Exhibit 10.1

EXECUTION VERSION

 

BANK OF AMERICA, N.A.

MERRILL LYNCH, PIERCE, FENNER &

SMITH INCORPORATED

One Bryant Park

New York, New York 10036

  

MIZUHO BANK, LTD.

1251 Avenue of the Americas

New York, New York 10020

CONFIDENTIAL

February 17, 2014

Actavis plc

Morris Corporate Center III

400 Interpace Parkway

Parsippany, New Jersey 07054

Attention: Stephen Kaufhold, Vice President, Treasurer

Project Tango

Commitment Letter

Ladies and Gentlemen:

Actavis plc, a public limited company organized under the laws of Ireland
(“Parent” or “you”), has advised Bank of America, N.A. (“Bank of America”),
Mizuho Bank, Ltd. (“Mizuho Bank”) and Merrill Lynch, Pierce, Fenner & Smith
Incorporated (together with Bank of America and Mizuho Bank, the “Commitment
Parties”, “we” or “us”) that you intend to (a) acquire (the “Acquisition”) all
of the outstanding common stock of a company previously identified to us and
code-named “Foxtrot” (the “Acquired Business”) from its equity holders
(collectively, the “Sellers”) pursuant to that certain Agreement and Plan of
Merger, dated as of the date hereof, by and among Parent, Tango US Holdings Inc.
(“US Holdco”), Tango Merger Sub 1 LLC (“Merger Sub 1”), Tango Merger Sub 2 LLC
(“Merger Sub 2”) and the Acquired Business (as amended in accordance with the
terms hereof and in effect from time to time, including all schedules and
exhibits thereto, the “Merger Agreement”), (b) terminate the Credit Agreement
(the “Existing Forest Laboratories Credit Agreement”), dated as of December 4,
2012, by and among Forest Laboratories, Inc., JP Morgan Chase Bank, N.A., as
administrative agent, and the other lenders party thereto, as amended by that
certain Amendment No. 1, dated as of December 2, 2013 and pay in full any
indebtedness (other than contingent indemnification obligations) outstanding
thereunder (the “Refinancing”) and (c) consummate the other transactions
described below. After the merger of Merger Sub 1 with and into the Acquired
Business with the Acquired Business being the surviving entity (the “First
Merger”) and immediately following the First Merger, the merger of the Acquired
Business, as surviving entity of the First Merger, with and into Merger Sub 2,
with Merger Sub 2 being the surviving entity, the Acquired Business (as merged
with an into Merger Sub 2) will be an indirect wholly-owned subsidiary of
Parent. For purposes of this letter agreement, Parent, the Acquired Business and
their respective subsidiaries are sometimes collectively referred to herein as
the “Companies”.

You have also advised us that you intend to finance the “Cash Election
Consideration” and the “Fractional Share Consideration” (each term as defined in
the Merger Agreement) and the costs and expenses related to the Transaction (as
hereinafter defined) from the following sources (and that no

 

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financing other than (a) the financing described herein and (b) the issuance of
common equity interests in Parent to the Sellers in accordance with the Merger
Agreement will be required in connection with the Transaction):

(a) up to $4.75 billion in gross proceeds from the incurrence by the Borrowers
(as defined in Annex II attached hereto) of (1) a tranche of senior unsecured
cash bridge in an original aggregate principal amount of $3.0 billion maturing
60 days after the Closing Date (as hereinafter defined) (the “Cash Bridge
Tranche”) and (2) a tranche of senior unsecured term loans in an original
aggregate principal amount of $1.750 billion maturing five years after the
Closing Date (the “Five Year Tranche”), which may, at Parent’s election, be
incurred under either a new credit agreement or as new tranches of term loans
under one of the Existing Actavis Credit Agreements (as hereinafter defined) (in
either case, the “Senior Credit Facilities”);

(b) up to $2.250 billion in gross proceeds from the issuance and sale by the
Borrowers (as defined in Annex I attached hereto) of senior unsecured notes (the
“Notes”);

(c) if the Credit Documentation (as hereinafter defined) with respect to the
Five Year Tranche does not become effective in accordance with its terms and/or
the Notes are not issued and sold on or prior to the Closing Date, up to $4.0
billion in loans under a senior unsecured bridge facility (the “Bridge Facility”
and, together with the Senior Credit Facilities, the “Facilities”) made
available to the Borrowers as interim financing to the Senior Credit Facilities
and/or the Permanent Securities (as defined in Annex I attached hereto), as
applicable; and

(d) drawings under the Amended and Restated Actavis Revolving Credit and
Guaranty Agreement, dated as of October 1, 2013, among Parent, Actavis WC
Holdings S.à r.l., Actavis, Inc., the lenders party thereto and Bank of America,
as administrative agent thereunder (as amended through, and in effect on, the
Closing Date, the “Existing Actavis Revolving Credit and Guaranty Agreement”)
and/or Parent’s and its subsidiaries’ cash on hand.

You have further informed us that, in connection with the foregoing, you will
seek an amendment to, or amendment and restatement of, each of (a) the Existing
Actavis Revolving Credit and Guaranty Agreement, (b) the Amended and Restated
Actavis Term Loan Credit and Guaranty Agreement, dated as of October 1, 2013,
among Parent, Actavis WC Holdings S.à r.l., Actavis, Inc., the lenders party
thereto and Bank of America, as administrative agent thereunder (as amended
through, and in effect on, the Closing Date, the “Existing Actavis Term Loan
Credit and Guaranty Agreement”) and (c) the WC Term Loan Credit and Guaranty
Agreement, dated as of August 1, 2013, among Parent, Warner Chilcott
Corporation, WC Luxco S.à r.l., Warner Chilcott Company, LLC, Warner Chilcott
Finance, LLC, the lenders party thereto and Bank of America, as administrative
agent thereunder (as amended through, and in effect on, the Closing Date, the
“Existing WC Term Loan Credit and Guaranty Agreement” and, together with the
Existing Actavis Revolving Credit and Guaranty Agreement and the Existing
Actavis Term Loan Credit and Guaranty Agreement, the “Existing Actavis Credit
Agreements”), which amendments (collectively, the “Actavis Credit Agreement
Amendments”) will, among other things to be agreed, (1) modify the covenant
contained in Section 7.08 of each of the Existing Actavis Credit Agreements (and
the related provisions and definitions) to (i) permit the consummation of the
Transaction (including the incurrence of the indebtedness described hereby prior
to the Closing Date) and (ii) conform to the maximum consolidated leverage ratio
financial covenant that will be contained in the Credit Documentation (as
hereinafter defined) for the Senior Credit Facilities, (2) permit the
Post-Closing Restructuring (as defined in Annex III attached hereto), (3) permit
the Transaction (including the assumption of any Acquired Business indebtedness
(other than the Existing Forest Laboratories Credit Agreement)), (4) update the
definition of “FATCA” as provided in Annex II attached hereto, (5) extend the
Maturity Date under the Existing Actavis Revolving Credit and Guaranty Agreement
from September 16, 2017 to September 16,

 

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2018, (6) amend the covenant to provide subsidiary guaranties to reflect such
covenant as set forth in Annex I and Annex II, (7) provide for a guaranty by the
TopCo Guarantor (as defined in Annex I and Annex II), (8) amend the negative
covenants to include limitations on the activities of Parent and certain of its
subsidiaries, as set forth in Annex II and (9) provide that up to $500.0 million
of loans under the Existing Actavis Revolving Credit and Guaranty Agreement
shall be extended by the Lenders on the Pre-Funding Date (as defined on Annex II
hereto) subject only to the conditions set forth in clauses (i)-(iii) of Annex
III and the conditions set forth in Section 5 of this Commitment Letter.

The Acquisition, the entering into and funding of the Facilities, the issuance
and sale of the Notes, the Actavis Credit Agreement Amendments, the Refinancing
and all related transactions are hereinafter collectively referred to as the
“Transaction”. The date of consummation of the Acquisition is referred to herein
as the “Closing Date”. The date that this Commitment Letter is accepted by
Parent is referred to herein as the “Commitment Date”.

1. Commitments. In connection with the foregoing, (a)(i) each of Bank of America
and Mizuho Bank is pleased to advise you of its several, and not joint,
commitment to provide (x) up to $175.0 million (for a total of $350.0 million)
of the Five Year Tranche and (y) 50% of the Cash Bridge Tranche (in such
capacity, the “Initial Senior Lenders”), (ii) Bank of America is pleased to
advise you of its willingness to act as the sole and exclusive administrative
agent (in such capacity, the “Senior Administrative Agent”) for the Senior
Credit Facilities, (iii) Mizuho Bank is pleased to advise you of its willingness
to act as sole syndication agent for the Senior Credit Facilities and (iv) each
of Merrill Lynch, Pierce, Fenner & Smith Incorporated or any of its affiliates
designated to act in such capacity, (“MLPFS”), and Mizuho Bank is pleased to
advise you of its willingness, and you hereby engage MLPFS and Mizuho Bank, to
act as exclusive lead arrangers and exclusive bookrunning managers (in such
capacities, the “Senior Lead Arrangers”) for the Senior Credit Facilities, and
in connection therewith to form a syndicate of lenders (including Bank of
America and Mizuho Bank) for the Senior Credit Facilities that are reasonably
acceptable to you (collectively, the “Senior Lenders”), in each case upon and
subject to the terms and conditions set forth in this letter agreement and in
Annex II hereto (the “Senior Financing Summary of Terms”) and Annex III hereto,
(b)(i) each of Bank of America and Mizuho Bank is pleased to advise you of its
several, and not joint, commitment to provide 50.0% of the Bridge Facility for a
total of $4.0 billion (in such capacity, the “Initial Bridge Lenders” and,
together with the Initial Senior Lenders, the “Initial Lenders”), (ii) Bank of
America is pleased to inform you of its willingness to act as the sole and
exclusive administrative agent (in such capacity, the “Bridge Administrative
Agent” and, together with the Senior Administrative Agent, the “Administrative
Agents”) for the Bridge Facility, (iii) Mizuho Bank is pleased to advise you of
its willingness to act as sole syndication agent for the Bridge Facility and
(iv) each of MLPFS and Mizuho Bank is pleased to advise you of its willingness,
and you hereby engage MLPFS and Mizuho Bank, to act as exclusive lead arrangers
and exclusive bookrunning managers (in such capacities, the “Bridge Lead
Arrangers” and, together with the Senior Lead Arrangers, the “Lead Arrangers”)
for the Bridge Facility, and in connection therewith to form a syndicate of
lenders (including Bank of America and Mizuho Bank) for the Bridge Facility
selected in consultation with you (collectively, the “Bridge Lenders” and,
together with the Senior Lenders, the “Lenders”), in each case upon and subject
to the terms and conditions set forth in this letter agreement and in Annex I
hereto (the “Bridge Summary of Terms” and, together with the Senior Financing
Summary of Terms, the “Summaries of Terms”; the Summary of Terms, together with
this letter agreement and Annex III hereto, this “Commitment Letter”) and Annex
III hereto and (c)(i) Bank of America hereby agrees that, prior to the
termination of this Commitment Letter in accordance with its terms (or, if
earlier, the effectiveness of the Actavis Credit Agreement Amendments), it will
continue to hold at least $163,800,000 of loans under the Existing Actavis Term
Loan Credit and Guaranty Agreement, at least $187,800,000 of loans under the
Existing WC Term Loan Credit and Guaranty Agreement and at least $84,500,000 of
commitments under the Existing Actavis Revolving Credit and Guaranty Agreement
and, in its capacity as a lender and the administrative agent under each of the
Existing Actavis Credit Agreements, will consent to the Actavis

 

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Credit Agreement Amendments and (ii) Mizuho Bank hereby agrees that, prior to
the termination of this Commitment Letter in accordance with its terms (or, if
earlier, the effectiveness of the Actavis Credit Agreement Amendments), it will
continue to hold at least $67,000,000 of loans under the Existing Actavis Term
Loan Credit and Guaranty Agreement, at least $187,800,000 of loans under the
Existing WC Term Loan Credit and Guaranty Agreement and at least $55,000,000 of
commitments under the Existing Actavis Revolving Credit and Guaranty Agreement
and, in its capacity as a lender under each of the Existing Actavis Credit
Agreements, will consent to the Actavis Credit Agreement Amendments, provided
that nothing in this clause (c) shall restrict the ability of Bank of America
from making an assignment to Mizuho or the ability of Mizuho from making an
assignment to Bank of America, in each case, under an Existing Actavis Credit
Agreement; provided, further, that the amounts set forth in this clause
(c) shall be deemed to be automatically adjusted to reflect any scheduled
repayment, prepayment or commitment reduction under the applicable Existing
Actavis Credit Agreement after the date hereof.

