Exhibit 10.98

 

SIXTH AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT

 

This SIXTH AMENDMENT TO NOTE AND WARRANT AGREEMENT (this “Amendment”), dated as
of October 5, 2015, is made by and between TWINLAB CONSOLIDATED HOLDINGS, INC.,
a Nevada corporation (“Parent”), TWINLAB CONSOLIDATION CORPORATION, a Delaware
corporation (“TCC”), TWINLAB HOLDINGS, INC., a Michigan corporation (“Twinlab
Holdings”), ISI BRANDS INC., a Michigan corporation (“ISI Brands”), and TWINLAB
CORPORATION, a Delaware corporation (“Twinlab Corporation”), NUTRASCIENCE LABS,
INC., a Delaware corporation, NUTRASCIENCE LABS IP CORPORATION., a Delaware
corporation (each of the foregoing Persons being referred to herein individually
as a “Company” and collectively as the “Companies”), and PENTA MEZZANINE SBIC
FUND I, L.P., a Delaware limited partnership (the “Purchaser”).

 

WHEREAS, the Companies and the Purchaser are parties to a Note and Warrant
Purchase Agreement dated as of November 13, 2014, as amended by that certain
First Amendment to Note and Warrant Purchase Agreement, Consent and Joinder
dated as of January 22, 2015, that certain Second Amendment to Note and Warrant
Purchase Agreement and Consent dated as of February 4, 2015, that certain Third
Amendment to Note and Warrant Purchase Agreement and Consent dated as of April
30, 2015 and that certain Fourth Amendment to Note and Warrant Purchase
Agreement, Limited Consent and Limited Waiver dated as of June 30, 2015 and
Fifth Amendment to Note and Warrant Agreement and Limited Consent dated as of
September 9, 2015 (as the same may be further amended, restated, amended and
restated, supplemented or otherwise modified from time to time, the “Note
Purchase Agreement”).

 

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

 

1.          Capitalized Terms. Capitalized terms used but not defined herein
shall have the meanings set forth in the Note Purchase Agreement.

 

2.          Amendments to Note Purchase Agreement. Subject to the satisfaction
of the conditions precedent set forth herein and in reliance on the
representations, warranties and covenants of the Companies set forth herein and
in the Note Purchase Agreement, each party hereto hereby agrees that the Note
Purchase Agreement be and hereby is, amended as follows:

 

2.1.       Amendment and Restatement of Existing Defined Terms. Section 5.12 of
the Note Purchase Agreement is hereby amended and restated in its entirety
effective as of September 30, 2015 as follows:

 

5.12       Financial Covenants.

 

(a)         Minimum Adjusted EBITDA. Commencing with the month ending October
31, 2015 and until such time as all Obligations are paid, satisfied and
discharged in full, the Borrowers shall not, as of the end of any measurement
period set forth below, permit the Adjusted EBITDA for such measurement period
to be less than the amount set forth in the table below opposite such
measurement period.

 

 

 

 

Measurement Period Minimum Adjusted EBITDA October 1, 2015 to December 31, 2015
$ -2,500,000 October 1, 2015 to March 31, 2016 $ -1,750,000

 

(b)        Fixed Charge Coverage Ratio. Commencing June 30, 2016 and until such
time as all Obligations are paid, satisfied and discharged in full, the
Borrowers shall not, as of the end of any month, permit the Fixed Charge
Coverage Ratio for the period of trailing twelve months most recently ended on
or prior to such date to be less than 1.15x. Notwithstanding the foregoing, it
is hereby agreed that (i) the applicable measurement period for the month ending
June 30, 2016 shall be from April 1, 2015 to June 30, 2016 (trailing three
Months or T3M), (ii) the applicable measurement period for the month ending July
31, 2016 will be T4M, (iii) the applicable measurement period for the month
ending August 31, 2016 will be T5M, and (iv) the applicable measurement periods
shall so continue until T12M is achieved.

 

(c)        Total Funded Debt to Adjusted EBITDA Ratio. Commencing with the
fiscal quarter ending September 30, 2016 and until such time as all Obligations
are paid, satisfied and discharged in full, the Companies shall not, as of the
end of any fiscal quarter, permit the applicable ratio set forth in the table
below to exceed the amount set forth therein:

 

Applicable Ratio: (A) Total Funded Debt (calculated without giving effect to any
Indebtedness that is subordinate both to the Obligations) to (B) Adjusted EBITDA
for the period of four consecutive fiscal quarters most recently ended on or
prior to such date to exceed 4.0x

 

For the purposes of this Section 6.4, Adjusted EBITDA (1) for the measurement
period ending on September 30, 2016, shall equal the Adjusted EBITDA for the
fiscal quarter ending September 30, 2016 multiplied by 4, (2) for the
measurement period ending on December 31, 2016, shall equal the sum of Adjusted
EBITDA for the fiscal quarters ending September 30, 2016 and December 31, 2016,
multiplied by 2 and (3) for the measurement period ending on March 31, 2017,
shall equal the sum of the Adjusted EBITDA for the fiscal quarters ending
September 30, 2016, December 31, 2016 and March 31, 2017, multiplied by 4 and
divided by 3.

