Document:

Exhibit
10.3

CARREKER CORPORATION

FIRST
AMENDMENT TO EMPLOYMENT AGREEMENT

This First Amendment to Employment
Agreement (“First Amendment”) is entered into effective as of August    ,
2006, between Carreker Corporation, a Delaware corporation with its principal
executive offices at 4055 Valley View Lane, Suite 1000, Dallas, Texas 75244
(the “Company”), and John D. Carreker, III (the “Executive”) who resides at
6648 Castle Pines Drive, Plano, Texas 75093.

W I T N E S S E T H:

WHEREAS, the Executive and
the Company have entered into a Senior Executive Employment Agreement dated as
of May 19, 2006 (the “Agreement”)

WHEREAS, the Executive and
the Company desire to amend the terms of the employment of the Executive with
the Company by amending the terms of the Agreement pursuant to this First
Amendment;

NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, and subject to the terms and conditions hereinafter set
forth, the parties hereto agree as follows:

1.                                       AMENDMENT

Section 9.1(c) of the
Agreement is hereby amended in its entirety as follows:

(c)           Executive agrees to continue in
employment with the Company through the later of (i) February 15, 2007 or (ii) 90
days after a Triggering Event if a Triggering Event has occurred (such later
date is defined to be the “Effective Date”). Provided that the Executive
continues his employment through the Effective Date, the Company shall pay the
Executive, upon his termination of employment, severance payments in an amount
equal to the Executive’s annualized Base Salary in effect at the time of such
termination (“Annual Base Salary”), payable in installments over a period of 12
months provided, however, that  the
Effective Date notwithstanding, the election to terminate employment by the
Executive, for whatever reason, must occur on or before June 1, 2007 . The
Executive’s right to receive the severance benefits under this subsection (c) may
not be executed in combination with the benefits which may be payable to
Executive under Section 10 of this Agreement after the occurrence of a
Triggering Event. Notwithstanding subsection (b) above, any termination by
Executive under this subsection (c) shall require 30 days notice by Executive.

2.             DEFINITIONS; BINDING EFFECT

The
defined terms of this First Amendment shall have the meanings given to them in
the Agreement.  Except as amended hereby,
the Agreement shall remain in full force and effect and binding upon the
parties.

 

IN WITNESS
WHEREOF, the parties have executed this First Amendment on the day and year
first above written.

	
   

  	
   

  	
  CARREKER CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  J. D. Carreker, Jr.

  
	
   

  	
   

  	
  Chairman of the Board and

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  John D. Carreker, IIIExhibit 10.8

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (“Amendment”),
dated as of September 7, 2006 (the “Amendment Date”), is among
Nutraceutical International Corporation, Nutraceutical Corporation, the lending
institutions party to the Credit Agreement referred to below, and Coöperatieve
Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank International”, New York
Branch, as administrative agent for the Banks.

 

RECITALS:

 

A.                                   Nutraceutical
International Corporation, Nutraceutical Corporation, the lending institutions
party thereto, and the Administrative Agent have entered into that certain
Credit Agreement, dated as of January 28, 2002 (the “Credit Agreement”).

 

B.                                     Holdings
and the Borrower have requested that the Banks amend the Credit Agreement in
certain respects as specifically provided hereinbelow.

 

C.                                     Subject
to satisfaction or waiver of the conditions set forth herein, the Required
Banks are willing to amend the Credit Agreement as specifically provided
hereinbelow.

 

NOW, THEREFORE, in consideration of the premises and
mutual covenants herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

ARTICLE 1

 

Definitions

 

Section 1.1                                      Definitions.
Unless otherwise defined in this Amendment, capitalized terms used in this
Amendment shall have the same meanings in this Amendment as in the Credit
Agreement, as amended hereby.

 

ARTICLE 2

 

Amendments to Credit Agreement

 

Section 2.1                                      Amendment
to Section 3.02 of the Credit Agreement. Effective as of the Amendment
Date, Section 3.02 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

3.02                           Termination,
Reduction, or Increase of the Revolving Loan Commitments. (a)  Upon at
least three Business Days prior written notice (or telephonic notice promptly
confirmed in writing) to the Administrative Agent at its Notice Office (which
notice shall be irrevocable and shall be promptly transmitted to each of the
Banks by the Administrative Agent), the Borrower shall have the right, without
premium or penalty, to terminate or partially reduce the

 

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Total Unutilized Revolving Loan Commitment; provided
that (x) any such termination or partial reduction shall apply to
proportionately and permanently reduce the Revolving Loan Commitment of each
Bank and (y) any partial reduction pursuant to this Section 3.02(a) shall
be in the amount of at least $1,000,000.

 

(b)                                 In
the event of certain refusals by a Bank to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement which have
been approved by the Required Banks as provided in Section 12.12(b), the
Borrower shall have the right, upon five Business Days prior written notice to
the Administrative Agent at its Notice Office (which notice the Administrative
Agent shall promptly transmit to each of the Banks), to terminate the entire
Revolving Loan Commitment of such Bank, so long as all Revolving Loans,
together with accrued and unpaid interest, Fees and all other amounts, due and
owing to such Bank are repaid concurrently with the effectiveness of such
termination pursuant to Section 4.01(b) and the Borrower shall pay to
the Administrative Agent at such time an amount in cash and/or Cash Equivalents
equal to such Bank’s Percentage of the outstanding Letters of Credit (which
cash and/or Cash Equivalents shall be held by the Administrative Agent as
security for the obligations of the Borrower hereunder in respect of the
outstanding Letters of Credit pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the
Administrative Agent, which shall permit certain investments in Cash
Equivalents reasonably satisfactory to the Administrative Agent until the
proceeds are applied to the secured obligations) (at which time Annex I shall
be deemed modified to reflect such changed amounts), and at such time, such
Bank shall no longer constitute a “Bank” for purposes of this Agreement, except
with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.05, 4.04, 12.01 and 12.06), which shall
survive as to such repaid Bank.

 

(c)                                  (i) Upon notice to the Administrative Agent (who
shall promptly notify the Banks), the Borrower may, from time to time, request
an increase in the Total Revolving Loan Commitment up to an aggregate of
$90,000,000; provided that any such increase in the Total Revolving Loan
Commitment shall be in increments of $10,000,000. At the time of sending the
notice referred to in the first sentence of this clause (i), the
Borrower (in consultation with the Administrative Agent) may request that
each Bank determine if it agrees to increase its Revolving Loan Commitment and
specify the time period within which each Bank is requested to respond to such
request. Each Bank shall respond within such time period to the Administrative
Agent and shall indicate if such Bank agrees to increase its Revolving Loan
Commitment and, if so, whether by an amount equal to or less than its
Percentage of such requested increase. Any Bank not responding within such time
period shall be deemed to have declined to increase its Revolving Loan
Commitment. The Administrative Agent shall notify the Borrower and each Bank of
the Banks’ responses to each request made hereunder. To achieve the full amount
of a requested increase, the Borrower may

 

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also (A) request that
one or more Banks, in their sole and absolute discretion, nonratably increase
their Revolving Loan Commitment(s), and/or (B) invite additional Persons
to become Banks under the terms of this Agreement.

