UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

_____________________________

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 6, 2015 (April 30, 2015)

 

TWINLAB CONSOLIDATED HOLDINGS, INC.

 

 (Exact name of registrant as specified in its charter)

 

Nevada 000-55181 46-3951742
(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation)   Identification No.)

 

632 Broadway, Suite 201, New York, NY 10012
(Address of principal executive offices)  (Zip Code)

 

 

Registrant’s telephone number, including area code (212) 651-8500

 

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Letter of Credit

 

As previously disclosed in a Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 13, 2015, Twinlab Consolidated Holdings, Inc. (the “Company”) and Twinlab Consolidation Corporation (“TCC”), a wholly-owned subsidiary of the Company, entered into an Office Lease Agreement with First Central Tower, Limited Partnership (the “Lease”) on April 7, 2015, which Lease requires a $1 million security deposit, subject to reduction if the Company achieves certain market capitalization metrics at certain dates (the “Security Deposit”).

 

On April 30, 2015, JL Properties, Inc., an Alaska corporation (“JL”), the Company and TCC entered into a Reimbursement Agreement (the “JL Agreement”). Pursuant to the JL Agreement, JL has agreed to arrange for and provide, on or before May 1, 2015, an unconditional, irrevocable, transferable, and negotiable commercial letter of credit, which letter of credit will automatically renew on an annual basis for a five (5) year term expiring on April 30, 2020 (the “LOC”), to serve as the Security Deposit.

 

In the event the LOC is drawn upon (each, a “Draw Amount”), the Company and TCC are jointly obligated to reimburse JL, commencing on the sixth (6 th ) month anniversary of the date that the LOC is drawn upon, in semi-annual installments of fifty percent (50%) of the Draw Amount, plus interest. A final payment of the entire Draw Amount and accrued interest will be due and payable on the first anniversary of the date that the LOC is drawn upon. Interest will be charged at the greater of (i) federal interest rate for mid-term obligations published by the Internal Revenue Service as of the date the LOC is drawn upon or (ii) the federal interest rate that JL is required to pay to the issuer of the LOC in connection with the draw on the LOC. A Draw Amount may be prepaid, in whole or in part, at any time without premium or penalty.

 

In the event that all or any portion of an installment of a Draw Amount is not paid within fifteen (15) days after notice of such failure from JL (each an, "Unpaid Installment"), JL will have the option to require that the Company issue to JL (i) a warrant, in substantially the form of the First Warrant (as defined below), in the aggregate amount of "XX" shares of common stock, par value $0.01 per share, of the Company (“Common Stock”) exercisable at a purchase price of $0.01 in the aggregate and (ii) a warrant, in substantially the form of the Second Warrant (as defined below), in the aggregate amount of "YY" shares of Common Stock exercisable at a purchase price of $1.00 per share; provided, however, that the Company has no obligation to issue such additional warrants so long as the failure to pay an installment of the Draw Amount arises out of a prohibition to pay, and JL’s preclusion to accept, a payment of the Draw Amount under the terms of any of those certain subordination agreements separately entered into as of April 30, 2015, by and between JL on the one hand, and each of the Company’s lenders, MidCap Funding X Trust (“MidCap”), Penta Mezzanine SBIC Fund I, L.P. (“Penta”), and JL-BBNC Mezz Utah, LLC (“JL Mezz”), on the other hand. For purposes of the warrants to be issued as described above (i) "XX" shall mean the applicable unpaid Draw Amount divided by $1,000,000, multiplied by 465,880 and further multiplied by two and (ii) "YY" shall mean the applicable unpaid Draw Amount divided by $1,000,000, multiplied by 86,962 and further multiplied by two. Warrants issued as described above will be in full satisfaction of the obligation to pay the unpaid Draw Amounts for which such warrants are issued.