It is understood and agreed that Bank of America or MLPFS, as applicable, will
have “lead left” placement on all marketing materials relating to the Facilities
and will perform the duties and exercise the authority customarily performed and
exercised by them in such role. All capitalized terms used and not otherwise
defined herein shall have the same meanings as specified therefor in the
Summaries of Terms.

2. Syndication. The Lead Arrangers intend to commence syndication of the
Facilities promptly after your acceptance of the terms of this Commitment Letter
and the Fee Letters (as hereinafter defined), and the several commitments of the
Commitment Parties hereunder shall be reduced (a) in respect of the Bridge
Facility, dollar-for-dollar on a pro-rata basis as and when corresponding
commitments are received from the Bridge Lenders, (b) in respect of the Cash
Bridge Tranche, dollar-for-dollar on a pro-rata basis as and when corresponding
commitments are received from the Senior Lenders thereunder and (b) in respect
of the Five Year Tranche, as determined by the Lead Arrangers after full
subscription of the $1.4 billion in commitments in respect of the Senior Credit
Facilities that are not committed to by the Initial Senior Lenders hereunder,
upon allocation of the commitments thereunder, in each case pursuant to an
amendment or amendment and restatement of, or customary joinder to, this
Commitment Letter (any such amendment, amendment and restatement or joinder, a
“Joinder”) or pursuant to the Credit Documentation, whichever is earlier. The
parties agree to cooperate in good faith to execute and deliver Joinders
promptly upon prospective lenders’ being identified, and, except in the case of
prospective lenders specifically identified in a writing agreed by you and us
prior to the date hereof, as to which such acceptance is hereby acknowledged and
granted, accepted by Parent, such acceptance not to be unreasonably withheld or
delayed. With respect to any syndication, assignment or participation other than
through a Joinder or pursuant to the Credit Documentation, the Initial Lenders
shall not be relieved or released from their respective obligations hereunder
until the funding on the Closing Date has occurred (but without limiting
Parent’s acceptance of and obligation to execute and deliver Joinders as set
forth in the preceding sentence). Until the earlier of (x) the date that a
Successful Syndication (as defined in the Joint Fee Letter) is achieved and
(y) the date that is 60 days after the Closing Date (such earlier date, the
“Syndication Date”), you agree to assist, and to use your commercially
reasonable efforts to cause the Acquired Business and its subsidiaries to
assist, but in all instances subject to, and not in contravention of, the terms
of the Merger Agreement, the Lead Arrangers in achieving a syndication of each
such Facility that is satisfactory to the Lead Arrangers. Such assistance shall
include (a) your providing and causing your advisors to provide, and using your
commercially reasonable efforts to cause the Acquired Business, its subsidiaries
and its advisors (consistent with the terms of the Merger Agreement) to provide,
the Lead Arrangers and the Lenders upon request with all information reasonably
deemed necessary by the Lead Arrangers to complete such syndication, including,
but not limited to, information and evaluations prepared by you, the Acquired
Business and your and its advisors, or on your or its behalf, relating to the
Transaction (including the Projections (as hereinafter defined)), (b) your using
commercially reasonable efforts to assist the Lead Arrangers in the preparation,
within 60 days after the date hereof, of an

 

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information memorandum with respect to each of the Facilities (other than with
respect to the Cash Bridge Tranche) in form and substance consistent with the
information memorandum with respect to the Existing Actavis Credit Agreements,
and including such additional information as may be appropriate with respect to
the structure of the Facilities (each, an “Information Memorandum”) to be
completed during a period of at least fifteen consecutive business days
occurring at any time prior to the Closing Date (which fifteen consecutive
business-day period, (1) if it has not ended on or before August 15, 2014, shall
not commence before September 2, 2014 and (2) shall exclude November 27-28,
2014), and other materials to be used in connection with the syndication of each
such Facility, (c) your using your commercially reasonable efforts to ensure
that the syndication efforts of the Lead Arrangers benefit materially from your
existing lending relationships and, to the extent applicable and appropriate,
the existing banking relationships of the Acquired Business, (d) your otherwise
assisting the Lead Arrangers in their syndication efforts, including by making
your officers and advisors, and using your commercially reasonable efforts to
make the officers and advisors of the Acquired Business (consistent with the
terms of the Merger Agreement), reasonably available from time to time to attend
and make presentations regarding the business and prospects of the Companies and
the Transaction at one or more meetings of prospective Lenders at times and
locations mutually agreed upon and (e) using your commercially reasonable
efforts to ensure that prior to the Closing Date (or, if earlier, the first date
on which the Credit Documentation in respect of the Senior Credit Facilities has
become effective and the Notes have been issued and the commitments under the
Bridge Facility have been terminated in full), there will be no competing issues
of debt securities or bank credit financing (other than the Facilities, the
Notes and additional credit extensions under the Existing Actavis Revolving
Credit and Guaranty Agreement) by or on behalf of you, the Acquired Business or
any of your or its subsidiaries being offered, placed or arranged that could
reasonably be expected to materially impair the syndication of the Facilities
(it being understood that any indebtedness permitted under the Merger Agreement
as in effect on the date hereof shall not be subject to this clause (e)).
Notwithstanding anything to the contrary contained in this Commitment Letter,
the Fee Letters or any other letter agreement or other undertaking concerning
the financing of the Transaction contemplated hereby, but without limiting your
obligations to assist with syndication efforts as set forth herein, it is
understood that in no event shall the successful completion of syndication of
the Facilities or the receipt of any ratings constitute a condition to the
availability or initial funding of the Facilities on the Closing Date.

It is understood and agreed that the Lead Arrangers will manage and control all
aspects of the syndication of the Facilities in consultation with you, including
decisions as to the selection of prospective Lenders and any titles offered to
proposed Lenders, when commitments will be accepted and the final allocations of
the commitments among the Lenders, and, with your consent (not to be
unreasonably withheld), any titles or roles offered to prospective Lenders. It
is understood that no Lender participating in the Facilities will receive
compensation from you in order to obtain its commitment, except on the terms
contained herein, in the Summaries of Terms, and in the Joint Fee Letter. It is
also understood and agreed that the amount and distribution of the fees among
the Lenders will be at the reasonable discretion of the Lead Arrangers in
consultation with you.

3. Information Requirements. You hereby represent, warrant and covenant that
(a) all written information, other than Projections (as hereinafter defined) and
information of a general economic or general industry nature, that has been or
is hereafter made available to the Lead Arrangers or any of the Lenders by or on
behalf of you or any of your representatives, taken as a whole, or by or on
behalf of the Acquired Business or any of its representatives, taken as a whole,
in connection with any aspect of the Transaction (the “Information”) is and will
be, when furnished and taken as a whole, complete and correct in all material
respects and does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements contained
therein not misleading (in each case after giving effect to all supplements and
updates provided thereto) and (b) all financial projections concerning the
Companies that have been or are hereafter made available to the Lead Arrangers
or any of the Lenders by or on behalf of you or any of your representatives or
by or on behalf of the

 

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Acquired Business or its representatives (the “Projections”) have been or will
be prepared in good faith based upon reasonable assumptions that are believed by
the preparer thereof to be reasonable at the time made and at the time such
projections are delivered to the Lead Arrangers; it being understood and agreed
that such Projections are not to be viewed as facts and that actual results
during the period or periods covered by any such Projections may differ
significantly from the projected results, and no assurance can be given that the
projected results will be realized. You agree that, if at any time prior to the
later of the Closing Date and the Syndication Date, you become aware that any of
the representations and warranties in the preceding sentence would be incorrect
in any respect if the Information and Projections were being furnished, and such
representations were being made, at such time, then you will promptly supplement
the Information and the Projections so that such representations and warranties
will be correct at such time. Solely as they relate to matters with respect to
the Acquired Business and its subsidiaries, the foregoing representations,
warranties and covenants are made to the best of your knowledge. In issuing this
commitment and in arranging and syndicating each of the Facilities, the
Commitment Parties are and will be using and relying on the Information and the
Projections without independent verification thereof.

You acknowledge that the Commitment Parties on your behalf will make available
Information Materials (as hereinafter defined) to the proposed syndicate of
Lenders by posting the Information, the Projections, the Summaries of Terms and
any additional summary of terms prepared for distribution to Public Lenders (as
hereinafter defined) (collectively, the “Information Materials”) on SyndTrak or
another similar electronic system. In connection with the syndication of the
Facilities, unless the parties hereto otherwise agree in writing, you shall be
under no obligation to provide Information Materials suitable for distribution
to any prospective Lender (each, a “Public Lender”) that has personnel who do
not wish to receive material non-public information (within the meaning of the
United States federal securities laws, “MNPI”) with respect to the Companies,
their respective affiliates or any other entity, or the respective securities of
any of the foregoing. You agree, however, that the Credit Documentation will
contain provisions concerning Information Materials to be provided to Public
Lenders and the absence of MNPI therefrom that are substantially identical to
the Existing Actavis Credit Agreements. Prior to distribution of Information
Materials to prospective Lenders, you shall provide us with a letter authorizing
the dissemination thereof that is substantially identical to the letter provided
in connection with the Existing Actavis Credit Agreements.

4. Fees and Indemnities.

(a) You agree to pay the fees set forth in the separate fee letter addressed to
you dated the date hereof from the Commitment Parties (the “Joint Fee Letter”)
and the separate fee letter addressed to you dated the date hereof from Bank of
America (the “Administrative Fee Letter” and, together with the Joint Fee
Letter, the “Fee Letters”). You also agree to reimburse the Commitment Parties
for all reasonable and documented out-of-pocket fees and expenses (including,
but not limited to, the reasonable fees, disbursements and other charges of
Shearman & Sterling LLP, as counsel to the Lead Arrangers, the Senior
Administrative Agent, the Bridge Administrative Agent and the Initial Lenders
(and one additional counsel to each group of affected Indemnified Parties (as
hereinafter defined) that are similarly situated, taken as a whole, for any
conflict of interest and, if reasonably necessary, one local counsel in each of
Ireland, each jurisdiction of organization of each Borrower and, if reasonably
necessary, each jurisdiction of organization of any other guarantor)) incurred
in connection with the Transaction (not to include, for the avoidance of doubt,
the reasonable and documented fees, charges and other disbursements of counsel
for the administrative agent under the Existing Actavis Credit Agreements, which
shall be limited to Shearman & Sterling LLP, that are required to be reimbursed
pursuant to Section 11.04 of each of the Existing Actavis Credit Agreements),
the syndication thereof, the preparation of the Credit Documentation therefor
and the other transactions contemplated hereby (collectively, the “Expenses”);
provided, that you shall not be obligated to reimburse us for Expenses (other
than fees, charges and other disbursements of counsel) in excess of $150,000;
and provided further, that in the event the Closing Date does not occur,

 

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you shall not be required to reimburse any fees, disbursements and other charges
of Shearman & Sterling LLP unless we promptly notify you when such fees,
disbursements and other charges exceed $150,000 in the aggregate and provide you
(or cause Shearman & Sterling LLP to provide you) weekly invoiced updates
thereafter. You acknowledge that we may receive a benefit from any of such
counsel in connection with unrelated matters, including without limitation, a
discount, credit or other accommodation, based on the fees such counsel may
receive on account of their relationship with us including, without limitation,
fees paid pursuant hereto.