 

(ii)                                  If any Revolving Loan Commitments are increased
in accordance with this Section, the Administrative Agent and the Borrower
shall determine the effective date of such increase (the “Increase Effective
Date”). The Administrative Agent (in consultation with the Borrower) shall
promptly confirm in writing to the Banks the final allocation of such increase
and the Increase Effective Date. As a condition precedent to such increase, the
Borrower shall deliver to the Administrative Agent (A) a certificate of a
responsible officer of the Borrower, dated as of the Increase Effective Date
certifying and attaching the resolutions adopted by the Borrower approving or
consenting to such increase, certifying that immediately before and immediately
after giving effect to such increase the representations and warranties
contained in this Agreement and the other Credit Documents are true and correct
in all material respects on and as of the Increase Effective Date (except to
the extent that such representations and warranties were expressly made only in
reference to a specific date) and certifying that immediately before and
immediately after giving effect to such increase no Default or Event of Default
exists, (B) an opinion of counsel to Holdings and the Borrower, in form and
substance reasonably acceptable to the Administrative Agent, with respect to
the increase of the Total Revolving Loan Commitment, and (C) such other
agreements, documents, or instruments as may be reasonably required by the
Administrative Agent in connection therewith. The Borrower shall pay any
commitment fees and other reasonable out-of-pocket expenses incurred in
connection with any such increase and shall prepay any Eurodollar Loans
outstanding on the Increase Effective Date (and pay any costs incurred in
connection with such prepayment pursuant to Section 1.11) to the
extent necessary to keep outstanding Eurodollar Loans ratable with any revised
Percentage arising from any nonratable increase in the Revolving Loan
Commitments under this Section.

 

(iii)                               This Section shall supersede any provisions
in Section 12.12 to the contrary.

 

(d)                                 The
Total Revolving Loan Commitment (and the Revolving Loan Commitment of each
Bank) shall terminate on the Maturity Date.

 

Section 2.2                                      Amendment
to Section 3.03 of the Credit Agreement. Effective as of the Amendment
Date, Section 3.03 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:

 

3.03                           Reserved.

 

Section 2.3                                      Amendment
to Section 7.11 of the Credit Agreement. Effective as of the Amendment
Date, clause (a) of Section 7.11 of the Credit
Agreement is hereby amended and restated to read in its entirety as follows:

 

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(a)                                  Holdings
will, and will cause each of its Subsidiaries (except as otherwise provided in (i) Section 7.13
with respect to Foreign Subsidiaries and (ii) clause (iii) of Section 8.13
with respect to Controlled Subsidiaries) to, grant to the Collateral Agent
security interests in such assets and properties of Holdings and its
Subsidiaries as are not covered by the Security Documents (other than those
expressly excluded from the security created by the respective Security
Documents and any Real Property and Intellectual Property in which Liens in
favor of the Administrative Agent have not been perfected prior to June 30,
2006), and as may be requested from time to time by the Administrative
Agent or the Required Banks (collectively, the “Additional Security Documents”).
All such security interests shall be granted pursuant to documentation
reasonably satisfactory in form and substance to the Administrative Agent
and shall constitute valid and enforceable perfected security interests
superior to and prior to the rights of all third Persons and subject to no
other Liens except for Permitted Liens. The Additional Security Documents or
instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Additional Security Documents and all taxes, fees and
other charges payable in connection therewith shall have been paid in full. The
Banks hereby agree that at any time after June 30, 2006, upon written
request from the Borrower and notwithstanding any other provision of this
Agreement, any Security Document, or any other agreement, document, or
instrument executed or delivered in connection herewith or therewith, the
Administrative Agent may release any Liens on any Real Property or
Intellectual Property which is Collateral under this Agreement, any Security
Document, or any other agreement, document, or instrument executed or delivered
in connection herewith or therewith; provided that no such release will
be granted at any time during the existence of an Event of Default or if an
Event of Default would exist after giving effect to any such release.

 

Section 2.4                                      Amendment
to Section 7.13 of the Credit Agreement. Effective as of the Amendment
Date, Section 7.13 of the Credit Agreement is hereby amended by
adding at the end thereof immediately following the phrase “the Required Banks”
a proviso which shall read “; provided that the provisions of this Section 7.13
shall not apply if the combined assets of the Foreign Subsidiaries are less
than 10.0% of the total consolidated assets of Holdings and its Subsidiaries as
determined in accordance with GAAP; provided  further that the
Agent may, in its reasonable discretion elect not to perfect in any assets of
any Foreign Subsidiary if the Agent determines that it is not feasible or
economical to attain any such perfection according to the laws of the
applicable foreign jurisdiction.”

 

Section 2.5                                      Amendment
to Section 8.01 of the Credit Agreement. Effective as of the Amendment
Date, clause (b) of Section 8.01 of the Credit
Agreement is hereby amended and restated to read in its entirety as follows:

 

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(b)                                 Notwithstanding
the foregoing, Holdings will engage in no business other than (i) its
ownership of the capital stock of the Borrower, those obligations of officers
and employees of Holdings and its Subsidiaries to the extent permitted by Section 8.05(e) and
Borrower Subordinated Notes, (ii) having those liabilities which it is
responsible for under this Agreement, the other Documents to which it is a
party, the Registration Agreement, and the DDO Lease, (iii) the issuance
of Permitted Subordinated Indebtedness, Permitted Holdings PIK Securities,
shares of Holdings Common Stock and options and warrants to purchase Holdings
Common Stock in each case to the extent permitted hereunder and not giving rise
to a Change of Control Event and (iv) activities associated with expenses
paid with dividends made by the Borrower pursuant to Sections 8.06(iii) and
(iv). Notwithstanding the foregoing, Holdings may engage in those
activities that are expressly permitted by the terms of this Agreement and
those activities that are incidental to (A) the maintenance of its
corporate existence in compliance with applicable law, (B) legal, tax and
accounting matters in connection with any of the foregoing activities and (C) the
entering into, and performing its obligations under, this Agreement, the other
Documents to which it is a party, the Registration Agreement, and the DDO
Lease.

