FINANCIAL SUPPORT UNDERTAKING
THIS FINANCIAL SUPPORT UNDERTAKING (the "Undertaking") made by WARNER
CHILCOTT PUBLIC LIMITED COMPANY ("Warner PLC"), a public limited company
incorporated under the laws of Ireland, having an office at 345 Park Avenue,
Eighth Floor, New York, New York 10154, and by Warner Chilcott (Bermuda) Limited
("Warner Bermuda"), an exempted company incorporated under the laws of Bermuda,
having an address at P. O. Box HM1022, Hamilton HMDX Bermuda (Warner PLC and
Warner Bermuda shall hereinafter be referred to collectively as "Warner") in
favor of PNC BANK, NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States, having an office located at Two
Tower Center Boulevard, East Brunswick, New Jersey 08816, as Agent for the
Lenders under the Loan Agreement (as such terms are hereinafter defined).
W I T N E S S E T H:
WHEREAS, pursuant to a certain Revolving Credit and Security Agreement
dated of even date herewith by and between Warner Chilcott, Inc., a Delaware
corporation (the "Borrower"), PNC Bank, National Association and one or more
financial institutions named therein or which hereafter become a party thereto
(together with PNC Bank, National Association, collectively, the "Lenders") and
PNC Bank, National Association as the agent for the Lenders (PNC Bank, National
Association in such capacity, the "Agent") (as such may be amended from time to
time, the "Loan Agreement"), the Lenders have agreed to make certain Revolving
Advances to the Borrower; and
WHEREAS, as a condition precedent to the making of the Revolving Advances
by the Lenders to the Borrower, Warner has agreed to financially support the
operations of the Borrower in accordance with the provisions of this
Undertaking; and
WHEREAS, the Borrower is a wholly owned subsidiary of Warner PLC and
Warner PLC and Warner Bermuda will derive benefits from the financial
accommodations being accorded the Borrower by the Lenders pursuant to the terms
of the Loan Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make and/or continue to make the Revolving Advances (as each such
term is defined in the Loan Agreement), and in consideration of the Revolving
Advances made pursuant to the terms of the Loan Agreement and Other Documents,
and to enable the Revolving Advances to be maintained or obtained by the
Borrower under the terms of the Loan Agreement, Warner hereby agrees with the
Lenders as follows:
1. Warner shall, on a consolidated basis (exclusive of Borrower's
accounts), establish and maintain during the term of the Loan Agreement, a
balance in an amount of not less than $15,000,000 consisting of unpledged
and unencumbered cash and cash equivalents in form and substance
reasonably satisfactory to the Lenders. Warner will provide to the Lenders
from time to time, at the request of the Lenders, evidence satisfactory to
the Lenders that such balance has been established and is being
maintained.
2. Warner shall monitor the financial condition of the Borrower and
provide the Borrower with sufficient funds to ensure that the Borrower
maintains, at all times, Undrawn Availability as determined by the Agent,
of not less than $1,500,000. In the event that Agent determines that such
Undrawn Availability is less than $1,500,000 and so advises Warner
pursuant to Section 9 hereof, Warner shall, within five (5) days of the
sending of notice, provide the Borrower with sufficient funds to maintain
Undrawn Availability of $1,500,000.
3. In addition to and independent of its other obligations described
herein, including, but not limited to those set forth in paragraphs 1 and
2 above, in the event the Borrower suffers Cash Losses (as hereinafter
defined) based upon the Quarterly Financial Statements to be delivered to
the Lenders by the Borrower pursuant to Section 9.8 of the Loan Agreement,
Warner shall, on a quarterly basis and within three (3) days of receipt of
notice from the Lenders, provide the Borrower by wire transfer with cash
funds in an amount equal to: (a) Fifty percent (50%) of such Cash Losses
with respect to the first $7,000,000 of actual cumulative Cash Losses
incurred from the date hereof; and (b) One Hundred percent (100%) of all
Cash Losses incurred in excess of $7,000,000, less amounts of cash
provided by Warner to the Borrower during the applicable quarterly period.
For the purposes hereof, the term "Cash Losses" shall mean and be defined
as Borrower's net losses (or income) after taxes, plus depreciation,
amortization and non-cash interest expense, less all non-cash income and
less all distributions permitted under the Loan Agreement.
