Document:

ex_144129.htm

 

EXHIBIT 10.199

 

AMENDMENT NO. 17 TO CREDIT AND SECURITY AGREEMENT AND LIMITED WAIVER 

 

 

THIS AMENDMENT NO. 17 TO CREDIT AND SECURITY AGREEMENT AND LIMITED WAIVER (this “Amendment”) is made as of this 22nd day of April, 2019, by and among TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation, TWINLAB CONSOLIDATION CORPORATION, a Delaware corporation, 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.), 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 IV TRUST, a Delaware statutory trust, as successor-by-assignment from MidCap Funding X 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 Existing 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 (the “Original Agreement”) (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, by that certain Amendment No. 11 to Credit and Security Agreement dated as of September 1, 2016, by that certain Amendment No. 12 to Credit and Security Agreement and Limited Consent dated as of December 2, 2017, by that certain Amendment No. 13 to Credit and Security Agreement and Limited Consent dated as of August 30, 2017, by that certain Amendment No. 14 to Credit and Security Agreement and Limited Waiver dated as of March 22, 2018, by that certain Amendment No. 15 to Credit and Security Agreement dated as of December 4, 2018, and by that certain Amendment No. 16 to Credit and Security Agreement (the “Sixteenth Amendment”) dated as of January 22, 2019 (the “Existing Credit Agreement”), Agent and Lenders agreed to make available to Borrowers a secured revolving credit facility in an amended principal amount of up to $5,000,000 from time to time (as amended, modified, supplemented, extended and restated from time to time). Capitalized terms used but not otherwise defined in this Amendment shall have the meanings set forth in the Existing Credit Agreement.

 

 

 

 

B.     Borrowers have failed to satisfy Section 6.2 (Minimum Adjusted EBITDA) of the Credit Agreement because Borrowers’ Adjusted EBITDA was less than $1,400,000 with respect to the measurement period from January 1, 2018 to December 31, 2018, and such failure constitutes an Event of Default under the Credit Agreement (the “Existing Event of Default”). Borrowers have requested that Agent and the Lenders waive the Existing Event of Default, and Agent and Lenders have agreed to do so, in accordance with the terms and subject to the conditions set forth herein

 

C.     Borrowers have requested that the Administrative Agent and the Lenders agree to amend the Existing Credit Agreement to, among other things, (i) extend the Commitment Expiry Date, (ii) increase the Revolving Loan Commitment Amount from $5,000,000 to $12,000,000, (iii) modify the financial covenants and (iv) revise other provisions.

 

D.      Borrowers, Agent and Lenders have agreed to amend the Existing 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.     Amendments to Existing Credit Agreement.     

 

(a)   Original Agreement. The Original Agreement is hereby amended to delete the bold, stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold, double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Credit and Security Agreement attached as Exhibit A hereto. So as to avoid any confusion, Exhibit A sets forth the operative terms of the Existing Credit Agreement after giving effect to this Amendment (as may be as further amended, modified, supplemented, extended and restated from time to time, the “Credit Agreement”), but does not include any Annexes, Exhibits or Schedules.

 

 

 

 

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

 

(c)   Exhibit B. Exhibit B to the Existing Credit Agreement containing the Compliance Certificate is hereby amended and restated as set forth on Exhibit C attached to and made a part of this Amendment.

 

(d)   Certain Schedules. Schedules 3.4, 3.17, 3.19, 5.1, 5.14 and 9.2 to the Existing Credit Agreement are hereby amended and restated as set forth on Exhibit D attached to and made a part of this Amendment, and shall be deemed to be given as of the date of this Amendment.

 

3.     Limited Waiver.  Each of the Borrowers hereby acknowledges and agrees that the Existing Event of Default continues to exist as of the date hereof. At the request of and as an accommodation to Borrowers and subject to the terms and conditions set forth herein, Agent and Lenders hereby waive the Existing Event of Default. The limited waiver set forth in this Section 3 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, including, without limitation, the rights of the Agent under Section 2.1(b)(i) of the Credit Agreement; (c) waive any other Event of Default that may exist as of the date hereof; (d) waive compliance with Section 6.2 of the Credit Agreement for any period other than with respect to the measurement period from January 1, 2018 to December 31, 2018; or (e) 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.

 

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 Existing Credit Agreement are, after giving effect to this Amendment and the transactions contemplated hereby, true and correct with respect to such Borrower as of the date hereof to the same extent as though made on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date or except as specifically amended pursuant to the terms of this Amendment, and (b) covenants to perform its respective obligations under the Existing 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 of the Borrowers 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 enter into this Amendment, Borrower shall pay to Agent a modification fee equal to One Hundred Twenty Thousand and No/100 Dollars ($120,000.00) (the “Modification Fee”). The Modification Fee shall be fully earned upon the execution of this Amendment. Borrowers will be given a $33,333.33 credit towards the Modification Fee for a fee paid in connection with the Sixteenth Amendment. 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 Existing Credit Agreement after giving effect to this Amendment.

 

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)     Borrowers shall have delivered to Agent an Amended and Restated Revolving Loan Note, duly executed by an authorized officer of each Borrower;

 

(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 all of the fees owing pursuant to this Amendment and Agent’s reasonable out-of-pocket legal fees and expenses.

 

7.     Post-Seventeenth Amendment Closing Requirements.  Borrowers shall satisfy and complete each of the following obligations, or provide Agent each of the items listed below, as applicable, on or before the date indicated below, all to the satisfaction of Agent in its sole and absolute discretion:

 

(a)     As soon as possible, but in any case within thirty (30) days of the Seventeenth Amendment Closing Date, Borrowers shall deliver or cause to be delivered to Agent, an updated Schedule 3.17 (Material Contracts) and an updated Schedule 3.19 (Intellectual Property), such Schedule being deemed to be given as of the Seventeenth Amendment Closing Date.     

 

(b)     As soon as possible, but in any case within fourteen (14) days of the Seventeenth Amendment Closing Date, Borrowers shall deliver or cause to be delivered to Agent fully executed Deposit Account Control Agreements in form and substance satisfactory to Agent with respect to each of the deposit accounts at Bank of America ending in (i) 5106, (ii) 5119 and (iii) 4089.

