Exhibit 10.1

 

AMENDMENT NO. 11 TO CREDIT AND SECURITY AGREEMENT

 

 

THIS AMENDMENT NO. 11 TO CREDIT AND SECURITY AGREEMENT (this “Amendment”) is
made and entered into as of this 1st day of September, 2016, 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 (“Twinlab Corporation”), NUTRASCIENCE LABS,
INC., a Delaware corporation (formerly known as TCC CM Subco I, Inc.),
NUTRASCIENCE LABS IP CORPORATION, a Delaware corporation (formerly known as TCC
CM Subco II, Inc.), ORGANIC HOLDINGS LLC, a Delaware limited liability company,
RESERVE LIFE ORGANICS, LLC, a Delaware limited liability company, RESVITALE,
LLC, a Delaware limited liability company, RE-BODY, LLC, a Delaware limited
liability company, INNOVITAMIN ORGANICS, LLC, a Delaware limited liability
company, ORGANICS MANAGEMENT LLC, a Delaware limited liability company,
COCOAWELL, LLC, a Delaware limited liability company, FEMBODY, LLC, a Delaware
limited liability company, RESERVE LIFE NUTRITION, L.L.C., a Delaware limited
liability company, INNOVITA SPECIALTY DISTRIBUTION, LLC, a Delaware limited
liability company, and JOIE ESSANCE, LLC, a Delaware limited liability company
(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 and Limited Consent dated as of April 7, 2015, by that
certain Amendment No. 3 to Credit and Security Agreement and Limited Consent
dated as of April 30, 2015, by that certain Amendment No. 4 to Credit and
Security Agreement and Limited Waiver dated as of June 30, 2015, by that certain
Amendment No. 5 to Credit and Security Agreement and Limited Consent dated as of
June 30, 2015, by that certain Amendment No. 6 to Credit and Security Agreement,
Limited Consent and Limited Waiver dated as of September 9, 2015, by that
certain Amendment No. 7 and Joinder Agreement to Credit and Security Agreement
dated as of October 5, 2015, by that certain Amendment No. 8 to Credit and
Security Agreement dated as of January 28, 2016, by that certain Amendment No. 9
to Credit and Security Agreement dated as of April 5, 2016, by that certain
Amendment No. 10 to Credit and Security Agreement dated as of August 11, 2016,
but effective as of July 29, 2016, and 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 the original 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.

 

 

 

 

 

B.      Pursuant to Section 2.1(c) of the Credit Agreement, the Borrowers have
requested, and the Lenders have agreed, to activate an Additional Tranche in the
amount of $2,000,000, subject to the terms and conditions set forth herein.

 

C.      Borrowers, Agent and Lenders have agreed to amend the Credit Agreement
as set forth herein.

 

 

 

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.      Amendment to Credit Agreement.

 

(a)      Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the defined terms “Revolving Loan Commitment Amount” in their entirety,
respectively, as follows:

 

“Revolving Loan Commitment Amount” means, as to any Lender, the dollar amount
set forth opposite such Lender’s name on the Commitment Annex under the column
“Revolving Loan Commitment Amount” (if such Lender’s name is not so set forth
thereon, then the dollar amount on the Commitment Annex for the Revolving Loan
Commitment Amount for such Lender shall be deemed to be $0), as such amount may
be adjusted from time to time (a) by any amounts assigned (with respect to such
Lender’s portion of Revolving Loans outstanding and its commitment to make
Revolving Loans) pursuant to the terms of any and all effective assignment
agreements to which such Lender is a party, and (b) any Additional Tranche(s)
activated by Borrowers. For the avoidance of doubt, the aggregate Revolving Loan
Commitment Amount of all Lenders on the Eleventh Amendment Closing Date shall be
$17,000,000 and if the Additional Tranche is fully activated by Borrowers
pursuant to the terms of the Agreement such amount shall increase to
$20,000,000.

