Document:

Exhibit 10.17

 

SECURITY AGREEMENT

 

1.   THE SECURITY. Each
of the undersigned, 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”; together with Parent, TCC, Twinlab Holdings
and ISI Brands, the “Companies”; and each individually, a “Company”) hereby assigns and grants
to PENTA MEZZANINE SBIC FUND I, L.P., a Delaware limited partnership, its subsidiaries and affiliates (collectively, the “Purchaser”)
a security interest in the following described property now owned or hereafter acquired by such Company (“Collateral”):

 

(a)  All accounts, contract rights,
chattel paper, instruments, deposit accounts, letter of credit rights, payment intangibles and general intangibles, including all
amounts due to such Company from a factor; and all returned or repossessed goods which, on sale or lease, resulted in an account
or chattel paper.

 

(b)  All inventory, including
all materials, work in process and finished goods.

 

(c)  All machinery, furniture,
fixtures and other equipment of every type now owned or hereafter acquired by such Company.

 

(d)  All instruments, notes, chattel
paper, documents, certificates of deposit, securities and investment property of every type. The Collateral shall include all liens,
security agreements, leases and other contracts securing or otherwise relating to the foregoing.

 

(e)  All general intangibles,
including, but not limited to, (i) all patents, and all unpatented or unpatentable inventions; (ii) all trademarks, service marks,
and trade names; (iii) all copyrights and literary rights; (iv) all computer software programs; (v) all mask works of semiconductor
chip products; (vi) all trade secrets, proprietary information, customer lists, manufacturing, engineering and production plans,
drawings, specifications, processes and systems. The Collateral shall include all good will connected with or symbolized by any
of such general intangibles; all contract rights, documents, applications, licenses, materials and other matters related to such
general intangibles; all tangible property embodying or incorporating any such general intangibles; and all chattel paper and instruments
relating to such general intangibles.

 

(f)  All negotiable and nonnegotiable
documents of title covering any Collateral.

 

(g)  All accessions, attachments
and other additions to the Collateral, and all tools, parts and equipment used in connection with the Collateral.

 

(h)  All substitutes or replacements
for any Collateral, all cash or non-cash proceeds, product, rents and profits of any Collateral, all income, benefits and property
receivable on account of the Collateral, all rights under warranties and insurance contracts, letters of credit, guaranties or
other supporting obligations covering the Collateral, and any causes of action relating to the Collateral, and all proceeds (including
insurance proceeds) from the sale, destruction, loss, or other disposition of any of the Collateral and sums due from a third party
which has damaged or destroyed the Collateral or from that party’s insurer, whether due to judgment, settlement or other
process.

 

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(i)  All books, data and records pertaining to any Collateral, whether in the form of a writing,
photograph, microfilm or electronic media, including but not limited to any computer-readable memory and any computer hardware
or software necessary to process such memory (“Books and Records”).

 

Notwithstanding anything to the contrary
in this Agreement or any other Transaction Document (as defined in the Note Purchase Agreement), the Purchaser’s security
interest in and lien on the Collateral shall be subordinated to the lien of the Senior Lender (as defined in the Note Purchase
Agreement) and subject to the terms of the Subordination Agreement (as defined in the Note Purchase Agreement).

 

2.  THE INDEBTEDNESS.
The Collateral secures and will secure all Indebtedness of the Companies to the Purchaser. Each party obligated under any Indebtedness
is referred to in this Agreement as a “Debtor.” “Indebtedness” means all debts, obligations
or liabilities now or hereafter existing, absolute or contingent of the Debtor or any one or more of them to the Purchaser, whether
voluntary or involuntary, whether due or not due, or whether incurred directly or indirectly or acquired by the Purchaser by assignment
or otherwise, including but not limited to debts, obligations or liabilities arising under that certain Note and Warrant Purchase
Agreement, dated as of the date hereof, by and between the Companies and the Purchaser (the “Note Purchase Agreement”).

 

3.  COMPANIES’ COVENANTS. Each Company
represents, covenants and warrants that unless compliance is waived by the Purchaser in writing:

 

(a)  Such Company will properly
preserve the Collateral; defend the Collateral against any adverse claims and demands other than Permitted Encumbrances (as defined
in the Note Purchase Agreement); and keep accurate Books and Records.

