Exhibit 10.55

 

AMENDMENT NO. 3 TO CREDIT AND SECURITY AGREEMENT

AND LIMITED CONSENT

 

THIS AMENDMENT NO. 3 TO CREDIT AND SECURITY AGREEMENT AND LIMITED CONSENT (this
“Amendment”) is made as of this 30th day of April, 2015, by and among TWINLAB
CONSOLIDATED HOLDINGS, INC., a Nevada corporation (“TCHI”), TWINLAB
CONSOLIDATION CORPORATION, a Delaware corporation (“TCC”), TWINLAB HOLDINGS,
INC., a Michigan corporation, ISI BRANDS INC., a Michigan corporation, TWINLAB
CORPORATION, a Delaware corporation, NUTRASCIENCE LABS, INC., a Delaware
corporation (formerly known as TCC CM Subco I, Inc.), and NUTRASCIENCE LABS IP
CORPORATION, a Delaware corporation (formerly known as TCC CM Subco II, Inc.)
(each of the foregoing Persons being referred to herein individually as a
“Borrower”, and collectively as “Borrowers”), and MIDCAP FUNDING X TRUST, a
Delaware statutory trust, as successor-by-assignment from MidCap Financial Trust
(as Agent for Lenders, “Agent”, and individually, as a Lender), and the other
financial institutions or other entities from time to time parties to the Credit
Agreement referenced below, each as a Lender.

 

RECITALS

 

A. Pursuant to that certain Credit and Security Agreement dated as of January
22, 2015 by and among Borrowers, Agent and Lenders (as amended by that certain
Amendment No. 1 to Credit and Security Agreement and Limited Consent dated as of
February 4, 2015, by that certain Amendment No. 2 to Credit and Security
Agreement dated as of April 7, 2015, as further amended hereby and as it may be
further amended, modified and restated from time to time, the “Credit
Agreement”), Agent and Lenders agreed to make available to Borrowers a secured
revolving credit facility in a principal amount of up to $15,000,000 from time
to time (as amended, modified, supplemented, extended and restated from time to
time, collectively, the “Loans”). Capitalized terms used but not otherwise
defined in this Amendment shall have the meanings set forth in the Credit
Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, the terms and conditions set
forth in this Amendment, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Agent, Lenders and Borrowers
hereby agree as follows:

 

1. Recitals. This Amendment shall constitute a Financing Document and the
Recitals set forth above shall be construed as part of this Amendment as if set
forth fully in the body of this Amendment.

 

2. Limited Consent for JL Properties Reimbursement Agreement. At the request of
and as an accommodation to Borrowers and subject to the strict compliance with
the terms, conditions and requirements set forth herein (including, without
limitation, satisfaction of each of the conditions set forth in Section 7
below), Agent and Lenders hereby consent to the JL Properties Reimbursement
Agreement (as defined below) and the First Tower Central Letter of Credit (as
defined below). The limited consent set forth in this Section 2 is effective
solely for the purposes set forth herein and shall be limited precisely as
written and shall not be deemed to (a) except as expressly provided herein, be a
consent to any amendment, waiver or modification of any term or condition of the
Credit Agreement or of any other Financing Document; (b) prejudice any right
that Agent or the Lenders have or may have in the future under or in connection
with the Credit Agreement or any other Financing Document; (c) waive any Event
of Default that exists as of the date hereof; or (d) establish a custom or
course of dealing among any of the Credit Parties, on the one hand, or Agent or
any Lender, on the other hand.

 

3. Amendment to Credit Agreement.

 

(a)                Section 1.1 – Additional Defined Terms. Section 1.1 of the
Credit Agreement is hereby amended to add the following defined terms in their
alphabetical order:

 

“First Central Tower Letter of Credit” shall mean that certain Letter of Credit
to be issued by Wells Fargo Bank, National Association or such other letter of
credit issuer as permitted under the Florida Lease, as issuing bank for the
account of JL Properties, Inc. to be provided to First Central Tower, Limited
Partnership or its mortgagee for the benefit of TCC and Parent, in a principal
amount of $1,000,000 as a security deposit for, and in connection with, the
Florida Lease on terms and conditions satisfactory to Agent.

 

1

 

 

“JL Properties Reimbursement Agreement” means that certain Reimbursement
Agreement by and among JL Properties, Inc., TCC and Parent, on terms and
conditions satisfactory to Agent. All indebtedness, obligations, and liabilities
owing under the JL Properties Reimbursement Agreement shall be subject to a
Subordination Agreement with the Agent.

