Exhibit 10.30

 

SECOND AMENDMENT TO CREDIT AGREEMENT

 

THIS AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into as of
December 1, 2005, by and between NATURAL ALTERNATIVES INTERNATIONAL, INC., a
Delaware corporation (“Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Bank”).

 

RECITALS

 

WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of May 1, 2004, as amended from time to time (“Credit Agreement”).

 

WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree that the Credit Agreement
shall be amended as follows:

 

1. Section 1.1.(a) is hereby amended by deleting “November 1, 2006” as the last
day on which Bank will make advances under the Line of Credit, and by
substituting for said date “November 1, 2007,” with such change to be effective
upon the execution and delivery to Bank of a promissory note dated as of
December 1, 2005 (which promissory note shall replace and be deemed the Line of
Credit Note defined in and made pursuant to the Credit Agreement) and all other
contracts, instruments and documents required by Bank to evidence such change.

 

2. Section 1.4.(a) is hereby deleted in its entirety, and the following
substituted therefor:

 

“(a) Foreign Exchange Facility. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make available to Borrower a facility (the
“Foreign Exchange Facility”) under which Bank, from time to time up to and
including November 1, 2007, will enter into foreign exchange contracts for the
account of Borrower for the purchase and/or sale by Borrower in United States
dollars of foreign currencies designated by Borrower; provided however, that the
contact limit shall not at any time exceed an aggregate of One Million Eight
Hundred Thousand United States Dollars (US$1,800,000.00). No foreign exchange
contract shall be executed for a term which extends beyond November 1, 2008.
Borrower shall have a “Delivery Limit” under the Foreign Exchange Facility not
to exceed at any time the aggregate principal amount of Zero United States
Dollars (US$0.00) with PVD (“Payment versus Delivery”) which will require
Borrower to provide funds before the currency is delivered

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and this will eliminate the 1 or 2 business day settlement period and mitigate
settlement risk. All foreign exchange transactions shall be subject to the
additional terms of a Foreign Exchange Agreement dated as of May 1, 2004
(“Foreign Exchange Agreement”), all terms of which are incorporated herein by
this reference.”

 

3. Section 4.3.(d) is hereby deleted in its entirety, and the following
substituted therefor:

 

“(d) not later than 15 days after and as of the end of each month, an inventory
collateral report, an aged listing of accounts receivable and accounts payable,
and a reconciliation of accounts; semi-monthly collateral report if Borrower
elects to use 35% concentration allowance for Obesity Research, Fiber Thin and
Mannatech, Inc., and not later than 30 days after and as of the end of each May
and November, a list of the names, addresses and contact phone numbers of all
Borrower’s account debtors;”

 

4. Sections 4.9.(b) and (d) are hereby deleted in their entirety, and the
following substituted therefor:

 

“(b) Total Liabilities divided by Tangible Net Worth not greater than 1.25 to
1.0 until fiscal year end June 30, 2007 and not greater than 1.0 to 1.0,
thereafter, with “Total Liabilities” defined as the aggregate of current
liabilities and non-current liabilities less subordinated debt, and with
“Tangible Net Worth” as defined above.

 

(d) Fixed Charge Coverage Ratio not less than 1.25 to 1.0 as of each fiscal
quarter end, with “Fixed Charge Coverage Ratio” defined as the aggregate of net
profit after taxes plus depreciation expense, amortization expense and net
contributions, divided by the aggregate of the current maturity of long-term
debt and capitalized lease payments.”

 

5. Sections 5.2., 5.3., 5.4., 5.5. and 5.9. are hereby deleted in their
entirety, and the following substituted therefor:

 

“SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment in fixed
assets in any fiscal year in excess of an aggregate of $5,500,000.00.

 

SECTION 5.3. LEASE EXPENDITURES. Incur operating lease expense in any fiscal
year in excess of an aggregate of $500,000.00.

 

SECTION 5.4. OTHER INDEBTEDNESS. Create, incur, assume or permit to exist any
indebtedness or liabilities resulting from borrowings, loans or advances,
whether secured or

 

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unsecured, matured or unmatured, liquidated or unliquidated, joint or several,
except (a) the liabilities of Borrower to Bank, (b) any other liabilities of
Borrower existing as of, and disclosed to Bank prior to, the date hereof, and
(c) liabilities which may be obtained for NAI Europe not to exceed an aggregate
of $1,000,000.00.

 

SECTION 5.5. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into or
consolidate with any other entity; make any substantial change in the nature of
Borrower’s business as conducted as of the date hereof; acquire all or
substantially all of the assets of any other entity; nor sell, lease, transfer
or otherwise dispose of all or a substantial or material portion of Borrower’s
assets except (a) in the ordinary course of its business, and (b) the
acquisition of Real Health Laboratories, Inc. to be completed during fiscal year
end of 2006.

 

SECTION 5.9. PLEDGE OF ASSETS. Mortgage, pledge, grant or permit to exist a
security interest in, or lien upon, all or any portion of Borrower’s assets now
owned or hereafter acquired, except any of the foregoing in favor of Bank or
which is existing as of, and disclosed to Bank in writing prior to, the date
hereof, and liens to the extend permitted under Section 5.4. hereunder.”

 

6. Section 7.2. is hereby amended by deleting the reference to “Carlsbad LPO,
5857 Owens Avenue, Suite 106, Carlsbad, CA 92008” as the Bank’s address, and by
substituting therefor: “San Diego Regional Commercial Banking Office, 401 B
Street, Suite 2201, San Diego, CA 92101”

 

7. In consideration of the set forth herein and as a condition to the
effectiveness hereof, Borrower shall pay to Bank a non-refundable commitment fee
equal to $10,000.00, which fee shall be due and payable in full on November 1,
2006.

 

8. Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.

 

9. Borrower hereby remakes all representations and warranties contained in the
Credit Agreement and reaffirms all covenants set forth therein. Borrower further
certifies that as of the date of this Amendment there exists no Event of Default
as defined in the Credit Agreement, nor any condition, act or event which with
the giving of notice or the passage of time or both would constitute any such
Event of Default.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
as of the day and year first written above.

 

NATURAL ALTERNATIVES

INTERNATIONAL, INC.

      WELLS FARGO BANK,
NATIONAL ASSOCIATION

By:

 

/s/ Randell Weaver

     

By:

 

/s/ Bernie Palmer

   

Randell Weaver

President

         

Bernie Palmer

Vice President

          By:  

/s/ John Reaves

               

John Reaves

Chief Financial Officer

           

 

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