 

(c)     As soon as possible, but in any case within thirty (30) days of the Seventeenth Amendment Closing Date, Borrowers shall deliver or cause to be delivered to Agent one or more fully executed Grants of Security Interest in Patent and Trademarks in form and substance satisfactory to Agent with respect to all of the U.S. registered intellectual property of Borrowers not subject to such an agreement in favor of Agent as of the Seventeenth Amendment Closing Date.

 

 

 

 

(d)     As soon as possible, but in any case within ninety (90) days of the Seventeenth Amendment Closing Date, Borrowers shall deliver or cause to be delivered to Agent fully-executed copies of amendments to the Subordinated Debt Documents extending the maturity date of each of the Penta Debt, JL-BBNC Debt, Golisano Holdings Debt, Great Harbor Debt and Little Harbor Debt to be no earlier than October 22, 2021, and otherwise in form and substance satisfactory to Agent in all respects or provide evidence such Debt has been discharged in full, provided that no portion of the Revolving Loans or the Collateral shall be used, directly or indirectly, to make payment on such Subordinated Debt.

 

(e)     On or before August 31, 2020, the Borrowers shall (i) deliver or cause to be delivered to Agent fully-executed copies of amendments to the Subordinated Debt Documents extending the maturity date of the Macatawa Debt to be no earlier than six months after the Commitment Expiry Date, and otherwise in form and substance satisfactory to Agent in all respects, (ii) refinance the Macatawa Debt with Refinancing Debt having a maturity date no earlier than October 22, 2021 or (iii) obtain the written consent of the Agent to the repayment of the Macatawa Debt at its current maturity date of November 30, 2020, which consent may be withheld in the Agent’s sole and absolute discretion.

 

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 Existing 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, except as expressly provided in this Amendment, as a waiver of any existing Defaults or Events of Default under the Existing 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 Existing Credit Agreement.

 

 

 

 

10.   Affirmation. Except as specifically amended and waived pursuant to the terms hereof, the Existing 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 Existing Credit Agreement (as amended and modified 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.    Miscellaneous.

 

(a)     Reference to the Effect on the Existing Credit Agreement.  Upon the effectiveness of this Amendment, each reference in the Existing Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of similar import shall mean and be a reference to the Existing Credit Agreement, as amended and modified by this Amendment. Except as specifically amended and waived above, the Existing 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 Existing 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 Existing 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.

 

12.  Note.  As of the February 13, 2019, Lender has determined not to evidence its Revolving Loan Commitment or any portion of its Obligations under the Credit Agreement by a Note from Borrowers.  Agent shall maintain a record of the Lenders and their respective amounts in accordance with the terms of the Credit Agreement.  Borrowers acknowledge and agree that all outstanding Obligations, including, without limitation, principal and interest under the Note as of the date hereof continue in full force and effect and the cancellation of the Note shall not constitute a novation of any of the Obligations evidenced by the Note

 

[SIGNATURES APPEAR ON FOLLOWING PAGES]

 

 

 

 

 

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 IV 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 IV 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	 	 

                   

 

 

 

	BORROWERS: 	TWINLAB CONSOLIDATED HOLDINGS, INC.	 	 
	 	TWINLAB CONSOLIDATION CORPORATION	 	 
	 	TWINLAB HOLDINGS, INC.	 	 
	 	TWINLAB CORPORATION 	 	 
	 	ISI BRANDS, INC.	 	 
	 	NUTRASCIENCE LABS, INC.	 	 
	 	NUTRASCIENCE LABS IP CORPORATION	 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/Anthony Zolezzi	(SEAL)	 
	 	Name:	Anthony Zolezzi	 	 
	 	Title:	Chief Executive Officer	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	ORGANIC HOLDINGS LLC	 	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/Anthony Zolezzi	(SEAL)	 
	 	Name:	Anthony Zolezzi	 	 
	 	Title:	Sole Manager	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	RESERVE LIFE ORGANICS, LLC	 	 
	 	RESVITALE, LLC	 	 
	 	RE-BODY, LLC	 	 
	 	INNOVITAMIN ORGANICS, LLC	 	 
	 	ORGANICS MANAGEMENT LLC	 	 
	 	COCOAWELL, LLC	 	 
	 	FEMBODY, LLC	 	 
	 	RESERVE LIFE NUTRITION, L.L.C.	 	 
	 	INNOVITA SPECIALTY DISTRIBUTION LLC	 	 
	 	JOIE ESSANCE, LLC	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	By:	ORGANIC HOLDINGS LLC,	 	 
	 	 	its sole Member	 	 
	 	 	 	 	 
	 	By:	/s/Anthony Zolezzi	(SEAL)	 
	 	Name:	Anthony Zolezzi	 	 
	 	Title: 	Sole Manager	 	 

 

 

 

 

EXHIBIT A

 

Existing Credit Agreement

After Giving Effect To Amendment No. 17

 

 

 

 

 

 

EXHIBIT B

 

Commitment Annex

 

 

 

 

 

Annex A to Credit Agreement (Commitment Annex)

 

 

	
			Lender

				 	
			Revolving Loan

			Commitment

			Amount

				 	
			Revolving Loan 

			Commitment 

			Percentage

			
	
			MidCap Funding IV Trust

				 	
			$12,000,000

				 	
			100%

			
	
			TOTALS

				 	
			$12,000,000

				 	
			100%

			

 

 

 

 

EXHIBIT C

 

Compliance Certificate

 

 

 

 

 

Exhibit B to Credit Agreement (FORM OF Compliance Certificate)

 

 

COMPLIANCE CERTIFICATE

 

This Compliance Certificate is given by _____________________, a Responsible Officer of TWINLAB CONSOLIDATION CORPORATION (the “Borrower Representative”), pursuant to that certain Credit and Security Agreement dated as of January 22, 2015 among the Borrower Representative, TWINLAB CONSOLIDATED HOLDINGS, INC., TWINLAB HOLDINGS, INC., ISI BRANDS INC., TWINLAB CORPORATION, NUTRASCIENCE LABS, INC.(formerly known as TCC CM Subco I, Inc.), NUTRASCIENCE LABS IP CORPORATION (formerly known as TCC CM Subco II, Inc.), ORGANIC HOLDINGS LLC, RESERVE LIFE ORGANICS, LLC, RESVITALE, LLC, RE-BODY, LLC, INNOVITAMIN ORGANICS, LLC, ORGANICS MANAGEMENT LLC, COCOAWELL, LLC, FEMBODY, LLC, RESERVE LIFE NUTRITION, L.L.C., INNOVITA SPECIALTY DISTRIBUTION, LLC, JOIE ESSANCE, LLC and any additional Borrower that may hereafter be added thereto (collectively, “Borrowers”), MidCap Funding IV Trust, as successor by assignment from MidCap Funding X Trust (successor by assignment from MidCap Financial Trust), individually as a Lender and as Agent, and the financial institutions or other entities from time to time parties hereto, each as a Lender (as such agreement may have been amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein without definition shall have the meanings set forth in the Credit Agreement.

