EXHIBIT 10.1

SECOND AMENDMENT TO

REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO REVOLVING CREDIT, TERM LOAN AND SECURITY AGREEMENT
(this “Agreement”) is entered into May 15, 2019 by and among INTEGRATED
BIOPHARMA, INC., a corporation organized under the laws of the State of Delaware
(“Integrated”), InB:MANHATTAN DRUG COMPANY, INC., a corporation organized under
the laws of the State of New York (”MD”), AGROLABS, INC., a corporation
organized under the laws of the State of New Jersey (“AL”), IHT HEALTH PRODUCTS,
INC., a corporation organized under the laws of the State of Delaware (“IHT”),
IHT PROPERTIES CORP., a corporation organized under the laws of the State of
Delaware (“IHTP”), and VITAMIN FACTORY, INC. (also known as The Vitamin
Factory), a corporation organized under the laws of the State of Delaware
(“Vitamin”) (Integrated, MD, AL, IHT, IHTP and Vitamin, each a “Borrower”, and
collectively “Borrowers”), the financial institutions which are now or which
hereafter become a party hereto (collectively, the “Lenders” and individually a
“Lender”) and PNC BANK, NATIONAL ASSOCIATION (“PNC”), as agent for Lenders (PNC,
in such capacity, the “Agent”).

 

RECITALS

 

Whereas, Borrowers and PNC entered into a certain Revolving Credit, Term Loan
and Security Agreement dated June 27, 2012 (which has been, is being, and may be
further amended, replaced, restated, modified and/or extended from time to time,
the “Loan Agreement”); and

 

Whereas, Borrowers and PNC have agreed to modify the terms of the Loan Agreement
as set forth in this Agreement.

 

Now, therefore, in consideration of PNC’s continued extension of credit and the
agreements contained herein, the parties agree as follows:

 

AGREEMENT

 

1)   ACKNOWLEDGMENT OF BALANCE.  Borrowers acknowledge that the most recent
statement of account sent to Borrowers with respect to the Obligations is
correct.

 

2)

MODIFICATIONS. The Loan Agreement be and hereby is modified as follows:

 

(a)  The following definitions are hereby added to Section 1.2 of the Loan
Agreement to read as follows:

 

“Beneficial Owner” shall mean, for each Borrower, each of the following: (a)
each individual, if any who, directly or indirectly, owns 25% or more of such
Borrower's Equity Interests; and (b) a single individual with significant
responsibility to control, manage, or direct such Borrower.

 

“Certificate of Beneficial Ownership” shall mean, for each Borrower, a
certificate in form and substance reasonably acceptable to Agent (as amended or
modified by Agent from time to time in its sole discretion), certifying, among
other things, the Beneficial Owner of such Borrower.

 

“Second Amendment Closing Date” shall mean May 15, 2019.

 

(b)     The following definitions contained in Section 1.2 of the Loan Agreement
are hereby deleted and are replaced to read as follows:

 

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“Alternate Base Rate” shall mean, for any day, a rate per annum equal to the
higher of (i) the Base Rate in effect on such day, (ii) the Federal Funds Open
Rate in effect on such day plus .25% and (iii) the Daily LIBOR Rate plus 1%. For
purposes of this definition, “Daily LIBOR Rate” shall mean, for any day, the
rate per annum determined by Agent by dividing (x) the Published Rate by (y) a
number equal to 1.00 minus the percentage prescribed by the Federal Reserve for
determining the maximum reserve requirements with respect to any eurocurrency
funding by banks on such day. For the purposes of this definition, “Published
Rate” shall mean the rate of interest published each Business Day in The Wall
Street Journal “Money Rates” listing under the caption “London Interbank Offered
Rates” for a one month period (or, if no such rate is published therein for any
reason, then the Published Rate shall be the eurodollar rate for a one month
period as published in another publication determined by Agent).

 

“Contract Rate” shall have the meaning ascribed to such term in Section 3.1
hereof.

