EXHIBIT 4.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT, dated as of June 30, 1999 (this "AMENDMENT"),
to the Existing Credit Agreement (as defined below), is made among LEINER
HEALTH PRODUCTS INC., a Delaware corporation (the "U.S. BORROWER"), VITA
HEALTH PRODUCTS INC., a Manitoba corporation (the "CANADIAN BORROWER", and
together with the U.S. Borrower, the "BORROWERS") and the Lenders (such
capitalized term and other capitalized terms used in this preamble and the
recitals below to have the meanings set forth in, or as defined by reference
in, ARTICLE I) signatories hereto.
W I T N E S S E T H:
WHEREAS, the Borrowers, the U.S. Lenders, the Canadian Lenders, the
U.S. Agent, the Canadian Agent, Merrill Lynch Capital Corporation, as
Documentation Agent, and Salomon Brothers Holding Company Inc., as Syndication
Agent, are parties to a Credit Agreement, dated as of May 15, 1998 (as amended,
supplemented, amended and restated or otherwise modified to the date hereof, the
"EXISTING CREDIT AGREEMENT");
WHEREAS, the Borrowers have requested that the Lenders amend the Credit
Agreement to (i) allow the Canadian Borrower to enter into a construction loan
from the Manitoba Development Corporation in an aggregate principal amount not
to exceed Cdn $2,700,000 to assist the Canadian Borrower in expanding and
upgrading the existing production facility at 150 Beghin Avenue in Winnipeg,
Manitoba (the "CANADIAN PROPERTY") as well as purchasing new equipment and other
services related to such expansion (the "NEW EQUIPMENT"), such loan to be
secured by a Lien on the Canadian Property and the New Equipment, and (ii) add
an additional tranche of term loans in the aggregate principal amount of
$30,000,000 to be used to repay U.S. Revolving Loans outstanding on the First
Amendment Effective Date; and
WHEREAS, the Lenders have agreed, subject to the terms and conditions
hereinafter set forth, to amend the Existing Credit Agreement in certain
respects as provided below (the Existing Credit Agreement, as so amended by this
Amendment, being referred to as the "CREDIT AGREEMENT");
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereto agree as follows:
PART I
DEFINITIONS
SUBPART I.1. CERTAIN DEFINITIONS. The following terms (whether or not
underscored) when used in this Amendment shall have the following meanings (such
meanings to be equally applicable to the singular and plural form thereof):
"AMENDMENT" is defined in the PREAMBLE.
"BORROWERS" is defined in the PREAMBLE.
"CANADIAN BORROWER" is defined in the PREAMBLE.
"CREDIT AGREEMENT" is defined in the THIRD RECITAL.
"EXISTING CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"CANADIAN PROPERTY" is defined in the SECOND RECITAL.
"FIRST AMENDMENT" is defined in SUBPART 3.1.
"FIRST AMENDMENT EFFECTIVE DATE" is defined in SUBPART 3.1.
"NEW EQUIPMENT" is defined in the SECOND RECITAL.
"U.S. BORROWER" is defined in the PREAMBLE.
SUBPART I.2. OTHER DEFINITIONS. Terms for which meanings are provided
in the Existing Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
PART II
AMENDMENTS TO THE
EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the First Amendment
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with SUBPART 2.1 through SUBPART 2.6; except as so amended, the Existing Credit
Agreement shall continue in full force and effect in accordance with its terms.
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SUBPART II.1. AMENDMENTS TO RECITALS. The sixth recital of the Existing
Credit Agreement is hereby amended by deleting the "and" at the end of clause
(g), adding the word "and" at the end of clause (h) and adding a new clause (i)
at the end thereof to read as follows:
"(i) on the First Amendment Effective Date, from certain of
the U.S. Lenders, a Term D Loan Commitment pursuant to which Borrowings
of Term D Loans, in a maximum aggregate principal amount not to exceed
$30,000,000, will be made to the U.S. Borrower in a single Borrowing to
occur on the First Amendment Effective Date;
SUBPART 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definitions in such Section in the
appropriate alphabetical sequence:
"CANADIAN PROPERTY" means the Canadian Borrower's existing
production facility at 150 Beghin Avenue in Winnipeg, Manitoba.