 

(b)               Section 1.1 – Definition of Permitted Debt. The defined term
“Permitted Debt” in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety as follows:

 

“Permitted Debt” means: (a) Borrowers’ and its Subsidiaries’ Debt to Agent and
each Lender under this Agreement and the other Financing Documents; (b) Debt
incurred as a result of endorsing negotiable instruments received in the
Ordinary Course of Business; (c) purchase money Debt with respect to equipment,
Debt listed on Schedule 5.1, and such other Debt (other than the Essex Lease)
not to exceed $3,000,000 at any time (whether in the form of a loan or a Capital
Lease) used solely to acquire equipment used in the Ordinary Course of Business
and secured only by such equipment; (d) Debt existing on the date of this
Agreement and described on Schedule 5.1 and any Refinancing Debt; (e) Debt in
the form of insurance premiums financed through the applicable insurance
company; (f) trade accounts payable arising and paid on a timely basis and in
the Ordinary Course of Business; (g) Subordinated Debt, (h) the Essex Lease; (i)
the Nutricap Seller Notes and (j) the JL Properties Reimbursement Agreement.

 

4. Confirmation of Representations and Warranties; Reaffirmation of Security
Interest. Each Borrower hereby (a) confirms that all of the representations and
warranties set forth in the Credit Agreement are true and correct with respect
to such Borrower as of the date hereof, and (b) covenants to perform its
respective obligations under the Credit Agreement. Each Borrower confirms and
agrees that all security interests and Liens granted to Agent continue in full
force and effect, and all Collateral remains free and clear of any Liens, other
than those granted to Agent and Permitted Liens. Nothing herein is intended to
impair or limit the validity, priority or extent of Agent’s security interests
in and Liens on the Collateral.

 

5. Enforceability. This Amendment constitutes the legal, valid and binding
obligation of each Borrower, and is enforceable against each Borrower in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency or other similar laws relating to the enforcement of
creditors’ rights generally and by general equitable principles.

 

2

 

 

6. Costs and Fees. Borrowers shall be responsible for the payment of all
reasonable costs and fees of Agent’s counsel incurred in connection with the
preparation of this Amendment and any related documents. If Agent or any Lender
uses in-house counsel for any of these purposes, Borrowers further agree that
the Obligations include reasonable charges for such work commensurate with the
fees that would otherwise be charged by outside legal counsel selected by Agent
or such Lender for the work performed. Borrowers hereby authorize Agent to
deduct all of such fees set forth in this Section 6 from the proceeds of one or
more Revolving Loans made under the Credit Agreement.

 

7. Conditions to Effectiveness. This Amendment shall become effective as of the
date on which each of the following conditions has been satisfied (the
“Effective Date”):

 

(a)  Borrowers shall have delivered to Agent this Amendment, duly executed by an
authorized officer of each Borrower;

 

(b) [Reserved.];

 

(c) all representations and warranties of Borrowers contained herein shall be
true and correct in all material respects as of the Effective Date (and such
parties’ delivery of their respective signatures hereto shall be deemed to be
its certification thereof);

 

(d) [Reserved.];

 

(e) Agent shall have received from Borrowers of all of the fees owing pursuant
to this Amendment and Agent’s reasonable out-of-pocket legal fees and expenses;

 

(f) Borrowers shall have delivered to Agent fully executed copies of the JL
Properties Reimbursement Agreement and a Subordination Agreement with respect to
all indebtedness, obligations, and liabilities owing under the JL Properties
Reimbursement Agreement.

 

3

 

 

8. Release. Each Borrower, voluntarily, knowingly, unconditionally and
irrevocably, with specific and express intent, for and on behalf of itself and
all of its respective parents, subsidiaries, affiliates, members, managers,
predecessors, successors, and assigns, and each of their respective current and
former directors, officers, shareholders, agents, and employees (collectively,
“Releasing Parties”), does hereby fully and completely release, acquit and
forever discharge each Indemnitee of and from any and all actions, causes of
action, suits, debts, disputes, damages, claims, obligations, liabilities,
costs, expenses and demands of any kind whatsoever, at law or in equity, whether
matured or unmatured, liquidated or unliquidated, vested or contingent, choate
or inchoate, known or unknown that the Releasing Parties (or any of them) has
against the Indemnitees (or any of them) that directly or indirectly arise out
of, are based upon or are in any manner connected with any Prior Related Event.
“Prior Related Event” means any transaction, event, circumstance, action,
failure to act, occurrence of any type or sort, whether known or unknown, which
occurred, existed, was taken, was permitted or begun in accordance with,
pursuant to or by virtue of (a) any of the terms of this Amendment or any other
Financing Document, (b) any actions, transactions, matters or circumstances
related hereto or thereto, (c) the conduct of the relationship between any
Indemnitee and any Borrower, or (d) any other actions or inactions by any
Indemnitee, all on or prior to the Effective Date. Each Borrower acknowledges
that the foregoing release is a material inducement to Agent’s and Lender’s
decision to enter into this Amendment and to agree to the modifications
contemplated hereunder.

 

9. No Waiver or Novation. The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided in this Amendment, operate as
a waiver of any right, power or remedy of Agent, nor constitute a waiver of any
provision of the Credit Agreement, the Financing Documents or any other
documents, instruments and agreements executed or delivered in connection with
any of the foregoing. Nothing herein is intended or shall be construed as a
waiver of any existing Defaults or Events of Default under the Credit Agreement
or other Financing Documents or any of Agent’s rights and remedies in respect of
such Defaults or Events of Default. This Amendment (together with any other
document executed in connection herewith) is not intended to be, nor shall it be
construed as, a novation of the Credit Agreement.