(b) You also agree to indemnify and hold harmless each of the Commitment Parties
and each of their affiliates, successors and assigns, and their respective
officers, directors, employees, agents, advisors and other representatives
(each, an “Indemnified Party”) from and against, and hold each Indemnified Party
harmless from, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, the reasonable fees, disbursements and other
charges of one legal counsel for the Administrative Agents, the Lead Arrangers
and the Initial Lenders (and one additional counsel to each group of affected
Indemnified Parties that are similarly situated, taken as a whole, for any
conflict of interest and, if reasonably necessary, one local counsel in each
relevant jurisdiction)) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(a) any aspect of the Transaction and any of the other transactions contemplated
thereby or (b) the Facilities and any other financings in connection with the
Transaction, or any use made or proposed to be made with the proceeds thereof
(in all cases, whether or not caused or arising, in whole or in part, out of the
comparative, contributory or sole negligence of the Indemnified Party); provided
that the foregoing indemnity will not, as to any Indemnified Party, apply to
(i) losses, claims, damages, liabilities or related expenses to the extent they
(A) are found by a final, non-appealable judgment of a court of competent
jurisdiction to arise from the gross negligence, willful misconduct or bad faith
of the applicable Indemnified Party or any Related Indemnified Party (as
hereinafter defined), or (B) result from a claim brought by Parent against an
Indemnified Party for a material breach of such Indemnified Party’s obligations
under this Commitment Letter, the Fee Letters or other Credit Documentation if
Parent has obtained a final and non-appealable judgment in its favor on such
claims as determined by a court of competent jurisdiction, (ii) any settlement
entered into by such Indemnified Party without your written consent (such
consent not to be unreasonably withheld, conditioned or delayed) and (iii) any
disputes solely among the Indemnified Parties and not arising out of or in
connection with any act or omission of any Company (other than a dispute
involving a claim against any Commitment Party solely in its capacity as an
arranger, agent or similar role in connection with the Facilities). In the case
of any claim, litigation, investigation or proceeding (any of the foregoing, a
“Proceeding”) to which the indemnity in this paragraph applies, such indemnity
shall be effective whether or not such Proceeding is brought by you, your equity
holders or creditors or an Indemnified Party, whether or not an Indemnified
Party is otherwise a party thereto and whether or not any aspect of the
Transaction is consummated. You also agree that no Indemnified Party shall have
any liability (whether direct or indirect, in contract or tort or otherwise) to
you, the Seller, the Acquired Business or your or their subsidiaries or
affiliates or to your or their respective equity holders or creditors or any
other person arising out of, related to or in connection with any aspect of the
Transaction, except to the extent of direct (as opposed to special, indirect,
consequential or punitive) damages determined in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from (i) such
Indemnified Party’s gross negligence, bad faith or willful misconduct or (ii) a
material breach of such Indemnified Party’s obligations under this Commitment
Letter, the Fee Letters or other Credit Documentation, as found in a proceeding
to which you are a party. It is further agreed that the Commitment Parties shall
only have liability to you (as opposed to any other person), and that the
Commitment Parties shall be severally liable solely in respect of their
respective commitments under the Facilities, on a several, and not joint, basis
with any other Lender. Notwithstanding any other provision of this Commitment
Letter, no Indemnified Party shall be liable for any damages arising from the
use by others of information or other materials obtained through electronic

 

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telecommunications or other information transmission systems, other than for
direct, actual damages resulting from the gross negligence, bad faith or willful
misconduct of such Indemnified Party or any of its affiliates, or any of their
respective officers, directors, employees, advisors, affiliates, agents or
controlling persons as determined by a final, non-appealable judgment of a court
of competent jurisdiction. Notwithstanding any other provisions of this
Commitment Letter to the contrary, neither you nor any Indemnified Party shall
be liable for any indirect, special, punitive or consequential damages arising
out of, in connection with, or as a direct result of the Transaction or the
other transactions contemplated by this Commitment Letter, except that this
shall not limit your indemnification obligations set forth in this section. You
shall not, without the prior written consent of an Indemnified Party (which
consent shall not be unreasonably withheld), effect any settlement of any
pending or threatened Proceeding against an Indemnified Party in respect of
which indemnity could have been sought hereunder by such Indemnified Party
unless (i) such settlement includes an unconditional release of such Indemnified
Party from all liability or claims that are the subject matter of such
Proceeding and (ii) does not include any statement as to any admission of
liability.

For purposes hereof, a “Related Indemnified Party” of an Indemnified Party means
(1) any controlling person or controlled affiliate of such Indemnified Party,
(2) the respective directors, officers, or employees of such Indemnified Party
or any of its controlling persons or controlled affiliates and (3) the
respective agents of such Indemnified Party or any of its controlling persons or
controlled affiliates, in the case of this clause (3), acting at the
instructions of such Indemnified Party, controlling person or such controlled
affiliate; provided, that each reference to a controlled affiliate or
controlling person in this sentence pertains to a controlled affiliate or
controlling person involved in the negotiation of this Commitment Letter, the
Fee Letters or other Credit Documentation.

5. Conditions to Financing. The commitment of the Initial Senior Lenders in
respect of the Senior Credit Facilities, the commitment of the Initial Bridge
Lenders in respect of the Bridge Facility and the undertaking of the Lead
Arrangers to provide the services described herein are subject solely to the
satisfaction of each of the conditions set forth in Annex III hereto and each of
the following conditions precedent: (a) (i) solely with respect to the Senior
Credit Facilities, the negotiation, execution and delivery of definitive
documentation with respect to the Senior Credit Facilities by the Borrowers and
Parent consistent with this Commitment Letter, including the Documentation
Principles (as defined in the Senior Financing Summary of Terms) and the Fee
Letters and (ii) solely with respect to the Bridge Facility, the negotiation,
execution and delivery of definitive documentation with respect to the Bridge
Facility by the Borrowers and Parent consistent with this Commitment Letter,
including the Documentation Principles and the Fee Letters (the definitive
documentation referred to in clauses (i) and (ii) collectively, the “Credit
Documentation”); and (b) solely with respect to the Senior Credit Facilities,
the other conditions set forth in the Senior Financing Summary of Terms under
the heading “Conditions Precedent” and, solely with respect to the Bridge
Facility, the other conditions set forth in the Bridge Summary of Terms under
the heading “Conditions Precedent”. Notwithstanding anything in this Commitment
Letter, the Joint Fee Letter, the Administrative Fee Letter, the Credit
Documentation or any other letter agreement or other undertaking concerning the
financing of the Transaction to the contrary, (a) the representations and
warranties the accuracy of which shall be a condition to the availability of the
Facilities on the Closing Date shall be only (i) such representations made by or
with respect to the Acquired Business and its subsidiaries in the Merger
Agreement as are material to the interests of the Lenders, but only to the
extent that you have or any of your affiliates has the right to terminate your
or its obligations under the Merger Agreement, or to decline to consummate the
Acquisition pursuant to the Merger Agreement, as a result of a breach of such
representations in the Merger Agreement (the “Merger Agreement Representations”)
and (ii) the Specified Representations (as hereinafter defined) and (b) the
terms of the Credit Documentation shall be in a form such that they do not
impair the availability of (i) the Senior Credit Facilities on the Closing Date
if the conditions set forth in the section entitled “Conditions Precedent” in
the Senior Financing Summary of Terms are satisfied and (ii) the Bridge Facility
on the Closing Date if the conditions

 

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set forth in the section entitled “Conditions Precedent” in the Bridge Summary
of Terms are satisfied. For purposes hereof, “Specified Representations” means
the representations and warranties of Parent and the Borrowers (x) in the case
of the Senior Credit Facilities, contemplated by the Senior Financing Summary of
Terms, relating to the absence of a court order (by a court of competent
jurisdiction) in effect on the Closing Date enjoining the Senior Lenders from
funding the Senior Credit Facilities, (y) in the case of the Bridge Facility,
contemplated by the Bridge Summary of Terms, relating to the absence of a court
order (by a court of competent jurisdiction) in effect on the Closing Date
enjoining the Bridge Lenders from funding the Bridge Facility, and (z) in each
case, relating to corporate status, corporate power and authority to enter into
the Credit Documentation, due authorization, execution, delivery and
enforceability of the Credit Documentation, no conflicts of the Credit
Documentation in any material respect with material laws that would result in a
Parent Material Adverse Effect (as defined in the Merger Agreement) or charter
documents, solvency of Parent and its subsidiaries on the Closing Date on a
consolidated basis after giving effect to the Transaction (with solvency to be
defined in a manner consistent with the form of solvency certificate attached as
Exhibit A to Annex III hereto), Federal Reserve margin regulations, the U.S.A.
Patriot Act (with respect to the Borrowers only), OFAC (with respect the
Borrowers only) and the Investment Company Act. There shall be no conditions to
closing and funding not expressly set forth in this Section 5 or Annex III
hereto and (i) solely with respect to the Senior Credit Facilities, the other
conditions referenced in the Senior Financing Summary of Terms under the heading
“Conditions Precedent” and (ii) solely with respect to the Bridge Facility, the
other conditions referenced in the Bridge Summary of Terms under the heading
“Conditions Precedent”.

6. Confidentiality and Other Obligations. This Commitment Letter and the Fee
Letters and the contents hereof and thereof are confidential and, may not be
disclosed by you in whole or in part to any person or entity without our prior
written consent except (i) on a confidential basis to your affiliates, and your
or your affiliates’ officers, directors, employees, agents, attorneys,
accountants and other professional advisors in connection with the Transaction,
(ii) pursuant to the order of any court or administrative agency in any pending
legal or administrative proceeding, or otherwise as required by applicable law
or compulsory legal process based on the reasonable advice of your legal counsel
(in which case you agree, to the extent practicable and not prohibited by
applicable law, to inform us promptly thereof), and (iii) this Commitment Letter
and the Fee Letters (redacted in a manner reasonably satisfactory to us) may be
disclosed on a confidential basis to the Acquired Business and to the
affiliates, board of directors, officers, directors, employees, agents,
attorneys, accountants and other advisors of the Acquired Business in connection
with the Transaction. Notwithstanding the foregoing, (i) following your
acceptance hereof, you may disclose the Summaries of Terms in any offering
memoranda relating to the Notes or in any syndication or other marketing
materials in connection with the Facilities or the Actavis Credit Agreement
Amendments or in any proxy statement or similar public filing related to the
Transaction or in connection with any public filing requirement, (ii) following
your acceptance of the provisions hereof and return of an executed counterpart
of this Commitment Letter to the Lead Arrangers as provided below, you may file
a copy of any portion of this Commitment Letter (but not the Fee Letters) in any
public record in which you are required by law or regulation on the advice of
your counsel to file it, (iii) you may disclose the Summaries of Terms to any
rating agency in connection with the Transaction to the extent necessary to
satisfy your obligations or the conditions hereunder and (iv) you may disclose
the aggregate fee amounts contained in the Fee Letters as part of Projections,
pro forma information or a generic disclosure of aggregate sources and uses
related to fee amounts related to the Transaction to the extent customary or
required in offering and marketing materials for the Senior Credit Facilities,
the Bridge Facility, the Notes and/or the Actavis Credit Agreement Amendments or
in any public filing relating to the Transaction.