"FIRST AMENDMENT" means the First Amendment to the Credit
Agreement, dated as of June 30, 1999, among the Borrowers and the
Lenders party thereto.
"FIRST AMENDMENT EFFECTIVE DATE" is defined in Section 3.1
of the First Amendment.
"MDC" means the Manitoba Development Corporation.
"MDC CAPITAL EXPENDITURES" means all Capital Expenditures
actually made with the proceeds of the MDC Loan to upgrade the Canadian
Property and purchase the New Equipment.
"MDC LOAN" means the construction loan from MDC to the
Canadian Borrower, in an aggregate principal amount not to exceed Cdn
$2,700,000, secured by the Canadian Property and the New Equipment and
any guarantee by the Canadian Borrower of such loan, all on terms and
conditions satisfactory to the Agents.
"NEW EQUIPMENT" means the Canadian Borrower's new equipment
purchased with the proceeds of the MDC Loan in connection with the
upgrade and expansion of the Canadian Property.
"TERM D LOAN COMMITMENT" is defined in SECTION 2.1.6.
"TERM D LOAN COMMITMENT AMOUNT" means, on any date,
$30,000,000.
"TERM D LOAN COMMITMENT TERMINATION DATE" means the
earliest of:
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(a) June 30, 1999 (if the Term D Loans have not been
made prior to such date); and
(b) the date on which any Commitment Termination
Event occurs.
Upon the occurrence of any event described in CLAUSES (b), the
Term D Loan Commitment shall terminate automatically and without any
further action.
"TERM D LOANS" is defined in SECTION 2.1.6.
"TERM D NOTE" means a promissory note of the U.S. Borrower
payable to any U.S. Lender, substantially in the form of EXHIBIT A-9
hereto (as such promissory note may be amended, endorsed or otherwise
modified from time to time), evidencing the aggregate Indebtedness of
the U.S. Borrower to such U.S. Lender resulting from outstanding Term D
Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
SUBPART 2.1.2 Section 1.1 of the Existing Credit Agreement is
hereby amended by amending
(a) the definition of "Applicable Margin" by inserting a new
clause (f) at the end of clause (e) to read as follows:
(f) with respect to the unpaid principal amount of
each Term D Loan maintained as a (i) U.S. Base Rate Loan, the
applicable percentage set forth below under the column
entitled "Applicable Margin for U.S. Base Rate Loans" and (ii)
LIBO Rate Loan, the applicable percentage set forth below
under the column entitled "Applicable Margin for LIBO Rate
Loans":
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- -----------
Less than 4.5:1 1.250% 2.250%
Greater than or equal to 4.5:1 and less than
5.0:1 1.500% 2.500%
Greater than or equal to 5.0:1 and less than
5.75:1 1.750% 2.750%
Greater than or equal to 5.75:1 2.000% 3.000%
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PROVIDED, HOWEVER, the Applicable Margin for Term D Loans for
the period from the First Amendment Effective Date through
(and including) the date on which the U.S. Agent receives a
Compliance Certificate in respect of the Fiscal Quarter ended
December 31, 1999 delivered pursuant to CLAUSE (c) of SECTION
9.1.1 shall be (A) 2.750% in the case of Term D Loans
maintained as LIBO Rate Loans and (B) 1.750% in the case of
Term D Loans maintained as Base Rate Loans.
