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Exhibit 10.01
AMENDMENT TO LOAN AND SECURITY AGREEMENT
AND WAIVER OF DEFAULT
THIS
AMENDMENT TO LOAN AND SECURITY AGREEMENT AND WAVIER OF
DEFAULTS (this “Amendment”), dated as of May __,
2008, is entered into by and among Nutrition 21, Inc., a New
York corporation, Nutrition 21, LLC, a New York limited
liability company, Iceland Health, LLC a New York limited
liability company (each a “Borrower” and
collectively, “Borrowers”) and Gerber Finance Inc.
(“Lender”).
RECITALS
Borrowers
and Lender are parties to a Loan and Security Agreement dated
June 30, 2007 (as amended from time to time, the “Loan
Agreement”).
Borrower
has requested that certain amendments be made to the Loan
Agreement and that Lender waive a certain Event of Default
arising under the Loan Agreement, which Lender is willing to
make and do pursuant to the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as
follows:
1.
Definitions .
Capitalized terms used in this Amendment have the meanings given to
them in the Loan Agreement unless otherwise specified.
2.
Amendments. Upon
the terms and subject to the conditions set forth in this
Amendment, the Loan Agreement is hereby amended as
follows:
(a)
The
following defined term in Section 1(a) is amended to provide
as follows:
“
Eligible Inventory ”
means Inventory owned by Borrower which Lender, in its sole and
absolute discretion, determines: (a) is subject to a first priority
perfected Lien in favor of Lender and is subject to no other Liens
whatsoever other than Permitted Liens; (b) is located in a public
warehouse known to Lender; (c) is located on premises with respect
to which Lender has received a landlord, mortgagee or warehouse
agreement acceptable in form and substance to Lender; (d) is not in
transit; (e) is not covered by a negotiable document of title,
unless such document and evidence of acceptable insurance covering
such Inventory has been delivered to Lender; (f) is in good
condition and meets all standards imposed by any governmental
agency, or department or division thereof having regulatory
Governmental Authority over such Inventory, its use or sale
including the Federal Fair Labor Standards Act of 1938 as amended,
and all rules, regulations and orders thereunder; (g) is currently
either usable or salable in the normal course of Borrower’s
business; (h) is not placed by Borrower on consignment or held by
Borrower on consignment from another Person; (i) is in conformity
with the representations and warranties made by Borrower to Lender
with respect thereto; (j) is not subject to any licensing, patent,
royalty (except for chromium picolinate), trademark, trade name or
copyright agreement with any third parties; (k) does not require
the consent of any Person for the completion of manufacture, sale
or other disposition of such Inventory by Lender following an Event
of Default and such completion, manufacture or sale does not
constitute a breach or default under any contract or agreement to
which Borrower is a party or to which such Inventory is or may be
subject; (l) is not work-in-process; (m) is covered by casualty
insurance acceptable to Lender;(n) does not include Selenomax; (o)
does not include inventory owned or sold to Iceland Health, LLC (p)
does not include inventory branded or labeled as Iceland Health and
(q) not to be ineligible for any other reason.
“
Minimum Average Monthly Loan Amount ”
shall now mean $1,000,000.
(b)
Section
13 is amended to provide as follows
“
Financial Covenants”
(b)
The
consolidated liabilities of Borrowers and their subsidiaries
at the end of each month shall not exceed five and one quarter
(5.25) times the net worth of Borrowers and their Subsidiaries
on a consolidated basis.
3.
No Other Changes .
Except as explicitly amended by this Amendment, all of the terms
and conditions of the Loan Agreement shall remain in full force and
effect.
4.
Waiver of Default .
Upon the terms and subject to the conditions set forth in this
Amendment, Lender hereby waives the Event of Default arising solely
from (a) Borrowers and their subsidiaries having consolidated
liabilities greater than two times the net worth of Borrowers and
their Subsidiaries on a consolidated basis at March 31, 2008. This
foregoing waiver shall be effective only in this specific instance
and for the specific purpose for which it is given, and this waiver
shall not entitle any Borrower to any other or further waiver in
any similar or other circumstances.
5.
Amendment Fee .
Borrowers shall pay Lender as of the date hereof a fully earned,
non-refundable fee in the amount of $15,000 in consideration of
Lender’s execution and delivery of this
Amendment.
6.
Con
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