The Commitment Parties shall use all confidential information provided to them
by or on behalf of you hereunder solely for the purpose of providing the
services which are the subject of this letter agreement and otherwise in
connection with the Transaction and shall treat confidentially all such

 

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information; provided, however, that nothing herein shall prevent the Commitment
Parties from disclosing any such information (i) pursuant to the order of any
court or administrative agency or in any pending legal or administrative
proceeding, or otherwise as required by applicable law or compulsory legal
process (in which case the Commitment Parties agree to inform you promptly
thereof prior to such disclosure to the extent not prohibited by law, rule or
regulation), (ii) upon the request or demand of any regulatory authority having
jurisdiction over the Commitment Parties or any of their respective affiliates
(including without limitation in the course of inspections, examinations or
inquiries by federal or state government agencies, regulatory agencies,
self-regulatory agencies and rating agencies), (iii) to the extent that such
information becomes publicly available other than by reason of disclosure in
violation of this agreement by the Commitment Parties, (iv) to the Commitment
Parties’ affiliates, and the Commitment Parties’ and their affiliates’
employees, officers, directors, legal counsel, independent auditors and other
experts or agents who need to know such information in connection with the
Transaction and are informed of the confidential nature of such information and
instructed to keep such confidential information confidential, (v) for purposes
of establishing any defense available under state and federal securities laws
including without limitation a “due diligence” defense, (vi) to the extent that
such information is or was received by the Commitment Parties from a third party
that is not to the Commitment Parties’ knowledge subject to confidentiality
obligations to you, (vii) to the extent that such information is independently
developed by the Commitment Parties or (viii) to potential Lenders, participants
or assignees who agree to be bound by the terms of this paragraph (or language
substantially similar to this paragraph or as otherwise reasonably acceptable to
you and each Commitment Party, including as may be agreed in any confidential
information memorandum or other marketing material). This paragraph shall
terminate on the date that is 18 months after the date hereof.

You acknowledge that the Commitment Parties or their affiliates may be providing
financing or other services to parties whose interests may conflict with yours.
None of the Commitment Parties or the Lead Arrangers will use confidential
information obtained from you by virtue of the transactions contemplated by this
letter or their other relationships with you in connection with the performance
by the Commitment Parties and the Lead Arrangers of services for other
companies. The Commitment Parties agree that they will not furnish confidential
information obtained from you to any of their other customers and will treat
confidential information relating to the Companies and their respective
affiliates with the same degree of care as they treat their own confidential
information. The Commitment Parties further advise you that they will not make
available to you confidential information that they have obtained or may obtain
from any other customer. In connection with the services and transactions
contemplated hereby, you agree that the Commitment Parties are permitted to
access, use and share with any of their bank or non-bank affiliates, agents,
advisors (legal or otherwise) or representatives any information concerning the
Companies or any of their respective affiliates that is or may come into the
possession of the Commitment Parties or any of such affiliates.

In connection with all aspects of each transaction contemplated by this
Commitment Letter, you acknowledge and agree, and acknowledge your affiliates’
understanding, that: (i) each of the Facilities and any related arranging or
other services described in this Commitment Letter is an arm’s-length commercial
transaction between you and your affiliates, on the one hand, and the Commitment
Parties, on the other hand, (ii) the Commitment Parties have not provided any
legal, accounting, regulatory or tax advice with respect to any of the
transactions contemplated hereby and you have consulted your own legal,
accounting, regulatory and tax advisors to the extent you have deemed
appropriate, (iii) you are capable of evaluating, and understand and accept, the
terms, risks and conditions of the transactions contemplated hereby, (iv) in
connection with each transaction contemplated hereby and the process leading to
such transaction, each of the Commitment Parties has been, is, and will be
acting solely as a principal and has not been, is not, and will not be acting as
an advisor, agent or fiduciary, for you or any of your affiliates, stockholders,
creditors or employees or any other party, (v) the Commitment Parties have not
assumed and will not assume an advisory, agency or fiduciary responsibility in
your or your affiliates’ favor

 

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with respect to any of the transactions contemplated hereby or the process
leading thereto (irrespective of whether any of the Commitment Parties has
advised or is currently advising you or your affiliates on other matters) and
the Commitment Parties have no obligation to you or your affiliates with respect
to the transactions contemplated hereby except those obligations expressly set
forth in this Commitment Letter and (vi) the Commitment Parties and their
respective affiliates may be engaged in a broad range of transactions that
involve interests that differ from yours and those of your affiliates, and the
Commitment Parties have no obligation to disclose any of such interests to you
or your affiliates. To the fullest extent permitted by law, you hereby waive and
release any claims that you may have against the Commitment Parties with respect
to any breach or alleged breach of agency or fiduciary duty in connection with
any aspect of any transaction contemplated by this Commitment Letter.

The Commitment Parties hereby notify you that pursuant to the requirements of
the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26,
2001) (the “U.S.A. Patriot Act”), each of them is required to obtain, verify and
record information that identifies you and any guarantor, which information
includes your name and address and other information that will allow the
Commitment Parties, as applicable, to identify you and any guarantor in
accordance with the U.S.A. Patriot Act.

7. Survival of Obligations. The provisions of Sections 2, 3, 4, 6 and 8 shall
remain in full force and effect regardless of whether any Credit Documentation
shall be executed and delivered and notwithstanding the termination of this
Commitment Letter or any commitment or undertaking of the Commitment Parties
hereunder, except that the provisions of Sections 2 and 3 shall not survive if
the commitments and undertakings of the Commitment Parties are terminated prior
to the effectiveness of the Senior Credit Facilities and funding of the Bridge
Facility (or, upon the closing of the Acquisition without the use of any
proceeds of the Senior Credit Facilities and/or the Bridge Facility, as
applicable) and the provisions of Sections 4 and 6 (other than with respect to
the confidentiality of the Fee Letters and the contents thereof) shall, except
with respect to events or circumstances occurring prior to the execution of the
Credit Documentation, be superseded by the reimbursement, confidentiality and
indemnification provisions of the Credit Documentation upon the effectiveness
thereof.

8. Miscellaneous. This Commitment Letter and the Fee Letters may be executed in
multiple counterparts and by different parties hereto in separate counterparts,
all of which, taken together, shall constitute an original. Delivery of an
executed counterpart of a signature page to this Commitment Letter or the Fee
Letters by telecopier, facsimile or other electronic transmission (e.g., a “pdf”
or “tiff”) shall be effective as delivery of a manually executed counterpart
thereof. Headings are for convenience of reference only and shall not affect the
construction of, or be taken into consideration when interpreting, this
Commitment Letter or the Fee Letters.

This Commitment Letter and the Fee Letters shall be governed by, and construed
in accordance with, the laws of the State of New York; provided, however, that
(i) the interpretation of the definition of Company Material Adverse Effect (as
defined in the Merger Agreement) and whether or not a Company Material Adverse
Effect has occurred, (ii) the determination of the accuracy of any Merger
Agreement Representations and whether as a result of any inaccuracy thereof you
(or your affiliates) have the right to terminate your (or their) obligations
under the Merger Agreement, or to decline to consummate the Transactions (as
defined in the Merger Agreement) pursuant to the Merger Agreement, and (iii) the
determination of whether the Transactions (as defined in the Merger Agreement)
have been consummated in accordance with the terms of the Merger Agreement, in
each case, shall be governed by, and construed and interpreted solely in
accordance with, the laws of the State of Delaware, without regard to any other
principles of conflicts of law. Each party hereto hereby irrevocably waives any
and all right to trial by jury in any action, proceeding or counterclaim
(whether based on contract, tort or otherwise) arising out of or relating to
this Commitment Letter, the Fee Letters, the Transaction and the other
transactions contemplated hereby and thereby or the actions of the Commitment
Parties in the negotiation,

 

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performance or enforcement hereof. Each party hereto hereby irrevocably and
unconditionally submits to the exclusive jurisdiction of any New York State
court or Federal court of the United States of America sitting in the Borough of
Manhattan in New York City in respect of any suit, action or proceeding arising
out of or relating to the provisions of this Commitment Letter, the Fee Letters,
the Transaction and the other transactions contemplated hereby and thereby and
irrevocably agrees that all claims in respect of any such suit, action or
proceeding may be heard and determined in any such court. The parties hereto
agree that service of any process, summons, notice or document by registered
mail addressed to you shall be effective service of process against you for any
suit, action or proceeding relating to any such dispute. Each party hereto
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of the venue of any such suit, action or
proceedings brought in any such court, and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. A final judgment in any such suit, action or proceeding brought in any
such court may be enforced in any other courts to whose jurisdiction you are or
may be subject by suit upon judgment.

This Commitment Letter, together with the Fee Letters, embodies the entire
agreement and understanding among the parties hereto and your affiliates with
respect to the Facilities and supersedes all prior agreements and understandings
relating to the subject matter hereof. No party has been authorized by the
Commitment Parties to make any oral or written statements that are inconsistent
with this Commitment Letter. Neither this Commitment Letter (including the
attachments hereto) nor the Fee Letters may be amended or any term or provision
hereof or thereof waived or modified except by an instrument in writing signed
by each of the parties hereto.

This Commitment Letter may not be assigned by you (other than to the TopCo
Guarantor or any Borrower) without our prior written consent (and any purported
assignment without such consent will be null and void), is intended to be solely
for the benefit of the parties hereto and is not intended to confer any benefits
upon, or create any rights in favor of, any person other than the parties hereto
(and the Indemnified Parties). Each Commitment Party may assign its commitment
hereunder, in whole or in part, to any of its affiliates (provided that no such
assignment to an affiliate shall reduce the amount of such Commitment Party’s
commitment hereunder) or, subject to the provisions of Section 2 of this
Commitment Letter, to any Lender. No Lead Arranger shall assign its rights under
this Commitment Letter or the Fee Letters as a Lead Arranger in its capacity as
such (other than to one of its affiliates) without the prior written consent of
each of the parties hereto (and any purported assignment without such consent
will be null and void).

Please indicate your acceptance of the terms of the Facilities set forth in this
Commitment Letter and the Fee Letters by returning to us executed counterparts
of this Commitment Letter and the Fee Letters not later than 11:59 p.m. (New
York City time) on February 17, 2014, whereupon the undertakings of the parties
with respect to the Facilities shall become effective to the extent and in the
manner provided hereby. This offer shall terminate with respect to the
Facilities if not so accepted by you at or prior to that time. Thereafter, all
commitments and undertakings of the Commitment Parties hereunder will expire on
the earliest of (a) the Outside Date (as defined below), (b) the closing of the
Acquisition without the use of the Senior Credit Facilities and the Bridge
Facility and (c) the termination of the Merger Agreement in accordance with its
terms.