 

(b)  Such Company's chief executive
office is located, in the state specified on the signature page hereof. In addition, such Company (if not an individual or other
unregistered entity), is incorporated in or organized under the laws of the state specified on such signature page. Such Company
shall give the Purchaser at least thirty (30) days’ notice before changing its residence or its chief executive office or
state of incorporation or organization. Such Company will notify the Purchaser in writing prior to any change in the location of
any Collateral, including the Books and Records.

 

(c)  Such Company will notify
the Purchaser in writing prior to any change in such Company's name, identity or business structure.

 

(d)  Unless otherwise agreed,
such Company will keep the Collateral free of all liens, claims, security interests and encumbrances of any kind or nature except
the security interest of the Purchaser and Permitted Encumbrances.

 

(e)  Such Company will promptly
notify the Purchaser in writing of any event which materially affects the value of the Collateral, the ability of such Company
to dispose of the Collateral, or the rights and remedies of the Purchaser in relation thereto, including, but not limited to, the
levy of any legal process against any Collateral.

 

(f)  Such Company shall pay all
costs necessary to preserve, defend, enforce and collect the Collateral, including but not limited to taxes, assessments, insurance
premiums, repairs, rent, storage costs and expenses of sales, and any costs to perfect the Purchaser’s security interest
(collectively, the “Collateral Costs”). Without waiving any Company's default for failure to make any such payment,
the Purchaser at its option may pay any such Collateral Costs, and discharge encumbrances (other than Permitted Encumbrances) on
the Collateral, and such Collateral Costs payments shall be a part of the Indebtedness and bear interest at the rate set out in
the documents evidencing such Indebtedness. Each Company agrees to reimburse the Purchaser on demand for any Collateral Costs so
incurred.

 

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(g) Until the Purchaser exercises
its rights to make collection, such Company will diligently collect all Collateral.

 

(h) If any Collateral is or becomes
the subject of any registration certificate, certificate of deposit or negotiable document of title, including any warehouse receipt
or bill of lading, such Company shall immediately deliver such document to the Purchaser or the Senior Lender, as bailee for the
benefit of the Purchaser for purposes of perfection in accordance with Section 31 of the Subordination Agreement, together with
any necessary endorsements.

 

(i) Such Company will not sell,
lease, agree to sell or lease, or otherwise dispose of any Collateral except Permitted Dispositions (as defined in the Note Purchase
Agreement) without the prior written consent of the Purchaser.

 

(j) Such Company will maintain
and keep in force all risk insurance covering the Collateral against fire, theft, liability and extended coverages (including without
limitation windstorm coverage and hurricane coverage as applicable), to the extent that any Collateral is of a type which can be
so insured. Such insurance shall be in form, amounts, coverages and basis reasonably acceptable to the Purchaser, shall require
losses to be paid on a replacement cost basis, shall be issued by insurance companies reasonably acceptable to the Purchaser and
include a loss payable endorsement in favor of the Purchaser in a form reasonably acceptable to the Purchaser. Upon the request
of the Purchaser, such Company will deliver to the Purchaser a copy of each insurance policy, or, if permitted by the Purchaser,
a certificate of insurance listing all insurance in force.

 

(k) Such Company will not attach
any Collateral to any real property or fixture in a manner which might cause such Collateral to become a part thereof unless such
Company first obtains the written consent of any owner, holder of any lien on the real property or fixture, or other person having
an interest in such property to the removal by the Purchaser of the Collateral from such real property or fixture. Such written
consent shall be in form and substance reasonably acceptable to the Purchaser and shall provide that the Purchaser has no liability
to such owner, holder of any lien, or any other person.

