders, judgments, injunctions, writs, or decrees, applicable to Saturn or any
of its Subsidiaries or Mercury and any of its Subsidiaries, as applicable, or
their respective properties or assets.
“Liens” means any
mortgages, security interests, liens, claims, pledges, options, rights of first
offer or refusal, charges, conditional or installment sale contracts and other
encumbrances.
“Life Insurance
Benefit” has the meaning set forth in Section 6.9(b).
“Mercury” has the
meaning set forth in the preamble hereto.
“Mercury Acquisition
Contract” has the meaning set forth in Section 6.4(a).
“Mercury Board” means
the Board of Directors of Mercury or any committee thereof.
“Mercury Book-Entry
Shares” has the meaning set forth in Section 2.1(b).
“Mercury Certificates”
has the meaning set forth in Section 2.1(b).
“Mercury Common Stock”
means common stock, par value $0.01 per share, of Mercury.
“Mercury Current Balance
Sheet” has the meaning set forth in Section 4.6(f).
“Mercury Disclosure
Letter” has the meaning set forth in Article IV.
“Mercury Equity
Awards” shall have the meaning set forth in Section 2.5(a).
“Mercury Expenses”
means all of the reasonable documented out-of-pocket fees and expenses
(including all commitment fees, ticking fees, extension fees, underwriting fees,
structuring fees, interest, expenses and other costs or fees incurred in
relation to the Commitment Letter, the Financing Definitive Agreements, the
Financing, any alternative financing or any of the Financing Arrangements and
fees, expenses and disbursements of counsel, accountants, investment bankers,
financing sources, experts and consultants to Mercury and its Affiliates and
Representatives) incurred by Mercury or any of its Subsidiaries on or prior to
the termination of this Agreement in connection with the transactions
contemplated hereby; provided, that in no event shall “Mercury Expenses” exceed
$250,000,000, in the aggregate.
“Mercury Financial
Advisor” has the meaning set forth in Section 4.17.
“Mercury Form 10-K”
has the meaning set forth in Article IV.
“Mercury Intellectual
Property” has the meaning set forth in Section 4.9(a).
“Mercury Material Adverse
Effect” means (a) a material adverse effect on the business, financial
condition, or results of operations of Mercury and its Subsidiaries, taken as a
whole or (b) any Event that prevents or materially delays, or would be
reasonably expected to prevent or materially delay, consummation by Mercury of
the transactions contemplated by this Agreement or the performance by Mercury of
any of its material obligations under this Agreement; provided, that any
effect resulting from any of the following Events shall not be considered when
determining whether a Mercury 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 GAAP 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 this Agreement or the transactions contemplated by this
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
other party to the Mergers; (vi) any failure of Mercury 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 Mercury
Material Adverse Effect may be taken into account in determining whether a
Mercury Material Adverse Effect has occurred), (vii) any change, in and of
itself, in the market price or trading volume of the Mercury Common Stock (it
being agreed that the facts and circumstances giving rise to such change that
are not otherwise excluded from the definition of Mercury Material Adverse
Effect may be taken into account in determining whether a Mercury Material
Adverse Effect has occurred); (viii) the taking of any action required by this
Agreement; or (ix) the matters listed on Section 9.1(b) of the Mercury
Disclosure Letter; provided, however, that a
specific breach of an express representation set forth in Section 4.4, 4.9(b)
and 4.13 shall be a breach of such representation notwithstanding subclause
(v). Notwithstanding the
proviso to clauses (a) and (b) of 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 Mercury 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 Mercury
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 Mercury Material Adverse Effect has occurred
or is reasonably expected to occur.
“Mercury Material
Contracts” has the meaning set forth in Section 4.8(a).
“Mercury Merger” has
the meaning set forth in the recitals.
“Mercury Merger
Consideration” has the meaning set forth in Section 2.1(b).
“Mercury Merger Surviving
Corporation” has the meaning set forth in Section 1.1(b).
“Mercury Overseas
Subsidiaries” has the meaning set forth in Section 6.14.
“Mercury Permits” has
the meaning set forth in Section 4.11(a).