 

“Additional Tranche” means an additional amount of Revolving Loan Commitment
equal to $5,000,000 (it being acknowledged that multiple Additional Tranches are
permitted pursuant to Section 2.1(c) in minimum amounts of $1,000,000 each for a
total of up to $5,000,000). It is acknowledged that on the Eleventh Amendment
Closing Date $2,000,000 was activated as an Additional Tranche and following
such date only $3,000,000 remains, subject to the terms and conditions of
Section 2.1(c), available as a potential additional amount of Revolving Loan
Commitment.

 

 

 

  

(b)      Section 1.1 of the Credit Agreement is hereby amended to add the
defined term “Eleventh Amendment Closing Date” in its alphabetical order as
follows:

 

“Eleventh Amendment Closing Date” means September 1, 2016.

 

(c)      Section 2.1(c) of the Credit Agreement is hereby amended and restated
in its entirety as follows:

 

Additional Tranches. After the Closing Date, so long as no Default or Event of
Default exists and subject to the terms of this Agreement, with the prior
written consent of Agent and all Lenders in their sole discretion, the Revolving
Loan Commitment may be increased by an aggregate amount not greater than
$5,000,000 upon the written request of Borrower Representative (which such
request shall state the aggregate amount of the Additional Tranche requested and
shall be made at least thirty (30) days prior to the proposed effective date of
such Additional Tranche) to Agent to activate an Additional Tranche; provided,
however, that Agent and Lenders shall have no obligation to consent to any
requested activation of an Additional Tranche and the written consent of Agent
and all Lenders shall be required in order to activate an Additional Tranche.
Upon activating an Additional Tranche, each Lender’s Commitment shall increase
by a proportionate amount so as to maintain the same Pro Rata Percentage of the
Revolving Loan Commitment as such Lender held immediately prior to such
activation. In the event Agent and all Lenders do not consent to the activation
of a requested Additional Tranche within thirty (30) days after receiving a
written request from Borrower Representative, then the Revolving Loan Commitment
shall not be increased. In the event Agent and all Lenders do not consent to the
activation of a requested Additional Tranche within forty-five (45) days after
receiving a written request from Borrower Representative, then the Revolving
Loan Commitment shall not be increased and Borrowers may promptly terminate this
Agreement without paying the fee required under Section 2.2(f) for early
termination. It is acknowledged that on the Eleventh Amendment Closing Date
$2,000,000 was activated as an Additional Tranche and following such date only
$3,000,000 remains, subject to the terms and conditions of this Section 2.1(c),
available as a potential additional amount of Revolving Loan Commitment.

 

(d)      Annex A to the Credit Agreement containing the Commitment Annex is
hereby amended and restated as set forth on Exhibit A attached to and made a
part of this Amendment.

 

3.      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.

 

 

 

 

4.      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.

 

5.      Costs and Fees. In consideration of Agent’s agreement to activate an
Additional Tranche in the amount of $2,000,000, Borrower shall pay to Agent an
origination fee equal to Twenty Thousand and No/100 Dollars ($20,000.00)
pursuant to the terms of Section 2.2(e) of the Credit Agreement. Furthermore,
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 5 from the proceeds of one or more Revolving Loans made
under the Credit Agreement.

 

6.      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)      the secretary or sole manager, as applicable, of each Borrower shall
have delivered to Agent a duly executed secretary’s or sole member’s, as
applicable, and incumbency certificate identifying the current officers or
managers, as applicable, of such Borrower who are duly authorized by such
Borrower’s board of directors or sole manager, as applicable, to execute and
deliver this Amendment and any related documents, together with resolutions of
the governing board or body of each Borrower authorizing the transactions
contemplated by this Amendment and copies, certified as true and complete by an
officer or sole manager, as applicable, of each Borrower of all documents
evidencing any other necessary action, approvals or consents for this Amendment;

 

(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); and

 

(d)      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.

 

7.      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.

 

 

 

 

8.      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. Except as expressly provided herein, 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.