 

JL is an affiliate of (i) JL Mezz, a lender to the Company, and (ii) Utah Lab, LLC, from whom Twinlab Corporation (“Twinlab”), a wholly-owned subsidiary of the Company, leases its Utah manufacturing facility. The relationship between the Company and JL Mezz was previously disclosed in the Company’s Current Reports on Form 8-K, filed with the SEC on January 28, 2015 and February 9, 2015, which Reports are hereby incorporated by reference herein.

 

2
 

 

As partial consideration for the entry by JL into the JL Agreement and the provision of the LOC, the Company issued JL two warrants (the “Warrants”) to purchase shares of Common Stock.

 

The first warrant (the “First Warrant”) is exercisable for an aggregate of 465,880 shares of Common Stock, subject to certain adjustments, at an aggregate purchase price of $0.01, at any time prior to April 30, 2020. In addition to adjustments on terms and conditions customary for a transaction of this nature in the event of (i) reorganization, recapitalization, stock split-up, combination of shares, mergers, consolidations and (ii) sale of all or substantially all of the Company’s assets or property, the number of shares of Common Stock issuable pursuant to the First Warrant will be increased in the event the Company’s and its Subsidiaries’ (as defined in the First Warrant) audited Adjusted EBITDA (as defined in the First Warrant) for the fiscal year ending December 31, 2018 does not equal or exceed $19,250,000.

 

The second warrant (the “Second Warrant”) is exercisable for an aggregate of 86,962 shares of Common Stock, at a per share purchase price of $1.00, at any time prior to April 30, 2020. The number of shares issuable upon exercise of the Second Warrant is subject to adjustment on terms and conditions customary for a transaction of this nature in the event of (i) reorganization, recapitalization, stock split-up, combination of shares, mergers, consolidations and (ii) sale of all or substantially all of the Company’s assets or property.

 

The Company has granted JL certain registration rights, commencing October 1, 2015, for the shares of Common Stock issuable on exercise of the Warrants.

 

The foregoing descriptions of the (i) JL Agreement; (ii) First Warrant; and (iii) Second Warrant are qualified in their entirety by reference to the full text of such documents, which documents are exhibits to this Report.

 

Midcap Funding X Trust

 

As previously reported in the Company’s (i) Current Report on Form 8-K filed with the SEC on January 28, 2015 and (ii) Current Report on Form 8-K filed with the SEC on February 9, 2015, the Company and its direct and indirect wholly owned subsidiaries, TCC, Twinlab Holdings, Inc. (“THI”), Twinlab, ISI Brands Inc. (“ISI Brands”), NutraScience Labs, Inc. (“NutraScience”) and NutraScience Labs IP Corporation (“NutraScience IP” and with the Company, TCC, THI, Twinlab, ISI Brands and NutraScience collectively, the “Twinlab Companies”), entered into a Credit and Security Agreement, dated January 22, 2015 (as amended by that certain Amendment No. 1 to Credit and Security Agreement and Limited Consent, dated February 4, 2015, and that certain Amendment No. 2 to Credit Agreement and Limited Consent, the “Credit Agreement”), with MidCap Financial Trust (“MidCap Trust”). MidCap Trust thereafter assigned all of its rights and interest under the Credit Agreement and related agreements to MidCap, an affiliate of MidCap Trust.

 

On April 30, 2015, the Twinlab Companies and MidCap entered into an Amendment No. 3 to Credit and Security Agreement and Limited Consent (the “MidCap Amendment”). Pursuant to the MidCap Amendment, (i) MidCap consented to the entry by the Twinlab Companies into the JL Agreement, (ii) MidCap consented to the issuance of the LOC and (iii) the Credit Agreement was amended to include the JL Agreement as Permitted Debt (as defined in the Credit Agreement).

 

The foregoing description of the MidCap Amendment is qualified in its entirety by reference to the full text of such document, which document is an exhibit to this Report.

 

3
 

 

Penta Mezzanine SBIC Fund I, L.P.

