Exhibit 10.48

 

SECOND AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND CONSENT

 

This SECOND AMENDMENT TO NOTE AND WARRANT AGREEMENT AND CONSENT (this
“Amendment”), dated as of February 4, 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”), TCC CM SUBCO I, INC., a Delaware corporation (“Subco
I”), TCC CM SUBCO II, INC., a Delaware corporation (“Subco II”; and together
with Parent, TCC, Twinlab Holdings, ISI Brands, Twinlab Corporation and Subco I,
the “Companies” and each individually, a “Company”), 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 (as the same may be further amended, restated,
amended and restated, supplemented or otherwise modified from time to time, the
“Note Purchase Agreement”); and

 

WHEREAS, (a) the Companies have requested that the Purchaser (i) consent to
Subco I’s and Subco II’s name changes and (ii) amend certain provisions of the
Note Purchase Agreement, and (b) the Purchaser 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 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.           Consent to Name Change. At the request of and as an accommodation
to the Companies 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), the Purchaser hereby
consents to (i) the name change of Subco I to “NutraScience Labs, Inc.” and (ii)
the name change of Subco II to “NutraScience Labs IP Corporation”, the
documentation for which, including, but not limited to, the Articles of
Amendment filed with the Delaware Secretary of State shall be delivered
immediately to the Purchaser upon filing. 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 Note Purchase Agreement or of any other Transaction
Document; (b) prejudice any right that the Purchaser have or may have in the
future under or in connection with the Note Purchase Agreement or any other
Transaction 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
Companies, on the one hand, or the Purchaser on the other hand.

 

3.           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 it hereby is, amended as follows:

 

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3.1.         Addition of New Defined Terms. Section 1 of the Note Purchase
Agreement is hereby amended by inserting the following new defined terms in the
appropriate alphabetical order:

 

“Nutricap Seller First Note” means the Unsecured Promissory Note in the
principal amount of $2,500,000 to be issued by Subco I to Nutricap Labs, LLC, a
New York limited liability company, in connection with the Target 2 Acquisition,
the principal and interest repayment of which shall have a maturity of 60 days
and bear interest at 6% per annum, a copy of which shall be provided to the
Purchaser promptly, and in any case within one business day, of execution.

 

“Nutricap Seller Second Note” means the Unsecured Promissory Note in the
principal amount of $1,478,000 to be issued by Subco I to Nutricap Labs, LLC, a
New York limited liability company, in connection with the Target 2 Acquisition,
the principal and interest repayment of which shall have a maturity of one year,
payable in 12 equal monthly installments and bear interest at 3% per annum, a
copy of which shall be provided to the Purchaser promptly, and in any case
within one business day, of execution.

 

“Nutricap Seller Notes” shall mean, collectively, the Nutricap Seller First Note
and Nutricap Seller Second Note.

 

3.2.         Amendment to Section 6.7. Section 6.7 of the Note Purchase
Agreement is hereby amended by replacing Section 6.7 in its entirety with the
following:

 

“6.7           Indebtedness.

 

Create, incur, assume or suffer to exist any Indebtedness (exclusive of trade
debt) except in respect of (a) the Indebtedness to Purchaser, (b) Permitted
Senior Debt, (c) the Essex Debt, (d) the Little Harbor Debt, (e) Indebtedness,
incurred at the time of, or within 20 days after, the acquisition of any fixed
assets for the purpose of financing all or any part of the acquisition cost
thereof, (f) the Utah Lease, (g) the Subordinated Debt; (h) Refinancing
Indebtedness with respect to any of the foregoing; provided that any Refinancing
Indebtedness that (i) is a renewal or extension of Permitted Senior Debt is
renewed or extended in accordance with Section 15 of the Subordination
Agreement, (ii) is a refinancing of Permitted Senior Debt is on terms reasonably
satisfactory to the Purchaser, (iii) is a renewal or extension of the
Subordinated Debt is renewed or extended in accordance with Section 15 of the
JL-BBNC Subordination Agreement and (iv) is a refinancing of the Subordinated
Debt is on terms reasonably satisfactory to the Purchaser; and (i) the Nutricap
Seller Notes.”

 

3.3.         Amendment to Section 6.11. Section 6.11 of the Note Purchase
Agreement is hereby amended by replacing Section 6.11 in its entirety with the
following:

 

“6.11         Entering Into or Modification of Certain Agreements

 

The Companies and their Subsidiaries shall not amend, restate, supplement or
otherwise modify (or permit or consent to any amendment, restatement, supplement
or modification of) the terms of (i) its articles or certificate of
incorporation, bylaws, any agreement between or among any of the holders of any
Company’s or any of its Subsidiaries’ Equity Interests, any other organizational
document, in each case which would be materially adverse to the Purchaser and
(ii) any of the Transaction Documents, the documents and/or instruments
evidencing the Permitted Senior Debt (unless permitted under the Subordination
Agreement), the documents and/or instruments evidencing the Little Harbor Debt
(unless permitted under the Little Harbor Subordination Agreement), the
Subordinated Loan Documents (unless permitted under the JL-BBNC Subordination
Agreement) or any of the leases for the Premises, in each case which would
result in a Material Adverse Effect or (iii) the Nutricap Seller Notes.”

 

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4.           Deferred Draw Note and Deferred Warrant. The Purchaser hereby
agrees that upon the date Subco I exercises its purchase option in connection
with the Target 2 Acquisition (the “Option Exercise Date”), the Purchaser agrees
to purchase the Deferred Draw Note and the Deferred Warrant on the date the
Target 2 Acquisition is consummated; provided that (i) the Target 2 Acquisition
is consummated within five (5) Business Days of the Option Exercise Date and
(ii) the Target 2 Acquisition is consummated in accordance with the terms
thereof (without any amendment, modification or waiver of any of the terms
thereof that would be materially adverse to the Purchaser without the consent of
the Purchaser).

 

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

 

5.1.         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.

 

5.2.         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.

 

5.3.         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 First Amendment Date), and (b) no
Default or Event of Default has occurred and is continuing.

 

6.            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.

 

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

 

7.1.         The Purchaser shall have received (i) a fully executed copy of this
Amendment, (ii) a fully executed amendment to the documents evidencing the
Permitted Senior Debt, (iii) a fully executed amendment to the Subordinated Loan
Agreement and (iv) a fully executed standstill agreement between Nutricap Labs,
LLC, Subco I and the Purchaser, in each case in form and substance reasonably
satisfactory to the Purchaser.

 

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7.2.         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).

 

7.3.         The Purchaser shall have received all fees and other amounts due
and payable to the Purchaser and its counsel in connection with this Amendment,
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.

 

8.            Miscellaneous.

 

8.1.         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.

 

8.2.         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.

 

8.3.         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.

 

8.4.         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.

 

8.5.         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.]

 

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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 – Second Amendment to Note and Warrant Purchase Agreement and
Consent]

 

 

 

 

  TCC CM SUBCO I, INC.         By: /s/ Thomas A. Tolworthy   Name: Thomas A.
Tolworthy   Title: Chief Executive Officer and President         TCC CM SUBCO
II, INC.         By: /s/ Thomas A. Tolworthy   Name: Thomas A. Tolworthy  
Title: Chief Executive Officer and President

 

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

 

 

 

 

  PURCHASER:       PENTA MEZZANINE SBIC FUND I, L.P.       By: Penta Mezzanine
SBIC Fund I GP, LLC, its General Partner         By: /s/ Richard E. Mount  
Name: Richard E. Mount   Title: Authorized Member

 

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