 

The undersigned Responsible Officer hereby certifies to Agent and Lenders that:

 

(a)     the financial statements delivered with this certificate in accordance with Section 4.1 of the Credit Agreement fairly present in all material respects the results of operations and financial condition of Borrowers and their Consolidated Subsidiaries as of the dates and the accounting period covered by such financial statements;

 

(b)     I have reviewed the terms of the Credit Agreement and have made, or caused to be made under my supervision, a review in reasonable detail of the transactions and conditions of Borrowers and their Consolidated Subsidiaries during the accounting period covered by such financial statements and such review has not disclosed the existence during or at the end of such accounting period, and I have no knowledge of the existence as of the date hereof, of any condition or event that constitutes a Default or an Event of Default, except as set forth in Schedule 1 hereto, which includes a description of the nature and period of existence of such Default or an Event of Default and what action Borrowers have taken, are undertaking and propose to take with respect thereto;

 

(c)     except as noted on Schedule 2 attached hereto, the Credit Agreement contains a complete and accurate list of all business locations of Borrowers and Guarantors and all names under which Borrowers and Guarantors currently conduct business; Schedule 2 specifically notes any changes in the names under which any Borrower or Guarantor conduct business;

 

 

 

 

(d)     except as noted on Schedule 3 attached hereto, the undersigned has no knowledge of (i) any federal or state tax liens having been filed against any Borrower, Guarantor or any Collateral or (ii) any failure of any Borrower or Guarantors to make required payments of withholding or other tax obligations of any Borrower or Guarantors during the accounting period to which the attached statements pertain or any subsequent period.

 

(e)     Schedule 5.14 to the Credit Agreement contains a complete and accurate statement of all deposit accounts and investment accounts maintained by Borrowers and Guarantors;

 

(f)     except as noted on Schedule 4 attached hereto and Schedule 3.6 to the Credit Agreement, the undersigned has no knowledge of any current, pending or threatened: (i) litigation against any Borrower or Guarantor; (ii)     inquiries, investigations or proceedings concerning the business affairs, practices, licensing or reimbursement entitlements of any Borrower or Guarantor; or (iii) any default by any Borrower or Guarantor under any Material Contract to which it is a party.

 

(g)     except as noted on Schedule 5 attached hereto, no Borrower or Guarantor has acquired, by purchase, by the approval or granting of any application for registration (whether or not such application was previously disclosed to Agent by Borrowers) or otherwise, any Intellectual Property that is registered with any United States or foreign Governmental Authority, or has filed with any such United States or foreign Governmental Authority, any new application for the registration of any Intellectual Property, or acquired rights under a license as a licensee with respect to any such registered Intellectual Property (or any such application for the registration of Intellectual Property) owned by another Person, that has not previously been reported to Agent on Schedule 3.17 to the Credit Agreement or any Schedule 5 to any previous Compliance Certificate delivered by the Company to Agent.

 

(j)     except as noted on Schedule 6 attached hereto, no Borrower or Guarantor has acquired, by purchase or otherwise, any Chattel Paper, Letter of Credit Rights, Instruments, Documents or Investment Property that has not previously been reported to Agent on any Schedule 6 to any previous Compliance Certificate delivered by Borrower Representative to Agent.

 

(k)     except as noted on Schedule 7 attached hereto, no Borrower or Guarantor is aware of any commercial tort claim that has not previously been reported to Agent on any Schedule 7 to any previous Compliance Certificate delivered by Borrower Representative to Agent.

 

(l)      Borrowers and Guarantors (if any) are in compliance with the covenants contained in Article 6 of the Credit Agreement, and in any Guarantee constituting a part of the Financing Documents, as demonstrated by the calculation of such covenants below, except as set forth below; in determining such compliance, the following calculations have been made: [See attached worksheets]. Such calculations and the certifications contained therein are true, correct and complete.

 

 

 

 

The foregoing certifications and computations are made as of ________________, 201__ (end of month) and as of _____________, 201__.

 

	 	
			Sincerely,

			
	 	 	 
	 	TWINLAB CONSOLIDATION CORPORATION
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

 

 

 

Adjusted EBITDA Worksheet (Attachment to Compliance Certificate)

 

	
			EBITDA for the applicable period is calculated as follows, in each case, determined on a consolidated basis in accordance with GAAP:

				 	 	 
	 	 	 	 	 
	
			Net Income for the period of the Borrowers, being the consolidated net income (or loss) of the Borrowers and their Subsidiaries for the period in question, after giving effect to deduction for provision for all operating expenses, all taxes and reserves (including reserves for deferred taxes) and all other proper deductions, all determined in accordance with GAAP; provided, however, that for purposes of calculating Net Income, there shall be excluded and no effect shall be given to (a) one-time extraordinary income items, as determined in accordance with GAAP, and (b) any Net Income attributable to any Subsidiary to the extent that any Borrower (or any Subsidiary through which such Borrower owns the subject Subsidiary) is prohibited (bylaw, contract minority ownership rights or otherwise) from receiving a distribution of such Net Income from such Subsidiary:

				 	$	
			 

			
	 	 	 	 	 
	Minus:	
			Any extraordinary gains, interest income, non-operating income, non-cash income and income tax benefits and decreases in any change in LIFO or any other inventory reserves for the period

				 	$	
			 

			
	 	 	 	 	 
	Plus:	
			non-cash extraordinary losses (including non-cash expenses with respect to stock option and stock based employee compensation programs), Interest Expense, income taxes, depreciation and amortization and increases in any change in LIFO reserves for the period

				 	$	
			 

			
	 	 	 	 	 
	
			EBITDA for the Defined Period:

				 	$	
			 

			
	 	 	 	 	 
	Plus:	
			any expenses relating to Acquisitions through the end of Fiscal Year 2015, plus severance payments and other costs relating to permanent headcount reductions, all as determined by GAAP, plus a one-time addback for a non-recurring lease payment to be made in order to terminate the Florida Lease of up to $2,000,000, which termination of the Florida Lease will be on terms and conditions satisfactory to the Agent.

