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EXHIBIT 10.4
FIRST AMENDMENT TO
LOAN AGREEMENT
AND SECURITY AGREEMENT
BY AND BETWEEN
FITNESSAGE, INC.
AND
NATURAL ALTERNATIVES INTERNATIONAL, INC.
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FIRST AMENDMENT
TO
LOAN AGREEMENT AND SECURITY AGREEMENT
This First Amendment to Loan Agreement and Security Agreement effective
this 6th day of December, 1999, amends that certain Loan Agreement and Security
Agreement dated November 11, 1999, by and between FitnessAge, Inc., a Nevada
corporation ("Corporation") and Natural Alternatives International, Inc. a
Delaware corporation ("Lender").
The parties to the Loan Agreement wish to amend Sections 2, 3.2 and 6.8
of the above referenced Loan Agreement to read as follows:
SECTION 2. SECURITY
As security for the performance and payment of all obligations and
indebtedness of the Corporation to the Lender, the Corporation agrees that at
all times prior to the performance and payment of all such obligations and
indebtedness, the Lender shall have a perfected security interest, superior to
all other liens in all the rights, title, and interest of the Corporation in
Custom Nutrition, LLC, a Delaware limited liability company, including, without
limitation, rights held by the Corporation as a member, manager or creditor of
Custom Nutrition, LLC, as well as the allocable interest of the Corporation in
any amount received by Custom Nutrition, LLC from the Corporation as
contribution to Custom Nutrition LLC by the Corporation of proceeds received by
the Corporation from Bally Total Fitness Holding Corporation or its affiliates
(Bally") pursuant to Section 6.8 hereinbelow, whether such interests are now
owned or hereafter acquired and wherever the same may be located, and shall
include the proceeds, products, and accessories of any kind to any thereof. The
interests described above are referred to herein as the "Collateral". In this
connection, the Corporation has executed and delivered to the Lender
concurrently herewith the Security Agreement attached hereto and incorporated
herein by this reference ("Security Agreement").
3.2 Subsequent Loan Funding. Upon the later of (i) November 23, 1999 or
(ii) satisfaction or waiver by the Lender of each of the conditions set forth in
Section 9 of this Agreement, the Lender shall deliver to the Corporation funds
in the amount of $350,000, less expenses of Lender including its legal fees
incurred in connection herewith. If the conditions set forth in Section 9 of
this Agreement are not satisfied, or waived by Lender (in its sole discretion)
by December 6, 1999, the amounts due under the Note(s) shall be all due and
payable and the Corporation shall be in default of this Agreement.
6.8 Operation of Custom Nutrition, LLC. During the term of the Loan and
as additional consideration for Lender entering into the Loan, Corporation shall
contribute to Custom Nutrition LLC all revenue Corporation receives from Bally
in connection with the distribution offer or sale by Bally of nutritional
products, and Corporation will take all action necessary or appropriate in
connection with the operation of Custom Nutrition, LLC to cause 40% of such
amounts to be
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distributed and paid to Lender. In addition Corporation agrees to take all
action necessary or appropriate in connection with the operation of Custom
Nutrition, LLC to cause the remaining 60% of such amounts to be deposited in an
escrow account of Custom Nutrition, LLC for the benefit of Lender to be held as
Collateral for the performance by the Corporation of its obligations pursuant to
the terms of this Agreement, the Notes and the Security Agreement. Upon payment
in full of all amounts due under the Loan Corporation and Lender shall take all
action necessary or appropriate in connection with the operation of Custom
Nutrition, LLC to cause any remaining portion of funds in the escrow to be
distributed and paid to Corporation.
The parties to the above referenced Security Agreement wish to amend
Section 1(i) to read as follows:
1. Definitions of Terms Used Herein.
(i) "Bally Proceeds" shall mean all of the gross receipts of the
Corporation from Bally Total Fitness Holding Corporation or its affiliates
("Bally") in connection with or resulting from the offer sale and distribution
by Bally of nutritional products, which amount Debtor has undertaken to cause to
be contributed and transferred to Custom Nutrition, LLC, and 60% of which funds
Debtor has undertaken to cause Custom Nutrition LLC to place in an escrow
account, the contents of which account are to be held as security for the
amounts to become due and owing on the Notes (as defined below) pursuant to this
Agreement and the Loan Agreement between Debtor and Secured Party dated November
11, 1999 (the "Loan Agreement"), a copy of which is incorporated herein by this
reference.
All remaining terms of both the Loan Agreement and the Security
Agreement remain in full force and effect.
Corporation: Lender:
FitnessAge, Inc. Natural Alternatives International, Inc.
a Nevada corporation a Delaware corporation
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxx X. XxXxxx
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Xxxxxxx X. Xxxx, Xxxx X. XxXxxx,
President Chief Executive Officer