(b) the definition of "Cash Flow Coverage Ratio" by inserting
the phrase "(other than MDC Capital Expenditures)" after the words
"Capital Expenditures" in clause (a) thereof;
(c) the definition of "EBITDA" by deleting the "." at the end
of clause (h) and replacing it with "," and adding the word "PLUS"
immediately thereafter and adding a new clause (i) and (j) at the end
thereof to read as follows:
"(i) the amount deducted, in determining Net Income,
representing any increases in non-cash reserves for future
returns of product and future charge-back reserves,
PLUS
"(j) the amount deducted, in determining Net Income,
representing reserves associated with the Madison, Wisconsin,
Sherburne, New York and Kalamazoo, Michigan shutdowns and the
reserve associated with the Your Life brand relaunch in the
2000 Fiscal Year,"
(d) the definition of "Stated Maturity Date" by deleting the
"and" at the end of clause (b), replacing the "." at the end of clause
(c) with "; and" and adding a new clause (d) at the end thereof to read
as follows:
"(d) in the case of Term D Loans, December 30, 2005."
(e) and restating the following definitions:
"TERM LOAN" means, as the context may require, a Term
B Loan, a Term C Loan, a Term D Loan or a Canadian Term Loan.
"TERM LOAN COMMITMENT" means, as the context may
require, the Incremental Term B Loan Commitment, the
Incremental Term C Loan Commitment, the Term D Loan Commitment
or the Canadian Term Loan Commitment.
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"TERM LOAN COMMITMENT AMOUNT" means, as the context
may require, the Incremental Term B Loan Commitment Amount,
the Incremental Term C Loan Commitment Amount, the Term D Loan
Commitment or the Canadian Term Loan Commitment.
"TERM LOAN COMMITMENT TERMINATION DATE" means, as the
context may require, the Incremental Term B Loan Commitment
Termination Date, the Incremental Term C Loan Commitment
Termination Date, the Term D Loan Commitment or the Canadian
Term Loan Commitment Termination Date.
"TERM NOTE" means, as the context may require, a Term
B Note, a Term C Note, a Term D Note or a Canadian Term Note.
"U.S. LOAN" means, as the context may require, a
Term B Loan, a Term C Loan, a Term D Loan, a U.S. Revolving
Loan or a Swing Line Loan.
"U.S. NOTE" means, as the context may require, a
U.S. Revolving Note, a Term B Note, a Term C Note, a Term D
Loan or a U.S. Swing Line Note.
"U.S. PERCENTAGE" means, relative to any U.S. Lender,
the applicable percentage relating to U.S. Revolving Loans,
Term B Loans, Term C Loans or Term D Loans, as the case may
be, as set forth opposite its name on SCHEDULE II hereto
(except in the case of Term D Loans, which are set forth on
SCHEDULE III hereto) or set forth in a Lender Assignment
Agreement, as such percentage may be adjusted from time to
time (a) pursuant to Lender Assignment Agreement(s) executed
by such Lender and its Assignee Lender(s) and delivered
pursuant to SECTION 12.11.1 or (b) by a reallocation pursuant
to SECTION 2.2.3.
SUBPART II.2. AMENDMENTS TO ARTICLE II. Article II of the Existing
Credit Agreement is hereby amended as set forth as follows.
SUBPART II.2.1. Section 2.1 of the Existing Credit Agreement is
hereby amended by
(b) deleting the "or" at the end of clause (b) of Section
2.1.4, replacing the "." at the end of clause (c) with "; or" and
adding a new clause (d) at the end thereof to read as follows:
"(d) all Term D Loans (i) of all U.S. Lenders
would exceed the Term D Loan Commitment Amount; or (ii) of such
U.S. Lender with a Term D Loan Commitment would exceed such U.S.
Lender's U.S. Percentage of the Term D Loan Commitment Amount."