 

9.      Affirmation. Except as specifically amended and waived 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.

 

10.      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 and waived 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]

 

 

 

(Signature Page to Amendment No. 11 to Credit and Security Agreement)

 

 

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
  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   Name: Maurice Amsellem
  Title: Authorized Signatory

 

 

 

 

(Signature Page to Amendment No. 11 to Credit and Security Agreement)

 

 

BORROWERS:   TWINLAB CONSOLIDATION CORPORATION           By:   /s/ Naomi Whittel
    Name:   Naomi Whittel     Title:     Chief Executive Officer            
TWINLAB CONSOLIDATED HOLDINGS, INC.   TWINLAB HOLDINGS, INC.       By: /s/ Naomi
Whittel   By: /s/ Naomi Whittel Name: Naomi Whittel   Name: Naomi Whittel Title:
Chief Executive Officer   Title: Chief Executive Officer             TWINLAB
CORPORATION   ISI BRANDS INC.         By: /s/ Naomi Whittel   By: /s/ Naomi
Whittel Name:   Naomi Whittel   Name:   Naomi Whittel Title: Chief Executive
Officer     Title: Chief Executive Officer               NUTRASCIENCE LABS,
INC.     NUTRASCIENCE LABS IP CORPORATION         By: /s/ Naomi Whittel)   By:
/s/ Naomi Whittel Name:   Naomi Whittel   Name:   Naomi Whittel Title: Chief
Executive Officer     Title: Chief Executive Officer               ORGANIC
HOLDINGS LLC    RESERVE LIFE ORGANICS, LLC           By ORGANIC HOLDINGS LLC,its
sole Member       By: /s/ Naomi Whittel   By: /s/ Naomi Whittel Name:   Naomi
Whittel   Name:   Naomi Whittel Title:     Sole Manager   Title: Sole Manager   
           

 

 

 

(Signature Page to Amendment No. 11 to Credit and Security Agreement)

 

 

 RESVITALE, LLC   RE-BODY, LLC       By ORGANIC HOLDINGS LLC,its sole Member  
By ORGANIC HOLDINGS LLC,its sole Member       By: /s/ Naomi Whittel   By: /s/
Naomi Whittel Name:   Naomi Whittel   Name:   Naomi Whittel Title: Sole Manager 
  Title: Sole Manager              INNOVITAMIN ORGANICS, LLC    ORGANICS
MANAGEMENT LLC        By ORGANIC HOLDINGS LLC,its sole Member   By ORGANIC
HOLDINGS LLC,its sole Member       By: /s/ Naomi Whittel   By: /s/ Naomi Whittel
Name:   Naomi Whittel   Name:   Naomi Whittel Title: Sole Manager    Title: Sole
Manager              COCOAWELL, LLC    FEMBODY, LLC        By ORGANIC HOLDINGS
LLC,its sole Member    By ORGANIC HOLDINGS LLC,its sole Member        By: /s/
Naomi Whittel   By: /s/ Naomi Whittel Name:   Naomi Whittel   Name:   Naomi
Whittel Title: Sole Manager    Title: Sole Manager              RESERVE LIFE
NUTRITION, L.L.C.    INNOVITA SPECIALTY DISTRIBUTION, LLC       By ORGANIC
HOLDINGS LLC,its sole Member    By ORGANIC HOLDINGS LLC,its sole Member      
By: /s/ Naomi Whittel    By: /s/ Naomi Whittel Name:   Naomi Whittel   Name:
Naomi Whittel Title: Sole Manager    Title:  Sole Manager             JOIE
ESSANCE, LLC            By ORGANIC HOLDINGS LLC,its sole Member            By:
/s/ Naomi Whittel     Name:   Naomi Whittel     Title:    Sole Manager    

 

 

 

 

 

 

Annex A to Credit Agreement (Commitment Annex)

 

Lender   Revolving Loan Commitment Amount   Revolving Loan Commitment Percentage
MidCap Funding X Trust   $17,000,000   100% TOTALS   $17,000,000   100%