“Mercury Plans” means
all “employee benefit plans” within the meaning of Section 3(3) of ERISA, all
medical, dental, life insurance, equity, bonus or other incentive compensation,
disability, salary continuation, severance, retention, retirement, pension,
deferred compensation, vacation, sick pay or paid time off plans or policies,
and any other plans, agreements (including employment, consulting and collective
bargaining agreements), policies, trust funds or arrangements (whether written
or unwritten, insured or self-insured) (a) established, maintained, sponsored or
contributed to (or with respect to which any obligation to contribute has been
undertaken) by Mercury, its Subsidiaries or any of their respective ERISA
Affiliates on behalf of any employee, officer, director, shareholder or other
service provider of Mercury or its Subsidiaries (whether current, former or
retired) or their beneficiaries, or (b) with respect to which Mercury, its
Subsidiaries or any of their respective ERISA Affiliates has or has had any
obligation on behalf of any such employee, officer, director, shareholder or
other service provider or beneficiary.
“Mercury
Recommendation” has the meaning set forth in Section 6.2(a).
“Mercury Regulatory
Agency” has the meaning set forth in Section 4.12(a).
“Mercury Regulatory
Permits” has the meaning set forth in Section 4.12(a).
“Mercury SEC Reports”
has the meaning set forth in Section 4.6(a).
“Mercury Shareholder
Approval” has the meaning set forth in Section 4.3(c).
“Mercury Shareholder
Meeting” has the meaning set forth in Section 6.2(a).
“Mercury Stock Incentive
Plans” means Mercury’s 2006 Incentive Stock Plan, 2004 Incentive Stock
Plan, 2001 Incentive Stock Plan, 1996 Incentive Stock Plan, 2006 Non-Employee
Director Stock Option Plan, 2001 Non-Employee Director Stock Option Plan, and
1996 Non-Employee Director Stock Option Plan.
“Mercury Stock Measurement
Price” means the volume weighted average price per share of Mercury
Common Stock (rounded to the nearest cent) on the NYSE for the five (5)
consecutive trading days ending on (and including) the second trading day
immediately prior to the Closing Date (as reported by Bloomberg LP for each such
trading day, or, if not reported by Bloomberg LP, any other authoritative source
reasonably selected by Mercury).
“Merger Sub 1”
has the meaning set forth in the preamble hereto.
“Merger Sub 2”
has the meaning set forth in the preamble hereto.
“Mergers” means the
Saturn Merger and the Mercury Merger.
“New Jersey
Properties” has the meaning set forth in Section 6.20.
“New Plans” has the
meaning set forth in Section 6.9(j).
“NJBCA” has the
meaning set forth in the recitals.
“NJDEP” has the
meaning set forth in Section 6.20.
“NYSE” means the New
York Stock Exchange.
“Old Plans” has the
meaning set forth in Section 6.9(j).
“OMT” has the meaning
set forth in Section 3.13(a).
“Order” means with
respect to any Person, any award, decision, injunction, judgment, stipulation,
order, ruling, subpoena, writ, decree, consent decree or verdict entered,
issued, made or rendered by any arbitrator or Governmental Entity of competent
jurisdiction affecting such Person or any of its properties.
“Permitted Liens”
means, with respect to any Person, (a) statutory Liens for current Taxes or
other governmental charges not yet due and payable or the amount or validity of
which is being contested in good faith by appropriate Proceedings and are
adequately reserved for, (b) mechanics’, carriers’, workers’, repairers’ and
similar statutory Liens arising or incurred in the ordinary course of business
for amounts which are not delinquent or which are being contested by appropriate
Proceedings, (c) zoning, entitlement, building and other land use regulations
imposed by governmental agencies having jurisdiction over such Person’s owned or
leased real property, which are not violated by the current use and operation of
such real property, (d) covenants, conditions, restrictions, easements and other
similar non-monetary matters of record affecting title to such Person’s owned or
leased real property, which do not materially impair the occupancy or use of
such real property for the purposes for which it is currently used in connection
with such Person’s businesses, (e) any right of way or easement related to
public roads and highways and (f) Liens arising under workers’ compensation,
unemployment insurance, social security, retirement and similar
legislation.
“Person” means an
individual, a group (including a “group” under Section 13(d) of the Exchange
Act), a partnership, a corporation, a limited liability company, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization
and a Governmental Entity or any department, agency or political subdivision
thereof.
