Amendment No. 3 to LASA [3/10/98]









Exhibit

10.30




 




AMENDMENT

NO. 1 TO LOAN AND SECURITY AGREEMENT




 




 




            AMENDMENT, dated June 13, 2001, by and

between IVC INDUSTRIES, INC., a Delaware corporation (“Borrower”), and CONGRESS

FINANCIAL CORPORATION, a Delaware corporation (“Lender”).




 




 




W  I  T  N  E  S  S  E

T  H :




 




 




                WHEREAS,

Lender and Borrower have entered into financing arrangements pursuant to which

Lender may make loans and advances and provide other financial accommodations

to Borrower as set forth in the Loan and Security Agreement, dated October 16,

2000, between Lender and Borrower (as amended hereby and as the same may

hereafter be further amended, modified, supplemented, extended, renewed,

restated or replaced, the “Loan Agreement”, and together with all agreements,

documents and instruments at any time executed and/or delivered in connection

therewith or related thereto, as from time to time amended and supplemented,

collectively, the “Financing Agreements”).




 




                WHEREAS,

Borrower has requested certain amendments to the Loan Agreement and Lender is

willing to agree to such amendments, subject to the terms and condi­tions

contained herein.




 




                WHEREAS,

by this Amendment No. 1, Lender and Borrower desire and intend to evidence such

amendments.




 




                NOW

THEREFORE, in consideration of the foregoing and the mutual agreements and

covenants contained herein, the parties hereto agree as follows:




 




1.                                         Definitions.




 




	

  (a)


  	

   


  	

  Additional Definitions. As used herein, the term

  “Amendment No. 1” shall mean this Amendment No. 1 to Loan and Security

  Agreement by and among Lender, Borrower, Guarantor and International Vitamin

  Overseas Sales Corp., as the same now exists or may hereafter be amended,

  modified, supplemented, extended, renewed, restated or replaced, and the Loan

  Agreement and the other Financing Agreements are hereby amended to include,

  in addition and not in limitation, such definition.


  





 




 




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  (b)


  	

   


  	

  Interpretation.  For purposes of this Amendment No. 1, unless otherwise defined

  herein, all terms used herein, including, but not limited to, those terms

  used and/or defined in the recitals above, shall have the respective meanings

  assigned to such terms in the Loan Agreement.


  





 




2.                                         Eurodollar Rate Loans.

Notwithstanding any provision of the Loan Agreement or any of the other

Financing Agreements to the contrary, from and after June 1, 2001:




 




	

  (a)


  	

   


  	

  Borrower shall not request and

  Lender shall not make any Eurodollar Rate Loans, except that any Eurodollar

  Rate Loans outstanding as of May 31, 2001 shall continue to be treated as

  Eurodollar Rate Loans until the end of the Interest Period currently in

  effect for such Eurodollar Rate Loans;


  
	

   


  	

   


  	

   


  
	

  (b)


  	

   


  	

  the Interest Rate in respect

  of all Loans made on or after such date shall be the Interest Rate applicable

  to Prime Rate Loans; and


  
	

   


  	

   


  	

   


  
	

  (c)


  	

   


  	

  Borrower shall not request

  that any Prime Rate Loans be converted to Eurodollar Rate Loans and Lender

  shall not be obligated to convert any such Prime Rate Loans to Eurodollar

  Rate Loans.


  





 




3.                                       Borrowing Base.  Section 1.6 of the Loan Agreement is hereby amended by adding the

following new sentence at the end thereof:




 




                                                                “Notwithstanding

anything to the contrary contained in this Agreement or any of the other

Financing Agreements, commencing on May 1, 2001 and effective on the first day

of each and every month thereafter, the percentage set forth in clause (b)(i)

above shall be reduced by one (1%) percent, so that effective on May 1, 2001

such percentage in clause (b)(i) shall automatically and without further action

be reduced from sixty (60%) percent to fifty-nine (59%) percent and such

percentage shall thereafter continue to be so reduced by one (1%) percent as of

the first day of each month thereafter. 