 

Section 2.6                                      Amendment
to Section 8.02 of the Credit Agreement. Effective as of the Amendment
Date, clause (b), clause (e), clause (n), clause (o),
and clause (u) of Section 8.02 of the Credit Agreement are
hereby amended and restated to read in their respective entireties as follows:

 

(b)                                 Capital
Expenditures by the Borrower and its Subsidiaries;

 

(e)                                  the
Borrower and its Subsidiaries may sell or exchange equipment in the
ordinary course of business;

 

(n)                                 so
long as no Default or Event of Default exists or would result therefrom, each
of the Borrower and its Subsidiaries may sell assets, other than accounts
(as defined in the UCC), at the fair market value (as determined in good faith
by the Board of Directors or senior management of the Borrower);

 

(o)                                 so
long as no Default or Event of Default then exists or would result therefrom,
the Borrower and its Subsidiaries may acquire (y) assets or capital stock
of any Person as permitted by Section 8.05 or (z) all or substantially all
of the assets or capital stock of any Person (any such acquisition permitted by
this clause (z), a “Permitted Acquisition”), provided, that (i) such
Person (or the assets so acquired) was, immediately prior to such acquisition,
engaged (or used) primarily in the businesses permitted pursuant to Section 8.01(a),
(ii) if such acquisition is structured as a stock acquisition, the
provisions of Section 8.13 have been complied with in respect of such
Person if (A) the Person so acquired becomes a Wholly-Owned Subsidiary of
the Borrower or a Controlled Subsidiary of the Borrower or (B) such Person
is merged with and into the Borrower or a

 

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Wholly-Owned Subsidiary or a Controlled Subsidiary of
the Borrower (with the Borrower, such Wholly-Owned Subsidiary or such
Controlled Subsidiary being the surviving corporation of such merger), (iii) any
Liens or Indebtedness assumed or issued in connection with such acquisition are
otherwise permitted under Section 8.03 or 8.04, as the case may be, (iv) the
only consideration paid in connection with such Permitted Acquisition consists
of cash (including cash constituting the proceeds of Revolving Loans
hereunder), Holdings Common Stock (valued based on the then current trading
price for such Holdings Common Stock), Permitted Subordinated Indebtedness,
Permitted Holdings PIK Securities (valued at the aggregate liquidation
preference thereof in the case of preferred stock and the aggregate face amount
thereof in the case of indebtedness) and/or additional Indebtedness assumed or
incurred pursuant to Section 8.04(j) or 8.04(s), (v) the aggregate
amount of cash consideration paid and Indebtedness assumed or incurred pursuant
to Section 8.04(j) and/or 8.04(s) (including any such consideration paid
in respect of Investments previously made in such entity pursuant to Section 8.05)
in connection with any such Permitted Acquisition (or series of related
Permitted Acquisitions) occurring after June 30, 2006 shall not exceed
$30,000,000 plus the then applicable Equity Proceeds Amount, (vi) in the
case of any such Permitted Acquisition (or series of related Permitted
Acquisitions) occurring after June 30, 2006 involving an aggregate amount
of cash consideration paid and Indebtedness assumed or incurred pursuant to
Sections 8.04(j), 8.04(q) or 8.04(s) in excess of $30,000,000 (plus, as of any
date, the then applicable Equity Proceeds Amount as of such date), prior
written consent of the Required Banks to the consummation thereof shall have
been obtained and (vii) in the case of any Permitted Acquisition involving
an expenditure (with the consideration valued as set forth in clause (iv) above)
in excess of $5,000,000, the Borrower shall, on or prior to the date of closing
of such Permitted Acquisition, provide to the Administrative Agent a
certificate, which shall certify calculations showing, in reasonable detail,
that on a pro forma basis, immediately after giving effect to such Permitted
Acquisition, the Borrower would have been in compliance with Sections 8.09 and
8.10 of this Agreement for the most recently ended Test Period;

 

(u)                                 the
Borrower and its Subsidiaries may effect any sale of Real Property at any
time no Event of Default exists or would exist after giving effect to such
sale;

 

Section 2.7                                      Amendment
to Section 8.03 of the Credit Agreement. Effective as of the Amendment
Date, clause (o) of Section 8.03 of the Credit
Agreement is hereby amended and restated to read in its entirety as follows:

 

(o)                                 Liens
on Real Property and Intellectual Property of the Borrower, Holdings, and their
Subsidiaries, and any proceeds from the sale thereof and products thereof,
which secure Indebtedness permitted pursuant to this Agreement, including,
without limitation, any Liens securing Indebtedness permitted pursuant to
Sections 8.04(p) or 8.04(r), so long as any such Lien

 

6

 

attaches only to Real Property that is/was the subject
of a Designated Real Property Sale (and is currently the subject of a lease or
synthetic lease arrangement permitted by Section 8.04(p)) or a Real
Property financing arrangement permitted by Section 8.04(r);

 

Section 2.8                                      Amendment
to Section 8.04 of the Credit Agreement. Effective as of the Amendment
Date, Section 8.04 of the Credit Agreement is hereby amended as
follows:

 

(a)                                  clause (d) is
hereby amended by deleting the phrase “(x) all such Capitalized Lease
Obligations are permitted under Section 8.08 and (y)” therefrom;

 

(b)                                 clause (j)
is hereby amended and restated to read in its entirety as follows:

 

(j)             Indebtedness of (i) a
Subsidiary acquired pursuant to a Permitted Acquisition (or Indebtedness
assumed at the time of a Permitted Acquisition of an asset securing such
Indebtedness), provided that (A) such Indebtedness was not incurred in
connection with or in anticipation of such Permitted Acquisition and (B) such
Indebtedness does not constitute debt for borrowed money (other than debt for
borrowed money incurred in connection with industrial revenue or industrial
development bond financings), it being understood and agreed that Capitalized
Lease Obligations and purchase money Indebtedness shall not constitute debt for
borrowed money for purposes of this clause (B), and (ii) Indebtedness of
the Borrower or a Subsidiary acquired pursuant to a Permitted Acquisition (or
Indebtedness assumed at the time of a Permitted Acquisition of an asset
securing such Indebtedness) which when added to all Indebtedness incurred
pursuant to clause (i) preceding does not exceed 30% of the total value of
the assets of the Subsidiary so acquired, or of the asset so acquired, as the
case may be;

 

(c)                                  clause (m)
is hereby amended by amending the reference therein to “$15,000,000” to read “$25,000,000”;

 

(d)                                 clause (o)
is hereby amended by amending the reference therein to “$200,000” to read “$500,000”;

 

(e)                                  clause (q)
is hereby amended by amending the reference therein to “$10,000,000” to read “$15,000,000”;

 

(f)                                    clause (r)
is hereby amended and restated to read in its entirety as follows:

 

(r)                                    Indebtedness
of the Borrower and its Subsidiaries incurred in respect of financing
arrangements relating to Real Property of the Borrower or its Subsidiaries, provided
that such

 

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Indebtedness is not guaranteed or otherwise recourse
to any other Person other than the primary obligor thereunder in respect
thereof and is not secured by any asset other than the respective Real Property
which is the subject of such financing arrangement; and

 

and

 

(g)                                 clause (s)
is hereby amended by amending the reference therein to “$7,000,000” to read “10,000,000”.