“PHSA” has the meaning
set forth in Section 3.12(a).
“Qualified Plan
Benefit” has the meaning set forth in Section 6.9(b).
“Proceeding” has the
meaning set forth in Section 3.10.
“Registered Intellectual
Property” means all Intellectual Property that is subject to an
application, certificate, filing or registration with a Governmental
Entity.
“Registration
Statement” has the meaning set forth in Section 6.1(a).
“Regulatory
Divestiture” has the meaning set forth in Section 6.5(c).
“Related Person” means
any former, current or future, direct or indirect, manager, director, officer,
employee, agent or Representative of Mercury, any former, current or future,
direct or indirect, holder of any equity interests or securities of Mercury, any
former, current or future affiliate or assignee of Mercury or any former,
current or future manager, director, officer, employee, agent, representative,
affiliate or assignee of any of the foregoing.
“Release” means any
spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, dumping, disposing, dispersing, leaching, or migrating into, onto, or
through the environment or within or upon any building, structure, facility or
fixture.
“Repayment Amount” has
the meaning set forth in Section 6.14.
“Representatives” has
the meaning set forth in Section 6.3.
“Xxxxxxxx-Xxxxx Act”
has the meaning set forth in Section 3.6(a).
“Saturn” has the
meaning set forth in the preamble hereto.
“Saturn Acquisition
Contract” has the meaning set forth in Section 6.4(a).
“Saturn Award Exchange
Ratio” has the meaning set forth in Section 2.4(a).
“Saturn Board” means
the Board of Directors of Saturn or any committee thereof.
“Saturn Book-Entry
Shares” has the meaning set forth in Section 2.1(a).
“Saturn Certificates”
has the meaning set forth in Section 2.1(a).
“Saturn Common Stock”
means the common stock, par value $0.50 per share, of Saturn.
“Saturn Current Balance
Sheet” has the meaning set forth in Section 3.6(f).
“Saturn Deferred Stock
Units” means each outstanding deferred stock unit, whether vested or
unvested, representing an unfunded contractual right to receive shares of Saturn
Common Stock issued under the Saturn Equity Plans.
“Saturn Disclosure
Letter” has the meaning set forth in Article III.
“Saturn Employees” has
the meaning set forth in Section 6.9(a).
“Saturn Employment
Agreements” has the meaning set forth in Section 3.13(a).
“Saturn Equity Plans”
means Saturn’s 2006 Stock Incentive Plan, Saturn’s 2002 Stock Option Plan,
Saturn’s 1997 Stock Incentive Plan and the new stock incentive plan which Saturn
is permitted to adopt and establish in accordance with the provisions of this
Agreement.
“Saturn Euronote
Facility” means the Credit Agreement dated October 24, 2007 entered into
among Saturn, as the Borrower, each of the lenders from time to time party
thereto, and BNP Paribas, as Administrative Agent, as amended, supplemented or
otherwise modified from time to time.
“Saturn Expenses”
means all of the reasonable documented out-of-pocket fees and expenses
(including all fees, expenses and disbursements of counsel, accountants,
investment bankers, experts and consultants to Saturn and its Affiliates and
Representatives) incurred by Saturn or any of its Subsidiaries on or prior to
the termination of this Agreement in connection with the transactions
contemplated hereby; provided that in no event shall “Saturn Expenses” exceed
$150,000,000, in the aggregate.
“Saturn Financial
Advisors” has the meaning set forth in Section 3.21.
“Saturn Foreign Pension
Plan” has the meaning set forth in Section 3.13(e).
“Saturn Foreign
Plan(s)” has the meaning set forth in Section 3.13(a).
“Saturn Form 10-K” has
the meaning set forth in Article III.
“Saturn Holdings BV”
means Schering-Plough International Holdings B.V.
“Saturn Intellectual
Property” has the meaning set forth in Section 3.9(a).
“Saturn Intl CV” means
Schering-Plough International C.V.