(b) adding a new Section 2.1.6 at the end thereof to read as
follows:
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"SECTION 2.1.6 TERM D LOAN COMMITMENT. In a single
Borrowing occurring on the First Amendment Effective Date,
each U.S. Lender that has a Term D Loan Commitment will make
loans (relative to such U.S. Lender, its "TERM D LOANS") to
the U.S. Borrower equal to such U.S. Lender's U.S. Percentage
of the aggregate amount of the Borrowing of Term D Loans
requested by the U.S. Borrower to be made on such day (with
the commitment of each such U.S. Lender described in this
section herein referred to as its "TERM D LOAN COMMITMENT").
No amounts paid or prepaid with respect to Term D Loans may be
reborrowed."
SUBPART II.2.2. Clause (b)(ii) of Section 2.6 of the Existing Credit
Agreement is hereby amended by deleting the phrase "a U.S. Revolving Note, a
Term B Note and a Term C Note" in the first sentence thereof and replacing it
with "a U.S. Note".
SUBPART II.3. AMENDMENTS TO ARTICLE V. Section 5.1.1 of Article V of
the Existing Credit Agreement is hereby amended by adding a new clause (l)
following clause (k) to read as follows:
(l) On the Stated Maturity Date and on each Quarterly Payment
Date occurring during any period set forth below (or, if a Quarterly
Payment Date occurs on the next succeeding Business Day pursuant to the
definition of Quarterly Payment Date, then on such next succeeding
Business Day), the U.S. Borrower shall make a scheduled repayment of
the outstanding principal amount, if any, of all Term D Loans in an
amount equal to the amount set forth below opposite the Stated Maturity
Date or such Quarterly Payment Date, as applicable:
Amount of Required
Period Principal Payment
------ ------------------
First Amendment Effective
Date through (and
including) 06/15/04 $ 75,000
06/16/04 through (and
including) 06/15/05 $4,500,000
06/16/05 through (and
including) 9/15/05 $5,250,000
Stated Maturity Date for
Term D Loans $5,250,000 or the then
outstanding principal amount
of all Term D Loans, if
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Amount of Required
Period Principal Payment
------ ------------------
different.
SUBPART II.4. AMENDMENTS TO ARTICLE IX. Article IX of the Existing
Credit Agreement is hereby amended as set forth as follows.
SUBPART II.4.1. Section 9.1.8 of the Existing Credit Agreement is
hereby amended by adding a new subclause (iii) at the end of subclause (ii) of
clause (a) thereof to read as follows:
"(iii) the Term D Loans to repay U.S. Revolving Loans on the
First Amendment Effective Date and fees and expenses incurred in
connection with the First Amendment."
SUBPART II.4.2. Section 9.2.2 of the Existing Credit Agreement is
hereby amended by deleting the "and" at the end of clause (k)(iii), adding the
word "and" at the end of clause (l) and adding a new clause (m) at the end
thereof to read as follows:
"(m) the MDC Loan;"
SUBPART II.4.3. Section 9.2.3 of the Existing Credit Agreement is
hereby amended by deleting the "and" at the end of clause (p), deleting the "."
at the end of clause (q) and replacing it with "; and" and adding a new clause
(r) at the end thereof to read as follows:
"(r) Liens on the Canadian Property and New Equipment
securing Indebtedness of the type described in CLAUSE (m) of
SECTION 9.2.2;"
SUBPART II.4.4. Section 9.2.16 of the Existing Credit Agreement is
hereby amended by deleting the word "and" at the end of subclause (ii), deleting
the "." at the end of clause (iii) and replacing it with "; and" and adding a
new clause (iv) at the end thereof to read as follows:
"(iv) for the purposes of this Section, only 50% of the amount
of MDC Capital Expenditures shall be considered Capital Expenditures."
SUBPART II.5. SCHEDULE III TO CREDIT AGREEMENT. The Existing Credit
Agreement is hereby amended by adding a new Schedule III thereto in the form of
SCHEDULE III hereto.
SUBPART II.6. EXHIBIT A-9 TO CREDIT AGREEMENT. The Existing Credit
Agreement is hereby amended by adding a new Exhibit A-9 thereto in the form of
EXHIBIT A-9 hereto.