 

“Maximum Loan Amount” shall mean, as of the Second Amendment Closing Date,
$11,585,175 minus repayments under the Term Loan on a go-forward basis,
provided, however, for calculation of the Maximum Loan Amount in Section 13.1
herein the Maximum Loan Amount shall mean $11,585,175.

 

“Maximum Term Loan Amount” shall mean $3,585,175.

 

“Revolving Interest Rate” shall mean an interest rate per annum equal to (a) the
Alternate Base Rate with respect to Domestic Rate Loans and (b) the sum of the
Eurodollar Rate plus two and one-half of one percent (2.50%) with respect to
Eurodollar Rate Loans.

 

“Term Loan Rate” shall mean an interest rate per annum equal to (a) the sum of
the Alternate Base Rate plus one quarter of one percent (0.25%) with respect to
Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus three percent
(3.00%) with respect to Eurodollar Rate Loans.

 

“Termination Date” shall mean May 15, 2024 or such other date as the Lenders may
agree in writing to extend the Termination Date until, without there being any
obligation on the part of the Lenders to extend the Termination Date.

 

 

(c)     Subsection 2.4 is hereby deleted from the Loan Agreement and replaced to
read as follows:

 

2.4     Term Loan. Subject to the terms and conditions of this Agreement, each
Lender, severally and not jointly, will make additional Advances so that the
Term Loan to Borrowers is in an amount equal to the Maximum Term Loan Amount, on
the Second Amendment Closing Date. The additional Advances made to Borrower as
of the Second Amendment Closing Date shall be utilized by Borrower (i) to
refinance the Subordinated Debt and (ii) to refinance the EGK Debt. The Term
Loan shall be advanced on the Second Amendment Closing Date and shall be, with
respect to principal, payable as follows, subject to acceleration upon the
occurrence of an Event of Default under this Agreement or termination of this
Agreement: eighty-four (84) consecutive monthly principal installments, the
first eighty-three (83) of which shall be in the amount of $42,681.00 commencing
on the first Business Day of June, 2019, and continuing on the first Business
Day of each month thereafter, with a final payment of any unpaid

 

 

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balance of principal and interest payable on the first Business Day of May,
2024, all as more particularly described in this Agreement and in the Note, and
subject to mandatory prepayment and acceleration upon the occurrence of an Event
of Default under this Agreement, on the Termination Date and/or earlier
termination of the Loan Agreement pursuant to the terms thereof. The Term Loan
shall be evidenced by one or more secured promissory notes (collectively, the
“Term Note”) in substantially the form attached hereto as Exhibit 2.4. The Term
Loan may consist of Domestic Rate Loans or Eurodollar Rate Loans, or a
combination thereof, as Borrowing Agent may request. In the event that Borrowers
desire to obtain or extend a Eurodollar Rate Loan or to convert a Domestic Rate
Loan to a Eurodollar Rate Loan, Borrowing Agent shall comply with the
notification requirements set forth in Sections 2.2(b) and (d) and the
provisions of Sections 2.2(b) through (g) shall apply.

 

(d)     Subsection 3.4(b) is hereby deleted from the Loan Agreement and replaced
to read as follows:

 

(b)     Collateral Monitoring Fee. Borrowers shall pay to Agent on the first day
of each month following any month in which Agent performs any collateral
monitoring - namely any field examination, collateral analysis or other business
analysis, the need for which is to be determined by Agent and which monitoring
is undertaken by Agent or for Agent’s benefit - a collateral monitoring fee in
an amount equal to $1,000 per day for each person employed to perform such
monitoring, such amount not to exceed $15,000 per examination or analysis, plus
all costs and disbursements incurred by Agent in the performance of such
examination or analysis.