As used herein, the “Outside Date” shall mean midnight Eastern Time (as defined
in the Merger Agreement), on August 17, 2014; provided that if, as of such date,
the condition set forth in Section 7.1(d) of the Merger Agreement and/or the
condition set forth in Section 7.1(c) of the Merger Agreement (if the applicable
Adverse Law (as defined in the Merger Agreement) or Order (as defined in the
Merger Agreement) is an order or injunction of a court of competent jurisdiction
under an Antitrust Law (as defined in the Merger Agreement)) has not been
satisfied but all other conditions to the Closing

 

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(as defined in the Merger Agreement) set forth in Article VII of the Merger
Agreement have been satisfied or waived (other than those conditions that by
their nature are to be satisfied at the Closing, which conditions shall be
capable of being satisfied), and either Parent or the Acquired Business has
prior to August 17, 2014 extended the “Outside Date” under to the Merger
Agreement by an additional three months until November 17, 2014, such extended
date shall thereafter be considered the Outside Date; provided, further, that if
on the Outside Date as extended pursuant to the preceding proviso the condition
set forth in Section 7.1(d) of the Merger Agreement and/or the condition set
forth in Section 7.1(c) of the Merger Agreement (if the applicable Adverse Law
or Order is an order or injunction of a court of competent jurisdiction under an
Antitrust Law)) has not been satisfied but all other conditions to the Closing
set forth in Article VII of the Merger Agreement have been satisfied or waived
(other than those conditions that by their nature are to be satisfied at the
Closing, which conditions shall be capable of being satisfied), and either
Parent or the Acquired Business have prior to November 17, 2014 extended the
“Outside Date” under to the Merger Agreement by an additional one month until
December 17, 2014, such extended date shall thereafter be considered the Outside
Date.

[The remainder of this page intentionally left blank.]

 

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We are pleased to have the opportunity to work with you in connection with this
important financing.

 

Very truly yours, BANK OF AMERICA, N.A. By:  

/s/ Robert LaPorte

  Name: Robert LaPorte   Title: Director MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED By:  

/s/ Jeff Standish

  Name: Jeff Standish   Title: Vice President

Signature Page to Tango Commitment Letter

--------------------------------------------------------------------------------

MIZUHO BANK, LTD. By:  

/s/ Raymond Ventura

  Name: Raymond Ventura   Title: Deputy General Manager

Signature Page to Tango Commitment Letter

--------------------------------------------------------------------------------

The provisions of this Commitment Letter are accepted and agreed to as of the
date first written above: ACTAVIS PLC By:  

/s/ David A. Buchen

  Name: David A. Buchen   Title: Chief Legal Officer - Global and Secretary

Signature Page to Tango Commitment Letter

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ANNEX I

PROJECT TANGO

SUMMARY OF TERMS AND CONDITIONS

BRIDGE LOANS

Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Annex I is attached.

 

Borrowers:    At the option of Actavis plc (“Parent”), Parent and/or one or more
existing or future subsidiaries of Parent organized under the laws of the United
States or any state thereof, Luxembourg, Puerto Rico, Ireland or any
jurisdiction selected by Parent and consented to by the Bridge Lead Arrangers
(such consent not to be unreasonably withheld, conditioned or delayed) will be
the borrowers under the Bridge Facility (as herein after defined) (in such
capacity, each a “Borrower”). As of the Commitment Date, Parent expects Actavis
Capital S.a r.l., a private limited liability company (société à responsabilité
limitée) incorporated under the Laws of the Grand-Duchy of Luxembourg, to be the
Borrower. Guarantors:    On the Closing Date, Actavis, Inc. and Warner Chilcott
Limited (a Bermuda company) or such other indirect subsidiary of Parent (the
“TopCo Guarantor”) that is itself a parent company of all the borrowers party to
the Existing Actavis Credit Agreements. Thereafter, any subsidiary of the TopCo
Guarantor (other than a Borrower) that becomes a guarantor of third party
indebtedness of any subsidiary of the TopCo Guarantor (other than a Borrower or
a guarantor under the Existing WC Term Loan Credit and Guaranty Agreement (or
any refinancing thereof) unless such party is also a guarantor under the
Existing Actavis Revolving Credit and Guaranty Agreement (or any refinancing
thereof) and the Existing Actavis Term Loan Credit and Guaranty Agreement (or
any refinancing thereof)) in an aggregate principal amount or commitment amount
exceeding $350,000,000 (unless, in the case of a non-U.S. subsidiary, such
guarantee would give rise to adverse tax consequences as reasonably determined
by TopCo Guarantor). Such guarantees by subsidiaries shall be automatically
released at such time as such subsidiaries no longer guarantee such other
indebtedness. In addition, if the TopCo Guarantor or any of its subsidiaries
provides a guaranty of indebtedness of the Acquired Business in an aggregate
principal amount or commitment amount exceeding $350,000,000, the Acquired
Business shall also guaranty the Facilities. Administrative Agent:    Bank of
America, N.A. or an affiliate thereof (“Bank of America”) will act as sole and
exclusive administrative agent for the Bridge Lenders (the “Administrative
Agent”). Syndication Agent:    Mizuho Bank, Ltd. (“Mizuho Bank”) will act as
sole and exclusive syndication agent for the Bridge Lenders.

 

Annex I-1

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Co-Documentation Agents:    One or more financial institutions selected by
Parent will act as co-documentation agents for the Bridge Facility. Lead
Arrangers and Bookrunning Managers:   

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated and Mizuho Bank will act as
lead arrangers and bookrunning managers for the Bridge Loans (in such
capacities, the “Bridge Lead Arrangers”).

Bridge Lenders:    Bank of America and Mizuho Bank (the “Initial Bridge
Lenders”) and, subject to Section 2 of the Commitment Letter, other financial
institutions determined by the Bridge Lead Arrangers in consultation with Parent
(the “Bridge Lenders”). Bridge Loans:    An aggregate principal amount of up to
$4.0 billion of senior unsecured bridge loans (the “Bridge Loans”), less (i) all
reductions pursuant to the Mandatory Prepayments and Commitment Reduction
section below and (ii) without duplication of clause (i) above, the aggregate
(x) gross proceeds of Notes or any other issuances of debt securities or
disqualified equity securities of the Parent and its subsidiaries (collectively,
“Permanent Securities”) issued on or prior to the Closing Date to the extent
that the gross proceeds thereof are made available to any Borrower on or prior
to the Closing Date and (y) commitments in respect of the Five Year Tranche
under the Senior Credit Facilities on the date the Credit Documentation in
respect thereof becomes effective in accordance with its terms. The Bridge Loans
will be available to the Borrowers in one drawing on the Closing Date. Ranking:
   The Bridge Loans will be senior unsecured obligations of TopCo Guarantor and
the Borrowers and rank pari passu in right of payment with or senior to all
other unsecured obligations of TopCo Guarantor and the Borrowers. Purpose:   
The proceeds of the Bridge Loans, together with (i) borrowings under the Senior
Credit Facilities and (ii) drawings under the Existing Actavis Revolving Credit
and Guaranty Agreement and Parent’s and its subsidiaries’ cash on hand, shall be
used to finance the “Cash Election Consideration” and the “Fractional Share
Consideration” (each term as defined in the Merger Agreement) and to pay costs
and expenses related to the Transaction. Interest Rate:    Interest shall be
payable quarterly in arrears at a rate per annum equal to three-month LIBOR plus
the Applicable Margin.    “Applicable Margin” shall be the basis points per
annum set forth in the table below for the period indicated opposite the long
term senior unsecured, non-credit enhanced debt rating or, if none, the issuer
rating or corporate credit rating of Parent by Standard & Poor’s, a division of
The McGraw-Hill Companies, Inc. (“S&P”) and Moody’s Investors Service, Inc.
(“Moody’s”), in each case after giving effect to the Transaction (the
“Ratings”). In the event of a single-level split between the Ratings, the higher
Rating shall apply, and in the event of a multi-level

 

Annex I-2

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   split between the Ratings, the Rating that is the midpoint between the two
Ratings, or, if there is no such midpoint, the Rating that is one level lower
than the higher Rating, shall apply. If either S&P or Moody’s does not have in
effect a Rating, then the Rating assigned by the other rating agency shall be
used. In the event that no Ratings are maintained for a reason other than such
rating agency ceasing to be in the business of rating corporate debt
obligations, the highest pricing in the grid shall apply.

 

     Debt Rating    Applicable Margin           On the Closing Date   
90 days after the
Closing Date    180 days after the
Closing Date    270 days after the
Closing Date   

³ A-/A3

   L + 100.0 bps    L + 150.0 bps    L + 200.0 bps    L + 250.0 bps   

BBB+/Baa1

   L + 112.5 bps    L + 162.5 bps    L + 212.5 bps    L + 262.50 bps   

BBB/Baa2

   L + 125.0 bps    L + 175.0 bps    L + 225.0 bps    L + 275.0 bps   

BBB-/Baa3

   L + 150.0 bps    L + 200.0 bps    L + 250.0 bps    L + 300.0 bps   

£ BB+/Ba1

   L + 175.0 bps    L + 225.0 bps    L + 275.0 bps    L + 325.0 bps

 

   If the rating system of Moody’s or S&P shall change or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
Parent and the Bridge Lenders shall negotiate in good faith to amend the
Applicable Margin to reflect such changed rating system (including, in such
case, an amendment to replace Moody’s or S&P, as applicable, with another rating
agency) or the unavailability of ratings from such rating agency and, pending
the effectiveness of any such amendment, the Applicable Margin shall be
determined by reference to the rating most recently in effect prior to such
change or cessation.    During the continuance of a payment default, interest
will accrue on the principal of the Bridge Loans at a rate of 200 basis points
in excess of the rate otherwise applicable to the Bridge Loans, and will be
payable on demand.    All calculations of interest shall be made on the basis of
actual number of days elapsed in a 360-day year. Duration Fees:    The Borrowers
shall pay to the Administrative Agent, for the ratable benefit of the Bridge
Lenders, a duration fee on the dates and in the amounts indicated below,
calculated on the aggregate principal amount of the Bridge Loans outstanding on
such dates:

 

    Date    (bps)    

90 days after the Closing Date

     50.0     

180 days after the Closing Date

     100.0     

270 days after the Closing Date

     150.0   

 

Cost and Yield Protection:    Same as the Senior Credit Facilities.

 

Annex I-3

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Maturity:    364 days after the Closing Date. Amortization:    None. Optional
Prepayments and Commitment Reductions:   

 

The Bridge Loans may be prepaid, or the commitments in respect thereof may be
reduced, without premium or penalty, in whole or in part, upon written notice,
at the option of TopCo Guarantor or any Borrower, at any time, together with
accrued interest to the prepayment date (if applicable).

Mandatory Prepayments and Commitment Reductions:   

 

The Borrowers shall prepay the Bridge Loans, and prior to the Closing Date, the
commitments in respect thereof shall be automatically reduced, without premium
or penalty together with accrued interest to the prepayment or purchase date,
with (a) all net after-tax cash proceeds from non-ordinary course sales of
property and assets of TopCo Guarantor or any of its subsidiaries after the
Commitment Date (including sales or issuances of equity interests, in each case
to third parties, by subsidiaries of TopCo Guarantor (but excluding sales of
inventory or factoring of accounts receivable in the ordinary course of
business, net cash after-tax proceeds from other sales of property or assets of
TopCo Guarantor and dispositions by TopCo Guarantor or a Borrower, as
applicable, or subsidiaries of TopCo Guarantor or a Borrower, to the extent the
repatriation of the proceeds of such dispositions, or otherwise using the
proceeds of such a sale to repay the Bridge Loans, would result in adverse tax
consequences as reasonably determined by TopCo Guarantor or such Borrower, as
applicable) in an amount not to exceed $150.0 million, subject to customary
reinvestment rights, and, after the execution and delivery of the Credit
Documentation, other exceptions to be agreed in the Credit Documentation),
(b) all net cash proceeds from the issuance or incurrence after the Commitment
Date of additional debt of TopCo Guarantor or the Borrowers (including, the
commitments in respect of the Five Year Tranche under the Senior Credit
Facilities on the date the Credit Documentation in respect thereof becomes
effective in accordance with its terms (but excluding any replacement, extension
or renewal of any debt of Parent or its subsidiaries existing on the Closing
Date which matures prior to the maturity of the Bridge Loans)) or any of its
subsidiaries other than drawings under the Existing Actavis Revolving Credit and
Guaranty Agreement that are not specifically designated by TopCo Guarantor for
application (and actually applied on the Closing Date) to finance a portion of
the Transaction and, after the execution and delivery of the Credit
Documentation, certain debt permitted under the Credit Documentation, and
(c) all net cash proceeds from any public issuance of equity interest by Parent
after the Commitment Date (other than any equity issued to the Sellers pursuant
to the Merger Agreement and other exceptions to be agreed).