 

(l) To the extent material to
the conduct of its business, such Company will, at its expense, diligently prosecute all patent, trademark or service mark or copyright
applications pending on or after the date hereof, will maintain in effect all issued patents and will renew all trademark and service
mark registrations, including payment of any and all maintenance and renewal fees relating thereto, except for such patents, service
marks and trademarks that are being sold, donated or abandoned by such Company in its reasonable business judgment. Such Company
also will promptly make application on any patentable but unpatented inventions, registerable but unregistered trademarks and service
marks, and copyrightable but uncopyrighted works to the extent material to the conduct of its business as determined in its reasonable
business judgment. To the extent material to the conduct of its business as determined in its reasonable business judgment, such
Company will at its expense protect and defend all rights in the Collateral against any material claims and demands of all persons
other than Senior Lender and the Purchaser and will, at its expense, enforce all rights in the Collateral against any and all infringers
of the Collateral where such infringement would materially impair the value or use of the Collateral to such Company or the Purchaser.
Such Company will not license or transfer any of the Collateral, except for such licenses as are customary in the ordinary course
of such Company's business, or except with the Purchaser's prior written consent.

 

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4.  ADDITIONAL OPTIONAL
REQUIREMENTS. Each Company agrees that the Purchaser may at its option at any time, whether or not any Company is in default:

 

(a)  Require such Company to deliver
to the Purchaser (i) copies of or extracts from the Books and Records, and (ii) information on any contracts or other matters affecting
the Collateral.

 

(b)  Examine the Collateral, including
the Books and Records, and make copies of or extracts from the Books and Records, and for such purposes enter at any reasonable
time upon the property where any Collateral or any Books and Records are located.

 

(c)  Subject to the terms of the
Subordination Agreement, require such Company to deliver to the Purchaser or the Senior Lender, as bailee for the benefit of the
Purchaser for purposes of perfection in accordance with Section 31 of the Subordination Agreement, any instruments, chattel paper
or letters of credit which are part of the Collateral, and to assign to the Purchaser the proceeds of any such letters of credit.

 

(d)  Subject to the terms of the
Subordination Agreement, notify any account debtors, any buyers of the Collateral, or any other persons of the Purchaser's interest
in the Collateral.

 

5.  DEFAULTS. Any one
or more of the following shall be a default hereunder:

 

(a)  Any Indebtedness is not paid
when due, after giving effect to any applicable grace or cure periods.

 

(b)  Any Company breaches any
term, provision, warranty or representation under this Agreement, and such breach remains uncured after any applicable cure period.

 

(c)  Subject to Section 5.17 of
the Note Purchase Agreement, the Purchaser fails to have an enforceable first lien (except for the liens of Senior Lender or any
prior liens to which the Purchaser has consented in writing) on or security interest in the Collateral except as a result of Purchaser
not taking action, or not requesting a Company to take action, to perfect such lien (unless Purchaser’s failure to take action
to perfect such lien is caused in whole or in party by a Company’s failure to take any action or provide any document requested
by Purchaser).

 

(d)  A default occurs under the
Note Purchase Agreement, any Transaction Document or other agreement evidencing the Indebtedness, and such default remains uncured
after any applicable cure period.

 

6.  PURCHASER'S REMEDIES
AFTER DEFAULT. Upon the occurrence and continuation of an event of any default, the Purchaser may do any one or more of the following,
to the extent permitted by law and subject to the terms of the Subordination Agreement:

 

(a)  Declare
any Indebtedness immediately due and payable, without notice or demand.

 

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(b)  Enforce the security interest
given hereunder pursuant to the Uniform Commercial Code and any other applicable law.

 

(c)  Enforce the security interest
of the Purchaser in any deposit account of any Company maintained with the Purchaser by applying such account to the Indebtedness.

 

(d)  Require any Company to obtain
the Purchaser's prior written consent to any sale, lease, agreement to sell or lease, or other disposition of any Collateral consisting
of inventory.

 

(e)  Require any Company to segregate
all collections and proceeds of the Collateral so that they are capable of identification and deliver daily such collections and
proceeds to the Purchaser in kind.

 

(f)  Require any Company to direct
all account debtors to forward all payments and proceeds of the Collateral to a post office box under the Purchaser's exclusive
control.

 

(g)  Require any Company to assemble
the Collateral, including the Books and Records, and make them available to the Purchaser at a place designated by the Purchaser.