				 	$	
			 

			
	 	 	 	 	 
	
			Adjusted EBITDA for the Defined Period

				 	$	
			 

			

 

 

 

 

Fixed Charge Coverage Ratio Worksheet (Attachment to Compliance Certificate)

 

	Fixed Charge Coverage Ratio for the applicable period is calculated as the ratio of:	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	Adjusted EBITDA for the period (calculated pursuant to the Adjusted EBITDA Worksheet)	 	$	
			 

			
	 	 	 	 	 
	Plus:	cash received during such period for Equity Interests so long as such cash is used as working capital and such cash is not received more than two times in any trailing-twelve-months period	 	$	 
	 	 	 	 	 
	Minus:	Capital Expenditures not financed by the seller of the capital asset or by a third party lender made (to the extent not already incurred in a prior period) or incurred during such period	 	$	
			 

			
	 	 	 	 	 
	Minus:	cash taxes paid during such period, to the extent greater than zero	 	$	
			 

			
	 	 	 	 	 
	Minus:	Permitted Distributions under clause (d) of the definition of that term	 	$	 
	 	 	 	 	 
	Total for the period:	 	 	
			 

			
	 	 	 	$	 
	 	 	 	 	 
	To	 	 	 	 
	 	 	 	 	 
	Fixed Charges for the applicable period, which is calculated with respect to the Borrowers and their Subsidiaries determined on a consolidated basis in accordance with GAAP, the sum, without duplication, as follows:	 	 	
			 

			
	 	 	 	 	 
	Cash Interest Expense paid during such period (other than interest paid-in-kind, amortization of financing fees, and other non-cash Interest Expense),	 	$	 
	 	 	 	 	 
	 	 	 	 	 
	Plus:	principal payments paid in cash in respect of Debt paid during such period, including cash payments with respect to Capital Leases, but excluding principal payments made on the Revolving Loans	 	$	 
	 	 	 	 	 
	Plus:	all Permitted Distributions (other than Permitted Distributions under clause (d) of the definition of that term) and other distributions paid in cash during such period	 	$	 
	 	 	 	 	 
	Fixed Charges for the applicable period:	 	$	 
	 	 	 	 	 
	Ratio:	 	 	 	 

 

 

 

 

Minimum Liquidity Worksheet (Attachment to Compliance Certificate)

 

	Revolving Loan Availability plus cash and cash equivalents that are (a) owned by any Borrower, and (b) not subject to any Lien other than a Lien in favor of Agent, excluding, however, any cash and cash equivalents in a specified amount pledged to or held by Agent to secure a specified Obligation in that amount.	 	$	 
	 	 	 	 	 

 

 

 

 

	Covenant Compliance:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	Minimum Adjusted EBIDTA	 	$	 	 	 	 
	 	 	 	 	 	 	 	 
	Minimum Fixed Charge Coverage Ratio for the period	 	 	 	 	 	to 1.0
	 	 	 	 	 	 	 	 
	Minimum Liquidity	 	$	 	 	 	 
	 	 	 	 	 	 	 	 
	In Compliance	 	 	 	Yes/No

 

 

 

 

EXHIBIT D

 

Schedules 3.4, 3.17, 3.19, 5.1, 5.14 and 9.2ex_144130.htm

 

EXHIBIT 10.200

 

WARRANT

 

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.

 

Warrant Certificate No.: 2019-27

 

Original Issue Date: April 22, 2019

 

FOR VALUE RECEIVED, Twinlab Consolidated Holdings, Inc., a Nevada corporation (the "Company"), hereby certifies that MidCap Funding IV Trust, a Delaware statutory trust, with an address at c/o MidCap Financial Services, LLC, as servicer, 7255 Woodmont Avenue, Suite 200, Bethesda, Maryland 20814, or its registered assigns (the "Holder") is entitled to purchase from the Company up to 500,000 duly authorized, validly issued, fully paid and nonassessable shares of Common Stock at a purchase price per share of $.76 (the "Exercise Price"), all subject to the terms, conditions and adjustments set forth below in this Warrant. Certain capitalized terms used herein are defined in Section 1 hereof.

 

This Warrant has been issued in connection with that certain Amendment No. 17, dated as of date hereof, relating to that certain Credit and Security Agreement, dated as of January 22, 2015, by and among the Company and the Company's subsidiaries, as borrowers, MidCap Funding IV Trust, a Delaware statutory trust (successor-by-assignment to MidCap Funding X Trust, successor-by-assignment to MidCap Financial Trust), as agent, and the financial institutions from time to time party thereto as lenders (as amended from time to time, the "Credit Agreement").

 

1.     Definitions. As used in this Warrant, the following terms have the respective meanings set forth below:

 

"Aggregate Exercise Price" means an amount equal to the product of (a) the number of Warrant Shares in respect of which this Warrant is then being exercised pursuant to Section 3 hereof, multiplied by (b) the Exercise Price.

 

"Board" means the board of directors of the Company.

 

 

 

 

"Business Day" means any day, except a Saturday, Sunday or legal holiday, on which banking institutions in the city of New York are authorized or obligated by law or executive order to close.

 

"Common Stock" means the common stock, par value $.001 per share, of the Company, and any capital stock of the Company into which such Common Stock shall have been converted, exchanged or reclassified following the date hereof.

 

"Company" has the meaning set forth in the preamble.

 

"Convertible Securities" means any securities (directly or indirectly) convertible into or exchangeable for Common Stock, but excluding Options.

 

"Credit Agreement" has the meaning set forth in the Preamble.

 

"Exercise Agreement" has the meaning set forth in Section 3(a)(i).

 

"Exercise Date" means, for any given exercise of this Warrant, the date on which the conditions to such exercise as set forth in Section 3 shall have been satisfied at or prior to 5:00 p.m., New York, New York time, on a Business Day, including, without limitation, the receipt by the Company of the Exercise Agreement, the Warrant and the Aggregate Exercise Price.

 

"Exercise Period" has the meaning set forth in Section 2.

 

"Exercise Price" has the meaning set forth in the preamble.