 

Section 2.9                                      Amendment
to Section 8.05 of the Credit Agreement. Effective as of the Amendment
Date, clause (g), clause (u), and clause (w) of Section 8.05
of the Credit Agreement are hereby amended and restated to read in their
respective entireties as follows:

 

(g)                                 the
Borrower may make intercompany loans and advances to any of its
Subsidiaries and any Subsidiary of the Borrower may make intercompany
loans and advances to the Borrower or any other Subsidiary of the Borrower
(collectively, “Intercompany Loans”), provided, that (w) at no time
shall the aggregate outstanding principal amount of Intercompany Loans made
pursuant to this clause (g) by the Borrower and its Domestic Subsidiaries
to Foreign Subsidiaries, when added to the sum of (i) the aggregate fair
market value of all assets transferred to Wholly-Owned Foreign Subsidiaries
pursuant to Section 8.02(l) and (ii) the amount of contributions,
capitalizations and forgiveness theretofore made pursuant to Section 8.05(l),
exceed $10,000,000 (determined without regard to any write-downs or write-offs
of such loans and advances), (x) each Intercompany Loan, regardless of amount,
made by a Foreign Subsidiary to the Borrower or a Domestic Subsidiary shall be
subordinated to the Obligations on the terms set forth in the subordination
provisions set forth on Exhibit L, (y) each Intercompany Loan in the
original principal amount of $500,000 or more shall be evidenced by an
Intercompany Note; provided that the aggregate amount of all
Intercompany Loans which are not evidenced by an Intercompany Note shall not at
any time exceed $1,000,000 and (z) each such Intercompany Note (other than
Intercompany Notes evidencing loans made by Foreign Subsidiaries) shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement;

 

(u)                                 the
Borrower and its Subsidiaries may make additional investments in the
Permitted Joint Ventures (as additional capital contributions or in exchange
for securities issued by such Permitted Joint Ventures), so long as the
aggregate additional investments in Permitted Joint Ventures made after June 30,
2006 do not exceed $7,500,000;

 

(w)                               in
addition to investments permitted above in this Section 8.05, so long as
no Default or Event of Default then exists or would result therefrom, the
Borrower and its Subsidiaries may make additional loans, advances and
investments to or in a Person so long as the amount of any such loan, advance
or investment (at the time of the making thereof) does not exceed an amount
equal to

 

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$7,500,000 less the aggregate amount previously used
to make loans, advances and investments pursuant to this clause (w) to the
extent the same are then still outstanding (determined without regard to any
write-downs or write-offs thereof and net of cash repayments of principal in
the case of loans and cash equity returns (whether as a dividend or redemption)
in the case of equity investments); provided that, any investment made
pursuant to this Section 8.05(w) constituting Margin Stock shall be made
in an entity engaged in a business permitted pursuant to Section 8.01(a).

 

Section 2.10                                Amendment
to Section 8.06 of the Credit Agreement. Effective as of the Amendment
Date, clause (iii) of Section 8.06 of the Credit
Agreement is hereby revised to change the reference to “$5,000,000” in clause (B) thereof
to read “$10,000,000” and  clause (vii) of
Section 8.06 of the Credit Agreement is hereby amended and restated
to read in its entirety as follows:

 

(vii)                           (a) Holdings
may pay cash Dividends, in addition to those permitted above in this Section 8.06,
in an aggregate amount not to exceed the sum of (y) $15,000,000, plus
(z) the then applicable Cumulative Consolidated Net Income Amount, so long as
in each such case no Default or Event of Default then exists or would result
therefrom, and (b) so long as no Default or Event of Default then exists
or would result therefrom, the Borrower may pay cash Dividends to Holdings
so long as the cash proceeds thereof are promptly used by Holdings for the
purpose described in clause (vii)(a) of this Section 8.06, provided
that in no event may more than half of the Cumulative Consolidated Net
Income Amount be used to pay cash Dividends to shareholders of Holdings other
than in the form of Holdings Common Stock repurchases and cash payments
owing in respect of Shareholder Subordinated Notes issued pursuant to Section 8.06(iii)(a).

 

Section 2.11                                Amendment
to Section 8.07 of the Credit Agreement. Effective as of the Amendment
Date, Section 8.07 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

 

8.07                           Transactions
with Affiliates. Holdings will not, and will not permit any of its
Subsidiaries to, enter into any transaction or series of transactions with
any Affiliate other than in the ordinary course of business and on terms and
conditions substantially as favorable to Holdings or such Subsidiary as would
be obtainable by Holdings or such Subsidiary at the time in a comparable arm’s-length
transaction with a Person other than an Affiliate (as determined in good faith
by the senior management or Board of Directors of Holdings); provided,
that the following shall in any event be permitted: (i) the Transaction; (ii) transactions
permitted pursuant to Sections 8.02(j), 8.02(l), 8.02(p) and 8.05(e); (iii) compensation
of officers and employees in the ordinary course of business and payment of
customary fees to non-officer directors of Holdings and its Subsidiaries; (iv) transactions
pursuant to the Registration Agreement; (v) transactions between and among
Holdings, the Borrower, and any

 

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of their respective Subsidiaries who are Guarantors;
and (vi) transactions between and among Subsidiaries of Holdings and the
Borrower who are not Guarantors.

 

Section 2.12                                Amendment
to Section 8.08 of the Credit Agreement. Effective as of the Amendment
Date, Section 8.08 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

 

8.08                           Reserved.

 

Section 2.13                                Amendment
to Section 8.09 of the Credit Agreement. Effective as of the Amendment
Date, Section 8.09 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

 

8.09                           Leverage
Ratio. The Borrower will not permit the Leverage Ratio on the last day of
any Test Period to be more than 3.50:1.00.