 

(h)  Enter upon the property where
any Collateral, including any Books and Records, are located and take possession of such Collateral and such Books and Records,
and use such property (including any buildings and facilities) and any of any Company's equipment, if the Purchaser deems such
use necessary or advisable in order to take possession of, hold, preserve, process, assemble, prepare for sale or lease, market
for sale or lease, sell or lease, or otherwise dispose of, any Collateral.

 

(i)  Demand and collect any payments
on and proceeds of the Collateral. In connection therewith each Company irrevocably authorizes the Purchaser to endorse or sign
such Company's name on all checks, drafts, collections, receipts and other documents, and to take possession of and open the mail
addressed to such Company and remove therefrom any payments and proceeds of the Collateral.

 

(j)  Grant extensions and compromise
or settle claims with respect to the Collateral for less than face value, all without prior notice to any Company.

 

(k)  Use or transfer any of any
Company's rights and interests in any Intellectual Property now owned or hereafter acquired by such Company, if the Purchaser deems
such use or transfer necessary or advisable in order to take possession of, hold, preserve, process, assemble, prepare for sale
or lease, market for sale or lease, sell or lease, or otherwise dispose of, any Collateral. Each Company agrees that any such use
or transfer shall be without any additional consideration to such Company. As used in this paragraph, “Intellectual Property”
includes, but is not limited to, all trade secrets, computer software, service marks, trademarks, trade names, trade styles, copyrights,
patents, applications for any of the foregoing, customer lists, working drawings, instructional manuals, and rights in processes
for technical manufacturing, packaging and labeling, in which any Company has any right or interest, whether by ownership, license,
contract or otherwise.

 

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(l)  Have a receiver appointed
by any court of competent jurisdiction to take possession of the Collateral. Each Company hereby consents to the appointment of
such a receiver and agrees not to oppose any such appointment.

 

(m)  Take such measures as the
Purchaser may deem necessary or advisable to take possession of, hold, preserve, process, assemble, insure, prepare for sale or
lease, market for sale or lease, sell or lease, or otherwise dispose of, any Collateral, and each Company hereby irrevocably constitutes
and appoints the Purchaser as such Company's attorney-in-fact to perform all acts and execute all documents in connection therewith.

 

(n)  Without notice or demand
to any Company, set off and apply against any and all of the Indebtedness any and all deposits (general or special, time or demand,
provisional or final) and any other indebtedness, at any time held or owing by the Purchaser or any of the Purchaser's agents or
affiliates to or for the credit of the account of any Company or any guarantor or endorser of any Company's Indebtedness.

 

(o)  Exercise any other remedies available to the Purchaser at law or in equity.

  

7.  WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO
THE SUBJECT MATTER OF THIS TRANSACTION. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT
MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH
WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT
HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

8.  MISCELLANEOUS.

 

(a)  Any waiver, express or implied,
of any provision hereunder and any delay or failure by the Purchaser to enforce any provision shall not preclude the Purchaser
from enforcing any such provision thereafter.

 

(b)  Each Company shall, at the
request of the Purchaser, execute such other agreements, documents, instruments, or financing statements in connection with this
Agreement as the Purchaser may reasonably deem necessary.

 

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(c)  All notes, security agreements,
subordination agreements and other documents executed by each Company or furnished to the Purchaser in connection with this Agreement
must be in form and substance satisfactory to the Purchaser.

 

(d)  This Agreement is governed
by and shall be interpreted according to federal law and the laws of New York. If state or local law and federal law are inconsistent,
or if state or local law is preempted by federal law, federal law governs. If the Purchaser has greater rights or remedies under
federal law, this paragraph shall not be deemed to deprive the Purchaser of such rights and remedies as may be available under
federal law. Jurisdiction and venue for any action or proceeding to enforce this Agreement shall be the forum appropriate for such
action or proceeding against the Debtor, to which jurisdiction each Company irrevocably submits and to which venue each Company
waives to the fullest extent permitted by law any defense asserting an inconvenient forum in connection therewith.

 

(e)  All rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies otherwise provided by law. Any single or partial exercise of
any right or remedy shall not preclude the further exercise thereof or the exercise of any other right or remedy.

 

(f)  All terms not defined herein
are used as set forth in the Uniform Commercial Code.