 

"Fair Market Value" means, as of any particular date: (a) the volume weighted average of the closing sales prices of the Common Stock for such day on all domestic securities exchanges on which the Common Stock may at the time be listed; (b) if there have been no sales of the Common Stock on any such exchange on any such day, the average of the highest bid and lowest asked prices for the Common Stock on all such exchanges at the end of such day; (c) if on any such day the Common Stock is not listed on a domestic securities exchange, the closing sales price of the Common Stock as quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association for such day; or (d) if there have been no sales of the Common Stock on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association on such day, the average of the highest bid and lowest asked prices for the Common Stock quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association at the end of such day; in each case, averaged over twenty (20) consecutive Business Days ending on the Business Day immediately prior to the day as of which "Fair Market Value" is being determined; provided, that if the Common Stock is listed on any domestic securities exchange, the term "Business Day" as used in this sentence means Business Days on which such exchange is open for trading. If at any time the Common Stock is not listed on any domestic securities exchange or quoted on the OTC Bulletin Board, the Pink OTC Markets or similar quotation system or association, the "Fair Market Value" of the Common Stock shall be the fair market value per share as determined in good faith by the Board.

 

"Holder" has the meaning set forth in the preamble.

 

2

 

 

"Options" means any warrants or other rights or options to subscribe for or purchase Common Stock or Convertible Securities.

 

"Original Issue Date" means April 22, 2019.

 

"Nasdaq" means The NASDAQ Stock Market LLC.

 

"OTC Bulletin Board" means the Financial Industry Regulatory Authority OTC Bulletin Board electronic inter-dealer quotation system.

 

"Person" means any individual, sole proprietorship, partnership, limited liability company, corporation, joint venture, trust, incorporated organization or government or department or agency thereof.

 

"Pink OTC Markets" means the OTC Markets Group Inc. electronic inter-dealer quotation system, including OTCQX, OTCQB and OTC Pink.

 

"Warrant" means this Warrant and all warrants issued upon division or combination of, or in substitution for, this Warrant.

 

"Warrant Shares" means the shares of Common Stock or other capital stock of the Company then purchasable upon exercise of this Warrant in accordance with the terms of this Warrant.

 

2.     Term of Warrant. Subject to the terms and conditions hereof, at any time or from time to time after the date hereof and prior to 5:00 p.m., New York, New York time, on the second anniversary of the date hereof or, if such day is not a Business Day, on the next preceding Business Day (the "Exercise Period"), the Holder of this Warrant may exercise this Warrant for all or any part of the Warrant Shares purchasable hereunder (subject to adjustment as provided herein).

 

3.      Exercise of Warrant.

 

(a)     Exercise Procedure. This Warrant may be exercised from time to time on any Business Day during the Exercise Period, for all or any part of the unexercised Warrant Shares, upon:

 

(i)     Surrender of this Warrant to the Company at its then principal executive offices (or an indemnification undertaking with respect to this Warrant in the case of its loss, theft or destruction), together with an Exercise Agreement in the form attached hereto as Exhibit A (each, an "Exercise Agreement"), duly completed (including specifying the number of Warrant Shares to be purchased) and executed; and

 

(ii)     Payment to the Company of the Aggregate Exercise Price in accordance with Section 3.(b).

 

3

 

 

(b)      Payment of the Aggregate Exercise Price.

 

(i)      Payment of the Aggregate Exercise Price shall be made by delivery to the Company of a certified or official bank check payable to the order of the Company or by wire transfer of immediately available funds to an account designated in writing by the Company, in the amount of such Aggregate Exercise Price.

 

(ii)     The Holder shall have the right to pay all or a portion of the Aggregate Exercise Price by making a cashless exercise, in which case the portion of the Aggregate Exercise Price to be so paid shall be paid by reducing the number of Warrant Shares otherwise issuable pursuant to the Exercise Agreement by a number determined by multiplying that number of Warrant Shares by a fraction, (i) the numerator of which is the Aggregate Exercise Price to be so paid and (ii) the denominator of which is the Fair Market Value as of the date of the exercise.

 

(c)     Delivery of Stock Certificates. Upon receipt by the Company of the Exercise Agreement, surrender of this Warrant and payment of the Aggregate Exercise Price (in accordance with Section 3.(a) hereof), the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holder a certificate or certificates representing the Warrant Shares issuable upon such exercise, together with cash in lieu of any fraction of a share, as provided in Section 3.(d) hereof. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Agreement and shall be registered in the name of the Holder or, subject to compliance with Section 5 below, such other Person's name as shall be designated in the Exercise Agreement. This Warrant shall be deemed to have been exercised and such certificate or certificates of Warrant Shares shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such Warrant Shares for all purposes, as of the Exercise Date.

 

(d)      Fractional Shares. The Company shall not be required to issue a fractional Warrant Share upon exercise of any Warrant. As to any fraction of a Warrant Share that the Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash (by delivery of a certified or official bank check or by wire transfer of immediately available funds) equal to the product of (i) such fraction multiplied by (ii) the Fair Market Value of one Warrant Share on the Exercise Date.

 

(e)     Delivery of New Warrant. Unless the purchase rights represented by this Warrant shall have expired or shall have been fully exercised, the Company shall, at the time of delivery of the certificate or certificates representing the Warrant Shares being issued in accordance with Section 3.(c) hereof, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unexpired and unexercised Warrant Shares called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.

 

4

 

 

(f)     Valid Issuance of Warrant and Warrant Shares; Payment of Taxes. With respect to the exercise of this Warrant, the Company hereby represents, covenants and agrees:

 

(i)      This Warrant is, and any Warrant issued in substitution for or replacement of this Warrant shall be, upon issuance, duly authorized and validly issued.

 

(ii)     All Warrant Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be, upon issuance, and the Company shall take all such actions as may be necessary or appropriate in order that such Warrant Shares are, validly issued, fully paid and non-assessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all taxes, liens and charges.

 

(iii)     The Company shall take all such actions as may be necessary to ensure that all such Warrant Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance).

 

(iv)     The Company shall use its best efforts to cause the Warrant Shares, immediately upon such exercise, to be listed on any domestic securities exchange upon which shares of Common Stock or other securities constituting Warrant Shares are listed at the time of such exercise.

 

(v)      The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issuance or delivery of Warrant Shares upon exercise of this Warrant; provided, that the Company shall not be required to pay any tax or governmental charge that may be imposed with respect to any applicable withholding or the issuance or delivery of the Warrant Shares to any Person other than the Holder, and no such issuance or delivery shall be made unless and until the Person requesting such issuance has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid.