 

(e)      Subsection 4.10 is hereby deleted from the Loan Agreement and replaced
to read as follows:

 

4.10     Inspection of Premises. At all reasonable times, during normal business
hours and upon twenty four (24) hours prior notice (provide no such notice is
required if a Default and/or Event of Default has occurred and is continuing),
Agent and each Lender shall have full access to and the right to audit, check,
inspect and make abstracts and copies from each Borrower’s books, records,
audits, correspondence and all other papers relating to the Collateral and the
operation of each Borrower’s business during normal business hours. Agent, any
Lender and their agents may enter upon any premises of any Borrower at any time
during business hours and at any other reasonable time, and from time to time,
for the purpose of inspecting the Collateral and any and all records pertaining
thereto and the operation of such Borrower’s business. The Agent may perform as
many field examinations as the Agent may deem reasonably necessary, provided
that, the Agent shall only perform two (2) field examinations with regard to the
Collateral in each fiscal year at the sole cost and expense of the Borrowers
(for the avoidance of doubt, subject to the immediately next proviso, Borrowers
shall not be liable for any costs and expenses for any other field exams
performed in any fiscal year), and further provided, however, upon the
occurrence and continuance of a Default and/or Event of Default, the Agent shall
be permitted to perform field examinations at any time and as frequently as
reasonably deemed necessary, at the sole cost and expense of the Borrowers. The
Agent shall perform in its sole discretion appraisals with regard to all
Collateral including, but not limited to, all Equipment and the Mortgaged
Premises, provided, however, the Borrowers shall pay solely for one appraisal
per fiscal year so long as no Default and/or Event of Default has occurred and
is continuing.

 

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(f)

Subsection 5.26 is hereby added to the Loan Agreement to read as follows:

 

5.26     Certificate of Beneficial Ownership. With respect to each Certificate
of Beneficial Ownership delivered to Agent and Lenders after the Second
Amendment Closing Date pursuant to Section 6.10(ii), the information set forth
in such Certificate of Beneficial Ownership is accurate, true and correct as of
the date of such Certificate of Beneficial Ownership. The Borrowers acknowledge
and agree that the Certificate of Beneficial Ownership is one of the Other
Documents.

 

 

(g)

Section 6.10 is hereby added to the Loan Agreement to read as follows:

 

6.10     Certificate of Beneficial Ownership and Other Additional Information.
Provide to Agent and the Lenders: (i) unless an updated Certificate of
Beneficial Ownership is delivered pursuant to Section 6.10(ii), confirmation of
the accuracy of the information set forth in the then most recent Certificate of
Beneficial Ownership provided to the Agent and Lenders; (ii) a new Certificate
of Beneficial Ownership, when the individual(s) to be identified as a Beneficial
Owner have changed; and (iii) such other information and documentation as may
reasonably be requested by Agent or any Lender from time to time for purposes of
compliance by Agent or such Lender with applicable laws (including without
limitation the USA Patriot Act and other "know your customer" and anti-money
laundering rules and regulations), and any policy or procedure implemented by
Agent or such Lender to comply therewith.

 

(h)     Subsection 13.1 is hereby deleted from the Loan Agreement and replaced
to read as follows:

 

13.1     Term. This Agreement, which shall inure to the benefit of and shall be
binding upon the respective successors and permitted assigns of each Borrower,
Agent and each Lender, shall become effective on the date hereof and shall
continue in full force and effect until the Termination Date (the “Term”) unless
sooner terminated as herein provided. Borrowers may terminate this Agreement at
any time upon ninety (90) days’ prior written notice upon payment in full of the
Obligations. In the event the Obligations are prepaid in full prior to the last
day of the Term (the date of such prepayment hereinafter referred to as the
“Early Termination Date”), Borrowers shall pay to Agent for the benefit of
Lenders an early termination fee in an amount equal to (x) two percent (2.00%)
of the Maximum Loan Amount if the Early Termination Date occurs on or after the
Second Amendment Closing Date to and including the date immediately preceding
the first anniversary of the Second Amendment Closing Date, (y) one percent
(1.00%) of the Maximum Loan Amount if the Early Termination Date occurs on or
after the first anniversary of the Second Amendment Closing Date to and
including the date immediately preceding the second anniversary of the Second
Amendment Closing Date, and (z) one half of one percent (0.50%) of the Maximum
Loan Amount if the Early Termination Date occurs on or after the second
anniversary of the Second Amendment Closing Date to and including the date
immediately preceding the third anniversary of the Second Amendment Closing
Date.