“Saturn Material Adverse
Effect” means (a) a material adverse effect on the business, financial
condition, or results of operations of Saturn and its Subsidiaries, taken as a
whole or (b) any Event that prevents or materially delays, or would be
reasonably expected to prevent or materially delay, consummation by Saturn of
the transactions contemplated by this Agreement or the performance by Saturn of
any of its material obligations under this Agreement; provided, that any
effect resulting from any of the following Events shall not be considered when
determining whether a Saturn 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 GAAP 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 this Agreement or the transactions
contemplated by this 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 other party to the Mergers, (vi) any failure of 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 Saturn
Material Adverse Effect may be taken into account in determining whether a
Saturn Material Adverse Effect has occurred), (vii) any change, in and of
itself, in the market price or trading volume of the Saturn Common Stock (it
being agreed that the facts and circumstances giving rise to such change that
are not otherwise excluded from the definition of Saturn Material Adverse Effect
may be taken into account in determining whether a Saturn Material Adverse
Effect has occurred); (viii) the taking of any action required by this
Agreement, or (ix) the matters listed on Section 9.1(b) of the Saturn Disclosure
Letter; provided, however, that a
specific breach of an express representation set forth in Section 3.4, 3.9(b)
and 3.13(h) shall be a breach of such representation notwithstanding subclause
(v). Notwithstanding the proviso to clauses (a) and (b) of the
preceding sentence, if an Event described in subclauses (i), (ii), (iii) or (iv)
of such provision has had a disproportionate effect on the business, financial
condition or results of operations of 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 Saturn 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
Saturn Material Adverse Effect has occurred or is reasonably expected to
occur.
“Saturn Material
Contracts” has the meaning set forth in Section 3.8(b).
“Saturn Merger” has
the meaning set forth in the recitals.
“Saturn Merger
Consideration” has the meaning set forth in Section 2.1(a).
“Saturn Merger Surviving
Corporation” has the meaning set forth in Section 1.1(a).
“Saturn Merger Surviving
Corporation Common Stock” means common stock, par value $0.50 per share,
of the Saturn Merger Surviving Corporation.
“Saturn Options” means
each outstanding option, whether vested or unvested, to purchase shares of
Saturn Common Stock issued under the Saturn Equity Plans.
“Saturn Pension Plan”
has the meaning set forth in Section 3.13(d).
“Saturn Performance
Award” has the meaning set forth in Section 2.4(c).
“Saturn Permits” has
the meaning set forth in Section 3.11(a).
“Saturn Plan” has the
meaning set forth in Section 3.13(a).
“Saturn Product” means
all biological and drug products, all animal health products and all consumer
products being tested in clinical trials, manufactured, sold or distributed by
Saturn or any of its Subsidiaries.
“Saturn
Recommendation” has the meaning set forth in Section 6.2(b).
“Saturn Regulatory
Agency” has the meaning set forth in Section 3.12(a).
“Saturn Regulatory
Permits” has the meaning set forth in Section 3.12(a).
“Saturn Restricted Stock
Units” means each outstanding restricted stock unit representing an
unfunded contractual right to receive shares of Saturn Common Stock issued under
the Saturn Equity Plans.
“Saturn Revolving Credit
Facility” means the Credit Agreement dated August 9, 2007 and entered
into among Saturn, as a Borrower, certain subsidiaries thereof from time to time
party thereto as Designated Borrowers, Saturn Ltd, as Swiss Borrower, the
lenders from time to time party thereto and Banc of America, N.A. as
Administrative Agent, as amended, supplemented or otherwise modified from time
to time.
“Saturn SEC Reports”
has the meaning set forth in Section 3.6(a).
“Saturn Severance
Plan” has the meaning set forth in Section 6.9(e).
“Saturn Share
Issuance” means the issuance of shares of Saturn Merger Surviving
Corporation Common Stock to holders of the Mercury Common Stock and the Saturn
Common Stock as a result of the Mergers pursuant to the terms and subject to the
conditions of this Agreement.
“Saturn Shareholder
Approval” has the meaning set forth in Section 3.3(c).
“Saturn Shareholder
Meeting” has the meaning set forth in Section 6.2(b).
“Saturn Sub” shall
mean “Schering Corporation.”
“Saturn Surviving Corporation
Convertible Preferred Stock” has the meaning set forth in Section
2.1(a)(i).
“SEC” means the United
States Securities and Exchange Commission.