 

(g)     Reservation of Shares. During the Exercise Period, the Company shall at all times reserve and keep available out of its authorized but unissued Common Stock or other securities constituting Warrant Shares, solely for the purpose of issuance upon the exercise of this Warrant, the maximum number of Warrant Shares issuable upon the exercise of this Warrant, and the par value per Warrant Share shall at all times be less than or equal to the applicable Exercise Price. The Company shall not increase the par value of any Warrant Shares receivable upon the exercise of this Warrant above the Exercise Price then in effect and shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant.

 

5

 

 

4.     Adjustment to Number of Warrant Shares. In order to prevent dilution of the purchase rights granted under this Warrant, the number of Warrant Shares issuable upon exercise of this Warrant shall be subject to adjustment from time to time as provided in this Section 4 (in each case, after taking into consideration any prior adjustments pursuant to this Section 4).

 

(a)     Adjustment to Number of Warrant Shares Upon Dividend, Subdivision or Combination of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, (i) pay a dividend or make any other distribution upon the Common Stock or any other capital stock of the Company payable in shares of Common Stock or in Options or Convertible Securities, or (ii) subdivide (by any stock split, recapitalization or otherwise) its outstanding shares of Common Stock into a greater number of shares, the number of Warrant Shares issuable upon exercise of this Warrant and the Exercise Price in effect immediately prior to any such dividend, distribution or subdivision shall be proportionately adjusted. If the Company at any time combines (by combination, reverse stock split or otherwise) its outstanding shares of Common Stock into a smaller number of shares, the number of Warrant Shares issuable upon exercise of this Warrant and the Exercise Price in effect immediately prior to such combination shall be proportionately adjusted. Any adjustment under this Section 4.(a) shall become effective at the close of business on the date the dividend, subdivision or combination becomes effective.

 

(b)     Adjustment to Number of Warrant Shares Upon Reorganization, Reclassification, Consolidation or Merger. In the event of any (i) capital reorganization of the Company, (ii) reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split-up or combination of shares), (iii) consolidation or merger of the Company with or into another Person, (iv) sale or lease of all or substantially all of the Company's assets to another Person or (v) other similar transaction (other than any such transaction covered by Section 4.(a)), in each case which entitles the holders of Common Stock to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock, this Warrant shall, immediately after such reorganization, reclassification, consolidation, merger, sale or similar transaction, remain outstanding and shall thereafter, in lieu of or in addition to (as the case may be) the number of Warrant Shares then exercisable under this Warrant, be exercisable for the kind and number of shares of stock or other securities or assets of the Company or of the successor Person resulting from such transaction to which the Holder would have been entitled upon such reorganization, reclassification, consolidation, merger, sale or similar transaction if the Holder had exercised this Warrant in full immediately prior to the time of such reorganization, reclassification, consolidation, merger, sale or similar transaction and acquired the applicable number of Warrant Shares then issuable hereunder as a result of such exercise (without taking into account any limitations or restrictions on the exercisability of this Warrant); and, in such case, appropriate adjustment (in form and substance reasonably satisfactory to the Holder) shall be made with respect to the Holder's rights under this Warrant to insure that the provisions of this Section 4 hereof shall thereafter be applicable, as nearly as possible, to this Warrant in relation to any shares of stock, securities or assets thereafter acquirable upon exercise of this Warrant. The provisions of this Section 4.(b) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or similar transactions. The Company shall not effect any such reorganization, reclassification, consolidation, merger, sale or similar transaction unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation, merger, sale or similar transaction, shall assume, by written instrument substantially similar in form and substance to this Warrant, the obligation to deliver to the Holder such shares of stock, securities or assets which, in accordance with the foregoing provisions, such Holder shall be entitled to receive upon exercise of this Warrant. Notwithstanding anything to the contrary contained herein, with respect to any corporate event or other transaction contemplated by the provisions of this Section 4.(b), the Holder shall have the right to elect prior to the consummation of such event or transaction, to give effect to the exercise rights contained in Section 2 instead of giving effect to the provisions contained in this Section 4.(b) with respect to this Warrant.

 

6

 

 

(c)     Certain Events. If any event of the type contemplated by the provisions of this Section 4 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features) occurs, then the Board shall, in its good faith judgment, make an appropriate adjustment in the number of Warrant Shares issuable upon exercise of this Warrant so as to protect the rights of the Holder in a manner consistent with the provisions of this Section 4; provided, that no such adjustment pursuant to this Section 4.(c) shall decrease the number of Warrant Shares issuable as otherwise determined pursuant to this Section 4.

 

(d)      Certificate as to Adjustment.

 

(i)     As promptly as reasonably practicable following any adjustment of the number of Warrant Shares pursuant to the provisions of this Section 4, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer setting forth in reasonable detail such adjustment and the facts upon which it is based and certifying the calculation thereof.

 

(ii)     As promptly as reasonably practicable following the receipt by the Company of a written request by the Holder, but in any event not later than five (5) Business Days thereafter, the Company shall furnish to the Holder a certificate of an executive officer certifying the number of Warrant Shares or the amount, if any, of other shares of stock, securities or assets then issuable upon exercise of the Warrant.

 

7

 

 

(e)     Notices. In the event:

 

(i)      that the Company shall take a record of the holders of its Common Stock (or other capital stock or securities at the time issuable upon exercise of the Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, to vote at a meeting (or by written consent), to receive any right to subscribe for or purchase any shares of capital stock of any class or any other securities, or to receive any other security; or

 

(ii)     of any capital reorganization of the Company, any reclassification of the Common Stock of the Company, any consolidation or merger of the Company with or into another Person, or sale or lease of all or substantially all of the Company's assets to another Person; or

 

(iii)     of the voluntary or involuntary dissolution, liquidation or winding-up of the Company;

 

then, and in each such case, the Company shall send or cause to be sent to the Holder at least ten (10) days prior to the applicable record date or the applicable expected effective date, as the case may be, for the event, a written notice specifying, as the case may be, (A) the record date for such dividend, distribution, meeting or consent or other right or action, and a description of such dividend, distribution or other right or action to be taken at such meeting or by written consent, or (B) the effective date on which such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up is proposed to take place, and the date, if any is to be fixed, as of which the books of the Company shall close or a record shall be taken with respect to which the holders of record of Common Stock (or such other capital stock or securities at the time issuable upon exercise of the Warrant) shall be entitled to exchange their shares of Common Stock (or such other capital stock or securities) for securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, sale, dissolution, liquidation or winding-up, and the amount per share and character of such exchange applicable to the Warrant and the Warrant Shares.

