Exhibit 10.52

 

THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT (JL
PROPERTIES) DATED AS OF APRIL 30, 2015 IN FAVOR OF MIDCAP FUNDING X TRUST, A
DELAWARE STATUTORY TRUST, ADMINISTRATIVE AGENT, WHICH SUBORDINATION AGREEMENT
(JL PROPERTIES) (AS AMENDED IN ACCORDANCE WITH ITS TERMS) IS INCORPORATED HEREIN
BY REFERENCE.

 

THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT (JL
PROPERTIES) DATED AS OF APRIL 30, 2015 IN FAVOR OF PENTA MEZZANINE SBIC FUND I,
L.P., A DELAWARE LIMITED PARTNERSHIP, AS THE SENIOR LENDER, WHICH SUBORDINATION
AGREEMENT (JL PROPERTIES) (AS AMENDED IN ACCORDANCE WITH ITS TERMS) IS
INCORPORATED HEREIN BY REFERENCE.

 

THIS INSTRUMENT IS SUBJECT TO THE TERMS OF A SUBORDINATION AGREEMENT (JL
PROPERTIES) DATED AS OF APRIL 30, 2015 IN FAVOR OF JL-BBNC MEZZ UTAH, LLC, AN
ALASKA LIMITED LIABILITY COMPANY, AS THE SENIOR LENDER, WHICH SUBORDINATION
AGREEMENT (JL PROPERTIES) (AS AMENDED IN ACCORDANCE WITH ITS TERMS) IS
INCORPORATED HEREIN BY REFERENCE.

 

REIMBURSEMENT AGREEMENT

 

THIS REIMBURSEMENT AGREEMENT (this “Agreement”), dated as of April 30, 2015, is
made by and between TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation
(“Parent”), TWINLAB CONSOLIDATION CORPORATION, a Delaware corporation (“TCC”),
and JL PROPERTIES, INC., an Alaska corporation (“JL Properties”).

 

WHEREAS, Parent and TCC are parties to that certain Office Lease Agreement,
dated April 7, 2015, among Parent and TCC, as tenant (collectively, the
“Tenant”), and First Central Tower, Limited Partnership (including its
successors or assigns, “Landlord”), as landlord, as may be amended from time to
time (the “Lease”).

 

WHEREAS, Tenant is obligated under the Lease to provide Landlord a security
deposit in the amount of $1,000,000 in the form of cash or an unconditional,
irrevocable, transferable, and negotiable commercial letter of credit (the
“Security Deposit”).

 

WHEREAS, Tenant has requested that JL Properties cause an unconditional,
irrevocable, transferable, and negotiable commercial letter of credit in the
amount of $1,000,000 to be issued in favor of Landlord or NXT Capital Funding,
LLC, Landlord’s mortgagee (“Landlord’s Mortgagee”), as directed by Landlord,
from Wells Fargo Bank, National Bank (the “Bank”) to satisfy Tenant’s obligation
to provide the Security Deposit under the Lease.

 

WHEREAS, JL Properties has agreed to do so subject to the terms and conditions
set forth herein.

 

NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained in this Agreement, and subject to the terms and conditions set forth
herein, each party hereto hereby agrees as follows:

 

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1. Issuance of LOC. On or before May 1, 2015, JL Properties will cause the Bank
or such other letter of credit issuer as permitted under Section 4.03 of the
Lease (the “LOC Issuer”) to issue an unconditional, irrevocable, transferable,
and negotiable commercial letter of credit in the amount of $1,000,000 (or such
lesser amount as permitted under the Lease), which letter of credit shall
automatically renew on an annual basis for a period of five (5) years, with an
expiration date of April 30, 2020 (the “Expiration Date”), in favor of Landlord
or Landlord’s Mortgagee, as directed by Landlord, to satisfy Tenant’s obligation
to provide the Security Deposit under the Lease (the “LOC”). The LOC shall be in
the form attached hereto as Exhibit A or such other form as is acceptable to the
LOC Issuer and Landlord. The LOC shall comply with the requirements of Section
4.03 of the Lease. On or after the Expiration Date (or sooner if the LOC is
returned to JL Properties or surrendered to the LOC Issuer), JL Properties shall
have no further obligation to provide the LOC and Tenant shall be solely
responsible for satisfying the obligations with respect to the LOC and the
Security Deposit under the Lease. After the Expiration Date, Tenant shall use
its best efforts to have the Landlord or the Landlord's mortgagee return the LOC
to JL Properties or surrender it to the LOC Issuer.