 

Annex I-4

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Conditions Precedent:    The borrowing under the Bridge Facility on the Closing
Date will be subject only to the conditions precedent expressly set forth in
Section 5 of the Commitment Letter and Annex III to the Commitment Letter.
Credit Documentation:    Same as the Senior Credit Facilities. Representations
and Warranties:    Same as the Senior Credit Facilities. Affirmative Covenants:
   Same as the Senior Credit Facilities plus a covenant for the Borrowers to pay
all fees due and payable under the Fee Letters. Negative Covenants:    Same as
the Senior Credit Facilities. Events of Default:    Same as the Senior Credit
Facilities. Clean-up Period:    Same as the Senior Credit Facilities.
Assignments and Participations:    Prior to the Closing Date, assignments of
commitments in respect of the Bridge Facility shall be governed by the
Commitment Letter. After funding under the Bridge Facility on the Closing Date,
but prior to the date that a Successful Syndication of the Bridge Facility has
been achieved, the Initial Bridge Lenders will be permitted to make assignments
to other entities selected in consultation with the Borrowers. Assignments after
a Successful Syndication of the Bridge Facility has been achieved or prior
thereto by Lenders other than Initial Bridge Lenders shall be permitted on the
same terms as the Senior Credit Facilities. Waivers and Amendments:    Same as
the Senior Credit Facilities. Defaulting Lenders:    Same as the Senior Credit
Facilities. Indemnification:    TopCo Guarantor and, after the Closing Date, the
Borrowers will indemnify and hold harmless the Administrative Agent, the Bridge
Lead Arrangers, each Bridge Lender and each of their affiliates and their
officers, directors, employees, agents and advisors from and against, and hold
each harmless from, all losses, liabilities, claims, damages or expenses arising
out of or relating to the Transaction, the Bridge Facility, the Borrowers’ use
of loan proceeds or the commitments, including reasonable fees, disbursements
and other charges of counsel, which shall be limited to one counsel, and if
necessary, one local counsel in each appropriate jurisdiction and, solely in the
case of a conflict of interest, one special conflicts counsel to all affected
indemnified persons, taken as a whole, unless such losses, claims, damages,
liabilities or expenses are found by a final, non-appealable judgment of a court
of competent jurisdiction (i) to arise from the gross negligence, willful
misconduct or bad faith of the applicable indemnified person (or any controlling
person or controlled affiliate of such indemnified person, the respective
directors, officers, or employees of such indemnified

 

Annex I-5

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   person or any of their controlling persons or controlled affiliates and the
respective agents of such indemnified person or any of their controlling persons
or controlled affiliates acting at the instructions of such indemnified person
or a controlling person or such controlled affiliate of such indemnified
person), or (ii) to result from a claim brought by any Borrower against an
indemnified person for a material breach of such indemnified person’s
obligations under the Commitment Letter, the Fee Letters or other Credit
Documentation. Governing Law:    New York; provided, however, that on or before
the Closing Date, (i) the interpretation of the definition of Company Material
Adverse Effect and whether or not a Company Material Adverse Effect has
occurred, (ii) the determination of the accuracy of any Merger Agreement
Representations and whether as a result of any inaccuracy thereof you (or your
affiliates) have the right to terminate your (or their) obligations under the
Merger Agreement, or to decline to consummate the Transactions (as defined in
the Merger Agreement) pursuant to the Merger Agreement, and (iii) the
determination of whether the Transactions (as defined in the Merger Agreement)
have been consummated in accordance with the terms of the Merger Agreement, in
each case, shall be governed by, and construed and interpreted solely in
accordance with, the laws of the State of Delaware, without regard to any other
principles of conflicts of law. Expenses:    Same as the Senior Credit
Facilities. Counsel to Bridge Lead Arranger:   

 

Shearman & Sterling LLP.

Miscellaneous:    Each of the parties shall (i) waive its right to a trial by
jury and (ii) submit to exclusive New York jurisdiction.

 

Annex I-6

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ANNEX II

PROJECT TANGO

SUMMARY OF TERMS AND CONDITIONS

SENIOR CREDIT FACILITIES

Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Annex II is attached.

 

Borrowers:    At the option of Actavis plc (“Parent”), Parent and/or one or more
existing or future subsidiaries of Parent organized under the laws of the United
States or any state thereof, Luxembourg, Puerto Rico, Ireland or any
jurisdiction selected by Parent and consented to by the Senior Lead Arrangers
(such consent not to be unreasonably withheld, conditioned or delayed) will be
the borrowers under the Senior Credit Facilities (as herein after defined) (in
such capacity, each a “Borrower”). As of the Commitment Date, Parent expects
Actavis Capital S.a r.l., a private limited liability company (société à
responsabilité limitée) incorporated under the Laws of the Grand-Duchy of
Luxembourg, to be the Borrower. Guarantors:    On the Closing Date, Actavis,
Inc. and Warner Chilcott Limited (a Bermuda company) or such other indirect
subsidiary of Parent (the “TopCo Guarantor”) that is itself a parent company of
all the borrowers party to the Existing Actavis Credit Agreements. Thereafter,
any subsidiary of the TopCo Guarantor (other than a Borrower) that becomes a
guarantor of third party indebtedness of any subsidiary of the TopCo Guarantor
(other than a Borrower or a guarantor under the Existing WC Term Loan Credit and
Guaranty Agreement (or any refinancing thereof) unless such party is also a
guarantor under the Existing Actavis Revolving Credit and Guaranty Agreement (or
any refinancing thereof) and the Existing Actavis Term Loan Credit and Guaranty
Agreement (or any refinancing thereof)) in an aggregate principal amount or
commitment amount exceeding $350,000,000 (unless, in the case of a non-U.S.
subsidiary, such guarantee would give rise to adverse tax consequences as
reasonably determined by TopCo Guarantor). Such guarantees by subsidiaries shall
be automatically released at such time as such subsidiaries no longer guarantee
such other indebtedness. In addition, if the TopCo Guarantor or any of its
subsidiaries provides a guaranty of indebtedness of the Acquired Business in an
aggregate principal amount or commitment amount exceeding $350,000,000, the
Acquired Business shall also guaranty the Facilities. Administrative Agent:   
Bank of America, N.A. (“Bank of America”) will act as sole and exclusive
administrative agent for the Senior Lenders (as hereinafter defined) (the
“Administrative Agent”). Syndication Agent:    Mizuho Bank, Ltd. (“Mizuho Bank”)
will act as sole and exclusive syndication agent for the Senior Lenders.

 

Annex II-1

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Co-Documentation Agents:    One or more financial institutions selected by
Parent will act as co-documentation agents for the Senior Credit Facilities.
Lead Arrangers and Bookrunning Managers:   

 

Merrill Lynch, Pierce, Fenner & Smith Incorporated and Mizuho Bank will act as
lead arrangers and bookrunning managers for the Senior Credit Facilities (in
such capacities, the “Senior Lead Arrangers”).

Senior Lenders:    Bank of America, Mizuho Bank and, subject to Section 2 of the
Commitment Letter, other banks and financial institutions determined by the
Senior Lead Arrangers and reasonably acceptable to Parent (the “Senior
Lenders”). Senior Credit Facilities:    An aggregate principal amount of up to
$4.750 billion will be available, at Parent’s election, under either a new
credit agreement or as new tranches of term loans under one of the Existing
Actavis Credit Agreements (in either case, the “Senior Credit Facilities”). The
Senior Credit Facilities shall be comprised of (1) a tranche of senior unsecured
cash bridge in an original aggregate principal amount of $3.0 billion maturing
60 days after the Closing Date (the “Cash Bridge Tranche”) and (2) a tranche of
senior unsecured term loans in an original aggregate principal amount of $1.750
billion maturing five years after the Closing Date (the “Five Year Tranche”).
The entire aggregate principal amount of the Senior Credit Facilities will be
available to the Borrowers in one drawing on the Closing Date. Purpose:    The
proceeds of the borrowings under the Senior Credit Facilities, together with (i)
proceeds from the Bridge Facility and/or the Notes and (ii) drawings under the
Existing Actavis Revolving Credit and Guaranty Agreement and Parent’s and its
subsidiaries’ cash on hand, shall be used to finance the “Cash Election
Consideration” and the “Fractional Share Consideration” (each term as defined in
the Merger Agreement) and to pay costs and expenses related to the Transaction.
Post-Closing Restructuring:    Parent and its subsidiaries may consummate any
intercompany transaction that does not result in a change of jurisdiction of any
Borrower or release TopCo Guarantor as a guarantor under the Senior Credit
Facilities (all such transactions, collectively, the “Post-Closing
Restructuring”). Interest Rates:    The interest rates per annum applicable to
the Senior Credit Facilities will be, at the option of the applicable Borrower
(i) LIBOR plus the Applicable Margin (as hereinafter defined) or (ii) the Base
Rate plus the Applicable Margin. The Applicable Margin means a percentage per
annum to be determined in accordance with the ratings based pricing grid
referred to below.    The applicable Borrower may elect interest periods of one,
two, three or six months (or, if agreed to by all the Senior Lenders, twelve
months or a period of shorter than 1 month) for LIBOR advances. Interest shall
be payable at the end of the selected interest period, but no less frequently
than quarterly.

 

Annex II-2

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   “LIBOR” and “Base Rate” will be defined and calculated on a basis
substantially identical to the Existing WC Term Loan Credit and Guaranty
Agreement.    During the continuance of a payment default, interest will accrue
on the principal of any loan at a rate of 200 basis points in excess of the rate
otherwise applicable to the outstanding loans, and will be payable on demand.
Applicable Margin:    The Applicable Margin for LIBOR advances shall be the
basis points per annum set forth in the table below opposite the long term
senior unsecured, non-credit enhanced debt rating or, if none, the issuer rating
or corporate credit rating of Parent by Standard & Poor’s, a division of The
McGraw-Hill Companies, Inc. (“S&P”) and Moody’s Investors Service, Inc.
(“Moody’s”), in each case after giving effect to the Transaction (the
“Ratings”). In the event of a single-level split between the Ratings, the higher
Rating shall apply, and in the event of a multi-level split between the Ratings,
the Rating that is the midpoint between the two Ratings, or, if there is no such
midpoint, the Rating that is one level lower than the higher Rating, shall
apply. If either S&P or Moody’s does not have in effect a Rating, then the
Rating assigned by the other rating agency shall be used. In the event that no
Ratings are maintained for a reason other than such rating agency ceasing to be
in the business of rating corporate debt obligations, the highest pricing in the
grid shall apply. The Applicable Margin for Base Rate advances shall be 100
basis points less than the Applicable Margin for LIBOR advances.