PART III
CONDITIONS TO EFFECTIVENESS
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SUBPART III.1. FIRST AMENDMENT EFFECTIVE DATE. This Amendment (and the
amendments and modifications contained herein) shall become effective, and shall
thereafter be referred to as "FIRST AMENDMENT", as of the date first above
written (the "FIRST AMENDMENT EFFECTIVE DATE") when all of the conditions set
forth in this SUBPART 3.1 have been satisfied.
SUBPART III.1.1. EXECUTION OF COUNTERPARTS. The Agents shall have
received counterparts of this Amendment, duly executed and delivered on behalf
of each of the Borrowers and the Required Lenders.
SUBPART III.1.2. RESOLUTIONS, ETC. The Agents shall have received from
the U.S. Borrower, a certificate, dated the Closing Date and with counterparts
for each Lender, duly executed and delivered by such Person's Secretary or
Assistant Secretary as to (a) resolutions of each such the U.S. Borrower's Board
of Directors then in full force and effect authorizing, to the extent relevant,
the execution, delivery and performance of this Amendment and each other Loan
Document to be executed by the U.S. Borrower and the transactions contemplated
hereby and thereby and (b) the incumbency and signatures of those of its
officers authorized to act, if applicable, with respect to this Amendment and
each other Loan Document to be executed by the U.S. Borrower, upon which
certificates each Lender, each Issuer and each Agent may conclusively rely until
it shall have received a further certificate of the U.S. Borrower's Secretary or
Assistant Secretary canceling or amending the prior certificate.
SUBPART III.1.3. DELIVERY OF NOTES. The Agents shall have
received, for the account of each U.S. Lender that has requested a Note prior
to the Amendment Effective Date, such U.S. Lender's Term D Notes duly
executed and delivered by an Authorized Officer of the U.S. Borrower.
SUBPART III.1.4. AFFIRMATION AND CONSENT. The Agents shall have
received an affirmation and consent in form and substance satisfactory to them,
executed and delivered by an Authorized Officer of each Obligor (other than the
Borrowers) under the Existing Credit Agreement and related Loan Documents.
SUBPART III.1.5. AMENDMENT FEE. The Agents shall have received, for the
account of each Lender signatory hereto prior to or on the First Amendment
Effective Date, an amendment fee equal to .075% of each such Lender's Percentage
of the Total Exposure Amount and all other fees, costs and expenses due and
payable pursuant to Sections 12.3 of the Credit Agreement, if then invoiced.
SUBPART III.1.6. OPINION OF COUNSEL. The Agents shall have
received an opinion, dated the First Amendment Effective Date and addressed
to the Agents and all Lenders, from Debevoise & Plimpton, counsel to the
Obligors, in form and substance satisfactory to the U.S. Agent.
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SUBPART III.1.7. DELIVERY OF AMENDMENT EFFECTIVE DATE CERTIFICATE. The
Agents shall have received executed counterparts of the Amendment Effective Date
Certificate, dated the Amendment Effective Date and duly executed and delivered
by the chief executive, financial or accounting (or equivalent thereof)
Authorized Officer of the U.S Borrower, in which certificate the U.S Borrower
shall agree and acknowledge that the statements made therein shall be deemed to
be true and correct representations and warranties of the U.S Borrower made as
of such date under this Amendment, and, at the time such certificate is
delivered, such statements shall in fact be true and correct in all material
respects.
SUBPART III.1.8. LEGAL DETAILS, ETC. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to the
Agents and their counsel. The Agents and their counsel shall have received all
information and such counterpart originals or such certified or other copies or
such materials, as the Agents or their counsel may reasonably request, and all
legal matters incident to the transactions contemplated by this Amendment shall
be satisfactory to the Agents and their counsel.