“Section 16” has the
meaning set forth in Section 6.9(h).
“Securities Act” means
the Securities Act of 1933, as amended.
“Senior Employees” has
the meaning set forth in Section 3.13(a).
“SERP Minimum Benefit”
has the meaning set forth in Section 6.9(b).
“Significant
Subsidiary” shall mean, with respect to any party, any corporation or
other organization, whether incorporated or unincorporated or domestic or
foreign to the United States, that is a “significant subsidiary” as defined
under Rule 1-02(w) of Regulation S-X promulgated under the Securities
Act.
“Site Professional”
has the meaning set forth in Section 6.20.
“Stock Consideration”
has the meaning set forth in Section 2.1(a).
“Subsequent Effective
Time” has the meaning set forth in Section 1.1(b).
“Subsidiary” means any
corporation, company, partnership, organization or other entity of which the
securities or other ownership interests having more than 50% of the ordinary
voting power in electing the board of directors or other governing body are, at
the time of such determination, owned by an entity or another Subsidiary of such
entity.
“Superior Proposal”
has the meaning set forth in Section 6.4(e).
“Takeover Statute” has
the meaning set forth in Section 3.24.
“Tax” or “Taxes” means any
United States federal, state, local or foreign income, gross receipts,
franchise, estimated, alternative minimum, add on minimum, sales, use, transfer,
real property gains, registration, value added, excise, natural resources,
severance, stamp, occupation, premium, windfall profit, environmental, customs,
duties, real property, special assessment, personal property, capital stock,
social security, unemployment, disability, payroll, license, employee or other
withholding, or other tax, of any kind whatsoever, including any interest,
penalties or additions to tax or additional amounts in respect of the
foregoing.
“Tax Returns” means
any return, report, information return, form, declaration, statement or other
document (including schedules or any related or supporting information) filed or
required to be filed with any Governmental Entity or other authority in
connection with the determination, assessment or collection of any Tax or the
administration of any Laws, regulations or administrative requirements relating
to any Tax, including any attachments, amendment, or supplements
thereto.
“Termination Fee”
means $1.25 billion.
“US Employee” has the
meaning set forth in Section 6.9(b).
“Willful and Material
Breach” means a material breach that is a consequence of an act
undertaken by the breaching party with the actual knowledge that the taking of
such act would, or would be reasonably expected to, cause a breach of this
Agreement.
9.2
Construction.
(a)
Unless
the context otherwise requires, as used in this Agreement (i) an accounting term
not otherwise defined in this Agreement has the meaning ascribed to it in
accordance with GAAP, (ii) “or” is not exclusive, (iii) “including” and its
variants mean “including, without limitation” and its variants, (iv) words
defined in the singular have the parallel meaning in the plural and vice versa,
(v) words of one gender shall be construed to apply to each gender,
(vi) the term “party” refers to a party to this Agreement and the term
“parties” refers to the parties to this Agreement and (vii) the terms “Article,”
“Section,” and “Schedule” refer to the specified Article, Section, or Schedule
of or to this Agreement.
(b)
A
reference to any Person includes such Person’s successors and permitted
assigns.
(c)
Any
references to “dollars” or “$” means dollars of the United States of
America.
ARTICLE
X
MISCELLANEOUS
10.1
Non-Survival of
Representations and Warranties. None of the representations
and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Subsequent Effective Time. This Section
10.1 shall not limit any covenant or agreement of the parties which by its terms
contemplates performance, in whole or in part, after the Subsequent Effective
Time.
10.2
Notices. Any
notices or other communications required or permitted under, or otherwise in
connection with this Agreement shall be in writing and shall be deemed to have
been duly given (a) when delivered in person or (b) upon confirmation of receipt
when transmitted by facsimile transmission (but only if followed by transmittal
by national overnight courier or by hand for delivery on the next Business Day)
or (c) on receipt after dispatch by registered or certified mail, postage
prepaid or (d) on the next Business Day if transmitted by national overnight
courier, addressed, in each case as follows:
Notices
to Mercury:
Merck
& Co., Inc.