 

(f)     If the Company issues a security exercisable for or convertible into shares of Common Stock after the Original Issue Date, and such security provides for anti-dilution protection, the shares of Common Stock issuable hereunder and the Exercise Price shall be subject to adjustment as if this Warrant included the same anti-dilution protection as the first issued security.

 

5.     Transfer of Warrant. Subject to the transfer conditions referred to in the legend endorsed hereon, this Warrant and all rights hereunder are transferable, in whole or in part, by the Holder without charge to the Holder, upon surrender of this Warrant to the Company at its then principal executive offices with a properly completed and duly executed Assignment in the form attached hereto as Exhibit B, together with funds sufficient to pay any transfer taxes described in Section 3(f)(v) in connection with the making of such transfer. Upon such compliance, surrender and delivery and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant, if any, not so assigned and this Warrant shall promptly be cancelled.

 

8

 

 

6.     Holder Not Deemed a Stockholder; Limitations on Liability. Except as otherwise specifically provided herein, prior to the issuance to the Holder of the Warrant Shares to which the Holder is then entitled to receive upon the due exercise of this Warrant, the Holder shall not be entitled to vote or receive dividends or be deemed the holder of shares of capital stock of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, as such, any of the rights of a stockholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a stockholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company

 

7.      Replacement on Loss; Division and Combination.

 

(a)     Replacement of Warrant on Loss. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and upon delivery of an indemnity reasonably satisfactory to it (it being understood that a written indemnification agreement or affidavit of loss of the Holder shall be a sufficient indemnity) and, in case of mutilation, upon surrender of such Warrant for cancellation to the Company, the Company at its own expense shall execute and deliver to the Holder, in lieu hereof, a new Warrant of like tenor and exercisable for an equivalent number of Warrant Shares as the Warrant so lost, stolen, destroyed or mutilated; provided, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

 

(b)     Division and Combination of Warrant. Subject to compliance with the applicable provisions of this Warrant as to any transfer or other assignment which may be involved in such division or combination, this Warrant may be divided or, following any such division of this Warrant, subsequently combined with other Warrants, upon the surrender of this Warrant or Warrants to the Company at its then principal executive offices, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the respective Holders or their agents or attorneys. Subject to compliance with the applicable provisions of this Warrant as to any transfer or assignment which may be involved in such division or combination, the Company shall at its own expense execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants so surrendered in accordance with such notice. Such new Warrant or Warrants shall be of like tenor to the surrendered Warrant or Warrants and shall be exercisable in the aggregate for an equivalent number of Warrant Shares as the Warrant or Warrants so surrendered in accordance with such notice.

 

9

 

 

8.     No Impairment. The Company shall not, by amendment of its Certificate of Incorporation or Bylaws, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant.

 

9.     Compliance with the Securities Act.

 

(a)   Agreement to Comply with the Securities Act; Legend. The Holder, by acceptance of this Warrant, agrees to comply in all respects with the provisions of this Section 9 and the restrictive legend requirements set forth on the face of this Warrant and further agrees that such Holder shall not offer, sell or otherwise dispose of this Warrant or any Warrant Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act of 1933, as amended (the "Securities Act"). This Warrant and all Warrant Shares issued upon exercise of this Warrant (unless registered under the Securities Act) shall be stamped or imprinted with a legend in substantially the following form:

 

     "THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED UNDER ANY STATE OR FOREIGN SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED OR ASSIGNED UNLESS (I) A REGISTRATION STATEMENT COVERING SUCH SHARES IS EFFECTIVE UNDER THE ACT AND IS QUALIFIED UNDER APPLICABLE STATE AND FOREIGN LAW OR (II) THE TRANSACTION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS UNDER THE ACT AND THE QUALIFICATION REQUIREMENTS UNDER APPLICABLE STATE AND FOREIGN LAW AND, IF THE CORPORATION REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL."

 

In addition, if the Holder is an Affiliate (as defined in the Credit Agreement) of the Company, certificates evidencing the Warrant Shares issued to the Holder shall bear a customary "affiliates" legend.

 

(b)     Representations of the Holder. In connection with the issuance of this Warrant, the Holder specifically represents, as of the date hereof, to the Company by acceptance of this Warrant as follows:

 

(i)     The Holder is an "accredited investor" as defined in Rule 501 of Regulation D promulgated under the Securities Act. The Holder is acquiring this Warrant and the Warrant Shares to be issued upon exercise hereof for investment for its own account and not with a view towards, or for resale in connection with, the public sale or distribution of this Warrant or the Warrant Shares, except pursuant to sales registered or exempted under the Securities Act.

 

10

 

 

(ii)     The Holder understands and acknowledges that this Warrant and the Warrant Shares to be issued upon exercise hereof are "restricted securities" under the federal securities laws inasmuch as they are being acquired from the Company in a transaction not involving a public offering and that, under such laws and applicable regulations, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In addition, the Holder represents that it is familiar with Rule 144 under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.

 

(iii)    The Holder acknowledges that it can bear the economic and financial risk of its investment for an indefinite period, and has such knowledge and experience in financial or business matters that it is capable of evaluating the merits and risks of the investment in the Warrant and the Warrant Shares. The Holder has had an opportunity to ask questions and receive answers from the Company regarding the terms and conditions of the offering of the Warrant and the business, properties, prospects and financial condition of the Company.

 

10.   Warrant Register. The Company shall keep and properly maintain at its principal executive offices books for the registration of the Warrant and any transfers thereof. The Company may deem and treat the Person in whose name the Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of the Warrant effected in accordance with the provisions of this Warrant.

 

11.   Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business Day if sent after normal business hours of the recipient; or (d) on the fifth day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the addresses indicated below (or at such other address for a party as shall be specified in a notice given in accordance with this Section 11).

 

	
			If to the Company:

				
			Twinlab Consolidated Holdings, Inc.