   Debt Rating    Applicable Margin for LIBOR advances    ³ A-/A3    L + 112.5
bps    BBB+/Baa1    L + 125.0 bps    BBB/Baa2    L + 137.5 bps    BBB-/Baa3    L
+ 162.5 bps    £ BB+/Ba1    L + 187.5 bps

   If the rating system of Moody’s or S&P shall change or if either such rating
agency shall cease to be in the business of rating corporate debt obligations,
Parent and the Senior Lenders shall negotiate in good faith to amend the
Applicable Margin to reflect such changed rating system (including, in such
case, an amendment to replace Moody’s or S&P, as applicable, with another rating
agency) or the unavailability of ratings from such rating agency and, pending
the effectiveness of any such amendment, the Applicable Margin shall be
determined by reference to the rating most recently in effect prior to such
change or cessation.

 

Annex II-3

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Calculation of Interest and Fees:    Other than calculations in respect of
interest at the Base Rate (which shall be made on the basis of actual number of
days elapsed in a 365/366 day year), all calculations of interest and fees shall
be made on the basis of actual number of days elapsed in a 360-day year. Cost
and Yield Protection:    The Credit Documentation will contain customary cost
and yield protection provisions that are substantially identical to those
contained in the Existing WC Term Loan Credit and Guaranty Agreement (including
with respect to the Dodd-Frank Act and the Basel III Accord); provided that (x)
the Borrowers shall not be liable for any tax imposed under FATCA and (y) FATCA
shall be defined as Sections 1471 through 1474 of the Code (or any amendment or
successor provisions that are substantively similar and not materially more
onerous to comply with), and any present or future regulations or official
interpretations thereof and any agreements entered into pursuant to Section
1471(b)(1) of the Code, any intergovernmental agreement entered into in
connection with the implementation of such Sections of the Code and any fiscal
or regulatory legislation, rules or practices adopted pursuant to such
intergovernmental agreement. Maturity:    Cash Bridge Tranche. 60 days after the
Closing Date.    Five Year Tranche. Five years after the Closing Date. Scheduled
Amortization:    Cash Bridge Tranche. Loans under the Cash Bridge Tranche will
not be subject to quarterly amortization and shall be payable in full on the
60th day following the Closing Date.    Five Year Tranche. Loans under the Five
Year Tranche will be subject to quarterly amortization of principal equal to
2.5% of the original aggregate principal amount thereof, with the balance
payable on the five year anniversary of the Closing Date. Optional Prepayments
and Commitment Reductions:   

 

The Senior Credit Facilities may be prepaid at any time in whole or in part
without premium or penalty, upon written notice, at the option of TopCo
Guarantor or any Borrower, except that any prepayment of LIBOR advances other
than at the end of the applicable interest periods therefor shall be made with
reimbursement for any funding losses and redeployment costs of the Senior
Lenders resulting therefrom. Each optional prepayment or commitment reduction in
respect of the Senior Credit Facilities shall be applied as directed by TopCo
Guarantor or any Borrower (or, in the absence of direction from TopCo Guarantor
or such Borrower, in the direct order of maturity). The unutilized portion of
any commitment under the Senior Credit Facilities may be reduced permanently or
terminated by TopCo Guarantor or any Borrower at any time without penalty.

Mandatory Prepayments:    The loans under the Cash Bridge Tranche shall be
prepaid at 100% of the outstanding principal amount thereof with the proceeds of
any dividends

 

Annex II-4

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   or distributions received by any Borrower from the cash of the Acquired
Companies designated by the Borrower’s as trapped cash on the Closing Date.
These mandatory prepayment provisions will not apply to the loans under the Five
Year Tranche. Conditions Precedent:    The borrowing under the Senior Credit
Facilities on the Closing Date will be subject only to the conditions precedent
expressly set forth in Section 5 of the Commitment Letter and Annex III to the
Commitment Letter. For the avoidance of doubt, the conditions in Section 5 of
the Commitment Letter and Annex III to the Commitment Letter shall not be
conditions to the funding of the Senior Credit Facilities on the Pre-Funding
Date (as hereinafter defined). Credit Documentation:    The Credit Documentation
shall be negotiated in good faith, shall contain terms consistent with the terms
set forth in this Senior Financing Summary of Terms and, to the extent not
provided in this Senior Financing Summary of Terms, shall be substantially
identical to the Existing WC Term Loan Credit and Guaranty Agreement, with such
changes to the terms in the Existing WC Term Loan Credit and Guaranty Agreement
as may be mutually agreed, taking into account the operational requirements of
Parent and its subsidiaries in light of their capital structure, size and
business practices both as of the Closing Date and after giving effect to the
Post-Closing Restructuring and shall contain terms regarding the pre-funding of
the Senior Credit Facilities by the Senior Lenders to the Administrative Agent
on a date that is up to three business days prior to the Closing Date (the
“Pre-Funding Date”) that are substantially identical to those set forth in
Article II of that certain Term Loan Credit Agreement dated, as of June 22,
2012, among Watson Pharmaceuticals, Inc., each lender from time to time party
thereto and Bank of America, N.A. as administrative agent. It is understood and
agreed that the Credit Documentation shall contain only those payments,
conditions to borrowing, representations, warranties, covenants and events of
default expressly set forth or referred to in this Senior Financing Summary of
Terms. The foregoing sentences are referenced herein as the “Documentation
Principles”. Representations and Warranties:    The Credit Documentation will
contain representations and warranties that are made only on the Closing Date,
substantially identical to those set forth in the Existing WC Term Loan Credit
and Guaranty Agreement (including defined terms used therein) and consistent
with the Documentation Principles. Affirmative Covenants:    The Credit
Documentation will contain affirmative covenants that are applicable only after
the Closing Date, substantially identical to those set forth in the Existing WC
Term Loan Credit and Guaranty Agreement (including defined terms used therein)
and consistent with the Documentation Principles. Negative Covenants:    The
Credit Documentation will contain negative covenants that are applicable only
after the Closing Date, substantially identical to those set

 

Annex II-5

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   forth in the Existing WC Term Loan Credit and Guaranty Agreement (including
defined terms used therein) and consistent with the Documentation Principles.
Notwithstanding the foregoing, the Credit Documentation will contain a covenant
that provides that Parent and each subsidiary of Parent that is a direct or
indirect parent of TopCo Guarantor (Parent and each such subsidiary of Parent,
the “Passive Holding Companies”), will not conduct, transact or otherwise engage
in any active trade or business or operations other than through a subsidiary of
TopCo Guarantor; provided that the foregoing will not prohibit any Passive
Holding Company from taking actions related to the following (and activities
incidental thereto): (i) its ownership of the equity interests of its direct
wholly-owned subsidiaries, which are direct or indirect parents of TopCo
Guarantor, (ii) the maintenance of its legal existence and, with respect to
Parent, status as a public company (including the ability to incur fees, costs
and expenses relating to such maintenance), (iii) the performance of its
obligations with respect to the Merger Agreement, the Facilities, any other
indebtedness in respect of which it is an obligor and any other agreement to
which it is a party, (iv) with respect to Parent, any public offering of its
common stock or with respect to any Passive Holding Company (other than Parent)
any other issuance of its equity interests to be agreed, (v) the making of
restricted payments, (vi) the incurrence of indebtedness, (vii) making
contributions to (or other equity investments in) the capital of its direct
subsidiaries, (viii) creation of a newly formed subsidiary with de minimis
capitalization and which is formed solely for the purpose of consummating an
acquisition by Parent (solely to the extent that, within a period of time to be
agreed, such newly formed subsidiary mergers with and into target and the
survivor thereof becomes a subsidiary of TopCo Guarantor or its subsidiaries),
(ix) guaranteeing the obligations of its subsidiaries, (x) participating in tax,
accounting and other administrative matters as a member or parent of the
consolidated group, (xi) holding any cash or certain property (including cash
and certain property received in connection with restricted payments), (xii)
providing indemnification to officers and directors, (xiii) the ownership and/or
dispositions of assets held on the Closing Date or acquired after the Closing
Date, in each case, the extent permitted by clauses (iii), (v), (vii) or (viii)
above and (xiv) activities incidental to the businesses or activities described
above. Financial Covenants:    Applicable only after the Closing Date and
limited to a maximum ratio of Consolidated Total Debt (to be defined and
consistent with the Documentation Principles) to Consolidated EBITDA (to be
defined and consistent with the Documentation Principles) of: (i) 4.25:1.00 for
the first four full fiscal quarters after the Closing Date, (ii) 4.00:1.00 from
the fifth full fiscal quarter after the Closing Date through the eighth full
fiscal quarter after the Closing Date and (iii) 3.50 for from the ninth full
fiscal quarter through the date of maturity of the Senior Credit Facilities.   
The financial covenant will be calculated on a consolidated basis and for each
consecutive four fiscal quarter period. Calculations will be made on a pro forma
basis for material acquisitions and material dispositions in a manner consistent
with the Documentation Principles.

 

Annex II-6

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Events of Default:    The Credit Documentation will contain events of default
that are substantially identical to those set forth in the Existing WC Term Loan
Credit and Guaranty Agreement (including defined terms used therein), and
consistent with the Documentation Principles. Clean-up Period:    If, during the
five-day period following the Closing Date, a matter or circumstance exists
which constitutes a breach of the representations and warranties or a breach of
the covenants or a potential or actual event of default, that matter or
circumstance will not constitute an event of default; provided that (i) the
matter or circumstance does not constitute a Major Default (to be defined and
consistent with the Documentation Principles) or a default or an event of
default incapable of being cured, (ii) reasonable steps are being taken to cure
that matter or circumstance and (iii) such potential or actual event of default
is cured or otherwise ceases to exist within five days following the Closing
Date. For the avoidance of doubt, nothing in this section shall affect the
Conditions Precedent set forth above. Assignments and Participations:    The
Credit Documentation will contain assignment and participation provisions that
are substantially identical to those set forth in the Existing Actavis Term Loan
Credit and Guaranty Agreement; provided that, no assignment of commitments shall
be made at any time prior to the initial funding under the Senior Credit
Facilities to any person that is not specifically identified in writing by the
Senior Lead Arrangers prior to the Commitment Date and agreed to in writing by
Parent prior to the Commitment Date. Waivers and Amendments:    The Credit
Documentation will contain amendment and waiver provisions that are that are
substantially identical to those contained in the Existing WC Term Loan Credit
and Guaranty Agreement. Defaulting Lenders:    The Credit Documentation shall
include customary “defaulting lender” provisions to be agreed that are that are
substantially identical to those set forth in the Existing WC Term Loan Credit
and Guaranty Agreement. Indemnification:    TopCo Guarantor and, after the
Closing Date, the Borrowers will indemnify and hold harmless the Administrative
Agent, the Senior Lead Arrangers, each Senior Lender and each of their
affiliates and their officers, directors, employees, agents and advisors from
and against, and hold each harmless from, all losses, liabilities, claims,
damages or expenses arising out of or relating to the Transaction, the Senior
Credit Facilities, the Borrowers’ use of loan proceeds or the commitments,
including reasonable fees, disbursements and other charges of counsel, which
shall be limited to one counsel, and if necessary, one local counsel in each
appropriate jurisdiction and, solely in the case of a conflict of interest, one
special conflicts counsel to all affected indemnified persons,

 