Xxx Xxxxx
Xxxxx
X.X. Xxx
000, XX0X-00
Xxxxxxxxxx
Xxxxxxx, XX 00000-0000
Attn: Office
of Secretary
Facsimile
No.: 000-000-0000
with a
copy to (which shall not constitute notice):
Fried,
Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx
Xxxx Xxxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxxx X. Shine
Xxxxxx Xxxxxxx
Facsimile
No.: 212-859-4000
Notices
to Saturn, Merger Sub 1 or Merger Sub 2:
Schering-Plough
Corporation
0000
Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx,
XX 00000
Attn: Xxxxxx
Xxxxxxxx
X.X. Xxx
Facsimile
No.: 000-000-0000
with a
copy to (which shall not constitute notice):
Wachtell,
Lipton, Xxxxx & Xxxx
00 Xxxx
00xx Xxxxxx
Xxx Xxxx,
XX 00000
Attn:
Xxxxxx X. Xxxxxxxxxx
Xxxxx X. Xxxxxxx
Facsimile
No.: 000-000-0000
10.3
Severability. If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated by
this Agreement is not affected in any manner materially adverse to any
party. Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated by this Agreement are fulfilled to the extent
possible.
10.4
Entire
Agreement. This Agreement, the exhibits hereto, the Saturn
Disclosure Letter, the Mercury Disclosure Letter and the other documents
delivered pursuant hereto and the Confidentiality Agreement constitute the
entire agreement of the parties and supersede all prior agreements and
undertakings, both written and oral, between the parties, or any of them, with
respect to the subject matter of this Agreement.
10.5
Assignment; Merger
Subs. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties, in whole or in
part (whether by operation of Law or otherwise), without the prior written
consent of the other parties, and any attempt to make any such assignment
without such consent shall be null and void. Saturn guarantees the
full and punctual performance by Merger Sub 1 and Merger Sub 2 of all the
obligations of Merger Sub 1 and Merger Sub 2 hereunder.
10.6
Extension;
Waiver. At any time prior to the Subsequent Effective Time,
the parties, by action taken or authorized by their respective Boards of
Directors, may to the extent legally allowed, (a) extend the time for
performance of any of the obligations or other acts of the other parties, (b)
waive any breach of an inaccuracy in the representations and warranties of the
other contained herein or in any document delivered pursuant hereto and (c)
waive compliance by the other of any of the agreements or conditions contained
herein.
10.7
Third Party
Beneficiaries. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto and their respective successors and
assigns, and nothing in this Agreement, express or implied, other than with
respect to the Indemnified Parties solely pursuant to Section 6.8, is intended
to or shall confer upon any other Person any right, benefit or remedy of any
nature whatsoever under or by reason of this Agreement.
10.8
No Strict
Construction. Each party has participated in the drafting of
this Agreement, which each party acknowledges is the result of extensive
negotiations between the parties.
10.9
Governing Law; Consent to
Jurisdiction.
(a)
This
Agreement shall in all respects be governed by, and construed in accordance
with, the Laws of the State of New Jersey applicable to agreements made and to
be performed entirely within such State, including all matters of construction,
validity and performance.
(b)
Any
claim, action or dispute against any party to this Agreement arising out of or
in any way relating to this Agreement shall be brought in the New Jersey
Superior Court in Hunterdon County or in the event (but only in the event) that
the New Jersey Superior Court does not have subject matter
jurisdiction over such claim, action or dispute, in the United States District
Court for the District of New Jersey sitting in Newark in the State of New
Jersey. Each of the parties hereby submits to the exclusive
jurisdiction of such courts for the purpose of any such claim, action or
dispute; provided, that a final judgment in any such claim, action or dispute
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by Law. Each party
irrevocably waives and unconditionally agrees not to assert, by way of a motion,
as a defense, counterclaim or otherwise, in any action or proceeding with
respect to this agreement (i) any objection that it may ever have that the
laying of venue of any such claim, action or dispute in any federal or state
court located in the above named county or city is improper, (ii) any objection
that any such claim, action or dispute brought in any of the above named courts
has been brought in an inconvenient forum and (iii) any claim that it is not
personally subject to the jurisdiction of the above named courts. To
the extent that service of process by mail is permitted by applicable Law, each
party irrevocably consents to the service of process in any such claim, action
or dispute in such courts by the mailing of such process by registered or
certified mail, postage prepaid, at its address for notices provided for
herein.