PART IV
MISCELLANEOUS
SUBPART IV.1. CROSS-REFERENCES. References in this Amendment to
any Part or Subpart are, unless otherwise specified or otherwise required by
the context, to such Part or Subpart of this Amendment.
SUBPART IV.2. LOAN DOCUMENT PURSUANT TO EXISTING CREDIT AGREEMENT. This
Amendment is a Loan Document executed pursuant to the Existing Credit Agreement
and shall be construed, administered and applied in accordance with all of the
terms and provisions of the Existing Credit Agreement.
SUBPART IV.3. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Each of the
Borrowers represents and warrants on the First Amendment Effective Date that all
of the statements contained in Section 7.2.1 of the Credit Agreement are true
and correct.
SUBPART IV.4. SUCCESSORS AND ASSIGNS. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SUBPART IV.5. COUNTERPARTS. This Amendment may be executed by the
parties hereto in several counterparts, each of which when executed and
delivered shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SUBPART IV.6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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SUBPART IV.7. RELEASE OF LIENS. The Lenders hereby acknowledges that
the Agents may release Liens as necessary to allow the Borrowers to enter into
the MDC Loan.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
LEINER HEALTH PRODUCTS INC.
By /s/ William B. Towne
------------------------------------
Title: Executive Vice President & Chief
Financial Officer
VITA HEALTH PRODUCTS INC.
By /s/ William B. Towne
------------------------------------
Title: Treasurer
THE BANK OF NOVA SCOTIA, as U.S. Agent,
Canadian Agent, a U.S. Lender and a
Canadian Lender
By /s/ Jim York
------------------------------------
Title: Vice President
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CITICORP U.S.A., INC.
By /s/ Timothy L. Freeman
-------------------------------------
Title: Managing Director & SCO
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MERRILL LYNCH CAPITAL CORPORATION
By /s/ Carol J.E. Felly
-------------------------------------
Title: Director
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LASALLE NATIONAL BANK
By /s/ Susan Kaminski
-------------------------------------
Title: Vice President, Commercial Banking
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COMERICA BANK
By /s/ Emmanuel M. Skevofilax
-------------------------------------
Title: Vice President
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BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By /s/ Clifford L. Wells
-------------------------------------
Title: Vice President & Team Leader
By /s/ William H. Hunter
-------------------------------------
Title: Vice President
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IMPERIAL BANK, a California Banking
Corporation
By /s/ Ray Vadalma
-------------------------------------
Title: Senior Vice President
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DEEPROCK & COMPANY
By: Eaton Vance Management,
as Investment Advisor
By /s/ Payson F. Swaffield
-------------------------------------
Title: Vice President
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By /s/ Payson F. Swaffield
-------------------------------------
Title: Vice President
EATON VANCE SENIOR INCOME TRUST
By: Eaton Vance Management,
as Investment Advisor
By /s/ Payson F. Swaffield
-------------------------------------
Title: Vice President
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NORTHERN LIFE INSURANCE COMPANY
By: ING Capital Advisors, Inc.,
as Investment Advisor
By /s/ Helen Y. Rhee
-------------------------------------
Title: Vice President & Portfolio Manager
ARCHIMEDES FUNDING II, LTD.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By /s/ Helen Y. Rhee
-------------------------------------
Title: Vice President & Portfolio Manager
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FLOATING RATE PORTFOLIO
By: Chancellor LGT Senior Secured
Management Inc., as attorney in fact
By /s/ Kathleen A. Lenarcic
-------------------------------------
Title: Authorized Signatory
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MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By /s/ John Wheeler
-------------------------------------
Title: Managing Director
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KZH CRESCENT LLC
By /s/ Virginia Conway
-------------------------------------
Title: Authorized Agent
KZH ING-2 LLC
By /s/ Virginia Conway
-------------------------------------
Title: Authorized Agent
KZH III LLC
By /s/ Virginia Conway
-------------------------------------
Title: Authorized Agent
KZH CNC LLC
By /s/ Virginia Conway
-------------------------------------
Title: Authorized Agent
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CERES FINANCE LTD.