 

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(i)     Schedule 4.5 to the Loan Agreement is hereby amended by deleting such
Schedule in its entirety and inserting in replacement thereof a new Schedule 4.5
as set forth in Exhibit A hereto.

 

(j)     Schedule 5.14 to the Loan Agreement is hereby amended by deleting such
Schedule in its entirety and inserting in replacement thereof a new Schedule
5.14 as set forth in Exhibit B hereto.

 

(k)     Schedule 7.4 to the Loan Agreement is hereby amended by deleting such
Schedule in its entirety and inserting in replacement thereof a new Schedule 7.4
as set forth in Exhibit C hereto.

 

3)  CONSENT TO PREPAYMENT OF SUBORDINATED DEBT AND VITAMIN NOTE. Borrowers and
Agent hereby acknowledge that, notwithstanding the provisions of Sections 2.22,
7.17, 7.21 and 7.24 of the Loan Agreement, on the Second Amendment Closing Date,
Borrowers shall draw down Revolving Advances to prepay in full (i) all
indebtedness owing by Integrated with respect to the Subordinated Debt and (ii)
all indebtedness owing by Integrated and MD with respect to the Vitamin Note;
provided, however, that, notwithstanding the foregoing, Integrated and MD may
repay the indebtedness owing by them with respect to the Vitamin Note by check
rather than by drawing down a Revolving Advance. The Agent hereby consents to
such prepayment, provided that (i) Borrowers shall provide Agent with a payoff
letter signed by the applicable note holders with respect to each of the
Subordinated Debt and the Vitamin Note, within three (3) days after the Second
Amendment Closing Date, (ii) Borrowers shall provide to the Bank evidence of the
wire transfers of the respective payoff amounts to the respective note holders,
and (iii) Borrowers shall execute and/or deliver such other information and/or
documentation as Lenders may reasonably require in connection with the foregoing
repayment as contemplated in this Section.

 

 

4)

ACKNOWLEDGMENTS. Borrowers acknowledge and represent that:

 

(A)     the Loan Agreement and Other Documents, each as amended hereby, are in
full force and effect without any defense, claim, counterclaim, right or claim
of set-off;

 

(B)     to the best of their knowledge, no default by the Agent or Lenders in
the performance of their duties under the Loan Agreement or the Other Documents
has occurred;

 

(C)     all representations and warranties of the Borrowers contained herein, in
the Loan Agreement (as amended and modified hereby) and in the Other Documents
(as  amended and modified hereby) are true and correct in all material respects
as of this date, except for any representation or warranty that specifically
refers to an earlier date;

 

(D)    Borrowers have taken all necessary action to authorize the execution and
delivery of this Agreement; and

 

(E)     this Agreement is a modification of an existing obligation and is not a
novation.

 

 

5)

CONDITIONS. As conditions to the effectiveness of any of the modifications,
consents, or waivers contained herein, the Borrowers agree to:

 

    (A)    provide the Agent with this Agreement and the Second Amended and
Restated Term Note, each properly executed;

 

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(B)     provide the Agent with secretary’s certificates and resolutions of the
Borrowers, in form and substance acceptable to the Agent;

 

(C)     provide the Agent with evidence of satisfactions with respect to each of
the following: (i) the Subordinated Debt and (ii) the Vitamin Note, which
satisfaction will be concurrent with the funding of the applicable Advance on
the date hereof;

 

(D)     provide the Agent with all information and documentation reasonably
required by the Agent;

 

(E)     pay to the Agent an Amendment Fee in the amount of $40,000.00;

 

(F)     pay all reasonable legal fees incurred by the Agent in entering into
this Agreement to Wilentz, Goldman & Spitzer, P.A.; and

 

(G)     pay all other reasonable costs and expenses incurred by the Lenders in
entering into this Agreement.