			4800 T-Rex Avenue, Suite 305

			Boca Raton, FL 33431

			Attention: Anthony Zolezzi

			 

			E-mail: az@twinlab.com 

			
	 	 
	
			with a copy to (which shall not constitute notice to the Company):

				
			Ackerman LLP

			Three Brickell City Centre

			98 Southeast Seventh Street

			Facsimile: (305) 374-5095

			E-mail: esther.moreno@ackerman.com

			Miami, FL 33131

			Attention: Esther Moreno, Esq.

			

 

11

 

 

	If to the Holder:	
			MidCap Funding IV Trust

			c/o MidCap Financial Services, LLC, as servicer

			7255 Woodmont Avenue, Suite 200

			Bethesda, Maryland 20814

			Attn: Portfolio Mgt. – Twin Labs Loan

			Facsimile: (301) 941-1450

			
	 	 
	
			with a copy to (which shall not constitute notice to the Company):

				
			Miles & Stockbridge P.C.

			100 Light Street

			Baltimore, Maryland 21202

			Facsimile: (410) 500-5051

			E-mail: frunge@milesstockbridge.com

			Attention: Frederick W. Runge, Jr.

			

 

 

12.   Cumulative Remedies. Except to the extent expressly provided in Section 6 to the contrary, the rights and remedies provided in this Warrant are cumulative and are not exclusive of, and are in addition to and not in substitution for, any other rights or remedies available at law, in equity or otherwise.

 

13.   Equitable Relief. Each of the Company and the Holder acknowledges that a breach or threatened breach by such party of any of its obligations under this Warrant would give rise to irreparable harm to the other party hereto for which monetary damages would not be an adequate remedy and hereby agrees that in the event of a breach or a threatened breach by such party of any such obligations, the other party hereto shall, in addition to any and all other rights and remedies that may be available to it in respect of such breach, be entitled to equitable relief, including a restraining order, an injunction, specific performance and any other relief that may be available from a court of competent jurisdiction.

 

14.   Entire Agreement. This Warrant, together with the Credit Agreement, constitutes the sole and entire agreement of the parties to this Warrant with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Warrant and the Credit Agreement, the statements in the body of this Warrant shall control.

 

15.   Successor and Assigns. This Warrant and the rights evidenced hereby shall be binding upon and shall inure to the benefit of the parties hereto and the successors of the Company and the successors and permitted assigns of the Holder. Such successors and/or permitted assigns of the Holder shall be deemed to be a Holder for all purposes hereunder.

 

16.   No Third-Party Beneficiaries. This Warrant is for the sole benefit of the Company and the Holder and their respective successors and, in the case of the Holder, permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever, under or by reason of this Warrant.

 

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17.   Headings. The headings in this Warrant are for reference only and shall not affect the interpretation of this Warrant.

 

18.  Amendment and Modification; Waiver. Except as otherwise provided herein, this Warrant may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by the Company or the Holder of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Warrant shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

19.   Severability. If any term or provision of this Warrant is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Warrant or invalidate or render unenforceable such term or provision in any other jurisdiction.

 

20.   Governing Law. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Nevada without giving effect to any choice or conflict of law provision or rule (whether of the State of Nevada or any other jurisdiction) that would cause the application of laws of any jurisdiction other than those of the State of Nevada.

 

21.   Submission to Jurisdiction. Any legal suit, action or proceeding arising out of or based upon this Warrant or the transactions contemplated hereby may be instituted in the federal courts of the United States of America or the courts of the State of New York in each case located in the city of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by certified or registered mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

22.   Waiver of Jury Trial. Each party acknowledges and agrees that any controversy which may arise under this Warrant is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Warrant or the transactions contemplated hereby.

 

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23.   Counterparts. This Warrant may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Warrant delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Warrant.

 

24.   No Strict Construction. This Warrant shall be construed without regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing any instrument to be drafted.

 

 

[SIGNATURE PAGE FOLLOWS]

 

14

 

 

IN WITNESS WHEREOF, the Company has duly executed this Warrant on the Original Issue Date.

 

	 	 	
			TWINLAB CONSOLIDATED HOLDINGS, INC.

				 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By:	/s/ Anthony Zolezzi	 
	 	 	Name:	Anthony Zolezzi	 
	 	 	Title:	Chief Executive Officer	 
	 	 	 	 	 
	 	 	 	 	 
	ACCEPTED AND AGREED TO AS OF THE ORIGINAL ISSUE DATE: 	 	 	 
	 	 	 	 	 
	
			MIDCAP FUNDING IV TRUST,

				 	 	 
	a Delaware statutory 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 Warrant No. 2019-27

 

 

 

 

EXHIBIT A

 

EXERCISE AGREEMENT

 

TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS

WARRANT TO PURCHASE COMMON STOCK

 

TWINLAB CONSOLIDATED HOLDINGS, INC.

 

1.     The undersigned holder hereby exercises the right to purchase _________________ of the shares of Common Stock ("Warrant Shares") of Twinlab Consolidated Holdings, Inc., a Nevada corporation (the "Company"), evidenced by Warrant

No. 2019-27 (the "Warrant"). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

 

(i)      Payment of Exercise Price. The Holder has paid to the Company the aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.

 

(ii)     Delivery of Warrant Shares.  The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares in accordance with the terms of the Warrant.  Delivery shall be made to Holder, or for its benefit, to the following address:

 

	Date:	 	,	20	 	 	 
	 	 	 	 	 	 	 
	Name of Registered Holder	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 	 	 	 	 	 

 

Exhibit A to Warrant No. 2019-27

 

 

 

 

EXHIBIT B

 

ASSIGNMENT OF WARRANT

 

(To be executed by the registered holder if such holder desires to transfer the Warrant)

 

	 	 	FOR VALUE RECEIVED	 	 
	hereby sells, assigns and transfers unto	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	(Please print name and address of transferee)	 	 	 	 	 
	 	 	 	 	 	 
	 
	this Warrant as to [________] Warrant Shares (as defined in the Warrant), together with all right, title and interest therein, and hereby irrevocably constitutes and appoints the Secretary of Twinlab Consolidated Holdings, Inc. (the "Company") Attorney, to transfer the within Warrant on the books of the Company, with full power of substitution.
	 
	Dated:

 

	 	 	 	Signature:	 	 	 
	 	 	 	 	 	 
	 	 	 	(Signature must confirm in all respects to name of holder as specified on the face of the Warrant.)	 	 

 

	 	 	 	 	 	 	 
	 	 	 	 	(Insert Social Security or Other Identifying Number of Assignee).

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