 

(g)  In the event of any action
by the Purchaser to enforce this Agreement or to protect the security interest of the Purchaser in the Collateral, or to take possession
of, hold, preserve, process, assemble, insure, prepare for sale or lease, market for sale or lease, sell or lease, or otherwise
dispose of, any Collateral, each Company agrees to pay immediately the costs and expenses thereof, together with reasonable attorneys'
fees and allocated costs for in-house legal services to the extent permitted by law.

 

(h)  In the event the Purchaser
seeks to take possession of any or all of the Collateral by judicial process, each Company hereby irrevocably waives any bonds
and any surety or security relating thereto that may be required by applicable law as an incident to such possession, and waives
any demand for possession prior to the commencement of any such suit or action.

 

(i)  This Agreement shall constitute a continuing agreement,
applying to all future as well as existing transactions, whether or not of the character contemplated at the date of this Agreement,
and if all transactions between the Purchaser and the Companies shall be closed at any time, shall be equally applicable to any
new transactions thereafter.

 

(j)  The Purchaser's rights hereunder shall inure to
the benefit of its successors and assigns. In the event of any assignment or transfer by the Purchaser of any of the Indebtedness
or the Collateral, the Purchaser thereafter shall be fully discharged from any responsibility with respect to the Collateral so
assigned or transferred, but the Purchaser shall retain all rights and powers hereby given with respect to any of the Indebtedness
or the Collateral not so assigned or transferred. All representations, warranties and agreements of each Company if more than one
are joint and several and all shall be binding upon the personal representatives, heirs, successors and assigns of such Company.

 

(k)  Each Company hereby agrees that the obligations
of the Companies hereunder are joint and several.

 

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9.
Final Agreement. BY SIGNING THIS DOCUMENT EACH PARTY REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS
THE FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT
LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH COMMITMENT
LETTER, TERM SHEET, OR OTHER WRITTEN OUTLINE OF TERMS AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR UNDERSTANDINGS OF THE PARTIES.

 

[The remainder of this page intentionally
left blank.]

 

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Dated: As of November 13, 2014.

 

	 	
        PENTA MEZZANINE SBIC FUND I,

        L.P., a Delaware limited partnership

	 	 	 
	 	By:	Penta Mezzanine SBIC Fund I
	 	 	GP, LLC, its General Partner
	 	 	 
	 	 	By:	/s/ Richard E. Mount
	 	 	Name: Richard E. Mount
	 	 	Title: Authorized Member
	 	 	 
	 	Address for Notices:
	 	20 N. Orange Avenue, Suite 1550
	 	Orlando, Florida 32801

 

[SIGNATURE PAGE TO SECURITY AGREEMENT]

 

    	 

    	 

    

 

	Address for Notices:	
        TWINLAB CONSOLIDATED HOLDINGS, INC., a

        Nevada corporation

	Twinlab Consolidation Corporation	 	 
	600 East Quality Drive	 	 
	American Fork, UT 84003	By:             	/s/ Thomas A. Tolworthy
	Attention: Mark Jaggi, Chief Financial Officer	Name:	Thomas A. Tolworthy
	Email: mjaggi@twinlab.com	Title:  	Chief Executive Officer and President
	 	 	 
	and	
        TWINLAB CONSOLIDATION CORPORATION, a

        Delaware corporation

	Twinlab Consolidation Corporation	 	 
	632 Broadway, Suite 201 	 	 
	New York, NY 10012	By:  	/s/ Thomas A. Tolworthy
	Attention: Richard Neuwirth, Chief Legal 	Name:	Thomas A. Tolworthy
	Officer	Title:	Chief Executive Officer and President
	Facsimile: 212-260-1853	 	 
	Email: rneuwirth@twinlab.com	TWINLAB HOLDINGS, INC., a Michigan corporation
	 	 	 
	With a copy to 	 	 
	 	By:              	/s/ Thomas A. Tolworthy
	Vanum LLP	Name:	Thomas A. Tolworthy
	Bridgewater Place	Title:	Chief Executive Officer and President
	P.O. Box 352	 	 
	Grand Rapids, MI 49501	ISI BRANDS INC., a Michigan corporation
	Attention: Mary Kay Shaver	 	 
	Facsimile: 616-336-7000	 	 
	 	By:              	/s/ Thomas A. Tolworthy
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and President
	 	 	 