 

Section 2.14                                Amendment
to Section 8.13 of the Credit Agreement. Effective as of the Amendment
Date, Section 8.13 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:

 

8.13                           Limitation
on the Creation of Subsidiaries. Notwithstanding anything to the contrary
contained in this Agreement, Holdings will not, and will not permit any of its
Subsidiaries to, establish, create or acquire after the Effective Date any
Subsidiary; provided that the Borrower and its Wholly-Owned Subsidiaries
shall be permitted to establish or create (x) Subsidiaries as a result of
investments made pursuant to Section 8.05 and (y) Wholly-Owned Subsidiaries
so long as, in each case:

 

(i)                                     prior
written notice thereof is given to the Administrative Agent as soon as
reasonably practicable;

 

(ii)                                  the
capital stock of such new Subsidiary owned by a Credit Party is pledged
pursuant to, and to the extent required by, this Agreement and the Pledge
Agreement and the certificates, if any, representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent;

 

(iii)                               such new Subsidiary
(other than a Foreign Subsidiary except to the extent otherwise required
pursuant to Section 7.13 and other than a Controlled Subsidiary which (A) was
created or acquired in connection with an acquisition permitted under Section 8.05
to the extent the aggregate consideration (including all cash, stock and
assumed or incurred Indebtedness) paid in connection with (I) such acquisition does
not exceed $5,000,000 and (II) all such acquisitions during the term of this
Agreement does not exceed $15,000,000 and (B) the Borrower directly or
indirectly owns less than eighty percent (80%) of the outstanding and voting
equity interests of such Controlled Subsidiary) executes a

 

10

 

counterpart of the Subsidiary Guaranty, the Pledge Agreement and
the Security Agreement; and

 

(iv)                              such
new Subsidiary (other than a Foreign Subsidiary except to the extent otherwise
required pursuant to Section 7.13 and other than a Controlled Subsidiary
which (A) was created or acquired in connection with an acquisition
permitted under Section 8.05 to the extent the aggregate consideration
(including all cash, stock and assumed or incurred Indebtedness) paid in
connection with (I) such acquisition does not exceed $5,000,000 and (II) all
such acquisitions during the term of this Agreement does not exceed $15,000,000
and (B) the Borrower directly or indirectly owns less than eighty percent
(80%) of the outstanding and voting equity interests of such Controlled
Subsidiary) takes all actions required pursuant to Section 7.11 to the
extent requested by the Administrative Agent or the Required Banks.

 

In addition, each new Subsidiary that is required to execute any Credit
Document shall execute and deliver, or cause to be executed and delivered, all
other relevant documentation of the type described in Section 5 as such
new Subsidiary would have had to deliver if such new Subsidiary were a Credit
Party on the Effective Date.

 

Section 2.15                                Amendment
to Section 10 of the Credit Agreement. Effective as of the Amendment
Date, (a) the definitions of “Bain Affiliates,” “Bain Capital,” “Scheduled
Commitment Reduction,” “Transaction Services Agreement,” and “Vitamin Antitrust
Litigation Proceeds Amount” in Section 10 of the Credit Agreement
are hereby deleted, (b) each of the following definitions in Section 10
of the Credit Agreement is hereby amended and restated in its entirety to read
as follows, respectively, and (c) the definition of “Intellectual Property”
set forth below is inserted in such section in alphabetical order:

 

“Applicable Base Rate Margin” shall mean, during any Applicable Period,
the respective percentage per annum set forth in clause (A), (B), (C), (D), or (E) below
if, but only if, as of the Test Date with respect to such Applicable Period the
condition set forth in clause (A), (B), (C), (D) or (E) as the case may be,
below is met:

 

(A)                              1.00%
if, as of the Test Date the Leverage Ratio for the Test Period ended on such
Test Date shall be 3.00:1.00 or greater;

 

(B)                                0.75%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 3.00:1.00 and none of the conditions
set forth in clauses (C), (D), and (E) below are satisfied;

 

(C)                                0.50%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 2.50:1.00 and neither condition set
forth in clauses (D) or (E) below is satisfied;

 

11

 

(D)                               0.25%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 2.00:1.00 and the condition set
forth in clause (E) below is not satisfied; or

 

(E)                                 0.00%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 1.50:1.00.

 

Notwithstanding anything to the contrary contained above in this
definition, (i) except as provided in clause (ii) below, the
Applicable Base Rate Margin shall be 0.75% until the day which is 90 days after
the Effective Date, whereafter the Applicable Base Rate Margin shall be as
otherwise determined in accordance with this definition and (ii) the
Applicable Base Rate Margin shall be 1.00% at any time when (x) an Event of
Default shall exist or (y) financial statements have not been delivered when
required pursuant to Section 7.01(a) or (b), as the case may be.

 

“Applicable Commitment
Fee Percentage” shall mean, during any Applicable Period, the respective
percentage per annum set forth in clause (A), (B), (C), (D), (E) or (F) below
if, but only if, as of the Test Date with respect to such Applicable Period the
condition set forth in clause (A), (B), (C), (D), (E) or (F) below,
as the case may be, is met:

 

(A)                              0.30%
if, as of the Test Date the Leverage Ratio for the Test Period ended on such
Test Date shall be 3.00:1.00 or greater;

 

(B)                                0.275%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 3.00:1.00 and none of the conditions
set forth in clause (C), (D), (E) and (F) below are satisfied;

 

(C)                                0.25%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 2.50:1.00 and none of the conditions
set forth in clause (D), (E) and (F) below are satisfied;

 

(D)                               0.225%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 2.00:1.00 and neither of the
conditions set forth in clause (E) or (F) below is satisfied;

 

(E)                                 0.20%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 1.50:1.00 and the condition set
forth in clause (F) below is not satisfied; or

 

(F)                                 0.175%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 1.00:1.00.

 

12

 

Notwithstanding anything to the contrary contained
above in this definition, (i), except as provided in clause (ii) below,
the Applicable Commitment Fee Percentage shall be 0.35% until the day which is
90 days after the Effective Date, whereafter the Applicable Commitment Fee
Percentage shall be as otherwise determined in accordance with this definition
and (ii) the Applicable Commitment Fee Percentage shall be 0.30% at all
times when (x) an Event of Default shall exist or (y) financial statements have
not been delivered when required pursuant to Section 7.01(a) or (b),
as the case may be.

 

“Applicable Eurodollar
Margin” shall mean, during any Applicable Period, the respective percentage per
annum set forth in clause (A), (B), (C), (D), (E) or (F) below if,
but only if, as of the Test Date with respect to such Applicable Period the
condition set forth in clause (A), (B), (C), (D), (E) or (F) as the
case may be, below is met:

 

(A)                              2.00%
if, as of the Test Date the Leverage Ratio for the Test Period ended on such
Test Date shall be 3.00:1.00 or greater;

 

(B)                                1.75%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 3.00:1.00 and none of the conditions
set forth in clauses (C), (D), (E) and (F) below are satisfied;

 

(C)                                1.50%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 2.50:1.00 and none of the conditions
set forth in clauses (D), (E) and (F) below are satisfied;

 

(D)                               1.25%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 2.00:1.00 and neither condition set
forth in clause (E) or (F) below is satisfied;

 

(E)                                 1.00%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 1.50:1.00 and the condition set
forth in clause (F) below is not satisfied; or

 

(F)                                 0.75%
if, but only if, as of the Test Date the Leverage Ratio for the Test Period
ended on such Test Date shall be less than 1.00:1.00.