By /s/ John Cullinane
----------------------------------
Title: Director
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BANK OF AMERICA NT & SA
By /s/ Joanne Toth
-------------------------------------
Title: Vice President
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UNION BANK OF CALIFORNIA, N.A.
By /s/ Scott Lane
-------------------------------------
Title: Vice President
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CONTINENTAL ASSURANCE COMPANY
By /s/ Mark L. Gold
-------------------------------------
Title: Managing Director
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SCHEDULE III to
Credit Agreement
TERM D LOAN PERCENTAGES
Percentage of
U.S. LENDERS Term D Loans
- ------------ -------------
THE BANK OF NOVA SCOTIA 100%
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EXHIBIT A-9
TERM D NOTE
$___________ June __, 1999
FOR VALUE RECEIVED, the undersigned, LEINER HEALTH PRODUCTS INC., a
Delaware corporation (the "U.S. BORROWER"), promises to pay to
________________________ and its registered assigns (the "U.S. LENDER") on the
Stated Maturity Date for all Term D Loans, the principal sum of
__________________ DOLLARS ($__________) or, if less, the aggregate unpaid
principal amount of the Term D Loan shown on the schedule attached hereto (and
any continuation thereof) made by the U.S. Lender pursuant to that certain
Credit Agreement, dated as of May 15, 1998 (as amended, supplemented, amended
and restated or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the U.S. Borrower, Vita Health Products Inc., a Manitoba corporation (the
"CANADIAN BORROWER", and together with the U.S. Borrower, the "BORROWERS"), the
various financial institutions (including the U.S. Lender) as are or may become
parties thereto which extend a Commitment under the U.S. Facility (collectively,
the "U.S. LENDERS"), the various financial institutions as are or may become
parties thereto which extend a Commitment under the Canadian Facility
(collectively, the "CANADIAN LENDERS", and together with the U.S. Lenders, the
"LENDERS") and The Bank of Nova Scotia ("SCOTIABANK"), acting through its New
York Agency, as agent for the U.S. Lenders under the U.S. Facility (in such
capacity, the "U.S. AGENT"), Scotiabank, acting through its executive offices in
Toronto, Ontario, as agent for the Canadian Lenders under the Canadian Facility
(in such capacity, the "CANADIAN AGENT", and together with the U.S. Agent, the
"AGENTS"), Merrill Lynch Capital Corporation, as Documentation Agent, and
Salomon Brothers Holding Company Inc., as Syndication Agent. Unless otherwise
defined, terms used herein have the meanings provided in the Credit Agreement.
The U.S. Borrower also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to the
account designated by the U.S. Agent pursuant to the Credit Agreement.
This Term D Note is one of the Term D Notes referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a description of the security for this Term D Note and for a statement of
the terms and conditions on which the U.S. Borrower is permitted and required to
make prepayments and repayments of principal of the Indebtedness
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evidenced by this Term D Note and on which such Indebtedness may be declared
to be immediately due and payable.
The U.S. Borrower hereby irrevocably authorizes the U.S. Lender to make (or
cause to be made) appropriate notations on the grid attached hereto (or on any
continuation of such grid), which notations, if made, shall evidence, INTER
ALIA, the date of and the outstanding principal of, the Term D Loans evidenced
hereby. Such notations shall be rebuttable presumptive evidence of the accuracy
of the information so set forth; PROVIDED, HOWEVER, that the failure of the U.S.
Lender to make any such notations shall not limit or otherwise affect any
Obligations of the U.S. Borrower.
Any assignment or transfer of this Term D Note shall be effective solely by
registration thereof in the Register pursuant to the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS TERM D NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).
LEINER HEALTH PRODUCTS INC.
By
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Name:
Title:
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TERM D LOAN AND PRINCIPAL PAYMENTS
[TABLE]
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