	 	TWINLAB CORPORATION, a Delaware corporation
	 	 	 
	 	By:  :              	/s/ Thomas A. Tolworthy
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and PresidentExhibit 10.18

 

THIS INSTRUMENT IS SUBJECT TO THE
TERMS OF A SUBORDINATION AGREEMENT DATED AS OF NOVEMBER 13, 2014 IN FAVOR OF FIFTH THIRD BANK, WHICH SUBORDINATION AGREEMENT (AS
AMENDED IN ACCORDANCE WITH ITS TERMS) IS INCORPORATED HEREIN BY REFERENCE.

 

THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM UNDER THE
ACT, THE RULES AND REGULATIONS THEREUNDER AND APPLICABLE STATE LAWS. IN ADDITION, THIS NOTE IS SUBJECT TO THE LIMITATIONS ON TRANSFER
SET FORTH IN THE NOTE AND WARRANT PURCHASE AGREEMENT, DATED AS OF NOVEMBER 13, 2014, BY AND
AMONG BORROWER AND LENDER NAMED THEREIN. A COPY OF THE NOTE AND WARRANT PURCHASE AGREEMENT IS AVAILABLE FOR INSPECTION AT THE PRINCIPAL
OFFICE OF BORROWER AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER HEREOF UPON WRITTEN REQUEST TO BORROWER.

 

DeFERRED
DRAW NOTE

 

	$2,000,000	Dated as of  ____________, 201_

 

FOR VALUE RECEIVED, 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”; together with Parent, TCC, Twinlab Holdings and ISI Brands, the "Borrower"), pursuant
to this secured note (this "Note"), hereby JOINTLY AND SEVERALLY promise to pay to PENTA MEZZANINE SBIC FUND I,
L.P., a Delaware limited partnership ("Lender"), at such place as Lender may designate from time to time in writing,
in lawful money of the United States of America, the principal amount of Two Million Dollars ($2,000,000), or such lesser amount
as shall equal the outstanding principal balance of the loan (the "Loan"), made to Borrower by Lender pursuant
to the Note and Warrant Purchase Agreement, dated as of the date hereof, by and between Borrower and Lender (the "Agreement"),
and to pay all other amounts due with respect to the Loan on the dates and in the amounts set forth in the Agreement and this Note.
Capitalized terms not defined herein shall have the meaning set forth in the Agreement.

 

1.          Payment
of Principal. Principal shall be payable quarterly commencing on November 13, 2017 in installments of (i) $90,000 per quarter
for the first four quarters, (ii) $110,000 per quarter for the next four quarters and (iii) $130,000 per quarter for each quarter
thereafter. Principal payments shall be due on the last day of each October, January, April and August. Unless due and payable
prior thereto (whether by acceleration or otherwise), the entire principal amount of the Loan evidenced hereby, together with any
accrued and unpaid interest, and any and all unpaid costs, fees and expenses accrued, shall be due and payable on November 13,
2019 (the "Maturity Date"). The Note will be payable both as to principal and interest by Federal funds wire transfer
to Lender as instructed by Lender.

 

    	 

    	 

    

 

2.            Payments
of Interest.

 

(a)          All
amounts outstanding from time to time hereunder shall bear interest until such amounts are paid, at a rate of twelve percent (12%)
per annum. Borrower shall pay the Interest monthly on the last day of each calendar month unless such date is a day which is not
a Business Day, in which case Borrower shall pay the Interest on such principal amount on the next succeeding Business Day (each
an "Interest Payment Date"). Interest on the Note will accrue from the most recent date on which interest has
been paid or, if no interest has been paid, from the date of issuance; provided that the first Interest Payment Date shall be ___________,
201_. Notwithstanding anything herein to the contrary, the interest rate applied to this Note shall at no time exceed the maximum
rate permitted by applicable law, whether now or hereafter in effect. Interest will be computed on the basis of a 360-day year
based on actual days elapsed.