In the event that the percentage set forth in clause (b)(ii) is

applicable or the percentage applicable to Eligible Inventory is otherwise

reduced pursuant to Section 2.1(b) hereof, on and after any date that such

other or reduced percentage may be applicable, such percentage shall be further

reduced by one (1%) percent effective on the first day of each and every month

thereafter automatically and without further action in the same manner as the

percentage set forth in clause (b)(i) is to be reduced.  Notwithstanding anything to the contrary

contained in this Agreement or in any of the other Financing Agreements, on

each date when any such reduction to such percentages 




 




 




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as set forth above becomes

effective, Borrower agrees absolutely and unconditionally to automatically and

without notice or demand make a payment in respect of the Revolving Loans in an

amount equal to the excess, if any, of the aggregate amount of the Revolving

Loans outstanding on such date over the amount equal to the lesser of the

Borrowing Base or the Revolving Loan Limit as set forth in Section 2.1(a) as so

reduced in immediately available funds. “




 




4.                                       Interest Rate.  Section 1.52 of the Loan Agreement is hereby deleted in its

entirety and the following substituted therefor:




 




                                                                “1.52

“Interest Rate” shall mean, from and after May 1, 2001:




 




                                                                (a)  Subject to clause (b) below, as to Prime

Rate Loans, a rate equal to three (3%) percent per annum in excess of the Prime

Rate.




 




                                                                (b)

Notwithstanding anything to the contrary contained in clause (a) above, the

Interest Rate shall mean, at Lender’s option, as to Prime Rate Loans, a rate

equal to five (5%) percent per annum in excess of the Prime Rate (i) for the

period (A) from and after the date of termination or non-renewal hereof until

Lender has received full and final payment of all Obligations (notwithstanding

entry of a judgement against Borrower) and (B) from and after the date of the

occurrence of an Event of Default for so long as such Event of Default

continuing, and (ii) on Loans to Borrower at any time outstanding in excess

of the Borrowing Base or the Revolving Loan Limit (whether or not such

excess(es) arise or are made with or without Lender’s knowledge or consent and

whether made before or after an Event of Default).”




 




5.                                       Letter of Credit Accommodations.  Section 2.2(b) is hereby deleted in its entirety and the

following substituted therefor:




 




                                                                “(b)  In addition to any charges, fees or expenses

charged by any bank or issuer in connection with the Letter of Credit

Accommodations, on and after May 1, 2001, Borrower shall pay to Lender a letter

of credit fee at a rate equal to three and one-quarter (3 1/4%) percent per

annum on the daily outstanding balance of the Letter of Credit Accommodations

for the immediately preceding month (or part thereof), payable in arrears as of

the first day of each succeeding month, except that Borrower shall pay to

Lender such letter of credit fee, at Lender’s option, upon notice to Borrower,

at a rate equal to five and one-quarter (5 1/4%) percent per annum on such

daily outstanding balance for: (i) the period from and after the date of

termination or non-renewal hereof until Lender has received full and final

payment of all Obligations (notwithstanding entry of a judgment against

Borrower) and (ii) the period from and after the date of the occurrence of an

Event of Default for so long as such Event of Default is continuing as

determined by Lender.  Such letter of

credit fee shall be calculated on the basis of a three 




 




 




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hundred sixty (360) day year and

actual days elapsed and the obligation of Borrower to pay such fee shall

survive the termination or non-renewal of this Agreement.”




 




6.                                       Special Availability Reserve.  Section 2 of the Loan Agreement is hereby amended by adding the

following new Section 2.4 thereto:




 




                                                                “2.4 Special

Availability Reserve.  Without

limiting any other rights or remedies of Lender under this Agreement or any of

the other Financing Agreements with respect to the establishment of Reserves or

otherwise, Lender may on the date hereof establish a special Reserve

permanently reducing the amount of Loans and Letter of Credit Accommodations

otherwise available to Borrower in an amount equal to $500,000 (the “Special

Availability Reserve”).  The term

“Reserves” as used herein shall include, without limitation, the Special

Availability Reserve.”




 




7.                                       Inventory Appraisals.  Section 7.3(d) of the Loan Agreement is hereby deleted in its

entirety and the following substituted therefor:




 




                                                                “(d)

Borrower shall, at its expense, on or before the date which is sixty (60) days

from the date of Amendment No. 1 and thereafter on or before the date which is

the last day of each succeeding three (3) month period, but at any time or

times as Lender may request on or after an Event of Default, deliver or cause

to be delivered to Lender written appraisals as to the Inventory in form, scope

and methodology acceptable to Lender and by an appraiser acceptable to Lender,

addressed to Lender and upon which Lender is expressly permitted to rely;”




 




8.                                       Equipment and Real Property

Appraisals.  Section 7.4(a) of the Loan Agreement is

hereby deleted in its entirety and the following is substituted therefor:




 




                                                                “(a)