10.10
Disclosure
Letters. The statements in the Saturn Disclosure Letter and
the Mercury Disclosure Letter relate to the provisions in the section of this
Agreement to which they expressly relate; provided, however, that any
information set forth in one section of the Saturn Disclosure Letter or the
Mercury Disclosure Letter, as the case may be, shall also be deemed to apply to
each other section to which its relevance is reasonably apparent. In
the Saturn Disclosure Letter and the Mercury Disclosure Letter, (a) all
capitalized terms used but not defined therein shall have the meanings assigned
to them in this Agreement, (b) the section numbers correspond to the section
numbers in this Agreement and (c) inclusion of any item in a disclosure letter
(i) does not represent a determination that such item is material or establish a
standard of materiality, (ii) does not represent a determination that such item
did not arise in the ordinary course of business and (iii) shall not constitute,
or be deemed to be, an admission to any third party concerning such
item.
10.11
Specific
Performance. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise
breached. Each party agrees that, in the event of any breach or
threatened breach by any other party of any covenant or obligation contained in
this Agreement, the non-breaching party shall be entitled (in addition to any
other remedy that may be available to it whether in law or equity, including
monetary damages, except as limited by Section 8.3) to seek and obtain (a) a
decree or order of specific performance to enforce the observance and
performance of such covenant or obligation, and (b) an injunction restraining
such breach or threatened breach. In circumstances where Mercury or
Saturn is obligated to consummate the Mergers and the Mergers have not been
consummated (other than as a result of the other party’s refusal to close in
violation of this Agreement) each of Saturn and Mercury expressly acknowledges
and agrees that the other party and its shareholders shall have suffered
irreparable harm, that monetary damages will be inadequate to compensate such
other party and its shareholders, and that such other party on behalf of itself
and its shareholders shall be entitled to enforce specifically Mercury’s or
Saturn’s, as the case may be, obligation to consummate the
Mergers. Notwithstanding the foregoing or any other provision of this
Agreement, the parties acknowledge and agree that neither Saturn nor Merger Sub
1 or Merger Sub 2 shall be entitled to enforce specifically the obligations of
Mercury to consummate the transactions contemplated by this Agreement unless all
of the conditions set forth in Section 7.1 and Section 7.2 shall have been
satisfied or waived and the proceeds of the Financing are then available in full
pursuant to the Commitment Letter (or if Financing Definitive Agreements have
been entered into, pursuant to such Financing Definitive
Agreements). Each party further agrees that no other party or any
other Person shall be required to obtain, furnish or post any bond or similar
instrument in connection with or as a condition to obtaining any remedy referred
to in this Section 10.11, and each party irrevocably waives any right it may
have to require the obtaining, furnishing or posting of any such bond or similar
instrument.
10.12
WAIVER OF TRIAL BY
JURY. THE PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING ARISING UNDER OR CONCERNING THIS AGREEMENT OR ANY ACTION OR
PROCEEDING ARISING OUT OF OR CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR
PROCEEDING.
10.13
Counterparts. This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.
10.14
Amendment. Subject
to applicable Law, this Agreement may be amended by the mutual agreement of the
parties at any time prior to the Initial Effective Time only by an instrument in
writing signed by the parties.
* * * *
*
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and
year first above written.
| MERCK & CO., INC. | |||
|
|
By:
|
/s/ Xxxxxxx X. Xxxxx | |
| Name: Xxxxxxx X. Xxxxx | |||
| Title: Chairman, President and Chief Executive Officer | |||
| SCHERING-PLOUGH CORPORATION | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx Xx. | |
| Name: Xxxxxx X. Xxxxxxxx Xx. | |||
| Title: Executive Vice President and General Counsel | |||
| BLUE, INC. | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx Xx. | |
| Name: Xxxxxx X. Xxxxxxxx Xx. | |||
| Title: Vice President | |||
| PURPLE, INC. | |||
|
|
By:
|
/s/ Xxxxxx X. Xxxxxxxx Xx. | |
| Name: Xxxxxx X. Xxxxxxxx Xx. | |||
| Title: Vice President | |||