 

Notwithstanding anything to the contrary contained
above in this definition, (i) except as provided in clause (ii) below,
the Applicable Eurodollar Margin shall be 1.75% until the day which is 90 days
after the Effective Date, whereafter the Applicable Eurodollar Margin shall be
as otherwise determined in accordance with this definition and (ii) the
Applicable Eurodollar Margin shall be 2.00% at any time when (x) an Event of
Default shall exist or (y) financial statements have

 

13

 

not been delivered when required pursuant to Section 7.01(a) or
(b), as the case may be.

 

“Change of Control Event”
shall mean (a) Holdings shall cease to own directly 100% on a fully
diluted basis of the economic and voting interest in the Borrower’s capital
stock, (b) any Person or “group” (within the meaning of Rules 13d-3
and 13d-5 under the Securities Exchange Act of 1934, as in effect on the
Effective Date), other than senior officers of Holdings and/or its Subsidiaries
and/or Continuing Directors, shall (i) have acquired beneficial ownership
of 25% or more on a fully diluted basis of the voting and/or economic interest
in Holdings’ capital stock or (ii) obtained the power (whether or not
exercised) to elect a majority of Holdings’ directors or (c) the Board of
Directors of Holdings shall cease to consist of a majority of Continuing
Directors.

 

“Controlled Subsidiary”
shall mean any entity that (i) the Borrower directly or indirectly owns at
least fifty-one percent (51%) of the outstanding and issued voting equity
interests, (ii) the Borrower has the power directly or indirectly to elect
at least a majority of the Board of Directors, or (iii) the Borrower has
the right at its election to acquire all of the voting equity interests of such
entity.

 

“Intellectual Property”
means copyrights, patents, and trademarks, whether foreign or domestic,
registered or unregistered, any application for any copyright, patent, or
trademark, and any other interest in any copyright, patent, or trademark.

 

“Maturity Date shall mean
September 7, 2011.

 

“Permitted Holdings PIK
Securities” shall mean any preferred stock or subordinated promissory note of
Holdings (or any security of Holdings that is convertible or exchangeable into
any preferred stock or subordinated promissory note of Holdings), so long as
the terms of any such preferred stock, subordinated promissory note or security
of Holdings (i) do not provide any collateral security, (ii) do not
provide any guaranty or other support by the Borrower or any Subsidiaries of
the Borrower, (iii) do not contain any mandatory put, redemption,
repayment, sinking find or other similar provision occurring before September 7,
2012, (iv) do not require the cash payment of dividends or interest before
September 7, 2012, (v) do not contain any covenants other than any
Permitted Covenant, (vi) do not grant the holders thereof any voting
rights except for (x) voting rights required to be granted to such holders
under applicable law and (y) limited customary voting rights on fundamental
matters such as mergers, consolidations, sales of substantial assets, or
liquidations involving Holdings, and (vii) are otherwise reasonably
satisfactory to the Administrative Agent.

 

“Permitted Subordinated
Indebtedness” shall mean unsecured subordinated notes (subordinate to all
Obligations and all amounts owing pursuant

 

14

 

to Interest Rate Protection Agreements and Other
Hedging Agreements on terms reasonably satisfactory to the Administrative
Agent) issued by Holdings or the Borrower so long as the terms of any such
subordinated notes (i) do not provide any collateral security, (ii) do
not provide any guaranty or other support from any Person other than the issuer
thereof, (iii) do not contain any mandatory put, redemption, repayment,
sinking find or other similar provision occurring before September 7,
2012, (iv) do not contain any covenants other than periodic reporting
requirements and other covenants reasonably satisfactory to the Administrative
Agent, (v) do not grant the holders thereof any voting rights except for
limited customary voting on fundamental matters such as mergers,
consolidations, sales of all or substantially all of the assets of Holdings and
its Subsidiaries, or liquidations involving Holdings or the Borrower, and (vi) are
otherwise reasonably satisfactory to the Administrative Agent.

 

“Required Banks” shall mean Non-Defaulting Banks the sum of whose
Revolving Loan Commitments (or, if after the Total Revolving Loan Commitment
has been terminated, outstanding Revolving Loans and Percentages of outstanding
Swingline Loans and Letter of Credit Outstandings) constitute greater than 50%
of the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of Defaulting Banks (or, if after the Total Revolving Loan
Commitment has been terminated, the total outstanding Revolving Loans of Non-Defaulting
Banks and the aggregate Percentages of all Non-Defaulting Banks of the total
outstanding Swingline Loans and Letter of Credit Outstandings at such time); provided
that at any time there are fewer than three Banks holding Revolving Loan Commitments,
or Revolving Loans after the Total Revolving Loan Commitment has been
terminated, at all such times “Required Banks” shall mean 100% of such
Non-Defaulting Banks.

 

Section 2.16                                Amendment
to Section 12.07 of the Credit Agreement. Effective as of the Amendment
Date, clause (a) of Section 12.07 of the Credit
Agreement is hereby amended and restated to read in its entirety as follows:

 

(a)                                  The
financial statements to be furnished to the Banks pursuant hereto shall be made
and prepared in accordance with GAAP consistently applied throughout the
periods involved (except as set forth in the notes thereto or as otherwise
disclosed in writing by Holdings or the Borrower to the Banks); provided,
that except as otherwise specifically provided herein, all computations
determining compliance with Sections 3.03 and 8, including definitions used
therein, shall utilize accounting principles and policies in effect at the time
of the preparation of, and in conformity with those used to prepare, the September 30,
2005 financial statements delivered to the Banks pursuant to Section 6.10(b),
but shall not give effect to (i) purchase accounting adjustments required
or permitted by APB 16 and its interpretations (including non-cash write-ups
and non-cash charges relating to inventory, fixed assets and in-process
research and development, in each case arising in connection with any Permitted
Acquisitions) and APB 17 and its interpretations (including non-cash charges
relating to

 

15

 

intangibles and goodwill arising in connection with
any Permitted Acquisitions) and (ii) those fees paid on or about the
Initial Borrowing Date to the Administrative Agent and the Banks in connection
with this Agreement.