4. All cash funds provided by Warner pursuant to clauses 2 and 3 of
this Agreement shall be contributed to the Borrower as either equity or
subordinated debt in form and substance reasonably satisfactory to the
Agent and shall be deposited in Borrower's account at the Agent, Account
#8008995934. All such cash funds provided by Warner pursuant to clauses 2
and 3 of this Undertaking shall remain with Borrower and may not be repaid
or otherwise returned to Warner as long as the Loan Agreement remains in
effect and any Obligations of Borrower remain outstanding.
5. Warner PLC shall provide to the Agent within thirty (30) days
after the end of each of Warner PLC's fiscal quarters, Warner PLC's
financial statements in form and substance satisfactory to the Agent,
together with all documentation submitted by Warner PLC to the Securities
and Exchange Commission, including all Form 20Fs, as well as a Certificate
by the Chief Financial Officer of Warner certifying as to all cash funds
contributed by Warner to the Borrower, as well as specifically: (a) all
cash funds delivered to the Borrower pursuant to the terms hereof and (b)
all cash funds returned to Warner by Borrower other than cash paid to
Warner for goods and services provided.
6. The failure of Warner to comply with any of the terms or
conditions contained herein shall be deemed an Event of Default under the
Loan Agreement.
7. This Undertaking is a continuing Undertaking and nothing shall
terminate, discharge or satisfy the liability of Warner hereunder until
the Obligations of the Borrower have been satisfied in full.
8. The Lenders may, in their reasonable discretion, enforce the
Obligations of Warner as contained herein and exercise any rights or
remedies which the Lenders may have by law (such rights and remedies being
cumulative and not alternative or exclusive) without pursuing or
exhausting any rights or remedy the Lenders may have against the Borrower
or any other person or entity for which the Lenders have with respect to
any collateral or any guaranty or any or all of such Obligations. The
Lenders need not join the Borrower or any other person or entity as a
party in any action brought to enforce the provisions hereof; and the
Lenders may exercise any right or remedy which they have under this
Undertaking without regard to any actions or omissions of the Borrower or
any other person or entity.
9. All notices, requests and other communications pursuant to this
Undertaking shall be in writing, to be either delivered by hand, overnight
delivery, or sent certified mail, return receipt requested, addressed to
the Agent at its office located at Two Tower Center Boulevard, East
Brunswick, New Jersey 08816, ATTENTION: Business Credit Department, or to
Warner at the address set forth on page 1 of this Undertaking, or at such
other address as either may give notice to the other as herein provided.
Any notice, request or communication hereunder shall be deemed to have
been given when delivered. However, and notwithstanding any other term or
provision contained herein to the contrary, Warner Bermuda hereby appoints
Warner PLC as its Agent to receive all service of process arising out of
any dispute relating to this Undertaking.
10. Any capitalized term not otherwise defined herein shall have the
meaning ascribed thereto in the Loan Agreement.
11. This Undertaking shall be construed in accordance with and
governed by the laws of the State of New Jersey.
12. This Undertaking shall be binding upon Warner, as well as its
successors or assigns and inure to the benefit of the Lenders and the
Lenders' successors and assigns.
13. WARNER HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW JERSEY AND, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, OF ANY FEDERAL COURT LOCATED IN THE STATE OF NEW JERSEY IN
CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THE
UNDERTAKINGS. WARNER HEREBY WAIVES THE DEFENSES OF FORUM NON CONVENIENS
AND IMPROPER VENUE.
14. WARNER EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY
LITIGATION RELATING TO, IN CONNECTION WITH, OR ARISING OUT OF THIS
UNDERTAKING OR ANY OTHER DOCUMENT DELIVERED IN CONNECTION WITH ANY OF THE
OBLIGATIONS.
IN WITNESS WHEREOF, has executed this Undertaking this 30th day of March,
1998.
ATTEST: WARNER CHILCOTT PUBLIC LIMITED COMPANY
/s/Paul S. Herendeen /s/Roger M. Boissonneault
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PAUL S. HERENDEEN, EVP ROGER M. BOISSONNEAULT, President
[SEAL]
WARNER CHILCOTT (BERMUDA) LIMITED
/s/Kevin Insley
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KEVIN INSLEY, Vice President