(i) upon Lender’s request, Borrower shall, at its expense, no more than once in

any twelve (12) month period, but at any time or times as Lender may request on

or after an Event of Default, deliver or cause to be delivered to Lender

written appraisals as to the Equipment and/or the Real Property in form, scope

and methodology acceptable to Lender and by an appraiser acceptable to Lender,

addressed to Lender and upon which Lender is expressly permitted to rely and

(ii) in addition, and without limitation, to the appraisals required to be

delivered to Lender pursuant to clause (i) above, Borrower shall, at its

expense, on or before the date which is sixty (60) days from the date of

Amendment No. 1, deliver or cause to be delivered to Lender written appraisals

as to the Equipment and/or the Real Property in form, scope and methodology

acceptable to Lender and by an appraiser acceptable to Lender, addressed to

Lender and upon which Lender is expressly permitted to rely;”




 




 




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9.                                       Adjusted Tangible Net Worth.  Section 9.18 is hereby deleted in its entirety and the following

substituted therefor:




 




                                                                “9.18 Adjusted

Tangible Net Worth.  Borrower shall

maintain Adjusted Tangible Net Worth of not less than the respective amount set

forth below at all times during each period indicated:




 




 




 




 




	

   


  	

   


  	

  Minimum Adjusted


  Tangible Net Worth


  	

   


  
	

  Month


  	

   


  	

   


  
	

  From

  May 31, 2001 through and including July 31, 2001


  	

   


  	

  $6,200,000


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  From

  August 1, 2001 through and including September 30, 2001


  	

   


  	

  $5,400,000


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  From

  October 1, 2001 through and including January 31, 2002


  	

   


  	

  $5,100,000


  	

   


  
	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  
	

  From

  February 1, 2002 and for each month thereafter


  	

   


  	

  $5,000,000”


  	

   


  
	

   


  	

   


  	

   


  





 




10.                               Real Property Collateral.  The first sentence of Section 9.19 of the Loan Agreement is

hereby amended by deleting the reference to “January 31, 2001” and substituting

“June 30, 2001” therefor.




 




11.                               Affirmative and Negative

Covenants.  Section 9 of the Loan Agreement is hereby

amended by adding the following new Section 9.22 thereto:




 




                                                         “9.22 Turnaround

Consultant.  On or before May 31,

2001, Borrower shall retain a consultant acceptable to Lender on terms

acceptable to Lender as to matters specified by Lender, including, but not

limited to, the evaluation of Borrower and the formulation of a strategy for

enhancing the business performance of Borrower.”




 




12.                               Default Waiver.




 




                                                                              (a)     Subject to the terms and conditions set

forth herein, Lender hereby waives the Event of Default arising under Section

10.1(a) of the Loan Agreement as a result of the failure of Borrower to

maintain the Adjusted Tangible Net Worth as required under Section 9.18 of the 




 




 




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                                                         Loan

Agreement through the date immediately prior to the effectiveness of Amendment

No. 1.




 




                                                                              (b)     Lender has not waived, is not by this

Amendment No. 1 waiving, and has no intention of waiving any Event of Default

which have or may have occurred on or prior to the date hereof, whether or not

continuing on the date hereof, or which may occur after the date hereof

(whether the same or similar to the Event of Default referred to above or

otherwise) and Lender specifically reserves all of the rights and remedies

available to Lender as a result of any such Events of Default pursuant to the

Loan Agreement, the other Financing Agreements, applicable law or otherwise, other

than the Event of Default specifically referred to in Section 11(a) above.  The foregoing waiver shall not be construed

as a bar to or a waiver of any other or further Event of Default on any future

occasion, whether similar in kind or otherwise and shall not constitute a

waiver, express or implied, of any of the rights and remedies of Lender arising

under the terms of the Loan Agreement or any other Financing Agreements on any

future occasion or otherwise.




 




13.                               Extension of Time for Delivery

of Certain Post-Closing Items.  Section 1(e) of

the letter agreement with respect to Certain Post-Closing Items, dated October

16, 2000, between Lender and Borrower is hereby amended by deleting the

reference to “November 15, 2000” and substituting “June 30, 2001” therefor.




 




14.                               Termination of Special Reserve

Agreement.  The Special Reserve Agreement, dated October

16, 2000, by and between Borrower and Lender is hereby terminated and shall be

of no further force and effect.




 




15.                               Amendment Fee.  In consideration of the amendments set forth herein, Lender has

charged the account of Borrower maintained by Lender, an amendment fee in the

aggregate amount of $50,000 which fee was fully earned as of May 1, 2001 and

shall constitute part of the Obligations.