 

2. Issuance of Warrants. In consideration of JL Properties causing the issuance
and maintenance of the LOC during the term of the Lease, on or before May 1,
2015, Parent shall issue to JL Properties a warrant in the aggregate amount of
465,880 shares of common stock of Parent exercisable at the purchase price of
$0.01 in the aggregate (the “Penny Warrant”) and a warrant in the aggregate
amount of 86,962 shares of common stock of Parent exercisable at the purchase
price of $1.00 per share (the “Dollar Warrant” and with the Penny Warrant, the
“Warrants”). The Penny Warrant shall be substantially in the form attached
hereto as Exhibit B and shall be exercisable into the common stock of the Parent
as provided therein. The Dollar Warrant shall be substantially in the form
attached hereto as Exhibit C and shall be exercisable into the common stock of
the Parent as provided therein. Parent and JL Properties, by their execution and
delivery of this Agreement, expressly agree to the terms and provisions of the
Warrants and to be bound thereby.

 

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3. Reimbursement Obligations. Except as set forth in the last paragraph of this
Section 3, in the event that Landlord draws upon the LOC, Tenant shall reimburse
JL Properties for the amount of such draw (each such draw, a “Draw Amount”) as
follows:

 

a. Commencing on the first (1st) day of the sixth (6th) month anniversary of the
date that Landlord draws on the LOC, the Draw Amount shall be paid in
semi-annual installments of fifty percent (50%) of the Draw Amount (each
semi-annual installment, an "Installment Amount") plus interest. A final payment
of the entire Draw Amount and accrued interest shall be due and payable on the
first (1st) anniversary of the date that Landlord draws on the LOC.

 

b. The interest rate shall be the greater of (i) federal interest rate for
mid-term obligations published by the Internal Revenue Service as of the date
Landlord draws upon the LOC or (ii) the federal interest rate that JL Properties
is required to pay to the LOC Issuer in connection with the draw on the LOC.
Interest shall be computed on the basis of a 360-day year for the actual number
of days outstanding.

 

c. Tenant may prepay a Draw Amount, in whole or in part, at any time without
premium or penalty. Any partial prepayment shall be applied to the last
installment coming due.

 

d. In the event that Tenant fails to pay all or any portion of an Installment
Amount within fifteen (15) days after notice of such failure from JL Properties
to Tenant (each an, "Unpaid Installment"), JL Properties shall have the option
(such option being specified in the notice of default relating to the Unpaid
Installment) to require that Parent issue to JL Properties a warrant in the
aggregate amount of "XX" shares of common stock of Parent exercisable at the
purchase price of $0.01 in the aggregate, such warrant being substantially in
the form of the Penny Warrant, and a warrant in the aggregate amount of "YY"
shares of common stock of Parent exercisable at the purchase price of $1.00 per
share, such warrant being substantially in the form of the Dollar Warrant, and
Parent shall issue such warrants within fifteen (15) days of receipt of notice
from JL Properties; provided, however, that Parent shall have no obligation to
issue additional warrants under this Section 3(d) so long as Tenant’s failure to
pay arises out of a prohibition to pay, and JL Properties’ preclusion to accept,
an Installment Payment under the terms of that certain Subordination Agreement
(JL-Properties), dated as of April 30, 2015, by and between JL Properties and
MidCap Funding X Trust, that certain Subordination Agreement (JL-Properties),
dated as of April 30, 2015, by and between JL Properties and Penta Mezzanine
SBIC Fund I, L.P. or that certain Subordination Agreement (JL-Properties), dated
as of April 30, 2015, by and between JL Properties and JL-BBNC Mezz Utah, LLC.
For purposes of the warrants issued under this Section 3(d), (i) "XX" shall mean
the applicable Unpaid Installment divided by $1,000,000, multiplied by 465,880
and further multiplied by two and (ii) "YY" shall mean the applicable Unpaid
Installment divided by $1,000,000, multiplied by 86,962 and further multiplied
by two. The warrants issued under this Section 3(d) are in full satisfaction of
Tenant's obligation to pay the Unpaid Installments for which such warrants are
issued.

 

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Notwithstanding the foregoing, if Landlord draws upon the LOC solely as a result
of the LOC Issuer’s determination not to renew the LOC at an annual renewal
during the term of the LOC, and JL Properties fails to replace the LOC with a
substitute LOC acceptable to the Landlord, Tenant shall not have an obligation
to reimburse JL Properties under this Section 3; provided, however, that if the
Landlord thereafter uses or applies the proceeds thereof in accordance to the
terms of the Lease applicable to the Security Deposit, Tenant, to the extent
Landlord uses or applies the proceeds of the LOC, shall be required to reimburse
JL Properties in accordance with this Section 3. Further, if Landlord draws upon
the LOC as a result of the LOC Issuer's failure to renew the LOC prior to the
Expiration Date, the proceeds of the LOC held as the Security Deposit shall be
considered the property of JL Properties’ and not Tenant's. Promptly after the
Expiration Date, JL Properties shall receive, directly or indirectly from
Tenant, the balance of the proceeds held as the Security Deposit, less any prior
reimbursements received from Tenant, and Tenant shall be solely responsible for
satisfying the LOC and Security Deposit obligations under the Lease.

