EXHIBIT 4.1
[EXECUTION COPY]
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT, dated as of December 16, 1999 (this "AMENDMENT"), to
the Existing Credit Agreement (as defined below), is made among XXXXXX 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, Xxxxxxx Xxxxx 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 prior to the date
hereof, the "EXISTING CREDIT AGREEMENT");
WHEREAS, the Borrowers have requested that the Lenders amend the Credit
Agreement as set forth below and consent to the acquisition (the
"GRANUTEC/XXXXXXX ACQUISITION") of the assets and properties relating to or
used or held for use in connection with the business and operations of
Granutec, Inc., a North Carolina corporation ("GRANUTEC"), and Xxxxxxx
Pharmaceuticals Ltd., a British Columbia corporation ("XXXXXXX", together
with Granutec, the "SELLERS"), and those assets and properties of Novopharm
Limited, an Ontario corporation ("NOVOPHARM"), principally used as a part of
the business and operations of the Sellers, for a purchase price of
$50,000,000, subject to post-closing working capital adjustments, and the
assumption of certain Indebtedness of Granutec in an amount not to exceed
$7,100,000; 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 1.1. 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.
"ASSET PURCHASE AGREEMENT" is defined in SUBPART 4.1.5.
"BORROWERS" is defined in the PREAMBLE.
"CANADIAN BORROWER" is defined in the PREAMBLE.
"CREDIT AGREEMENT" is defined in the THIRD RECITAL.
"EQUITY ISSUANCE" means the issuance by LHPG of additional capital stock of
at least $20,000,000 to finance, in part, the Purchase Price (as such term is
defined in the Asset Purchase Agreement) of the Granutec/Xxxxxxx Acquisition.
"EXISTING CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"GRANUTEC" is defined in the SECOND RECITAL.
"GRANUTEC/XXXXXXX ACQUISITION" is defined in the SECOND RECITAL.
"SECOND AMENDMENT" is defined in SUBPART 4.1.
"SECOND AMENDMENT EFFECTIVE DATE" is defined in SUBPART 4.1.
"SELLERS" is defined in the SECOND RECITAL.
"XXXXXXX" is defined in the SECOND RECITAL.
"U.S. BORROWER" is defined in the PREAMBLE.
SUBPART 1.2. 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 Second Amendment
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with SUBPART 2.1; except as so amended, the Existing Credit Agreement shall
continue in full force and effect in accordance with its terms.
SUBPART 2.1. AMENDMENTS TO ARTICLE I. Article I of the Existing Credit
Agreement is hereby amended as follows:
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:
"SECOND AMENDMENT" means the Second Amendment to the Credit Agreement,
dated as of December 16, 1999, among the Borrowers and the Lenders party
thereto.
"SECOND AMENDMENT EFFECTIVE DATE" is defined in Section 4.1 of the
Second Amendment.
SUBPART 2.1.2. The pricing grids contained in Section 1.1 of the Existing
Credit Agreement in the definition of "Applicable Margin" are hereby amended in
their entirety to read as follows, with the Applicable Margin being subject to
the terms of the Existing Credit Agreement for the period prior to the Second
Amendment Effective Date and the changes to the Applicable Margin becoming
effective on (and subsequent to) the Second Amendment Effective Date,
notwithstanding any terms of the Credit Agreement to the contrary:
(a) for U.S. Revolving Loans:
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ----------- -----------
Less than 3.0:1 0.000% 1.000%
Greater than or equal to 0.125% 1.125%
3.0:1 and less than 3.5:1
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ----------- -----------
Greater than or equal to 0.375% 1.375%
3.5:1 and less than 4.0:1
Greater than or equal to 0.750% 1.750%
4.0:1 and less than 4.5:1
Greater than or equal to 1.250% 2.250%
4.5:1 and less than 5.0:1
Greater than or equal to 1.500% 2.500%
5.0:1
(b) for Term B Loans:
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ----------- -----------
less than 5.0:1 1.625% 2.625%
Greater than or equal to 2.125% 3.125%
5.0:1
(c) for Term C Loans:
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ----------- -----------
less than 5.0:1 1.750% 2.750%
Greater than or equal to 2.250% 3.250%
5.0:1
(d) for Term D Loans:
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ----------- -----------
Less than 5.0:1 1.750% 2.750%
Applicable Applicable
Margin For Margin For
U.S. Base LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ----------- -----------