 

(b)          Following
any Event of Default (including before or after any judgment is entered) and after the Maturity Date, the principal balance outstanding
hereunder, together with all such other amounts outstanding hereunder, shall bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code) at a rate of eighteen percent (18%) per annum (the "Default Rate"),
and such Default Rate interest shall be due and payable upon demand. Interest will be computed on the basis of a 360-day year based
on actual days elapsed.

 

3.            Prepayments.
The Borrower may redeem the outstanding principal balance of the Note in whole or in part at any time in accordance with Section
8.1 of the Agreement; however, the Borrower shall pay to Lender a fee (the “Prepayment Penalty”) equal to: (i) three
percent (3%) of the principal amount being redeemed (other than scheduled principal payments) if such redemption occurs prior to
the first anniversary of the Effective Date, (ii) two percent (2%) of the principal amount being redeemed (other than scheduled
principal payments) if such redemption occurs on or after the first anniversary of the Effective Date but before the second anniversary
of the Effective Date; and (iii) one percent (1%) of the principal amount being redeemed (other than scheduled principal payments)
if such redemption occurs on or after the second anniversary of the Effective Date but before the third anniversary of the Effective
Date and (iv) zero percent (0%) of the principal amount being redeemed if such redemption occurs on or after the third anniversary
of the Effective Date.

 

4.            Lender's
Rights and Remedies. Upon the occurrence of an Event of Default, Lender shall not have any further obligation to advance money
or extend credit to or for the benefit of Borrower and may exercise all rights and remedies as set forth in the Agreement or otherwise
provided by law.

 

5.            Remedies
Cumulative, Etc.

 

(a)          No
right or remedy conferred upon or reserved to Lender hereunder or now or hereafter existing at law or in equity is intended to
be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and concurrent, and in addition
to every other such right or remedy, and may be pursued singly, concurrently, successively or otherwise, at the sole discretion
of Lender, and shall not be exhausted by any one exercise thereof but may be exercised as often as occasion therefor shall occur.

 

    	-2-

    	 

    

 

(b)          Borrower
hereby waives presentment, demand, notice of nonpayment, protest, notice of protest, notice of dishonor and any and all other notices
in connection with any default in the payment of, or any enforcement of the payment of, all amounts due under this Note. To the
extent permitted by law, Borrower waives the right to any stay of execution and the benefit of all exemption laws now or hereafter
in effect.

 

(c)          Costs
and Expenses. Following the occurrence of any Event of Default, Borrower shall pay upon demand all costs and expenses (including
reasonable attorneys' fees and expenses) incurred by Lender in the exercise of any of its rights, remedies or powers under this
Note and any amount thereof not paid promptly following demand therefor shall be added to the principal sum hereunder and shall
bear interest at the Default Rate from the date of such demand until paid in full.

 

6.            Notices.
All notices required to be given to any of the parties hereunder shall be given in the manner specified in Section 12.3 of the
Agreement.

 

7.            Successors
and Assigns. This Note inures to the benefit of Lender and binds Borrower, and their respective successors and assigns, and
the words "Borrower" and "Lender" whenever occurring herein shall be deemed and construed to include such respective
successors and assigns; provided, however, (i) neither this Note nor any rights hereunder may be assigned by Borrower
without Lender's prior written consent, which consent may be granted or withheld in Lender's sole discretion and (ii) Lender shall
be permitted to transfer the Note or any portion thereof (and the rights relating thereto under the Agreement and the other Transaction
Documents) to any Person so long as Lender complies with Section 12.2 of the Agreement.

 

8.            Governing
Law. This Note shall be governed by and construed in accordance with the laws of the State of New York. Borrower agrees that
any action or proceeding against it to enforce the Note may be commenced in state or federal court in New York County in the State
of New York, and Borrower waives personal service of process and agrees that a summons and complaint commencing an action or proceeding
in any such court shall be properly served and shall confer personal jurisdiction if served by registered or certified mail in
accordance with the notice provisions set forth herein.

 

9.            Entire
Agreement; Construction; Amendments and Waivers.

 

(a)          Entire
Agreement. This Note and each of the related Transaction Documents, taken together, constitute and contain the entire agreement
between Borrower and Lender with respect to the subject matter hereof and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications between the parties, whether written or oral, with respect to such subject matter.
Borrower acknowledges that it is not relying on any representation or agreement made by Lender or any employee, attorney or agent
thereof, other than the specific agreements set forth in this Note and Transaction Documents.