Annex II-7

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   taken as a whole, unless such losses, claims, damages, liabilities or
expenses are found by a final, non-appealable judgment of a court of competent
jurisdiction (i) to arise from the gross negligence, willful misconduct or bad
faith of the applicable indemnified person or any of such indemnified person’s
officers, directors, employees, agents and advisors, or (ii) to result from a
claim brought by TopCo Guarantor or any Borrower against an indemnified person
for a material breach in bad faith of such indemnified person’s obligations
under the Commitment Letter, the Fee Letters or other Credit Documentation.
Governing Law:    New York; provided, however, that, on or before the Closing
Date, (i) the interpretation of the definition of Company Material Adverse
Effect (as defined in the Merger Agreement) and whether or not a Company
Material Adverse Effect has occurred, (ii) the determination of the accuracy of
any Merger Agreement Representations and whether as a result of any inaccuracy
thereof you (or your affiliates) have the right to terminate your (or their)
obligations under the Merger Agreement, or to decline to consummate the
Transactions (as defined in the Merger Agreement) pursuant to the Merger
Agreement, and (iii) the determination of whether the Transactions (as defined
in the Merger Agreement) have been consummated in accordance with the terms of
the Merger Agreement, in each case, shall be governed by, and construed and
interpreted solely in accordance with, the laws of the State of Delaware,
without regard to any other principles of conflicts of law. Expenses:    TopCo
Guarantor and, after the Closing Date, the Borrowers shall pay (a) subject
(prior to the Closing Date) to the limitations set forth in the Commitment
Letter, all reasonable and documented out-of-pocket expenses of the
Administrative Agent associated with the preparation, execution, delivery and
administration of the Senior Credit Facilities and any amendment or waiver with
respect thereto (including the reasonable fees, disbursements and other charges
of counsel, which shall be limited to the counsel identified below and one local
counsel in each of Ireland, each jurisdiction of organization of each Borrower
and, if reasonably necessary, each jurisdiction of organization of any other
guarantor) and (b) all reasonable and documented out-of-pocket expenses of the
Senior Lenders (including the reasonable fees, disbursements and other charges
of counsel, which shall be limited to one counsel, and if necessary, one local
counsel in each appropriate jurisdiction and, solely in the case of a conflict
of interest, one special conflicts counsel to all affected indemnified persons,
taken as a whole) in connection with the enforcement of the Senior Credit
Facilities. Counsel to the Senior Lead Arrangers:   

 

Shearman & Sterling LLP.

Miscellaneous:    Each of the parties shall (i) waive its right to a trial by
jury and (ii) submit to exclusive New York jurisdiction.

 

Annex II-8

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ANNEX III

PROJECT TANGO

CONDITIONS PRECEDENT TO CLOSING

Capitalized terms not otherwise defined herein have the same meanings as
specified therefor in the Commitment Letter to which this Annex III is attached.

The initial borrowing under each of the Facilities shall be subject to the
following conditions precedent (which shall be satisfied prior to or
substantively concurrent with the funding under the applicable Facility);
provided that the conditions in this Annex III shall not be conditions to the
funding of the Facilities on the Pre-Funding Date:

(i) Since the Commitment Date, there shall not have occurred a “Company Material
Adverse Effect” under the Merger Agreement.

(ii) The Acquisition shall have been or shall be, substantially simultaneously
with the initial borrowings, consummated in accordance with the terms of the
Merger Agreement without giving effect to any amendments, modifications,
supplements, waivers or consents after the date hereof by Parent, US Holdco,
Merger Sub 1 or Merger Sub 2 that are materially adverse to the interests of the
Lenders and not approved by the Lead Arrangers (which approval shall not be
unreasonably withheld, conditioned or delayed). It is understood and agreed that
(a)(A) no increase in consideration shall be deemed to be materially adverse to
the interests of the Lenders so long as not funded with the proceeds of (x) any
equity issuance by Parent or (y) indebtedness that would cause the ratio
Consolidated Total Debt as of the Closing Date to Consolidated EBITDA for the
most recent period of four fiscal quarters for which financial statements are
available, in each case of Parent on a pro forma basis giving effect to the
Transaction, to exceed 4.25:1.00 and (B) a decrease in the “Cash Election
Consideration” (as defined in the Merger Agreement) of 20% or less shall not be
deemed to be materially adverse to the interests of the Lenders and (b) that any
amendment to the definition of “Company Material Adverse Effect” shall be deemed
materially adverse to the interests of the Lenders.

(iii) Parent shall have delivered to the Administrative Agent a certificate as
to the financial condition and solvency of Parent and its subsidiaries (on a
consolidated basis, after giving effect to the Transaction), in the form
attached as Exhibit A hereto.

(iv) TopCo Guarantor and each Borrower shall have delivered to the
Administrative Agent customary (A) legal opinions in substantially the form of
the legal opinions delivered in connection with the closing under the Existing
WC Term Loan Credit and Guaranty Agreement, modified to reflect the Senior
Credit Facilities and the Transaction; provided that legal opinions shall not be
required in any jurisdiction in which a Borrower is not organized (other than
New York), (B) evidence of authority (including the incumbency of officers
executing the Credit Documentation), (C) corporate resolutions, (D) good
standing certificates and (E) closing certificates regarding satisfaction of the
conditions precedent to funding of the Senior Credit Facilities.

(v) With respect to the Bridge Facility only, during a period of at least five
consecutive business days occurring at any time prior to the Closing Date (which
five consecutive business-day period, (1) if it has not ended on or before
August 15, 2014, shall not commence before

 

Annex III-1

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September 2, 2014 and (2) shall exclude November 27-28, 2014), the Borrower
shall have (A) provided to the Commitment Parties one or more offering memoranda
or private placement memoranda (including all financial statements and other
information that would be of the type that would be customary in a private
offering pursuant to Rule 144A (which, for the avoidance of doubt, need not
include financial statements or information required by Rules 3-09, 3-10 or 3-16
of Regulation S-X, Compensation Discussion and Analysis required by Regulation
S-K Item 402(b), other information or financial data customarily excluded from a
Rule 144A offering memorandum), and at no time during such five consecutive
business-day period shall the financial information in such Offering Document
have become stale) relating to the Notes (the “Offering Document”), (B) used
commercially reasonable efforts to cause the independent registered public
accountants of the Borrower and, consistent with its obligations under the
Acquisition Agreement, the Acquired Business to render customary “comfort
letters” with respect to the financial information in the Offering Document and
(C) caused the senior management and other representatives of the Borrowers and,
in a manner consistent with the Merger Agreement, the Acquired Business, to
provide access in connection with due diligence investigations and to prepare
and participate in a customary “road show”.

(vi) All fees due to the Administrative Agents, the Lead Arrangers and the
Lenders pursuant to the Fee Letters and, to the extent invoiced at least two
business days prior to the Closing Date, all reasonable and documented expenses
to be paid or reimbursed to the Administrative Agents and the Lead Arrangers on
or prior to the Closing Date pursuant to the Commitment Letter, shall have been
paid, in each case, from the proceeds of the initial funding under the
applicable Facility. Solely in the case of the Bridge Facility, the Parent shall
have complied with all of its obligations under the “Market Flex” provisions in
Section 3 of the Joint Fee Letter.

(vii) To the extent requested at least seven days prior to the Closing Date by
the Senior Lead Arrangers, the Borrowers shall have delivered the documentation
and other information with respect to the Borrowers to the Administrative Agent
that are required by regulatory authorities under applicable
“know-your-customer” rules and regulations, including the PATRIOT Act, prior to
the Closing Date.

(viii) Solely in the case of the of the Five Year Tranche, commitments shall
have been received from the Senior Lenders for the $1.4 billion of commitments
under the Senior Credit Facilities that are not committed to by the Initial
Senior Lenders hereunder.

(ix) With respect to the Bridge Facility in respect of the Five Year Tranche
only during a period of at least fifteen consecutive business days occuring at
any time prior to the Closing Date (which fifteen consecutive business-day
period, (1) if it has not ended on or before August 15, 2014, shall not commence
before September 2, 2014 and (2) shall exclude November 27-28, 2014), the
Borrowers shall have provided to the Bridge Lead Arrangers, an Information
Memorandum for such portion of the Bridge Facility.

 

Annex III-2

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EXHIBIT A

FORM OF SOLVENCY CERTIFICATE

[                    ], [            ]

The undersigned, [                    ], the [                    ] of Actavis
plc ( “Parent”), is familiar with the properties, businesses, assets and
liabilities of Parent and is duly authorized to execute this certificate (this
“Solvency Certificate”) on behalf of Parent.

This Solvency Certificate is delivered pursuant to Section [    ] of the Credit
Agreement dated as of [            ], [            ] (the “Credit Agreement”;
terms defined therein unless otherwise defined herein being used herein as
therein defined) among Parent, [the Borrowers], each lender from time to time
party thereto (collectively, the “Lenders”) and Bank of America, N.A., as
administrative agent thereunder (in such capacity, the “Administrative Agent”).

As used herein, “Company” means Parent and its subsidiaries on a consolidated
basis.

1. I, [    ], hereby certify that I am the [    ] of Parent and that I am
knowledgeable of the financial and accounting matters of the Company, the Credit
Agreement and the covenants and representations (financial or otherwise)
contained therein and that, as such, I am authorized to execute and deliver this
Solvency Certificate on behalf of Parent.

2. The undersigned certifies, on behalf of Parent and not in his individual
capacity, that he has made such investigation and inquiries as to the financial
condition of Parent as the undersigned deems necessary and prudent for the
purposes of providing this Solvency Certificate. The undersigned acknowledges
that the Administrative Agent and the Lenders are relying on the truth and
accuracy of this Solvency Certificate in connection with the making of Loans
under the Credit Agreement.

3. The undersigned certifies, on behalf of Parent and not in his individual
capacity, that (a) the financial information, projections and assumptions which
underlie and form the basis for the representations made in this Solvency
Certificate were made in good faith and were based on assumptions reasonably
believed by Parent to be fair in light of the circumstances existing at the time
made; and (b) for purposes of providing this Solvency Certificate, the amount of
contingent liabilities has been computed as the amount that, in the light of all
the facts and circumstances existing as of the date hereof, represents the
amount that can reasonably be expected to become an actual or matured liability.

BASED ON THE FOREGOING, the undersigned certifies, on behalf of Parent and not
in his individual capacity, that, on the date hereof, before and after giving
effect to the Transactions (and the Loans made or to be made and other
obligations incurred or to be incurred on the Closing Date):

(i) the fair value of the property of the Company (including, for the avoidance
of doubt, property consisting of the residual equity value of the Company’s
subsidiaries) is greater than the total amount of liabilities, including
contingent liabilities, of the Company;

(ii) the present fair salable value of the assets of the Company (including, for
the avoidance of doubt, property consisting of the residual equity value of the
Company’s subsidiaries) is greater than the amount that will be required to pay
the probable liability of the Company on the sum of its debts and other
liabilities, including contingent liabilities;

 

Exhibit A

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(iii) the Company has not, does not intend to, and does not believe (nor should
it reasonably believe) that it will, incur debts or liabilities beyond the
Company’s ability to pay such debts and liabilities as they become due (whether
at maturity or otherwise);

(iv) the Company does not have unreasonably small capital with which to conduct
the businesses in which it is engaged as such businesses are now conducted (and
reflected in the Projections) and are proposed to be conducted following the
Closing Date;

(v) the Company is able to pay its debts and liabilities, contingent obligations
and other commitments as they mature in the ordinary course of business; and

(vi) the Company is “solvent” within the meaning given to that term and similar
terms under the Bankruptcy Code and applicable laws relating to fraudulent
transfers and conveyances.

IN WITNESS WHEREOF, the undersigned has executed this Solvency Certificate as of
the first date written above, solely in his capacity as [                    ]
of Parent and not in his individual capacity.

 

Name:  

 

Title:  

 

 

Exhibit A