Greater than or equal to 2.250% 3.250%
5.0:1
(e) for Canadian Revolving Loans:
Applicable
Margin For Applicable
Canadian Prime Canadian BA
Leverage Ratio Rate Loans Stamping Fee
-------------- -------------- -------------
Less than 3.0:1 0.000% 1.000%
Greater than or equal to 0.125% 1.125%
3.0:1 and less than 3.5:1
Greater than or equal to 0.375% 1.375%
3.5:1 and less than 4.0:1
Greater than or equal to 0.750% 1.750%
4.0:1 and less than 4.5:1
Greater than or equal to 1.250% 2.250%
4.5:1 and less than 5.0:1
Greater than or equal to 1.500% 2.500%
5.0:1
(f) for Canadian Term Loans:
Applicable
Margin For Applicable
Canadian Prime Canadian BA
Leverage Ratio Rate Loans Stamping Fee
-------------- --------------- -------------
Less than 5.0:1 1.625% 2.625%
Greater than or equal to 2.125% 3.125%
5.0:1
PART III
WAIVER
SUBPART 3.1. WAIVER. By its signature below, each Lender hereby waives
(i) any
Default arising under Section 9.2.2 of the Credit Agreement as a result of
the Granutec/Xxxxxxx Acquisition; (ii) any Default arising under clause (f)
of Section 9.2.5 of the Credit Agreement (with respect only to the
$35,000,000 limit on Permitted Acquisitions) as a result of the
Granutec/Xxxxxxx Acquisition; (iii) the requirement that, concurrently with
the receipt by Parent or LHPG of any Net Equity Proceeds received in
connection with the Equity Issuance, an amount equal to 50% of such Net
Equity Proceeds be applied as a mandatory prepayment of the Term Loans
pursuant to clause (g) of Section 5.1.1 of the Credit Agreement; and (iv) any
Default arising under Section 9.2.3 of the Credit Agreement as a result of
the Granutec/Xxxxxxx Acquisition, PROVIDED, that any such Liens (A) attach
solely to the specific assets acquired in connection with the
Granutec/Xxxxxxx Acquisition, (B) were in existence prior to the date of the
Granutec/Xxxxxxx Acquisition, and (C) were not created in anticipation of the
Granutec/Xxxxxxx Acquisition.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. SECOND AMENDMENT EFFECTIVE DATE. This Amendment (and the
amendments and modifications contained herein) shall become effective, and shall
thereafter be referred to as "SECOND AMENDMENT", as of the date first above
written (the "SECOND AMENDMENT EFFECTIVE DATE") when all of the conditions set
forth in this SUBPART 4.1 have been satisfied.
SUBPART 4.1.1. 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 4.1.2. COMPLIANCE CERTIFICATE. The Agents shall have received,
with counterparts for each Lender, a pro-forma Compliance Certificate as of the
Second Amendment Effective Date evidencing PRO FORMA compliance with the
financial covenants set forth in SECTION 9.2.4 and as to such items therein as
the Agents reasonably request, dated the Second Amendment Effective Date, duly
executed (and with all schedules thereto duly completed) and delivered by an
Authorized Officer of the U.S. Borrower.
SUBPART 4.1.3. AMENDMENT FEE. The Agents shall have received, for the
account of each Lender signatory hereto prior to or on the Second Amendment
Effective Date (i) an amendment fee equal to .25% of each such Lender's
Percentage of the Total Exposure Amount and (ii) all other fees, costs and
expenses due and payable pursuant to Sections 12.3 of the Credit Agreement, if
then invoiced.
SUBPART 4.1.4. 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.
SUBPART 4.1.5. CLOSING. The Agents shall have received written notice
from the U.S. Borrower that the Closing contemplated by (and defined in) the
Asset Purchase Agreement, dated as of October 7, 1999, among the Borrowers, the
Sellers, Novopharm, Granutec Acquirco, Inc. and Granutec Holdings Corporation
(the "ASSET PURCHASE AGREEMENT") has occurred.
PART V
MISCELLANEOUS
SUBPART 5.1. 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 5.2. 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 5.3. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Each of the
Borrowers represents and warrants on the Second Amendment Effective Date that
all of the statements contained in clauses (a) through (c) of Section 7.2.1 of
the Credit Agreement are true and correct.
SUBPART 5.4. 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 5.5. 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 5.6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
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.
XXXXXX HEALTH PRODUCTS INC.
By /s/ Xxxxxxx X. Xxxxx
-------------------------
Title: Treasurer
VITA HEALTH PRODUCTS INC.