 

Section 2.17                                Addition
of Section 13.10 to the Credit Agreement. Effective as of the
Amendment Date, Section 13 of the Credit Agreement is hereby
amended to add a new Section 13.10 immediately following Section 13.09
thereto which new Section 13.10 shall read in its  entirety as follows:

 

Section 13.10. USA
PATRIOT Act. Each Bank that is subject to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”) hereby notifies each Credit Party that pursuant to the
requirements of the Act, such Bank is required to obtain, verify and record
information that identifies each Credit Party, which information includes the
name and address of each Credit Party and other information that will allow
such Bank to identify each Credit Party in accordance with the Act.

 

Section 2.18                                Amendment
to Annex I of the Credit Agreement. Effective as of the Amendment Date, Annex
I of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:

 

ANNEX I

 

LIST OF BANKS

 

	
  Bank

  	
   

  	
  Revolving Loan

  Commitment

  	
   

  	
  Percentage

  	
   

  
	
  Coöperatieve Centrale
  Raiffeisen-Boerenleenbank B.A., “Rabobank International,” New York Branch

  	
   

  	
  $

  	
  35,000,000

  	
   

  	
  58.33333

  	
  %

  
	
  Wells Fargo Bank, N.A.

  	
   

  	
  $

  	
  25,000,000

  	
   

  	
  41.66667

  	
  %

  
	
  Total

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  100

  	
  %

  

 

ARTICLE 3

 

Conditions and Postclosing Agreements

 

Section 3.1                                      Conditions
Precedent. The effectiveness of this Amendment is subject to the
satisfaction (or waiver) of the following conditions precedent:

 

(a)                                  no
Default or Event of Default shall be in existence as of the Amendment Date
immediately after giving effect to this Amendment;

 

16

 

(b)                                 the
Administrative Agent shall have received a fully executed copy of this
Amendment and each other agreement, document, or instrument reasonably
requested by the Administrative Agent in connection with this Amendment, in form and
substance reasonably satisfactory to the Administrative Agent;

 

(c)                                  the
Administrative Agent shall have received a fully executed copy of the (i) Assignment
and Assumption between KeyBank National Association, as assignor, and
Coöperatieve Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank International”,
New York Branch, as assignee, and (ii) Assignment and Assumption between
Zions First National Bank, as assignor, and Wells Fargo Bank, N.A., as
assignee, (the Assignment and Assumption Agreements referred to in clause (i) and
clause (ii) preceding are referred to collectively herein as
the “Assignments”), the Amended and Restated Revolving Notes executed in
connection with the Assignments, and evidence that the transactions under each
of the Assignments has been consummated including the payment of the “Purchase
Price” described therein; and

 

(d)                                 the
Borrower shall have paid to the Administrative Agent (i) for distribution
to each of the Banks in accordance with their respective Percentages
(immediately after giving effect to the Assignment), a fee in the amount of
$60,000 and (ii) for the Administrative Agent’s account all reasonable
out-of-pocket costs, reasonable fees, and reasonable out-of-pocket expenses to
the extent invoiced to the Borrower or as otherwise may be agreed between
the Borrower and the Administrative Agent.

 

ARTICLE 4

 

Ratifications, Representations, and Warranties

 

Section 4.1                                      Ratifications.
The terms and provisions set forth in this Amendment shall modify and supersede
all inconsistent terms and provisions set forth in the Credit Agreement and the
other Credit Documents and, except as expressly modified and superseded by this
Amendment, the terms and provisions of the Credit Agreement and the other
Credit Documents are ratified and confirmed and shall continue in full force
and effect. Holdings, the Borrower, the Administrative Agent, and the Banks
agree that the Credit Agreement and the other Credit Documents, as amended
hereby, shall continue to be legal, valid, binding, and enforceable in
accordance with their respective terms.

 

Section 4.2                                      Holdings’
and the Borrower’s Representations and Warranties. Each of Holdings and the
Borrower hereby represents and warrants to the Administrative Agent and the
Banks that (a) the execution, delivery, and performance of this Amendment
and any and all other Credit Documents executed and/or delivered in connection
herewith have been authorized by all requisite action on the part of
Holdings and the Borrower and will not violate the certificate of incorporation
or bylaws of Holdings or the Borrower, (b) the representations and
warranties of Holdings and the Borrower contained in the Credit Agreement, as
amended hereby, and any other Credit Document are true and correct in all
material respects on and as of the Amendment Date as though made on and as of
the Amendment Date (except to the extent that such representations and
warranties were expressly made only in reference to a specific date), and

 

17

 

(c) immediately after giving effect to this
Amendment, no Default or Event of Default has occurred and is continuing.

 

ARTICLE 5

 

Miscellaneous

 

Section 5.1                                      Increase
in Total Revolving Loan Commitment. The parties hereto agree that prior to
giving effect to this Amendment, the amount of the Total Revolving Commitment
is equal to $47,500,000 and that upon effectiveness of this Amendment,
including fulfillment of the conditions set forth in Section 3.1,
the amount of the Total Revolving Loan Commitment shall be increased to
$60,000,000. All future increases and reductions, and any termination, of the
Revolving Loan Commitments and the Total Revolving Loan Commitment occurring after
the Amendment Date shall be governed the terms of the Credit Agreement, as
amended hereby and by any additional amendments thereto hereafter entered into
by the parties to the Credit Agreement.

 

Section 5.2                                      Survival
of Representations and Warranties. All representations and warranties made
in this Amendment or any other Credit Document including any Credit Document
furnished in connection with this Amendment shall survive the execution and
delivery of this Amendment and the other Credit Documents, and no investigation
by the Administrative Agent or any Bank shall affect the representations and
warranties or the right of the Administrative Agent or any Bank to rely upon
them.

 

Section 5.3                                      Reference
to Credit Agreement and Other Credit Documents. Each of the Credit
Documents, including the Credit Agreement and any and all other agreements,
documents, or instruments now or hereafter executed and delivered pursuant to
the terms hereof or pursuant to the terms of the Credit Agreement and the other
Credit Documents as amended hereby, are hereby amended so that any reference in
such Credit Documents to the Credit Agreement or any other Credit Document
shall mean a reference to the Credit Agreement and such other Credit Document
as amended hereby.

 

Section 5.4                                      Severability.
Any provision in this Amendment that is held to be inoperative, unenforceable,
or invalid in any jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of this Amendment are
declared to be severable.

 

Section 5.5                                      Applicable
Law. THIS AMENDMENT AND ANY OTHER
DOCUMENT OR AGREEMENT EXECUTED IN CONNECTION HEREWITH AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Without in
any way limiting the preceding choice of law, the parties elect to be governed
by New York law in accordance with, and are relying (at least in part) on, Section 5–1401
of the General Obligations Law of the State of New York, as amended.