 




16.                               Additional Representations,

Warranties and Covenants.  Borrower

represents, warrants and covenants with and to Lender as follows, which

representations, warranties and covenants are continuing and shall survive the

execution and delivery hereof, and the truth and accuracy of, or compliance

with each, together with the representations, warranties and covenants in the

other Financing Agreements, being a continuing condition of the making of Loans

by Lender to Borrower:




 




                                                                              (a)     no Event of Default exists or has occurred as

of the date of this Amendment No. 1 (after giving effect to the amendments to

the 




 




 




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                                                         Financing

Agreements and waivers made by this Amendment No. 1); and




 




                                                                              (b)     this Amendment No. 1 has been duly executed

and delivered by each of Borrower, Guarantor and International Vitamin Overseas

Sales Corp. and is in full force and effect as of the date hereof and the

agreements and obligations of each of Borrower, Guarantor and International

Vitamin Overseas Sales Corp. contained herein constitute legal, valid and

binding obligations of each of Borrower, Guarantor and International Vitamin

Overseas Sales Corp. enforceable against each of them in accordance with their

respective terms.




 




17.                               Conditions Precedent.  The effectiveness of the amendments and consents contained herein

shall be subject to the satisfaction of each of the following, in a manner

satisfactory to Lender and its counsel:




 




                                                                              (a)     Lender shall have received this Amendment

No. 1 duly authorized, executed and delivered by the parties hereto; and




 




                                                                              (b)     no Event of Default, or event, act or

condition which with notice or passage of time or both would constitute an

Event of Default, shall exist or have occurred (after giving effect to the

amendments to the Financing Agreements and waivers made by this Amendment No.

1).




 




18.                               Effect of this Amendment.  Except as expressly set forth herein, no other amendments,

consents, changes, modifications or waivers to the Financing Agreements are

intended or implied, and in all other respects the Financing Agreements are

hereby specifically ratified, restated and confirmed by all parties hereto as

of the effective date hereof and Borrower shall not be entitled to any other or

further amendment, consent or waiver by virtue of the provisions of this

Amendment No. 1 or with respect to the subject matter of this Amendment No.

1.  To the extent of conflict between

the terms of this Amendment No. 1 and the other Financing Agreements, the terms

of this Amendment No. 1 shall control. 

The Loan Agreement and this Amendment No. 1 shall be read and construed

as one agreement.




 




19.                               Further Assurances.  The parties hereto shall execute and deliver such additional

documents and take such additional action as may be necessary or desirable to

effectuate the provisions and purposes of this Amendment No. 1.




 




20.                               Governing Law.  The validity, interpretation and enforcement of this Amendment

No. 1 and the other Financing Agreements and any dispute arising out of the

relationship between the parties hereto whether in contract, tort, equity or

otherwise, shall be governed 




 




 




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               by the internal laws of the State

of New York (without giving effect to principles of conflicts of laws).




 




21.                               Binding Effect.  This Amendment No. 1 shall be binding upon and inure to the

benefit of each of the parties hereto and their respective successors and

assigns.




 




22.                               Headings.  The headings listed herein are for convenience only and do not

constitute matters to be construed in interpreting this Amendment No. 1.




 




23.                               Counterparts.  This Amendment No. 1 may be executed in any number of

counterparts, but all of such counterparts shall together constitute but one

and the same agreement.  In making proof

of this Amendment No. 1, it shall not be necessary to produce or account for

more than one counterpart thereof signed by each of the parties hereto.  Delivery of an executed counterpart of this

Amendment No. 1 by telefacsimile shall have the same force and effect as

delivery of an original executed counterpart of this Amendment No. 1.  Any party delivering an executed counterpart

of this Amendment No. 1 by telefacsimile also shall deliver an original

executed counterpart of this Amendment No. 1, but the failure to deliver an

original executed counterpart shall not affect the validity, enforceability,

and binding effect of this Amendment No. 1 as to such party or any other party.




 




 




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               IN

WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly

executed and delivered by their authorized officers as of the day and year

first above written.




 




	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  Very truly yours,


  	 

	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	 

	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  CONGRESS FINANCIAL CORPORATION


  	 

	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  By: 


  	

  /s/ Thomas Martin


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

  Title: 


  	

  Assistant Vice President


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  AGREED:


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  IVC INDUSTRIES, INC.


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   /s/ E. Joseph Edell


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title: 


  	

  Chief Executive Officer


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  HALL LABORATORIES LTD.


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/ William Lederman


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title: 


  	

  President


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  INTERNATIONAL VITAMIN OVERSEAS  SALES

  CORP.


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By: 


  	

  /s/ E. Joseph Edell


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

  Title: 


  	

  President


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  	

   


  
													





 




 




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