By /s/ Xxxxxxx X. Xxxxx
-------------------------
Title: Treasurer
THE BANK OF NOVA SCOTIA, as U.S. Agent, Canadian
Agent, a U.S. Lender and a Canadian Lender
By /s/ Xxxx Xxxxxx
-------------------------
Title: Authorized Signatory
NORTHERN LIFE INSURANCE COMPANY
By: ING Capital Advisors, Inc.,
as Investment Advisor
By /s/ Xxxxx X. Xxxx
-------------------------
Title: Vice President & Portfolio Manager
ARCHIMEDES FUNDING II, LTD.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By /s/ Xxxxx X. Xxxx
-------------------------
Title: Vice President & Portfolio Manager
ARCHIMEDES FUNDING III, LTD.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By /s/ Xxxxx X. Xxxx
-------------------------
Title: Vice President & Portfolio Manager
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING Capital Advisors, Inc.,
as Investment Advisor
By /s/ Xxxxx X. Xxxx
-------------------------
Title: Vice President & Portfolio Manager
SEQUILS-ING I (HBDGM), LTD.
By: ING Capital Advisors, Inc.,
as Collateral Manager
By /s/ Xxxxx X. Xxxx
-------------------------
Title: Vice President & Portfolio Manager
SENIOR DEBT PORTFOLIO
By: Boston Management and Research,
as Investment Advisor
By /s/ Payson X. Xxxxxxxxx
-------------------------
Title: Vice President
XXXXX XXXXX SENIOR INCOME TRUST
By: Xxxxx Xxxxx Management,
as Investment Advisor
By /s/ Payson X. Xxxxxxxxx
-------------------------
Title: Vice President
XXXXX XXXXX INSTITUTIONAL SENIOR LOAN FUND
By: Xxxxx Xxxxx Management,
as Investment Advisor
By /s/ Payson X. Xxxxxxxxx
-------------------------
Title: Vice President
SOCIETE GENERALE
By /s/ X. Xxxxxx Xxxxxxx
-------------------------
Title: Director
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By /s/ Xxxxxxxx X. Xxxxx
-------------------------
Title: Vice President
By /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Vice President
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW Asset Management Company, as
Attorney-in-Fact
By /s/ Xxxx X. Gold
-------------------------
Title: Managing Director
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Title: Senior Vice President
SEQUILS I, LTD.
By: TCW Advisors, Inc.,
as its Collateral Manager
By /s/ Xxxx X. Gold
-------------------------
Title: Managing Director
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Title: Senior Vice President
UNITED OF OMAHA LIFE
INSURANCE COMPANY
By: TCW Asset Management Company,
as its Investment Advisor
By /s/ Xxxx X. Gold
-------------------------
Title: Managing Director
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------
Title: Senior Vice President
SOVEREIGN BANK
By /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Title: Senior Vice President
KZH CRESCENT LLC
By /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Authorized Agent
KZH CRESCENT-2 LLC
By /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Authorized Agent
KZH CRESCENT-3 LLC
By /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Authorized Agent
KZH ING-2 LLC
By /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Authorized Agent
KZH III LLC
By /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Authorized Agent
KZH CNC LLC
By /s/ Xxxxx X. Xxxxxx
-------------------------
Title: Authorized Agent
ALLSTATE LIFE INSURANCE COMPANY
By /s/ Xxxxx X. Xxxxxxx
-------------------------
Title: Authorized Signatory
By /s/ Xxxxxxxx X. Xxxxxx
-------------------------
Title: Authorized Signatory
CERES FINANCE LTD.
By /s/ Xxxxx Xxxx
-------------------------
Title: Director
UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxx X. Xxxx
-------------------------
Title: Vice President
CITICORP U.S.A., INC.
By /s/ Xxxxxxx X. Xxxxxxx
-------------------------
Title: Vice President
IMPERIAL BANK, a California Banking
Corporation
By /s/ Xxxxxxx X. Xxxxxx
-------------------------
Title: Assistant Vice President
BANK OF AMERICA NT & SA
By /s/ Xxxxxx Xxxxx Xxxxx
-------------------------
Title: Vice President Credit Products Officer
FLOATING RATE PORTFOLIO
By: INVESCO Senior Secured
Management Inc., as attorney in fact
By /s/ Xxxxxxx Xxxxxxxx
-------------------------
Title: Authorized Signatory
LASALLE BANK N.A.
By /s/ Xxxxx Xxxxxxxx
-------------------------
Title: Vice President
COMERICA BANK
By /s/ Xxxxxxxx X. Xxxxxxxxxx
--------------------------
Title: Vice President
XXXXXXX XXXXX CAPITAL CORPORATION
By /s/ Xxxxx X.X. Xxxxx
-------------------------
Title: Vice President