 

18

 

Section 5.6                                      Successors
and Assigns. This Amendment is binding upon and shall inure to the benefit
of Holdings, the Borrower, the Administrative Agent, and the Banks and their
respective successors and assigns, except neither Holdings nor the Borrower may assign
or transfer any of their respective rights or obligations hereunder without the
prior written consent of the Banks.

 

Section 5.7                                      Counterparts.
This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. Delivery of an executed counterpart of
a signature page of this Amendment by facsimile transmission or electronic
mail of a PDF copy shall be effective as delivery of a manually executed
counterpart hereof; provided that original copies of each signature
page are delivered to legal counsel for the Administrative Agent promptly
upon execution of this Amendment.

 

Section 5.8                                      Effect
of Amendment. No consent or waiver, express or implied, by the
Administrative Agent or any Bank to or for any breach of or deviation from any
covenant, condition, or duty by Holdings or the Borrower shall be deemed a
consent or waiver to or of any other breach of the same or any other covenant,
condition, or duty. Holdings and the Borrower hereby (a) agree that this
Amendment shall not limit or diminish the obligations of Holdings or the
Borrower under the Credit Documents, (b) reaffirms Holdings’ and the
Borrower’s obligations under each of the Credit Documents, and (c) agrees
that each of the Credit Documents to which Holdings or the Borrower is a party
remains in full force and effect and is hereby ratified and confirmed.

 

Section 5.9                                      Further
Assurances. Holdings and the Borrower shall execute and deliver, or cause
to be executed and delivered, to the Administrative Agent such documents and
agreements, and shall take or cause to be taken such actions as the
Administrative Agent may, from time to time, reasonably request to carry out
the terms of this Amendment and the other Credit Documents.

 

Section 5.10                                Headings.
The headings of the several sections and subsections of this Amendment are
inserted for convenience only and shall not in any way affect the meaning or
construction of any provision of this Amendment.

 

Section 5.11                                Entire
Agreement. THIS AMENDMENT AND ALL OTHER INSTRUMENTS, DOCUMENTS, AND
AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS
AMENDMENT, AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES
HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.

 

19

 

Section 5.12                                Amendment
as a Credit Document. This Amendment constitutes a Credit Document and any
failure of Holdings or the Borrower to comply with the terms and conditions of
this Amendment shall result in a Default under the Credit Agreement.

 

[Signature Pages To Follow]

 

20

 

IN WITNESS WHEREOF, the parties have entered into this
Amendment on the date first above written.

 

 

	
   

  	
  HOLDINGS:

  
	
   

  	
   

  
	
   

  	
  NUTRACEUTICAL INTERNATIONAL

  
	
   

  	
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank W. Gay II

  	
   

  
	
   

  	
   

  	
  Frank W. Gay II

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BORROWER:

  
	
   

  	
   

  
	
   

  	
  NUTRACEUTICAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank W. Gay II

  	
   

  
	
   

  	
   

  	
  Frank W. Gay II

  
	
   

  	
   

  	
  Chief Executive Officer

  
					

 

21

 

	
   

  	
  ADMINISTRATIVE AGENT AND THE 

  BANKS:

  
	
   

  	
   

  
	
   

  	
  COÖPERATIEVE CENTRALE

  
	
   

  	
  RAIFFEISEN-BOERENLEENBANK B.A.,

  
	
   

  	
  “RABOBANK INTERNATIONAL”,

  
	
   

  	
  NEW YORK BRANCH, as the

  Administrative Agent, a Letter of Credit

  Issuer, the Swingline Bank, and a Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. David Thomas

  	
   

  
	
   

  	
  Name:

  	
  J. David Thomas

  	
   

  
	
   

  	
  Title:

  	
  Executive Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Rebecca O. Morrow

  	
   

  
	
   

  	
  Name:

  	
  Rebecca O. Morrow

  	
   

  
	
   

  	
  Title:

  	
  Executive Director

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO BANK, N.A., as a Bank

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Troy S. Akagi

  	
   

  
	
   

  	
  Name:

  	
  Troy S. Akagi

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  
							

 

22

 

ACKNOWLEDGEMENT, CONSENT, AND REAFFIRMATION

 

Each of the undersigned Credit Parties acknowledges
and consents to the execution and terms and conditions of the foregoing First
Amendment to Credit Agreement and reaffirms its obligations under the Credit
Documents to which it is a party, and acknowledges and agrees that the Credit
Documents to which it is a party remain in full force and effect and such
Credit Documents are hereby ratified and confirmed in all respects.

 

Dated as of September 7, 2006.

 

	
   

  	
  ACTION LABS, INC.

  	
   

  
	
   

  	
  AU NATUREL, INC.

  	
   

  
	
   

  	
  AU NATUREL (CANADA), INC.

  	
   

  
	
   

  	
  AU NATUREL (JAPAN), INC.

  	
   

  
	
   

  	
  AU NATUREL (NETHERLANDS), INC.

  	
   

  
	
   

  	
  AU NATUREL (UK), INC.

  	
   

  
	
   

  	
  FRESH ORGANICS, INC.

  	
   

  
	
   

  	
  FRESH VITAMINS, INC.

  	
   

  
	
   

  	
  FUNFRESH FOODS, INC.

  	
   

  
	
   

  	
  HEALTHWAY CORPORATION

  	
   

  
	
   

  	
  M.K. HEALTH FOOD
  DISTRIBUTORS, INC.

  	
   

  
	
   

  	
  MONARCH NUTRITIONAL
  LABORATORIES, INC.

  	
   

  
	
   

  	
  NATURE’S LIFE, INC.

  	
   

  
	
   

  	
  NUTRA, INC.

  	
   

  
	
   

  	
  NUTRABRANDS, INC.

  	
   

  
	
   

  	
  NUTRAFORCE, INC.

  	
   

  
	
   

  	
  NUTRAMARKS, INC.

  	
   

  
	
   

  	
  NUTRAPURE, INC.

  	
   

  
	
   

  	
  SEYCHELLES ORGANICS, INC.

  	
   

  
	
   

  	
  SOLARAY, INC.

  	
   

  
	
   

  	
  WOODLAND PUBLISHING, INC.

  	
   

  
	
   

  	
  PEP PRODUCTS, INC.

  	
   

  
	
   

  	
  FRESH TO YOU, INC.

  	
   

  
	
   

  	
  GREAT BASIN BOTANICALS, INC.

  	
   

  
	
   

  	
  NATURAL BALANCE, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Frank W. Gay
  II

  	
   

  
	
   

  	
   

  	
  Frank W. Gay II

  
	
   

  	
   

  	
  Chief Executive Officer
  of each of the

  foregoing Credit
  Parties

  
					

 

23

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