 

    	-3-

    	 

    

 

(b)          Construction.
This Note is the result of negotiations between and has been reviewed by each of Borrower and Lender as of the date hereof and
their respective counsel; accordingly, this Note shall be deemed to be the product of the parties hereto, and no ambiguity shall
be construed in favor of or against Borrower or Lender. Borrower and Lender agree that they intend the literal words of this Note
and the related loan documents and that no parol evidence shall be necessary or appropriate to establish Borrower's or Lender's
actual intentions.

 

(c)          Amendments
and Waivers. Any and all amendments, modifications, discharges or waivers of, or consents to any departures from any provision
of this Note or of any of the related loan documents shall not be effective without the written consent of Lender and Borrower.
Any waiver or consent with respect to any provision of such loan documents shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice to or demand on Borrower in any case shall entitle Borrower to any other
or further notice or demand in similar or other circumstances. Any amendment, modification, waiver or consent affected in accordance
with this Section shall be binding upon Lender and on Borrower. Any forbearance, failure or delay by Lender in the exercise of
any right, power or remedy hereunder shall not be deemed to be a waiver of any such right, power or remedy and any single or partial
exercise of any right, power or remedy, shall not preclude the further exercise thereof. Every right, power and remedy of Lender
shall continue in full force and effect until such right, power or remedy is specifically waived by an instrument in writing executed
by Lender.

 

10.         Reliance
by Lender. All covenants, agreements, representations and warranties made herein by Borrower shall be deemed to be material
to and to have been relied upon by Lender, notwithstanding any investigation by Lender.

 

11.         No
Set-Offs by Borrower. All sums payable by Borrower pursuant to this Note or any of the related loan documents shall be payable
without notice or demand and shall be payable in United States Dollars without set-off or reduction of any manner whatsoever.

 

12.         Survival.
All covenants, representations and warranties made in this Note shall continue in full force and effect so long as any obligations
hereunder or commitment to fund remain outstanding. The obligations of Borrower to indemnify Lender with respect to the expenses,
damages, losses, costs and liabilities described in Section 11 shall survive until all applicable statute of limitations periods
with respect to actions that may be brought against Lender have run.

 

13.         WAIVER
OF TRIAL BY JURY. AS A MATERIAL INDUCEMENT TO THE EXECUTION OF THIS NOTE, EACH OF THE PARTIES HERETO AGREES THAT IN THE EVENT
ANY DISPUTE OR LITIGATION ARISING OUT OF THE TERMS AND PROVISIONS OF THIS NOTE, THE AGREEMENT OR OTHER TRANSACTION DOCUMENTS OR
THE RELATIONSHIP BETWEEN THE PARTIES HERETO, THEN NO PARTY SHALL SEEK A JURY TRIAL IN SUCH PROCEEDING, IT BEING EXPRESSLY AGREED
AND STIPULATED BY THE PARTIES HERETO THAT ANY DISPUTES ARE BETTER RESOLVED BY A JUDGE.

 

[Signature is on next
page.]

 

    	-4-

    	 

    

 

IN WITNESS WHEREOF, Borrower
has duly executed this Note as of the day and year first above written.

 

	 	
        TWINLAB CONSOLIDATED HOLDINGS,

        INC., a Nevada corporation

	 	 	 
	 	By:	 
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and President
	 	 	 
	 	
        TWINLAB CONSOLIDATION

        CORPORATION, a Delaware corporation

	 	 	 
	 	By:	 
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and President
	 	 	 
	 	TWINLAB HOLDINGS, INC., a Michigan corporation
	 	 	 
	 	By:	 
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and President
	 	 	 
	 	ISI BRANDS INC., a Michigan corporation
	 	 	 
	 	By:	 
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and President
	 	 	 
	 	TWINLAB CORPORATION, a Delaware corporation
	 	 	 
	 	By:	 
	 	Name:	Thomas A. Tolworthy
	 	Title:	Chief Executive Officer and President

 

Deferred Draw Note

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