 

10. Affirmation. Except as specifically amended pursuant to the terms hereof,
the Credit Agreement and all other Financing Documents (and all covenants,
terms, conditions and agreements therein) shall remain in full force and effect,
and are hereby ratified and confirmed in all respects by Borrowers. Each
Borrower covenants and agrees to comply with all of the terms, covenants and
conditions of the Credit Agreement (as amended hereby) and the Financing
Documents, notwithstanding any prior course of conduct, waivers, releases or
other actions or inactions on Agent’s or any Lender’s part which might otherwise
constitute or be construed as a waiver of or amendment to such terms, covenants
and conditions.

 

11. Post-Closing Obligations. On or before May 1, 2015, Borrowers shall deliver
to Agent a copy of the fully executed First Tower Central Letter of Credit in
the form attached to the JL Properties Reimbursement Agreement and the Warrants
(as defined in the JL Properties Reimbursement Agreement and in the form
attached thereto).

 

4

 

 

12. Miscellaneous.

 

(a) Reference to the Effect on the Credit Agreement. Upon the effectiveness of
this Amendment, each reference in the Credit Agreement to “this Agreement,”
“hereunder,” “hereof,” “herein,” or words of similar import shall mean and be a
reference to the Credit Agreement, as amended by this Amendment. Except as
specifically amended above, the Credit Agreement, and all other Financing
Documents (and all covenants, terms, conditions and agreements therein), shall
remain in full force and effect, and are hereby ratified and confirmed in all
respects by Borrowers.

 

(b) Incorporation of Credit Agreement Provisions. The provisions contained in
Section 11.6 (Indemnification), Section 12.8 (Governing Law; Submission to
Jurisdiction) and Section 12.9 (Waiver of Jury Trial) of the Credit Agreement
are incorporated herein by reference to the same extent as if reproduced herein
in their entirety.

 

(c) Headings. Section headings in this Amendment are included for convenience of
reference only and shall not constitute a part of this Amendment for any other
purpose.

 

(d) Counterparts. This Amendment may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. Signatures by facsimile or by
electronic mail delivery of an electronic version (e.g., .pdf or .tif file) of
an executed signature page shall be treated as delivery of an original and shall
bind the parties hereto. This Amendment constitutes the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.

 

 

 

[SIGNATURES APPEAR ON FOLLOWING PAGES]

5

 

 

IN WITNESS WHEREOF, intending to be legally bound, and intending that this
document constitute an agreement executed under seal, the undersigned have
executed this Amendment under seal as of the day and year first hereinabove set
forth.

 

AGENT: MIDCAP FUNDING X TRUST, a Delaware statutory trust, as
successor-by-assignment from MidCap Financial Trust         By:   Apollo Capital
Management, L.P.,     its investment manager         By:   Apollo Capital
Management GP, LLC,     its general partner               By: /s/ Maurice
Amsellem (SEAL)   Name: Maurice Amsellem   Title:  Authorized Signatory        
          LENDER: MIDCAP FUNDING X TRUST, a Delaware statutory trust, as
successor-by-assignment from MidCap Financial Trust         By: Apollo Capital
Management, L.P.,               its investment manager         By:   Apollo
Capital Management GP, LLC,     its general partner               By: /s/
Maurice Amsellem (SEAL)   Name: Maurice Amsellem   Title:  Authorized Signatory

 

6

 

 

BORROWERS:   TWINLAB CONSOLIDATION CORPORATION     By: /s/ Thomas A. Tolworthy
(Seal)     Name: Thomas A. Tolworthy     Title: Chief Executive Officer and
President      

TWINLAB CONSOLIDATED HOLDINGS, INC.

 

 

TWINLAB HOLDINGS, INC.

 

By: /s/ Thomas A. Tolworthy (Seal)   By: /s/ Thomas A. Tolworthy (Seal) Name:
Thomas A. Tolworthy       Name: Thomas A. Tolworthy Title: Chief Executive
Officer and President   Title:  Chief Executive Officer and President      

TWINLAB CORPORATION

 

 

ISI BRANDS INC.

 

By: /s/ Thomas A. Tolworthy (Seal)   By: /s/ Thomas A. Tolworthy (Seal) Name:  
Thomas A. Tolworthy   Name: Thomas A. Tolworthy Title: Title: Chief Executive
Officer and President   Title: Chief Executive Officer and President      

NUTRASCIENCE LABS, INC.

 

  NUTRASCIENCE LABS IP CORPORATION By: /s/ Thomas A. Tolworthy (Seal)   By: /s/
Thomas A. Tolworthy (Seal) Name:   Thomas A. Tolworthy   Name:   Thomas A.
Tolworthy Title: Title: Chief Executive Officer and President   Title:  Chief
Executive Officer and President

 

7