 

3.          Representations and Warranties; No Default. Each Company hereby
represents and warrants that:

 

3.1.      The execution, delivery and performance by such Company of this
Amendment (a) are within such Company’s corporate or similar powers and, at the
time of execution hereof and have been duly authorized by all necessary
corporate and similar action; (b) does not and will not result, in any breach or
default under any other document, instrument or agreement to which a Company or
any of its Subsidiaries is a party or to which a Company or any of its
Subsidiaries, the Premises, the Collateral or any of the property of a Company
or any of its Subsidiaries is subject or bound, except for such breaches or
defaults which, individually or in the aggregate, have not had, and would not
reasonably be expected to result in, a Material Adverse Effect and (c) will not
violate any applicable law, statute, regulation, rule, ordinance, code, rule or
order.

 

 

 

 

3.2.       This Amendment has been duly executed and delivered for the benefit
of or on behalf of each Company and constitutes a legal, valid and binding
obligation of each Company, enforceable against such Company in accordance with
its terms except (a) as the same may be limited by bankruptcy, insolvency,
reorganization moratorium or similar laws now or hereafter in effect relating to
creditors rights generally and (b) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

 

3.3.       Both before and after giving effect to this Amendment on the date
hereof (a) the representations and warranties of the Companies contained in
Section 4.1 of the Note Purchase Agreement and the other Transaction Documents
are true, correct and complete on and as of the date hereof as if made on such
date (and to the extent any representations and warranties shall relate to the
Effective Date or another earlier date, such representation and warranties shall
be deemed to be amended to relate to the date hereof), and (b) no Default or
Event of Default has occurred and is continuing.

 

4.          Ratification and Confirmation. The Companies hereby ratify and
confirm all of the terms and provisions of the Note Purchase Agreement and the
other Transaction Documents and agree that all of such terms and provisions, as
amended hereby, remain in full force and effect, except as, and to the extent
expressly set forth herein.

 

5.          Condition to Effectiveness. The effectiveness of this Amendment
shall be subject to the satisfaction of the following conditions precedent:

 

5.1.       The Purchaser shall have received a fully executed copy of this
Amendment.

 

5.2.       All representations and warranties of the Companies contained herein
shall be true and correct in all material respects as of the date hereof (and
such parties’ delivery of their respective signatures hereto shall be deemed to
be its certification thereof).

 

5.3.       The Purchaser shall have received all fees and other amounts due and
payable to the Purchaser and its counsel in connection with this Amendment,
including a a modification fee equal to Twenty-Five Thousand and No/100 Dollars
($25,000.00) due and payable on the date hereof, and to the extent invoiced,
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Companies under the Note Purchase Agreement.

 

6.          Miscellaneous.

 

6.1.       Except as otherwise expressly set forth herein, nothing herein shall
be deemed to constitute an amendment, modification or waiver of any of the
provisions of the Note Purchase Agreement, the Security Agreement or the other
Transaction Documents, all of which remain in full force and effect as of the
date hereof and are hereby ratified and confirmed. Each Company hereby
acknowledges and agrees that nothing contained herein shall be deemed to entitle
any Company to consent to, or a waiver, amendment or modification of, any of the
terms, conditions, obligations, covenants or agreements contained in the
Transaction Documents in similar or different circumstances. 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 Note Purchase
Agreement.

 

 

 

 

6.2.       This Amendment may be executed in any number of counterparts, each of
which, when executed and delivered, shall be an original, but all counterparts
shall together constitute one instrument. Delivery of an executed counterpart of
a signature page of this Amendment by facsimile or electronic mail shall be
equally effective as delivery of a manually executed counterpart of this
Amendment.

 

6.3.       This Amendment shall be governed by the laws of the State of New York
without giving effect to any conflict of law principles and shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

6.4.       The Companies agree to pay all reasonable expenses, including legal
fees and disbursements, incurred by Purchaser in connection with this Amendment
and the transactions contemplated hereby.

 

6.5.       This Amendment shall be deemed a Transaction Document for all
purposes of the Note Purchase Agreement and the other Transaction Documents. On
and after the date hereof, each reference in the Note Purchase Agreement and the
other Transaction Documents to the Note Purchase Agreement, shall mean and be a
reference to the Note Purchase Agreement, as modified by this Amendment.

 

6.6.       Each Company, 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 Indemnified Party 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 Indemnified Parties (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 Transaction Document, (b) any actions, transactions,
matters or circumstances related hereto or thereto, (c) the conduct of the
relationship between the Purchaser and any Company, or (d) any other actions or
inactions by the Purchaser, all on or prior to the date hereof. Each Company
acknowledges that the foregoing release is a material inducement to the
Purchaser’s decision to enter into this Amendment and to agree to the
modifications contemplated hereunder.

 

[Signature Pages Follow.]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment which shall
be deemed to be a sealed instrument as of the date first above written.

 

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

 

[Signature Page – Sixth Amendment to Note and Warrant Purchase Agreement]

 

 

 

 

  NUTRASCIENCE LABS, INC.       By: /s/ Thomas A. Tolworthy   Name:    Thomas A.
Tolworthy   Title:   Chief Executive Officer and President       NUTRASCIENCE
LABS IP CORPORATION       By: /s/ Thomas A. Tolworthy   Name:   Thomas A.
Tolworthy   Title:   Chief Executive Officer and President

 

[Signature Page – Sixth Amendment to Note and Warrant Purchase Agreement]

 

 

 

 

  PURCHASER:       PENTA MEZZANINE SBIC FUND I, L.P.       By: Penta Mezzanine
SBIC Fund I GP, LLC, its General Partner       By: /s/ Seth D. Ellis   Name: 
  Seth D. Ellis   Title:   Partner

 

[Signature Page – Sixth Amendment to Note and Warrant Purchase Agreement]