 

6)   MISCELLANEOUS. This Agreement shall be construed in accordance with and
governed by the laws of the State of New York, without reference to that state’s
conflicts of law principles. This Agreement, the Loan Agreement and the Other
Documents constitute the sole agreement of the parties with respect to the
subject matter thereof and supersede all oral negotiations and prior writings
with respect to the subject matter thereof. No amendment of this Agreement, and
no waiver of any one or more of the provisions hereof shall be effective unless
set forth in writing and signed by the parties hereto. The illegality,
unenforceability or inconsistency of any provision of this Agreement shall not
in any way affect or impair the legality, enforceability or consistency of the
remaining provisions of this Agreement, the Loan Agreement or the Other
Documents. This Agreement, the Loan Agreement and the Other Documents are
intended to be consistent. However, in the event of any inconsistencies among
this Agreement, the Loan Agreement and/or any of the Other Documents, the terms
of this Agreement, then the Loan Agreement, shall control. This Agreement may be
executed in any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all such
counterparts shall together constitute one and the same agreement.

 

7)   DEFINITIONS. The terms used herein and not otherwise defined or modified
herein shall have the meanings ascribed to them in the Loan Agreement. The terms
used herein and not otherwise defined or modified herein or defined in the Loan
Agreement shall have the meanings ascribed to them by the Uniform Commercial
Code as enacted in State of New York.

 

 

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

[SIGNATURE PAGES TO FOLLOW]

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[SIGNATURE PAGE TO SECOND AMENDMENT]

 

 

IN WITNESS WHEREOF, the parties hereto have hereunto executed this Agreement the
day and year first above mentioned.

 

ATTEST:            

INTEGRATED BIOPHARMA, INC.

   

By: /s/ Dina L. Masi 

By:/s/ Christina Kay

Name: DINA L. MASI     

Name: CHRISTINA KAY

Title: Secretary      

Title: Co-Chief Executive Officer

   

ATTEST:                             

 InB:MANHATTAN DRUG COMPANY, INC.

   

By: /s/ Dina L. Masi 

By: /s/ Riva Sheppard 

Name: DINA L. MASI     

Name: RIVA SHEPPARD

Title: Secretary     

Title: President and Chief Executive Officer

   

ATTEST:                           

  AGROLABS, INC.

   

By: /s/ Dina L. Masi 

By:/s/ Christina Kay

Name: DINA L. MASI     

Name: CHRISTINA KAY

By:/s/ Christina Kay

Title: Secretary     

Title: President and Chief Executive Officer

   

ATTEST:                            

 IHT HEALTH PRODUCTS, INC.

   

By: /s/ Dina L. Masi 

By:/s/ Christina Kay

Name: DINA L. MASI     

Name: CHRISTINA KAY

Title: Secretary     

Title: President and Chief Executive Officer

 

 

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

 

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[SIGNATURE PAGE TO SECOND AMENDMENT]

 

 

   

ATTEST:                             

IHT PROPERTIES CORP.

   

By: /s/ Dina L. Masi 

By:/s/ Riva Sheppard

Name: DINA L. MASI     

Name: RIVA SHEPPARD

Title: Secretary                             

Title: President and Chief Executive Officer

   

ATTEST:                                 

VITAMIN FACTORY, INC.   (also known as The Vitamin Factory)    

By: /s/ Dina L. Masi 

By: /s/ E Gerald Kay 

Name: DINA L. MASI    

Name: E GERALD KAY

Title: Secretary     

Title: President and Chief Executive Officer

   

 

 

 

 

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

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[SIGNATURE PAGE TO SECOND AMENDMENT]

 

   

                             

 PNC BANK, NATIONAL ASSOCIATION,   as Lender and as Agent      

By:/s/ Alberto Casasus

 

Name: ALBERTO CASASUS

 

Title: Senior Vice President

  New York, New York 10173    

 

 

 

 

 

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