 

4. Copy of Lease and Notices of Amendment to Lease. JL Properties acknowledges
receipt of a fully executed copy of the Lease. Subject to Section 6 below,
Tenant agrees to provide JL Properties with copies of each amendment or
modification to the Lease promptly (but in any event within 10 business days) of
the effective date of such amendment or modification.

 

5. Notices of Default Under Lease. Tenant agrees to provide JL Properties copies
of all notices of default given by Landlord to Tenant under the Lease promptly
(but in any event within 2 business days) of receipt.

 

6. Amendment to Section 4.03 of Lease. Tenant shall not amend or modify, or
permit any amendment or modification of, Section 4.03 of the Lease without first
obtaining the written consent of JL Properties, such consent not to be
unreasonably withheld or delayed.

 

7. Rights and Obligations Under Lease. Tenant shall undertake all reasonably
required or requested actions to enforce its rights and Landlord’s obligations
under Article IV of the Lease, including without limitation those provisions of
such Section 4.03 regarding the return of the LOC to JL Properties, and shall
fully cooperate and coordinate with JL Properties in connection therewith.

 

8. Continuing Agreement. This Agreement is a continuing agreement and will
remain in full force and effect until the later of (a) surrender of the LOC to
the LOC Issuer (b) the expiration or termination of the LOC or (c) full payment
of all reimbursement obligations by Tenant under Section 3.

 

9. Notices. Any notice or other communication required or permitted under this
Agreement shall be in writing and personally delivered, mailed by registered or
certified mail (return receipt requested and postage prepaid), sent by facsimile
(with a confirming copy sent by regular mail), or sent by prepaid overnight
courier service, and addressed to the relevant party at its address set forth
below, or at such other address as such party may, by written notice, designate
as its address for purposes of notice under this Agreement:

 

If to JL Properties, at:

 

JL Properties, Inc.

P.O. Box 202845

Anchorage, AK 99520-2845

Attention: Jonathan B. Rubini

Facsimile: (907) 279-8066

 

with a copy to:

 

Landye Bennett Blumstein LLP

701 West 8th Avenue, Suite 1200

Anchorage, Alaska 99501

Attention: Joshua D. Hodes, Esq.

Facsimile: (907) 276-8433

 

If to Tenant, at:

 

c/o Twinlab Consolidation Corporation

632 Broadway, Suite 201

New York, New York 10012

Facsimile: (212) 505-5413

E-mail: rneuwirth@twinlab.com

Attention: General Counsel

 

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If mailed, notice shall be deemed to be given three (3) days after being sent,
and if sent by personal delivery, facsimile or prepaid courier, notice shall be
deemed to be given when delivered.

 

10. Successors and Assigns. This Agreement shall inure to the benefit of, and
shall be binding upon, the respective successors and assigns of Tenant and JL
Properties; provided, however, that no party may assign this Agreement in whole
or in part without the prior written consent of each other party (such consent
not to be unreasonably withheld or delayed).

 

11. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and all of which together shall
constitute one and the same instrument, but in making proof hereof, it shall
only be necessary to produce one such counterpart containing signatures pages
signed by each party. Delivery of an executed counterpart of a signature page of
this Agreement by facsimile or electronic mail shall be equally effective as
delivery of a manually executed counterpart of this Agreement.

 

12. Severability. In the event that any provision of this Agreement is deemed to
be invalid, illegal or unenforceable by reason of the operation of any law or by
reason of the interpretation placed thereon by any court or governmental
authority, the validity, legality and enforceability of the remaining provisions
of this Agreement shall not in any way be affected or impaired thereby, and the
affected provision shall be modified to the minimum extent permitted by law so
as most fully to achieve the intention of this Agreement.

 

13. Governing Law. This Agreement shall be governed by and shall be construed
and enforced in accordance with the internal laws of the State of New York,
without regard to conflicts of law principles.

 

14. Amendment. This Agreement shall not be amended except by a writing signed by
all the parties.

 

15. Entire Agreement. This Agreement and the Warrants constitute the entire
agreement and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

 

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IN WITNESS WHEREOF, intending to be legally bound, and intending that this
Agreement constitute an instrument executed and delivered under seal, the
parties have caused this Agreement to be executed as of the date first written
above.

 

  JL PROPERTIES, INC.         By: /s/ Jonathan B. Rubini   Name:  Jonathan B.
Rubini   Title:  Chief Executive Officer

 

TWINLAB CONSOLIDATED HOLDINGS, INC.               By: /s/ Thomas A. Tolworthy  
Name: Thomas A. Tolworthy   Title: Chief Executive Officer and President        
  TWINLAB CONSOLIDATION CORPORATION           By: /s/ Thomas A. Tolworthy  
Name: Thomas A. Tolworthy   Title: Chief Executive Officer and President  

 

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EXHIBIT A

LETTER OF CREDIT

 

 

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EXHIBIT B

FORM OF PENNY WARRANT

 

 

-8-

 

 

EXHIBIT C

FORM OF DOLLAR WARRANT

 

 

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