 

As previously reported in the Company’s (i) Current Report on Form 8-K filed with the SEC on November 18, 2014, (ii) Current Report on Form 8-K filed with the SEC on January 28, 2015 and (iii) Current Report on Form 8-K filed with the SEC on February 9, 2015, the Twinlab Companies entered into a Note and Warrant Purchase Agreement, dated as of November 13, 2014, as amended by the First Amendment to Note and Warrant Purchase Agreement, Consent and Joinder dated as of January 22, 2015 and as further amended by the Second Amendment to Note and Warrant Purchase Agreement and Consent dated as of February 4, 2015 (as so amended, the “Penta NWPA”), with Penta.

 

On April 30, 2015, the Twinlab Companies and Penta entered into a Third Amendment to Note and Warrant Purchase Agreement and Consent (the “Third Penta Amendment”). Pursuant to the Third Penta Amendment, (i) Penta consented to the entry by the Twinlab Companies into the JL Agreement, (ii) Penta consented to the issuance of the LOC and (iii) the Penta NWPA was amended to include the JL Agreement as (x) permitted Indebtedness (as defined in the Penta NWPA) and (y) within the coverage of the Penta NWPA’s covenant against amending certain agreements and documents.

 

The foregoing description of the Third Penta Amendment is qualified in its entirety by reference to the full text of such document, which document is an exhibit to this Report.

 

JL-BBNC Mezz Utah, LLC

 

As previously reported in the Company’s (i) Current Report on Form 8-K filed with the SEC on January 28, 2013 and (ii) Current Report on Form 8-K filed with the SEC on February 9, 2015, the Twinlab Companies entered into a Note and Warrant Purchase Agreement dated January 22, 2015, as amended by the First Amendment to Note and Warrant Purchase Agreement and Consent dated as of February 4, 2015 (as so amended, the “JL Purchase Agreement”), with JL Mezz.

 

On April 30, 2015, the Twinlab Companies and JL Mezz entered into a Second Amendment to Note and Warrant Purchase Agreement and Consent (the “Second JL Amendment”). Pursuant to the Second JL Amendment, (i) JL Mezz consented to the entry by the Twinlab Companies into the JL Agreement, (ii) JL Mezz consented to the issuance of the LOC and (iii) the JL Purchase Agreement was amended to include the JL Agreement as (x) permitted Indebtedness (as defined in the JL Purchase Agreement) and (y) within the coverage of the JL Purchase Agreement’s covenant against amending certain agreements and documents.

 

The foregoing description of the Second JL Amendment is qualified in its entirety by reference to the full text of such document, which document is an exhibit to this Report.

 

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

(a) The information set forth in Item 1.01 above is hereby incorporated by reference in answer to Item 2.03(a).

 

4
 


Item 3.02 Unregistered Sales of Equity Securities.

 

The information set forth in Item 1.01 above is hereby incorporated by reference in partial answer to Item 3.02.

 

The Company issued the Warrants in reliance upon the exemption from registration under Rule 506 of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), for private offerings not involving a public distribution. The Company believes that the issuance and sale of the Warrants were exempt from the registration and prospectus delivery requirements of the Securities Act by virtue of Rule 506 of Regulation D. The Warrants were issued directly by the Company and did not involve a public offering or general solicitation. JL was afforded an opportunity for effective access to the files and records of the Company that contained the relevant information needed to make its investment decision, including the Company’s financial statements and periodic reports under the Securities Exchange Act of 1934, as amended. The Company reasonably believed that JL, immediately prior to the issuance of the Warrants, had such knowledge and experience in the Company’s financial and business matters that it was capable of evaluating the merits and risks of its investment. JL had the opportunity to speak with the Company’s management on several occasions prior to its investment decision. There were no commissions paid on the issuance of the Warrants.

 

Item 9.01 Financial Statements and Exhibits.
   
(d) Exhibits
   
Exhibit 10.52 Reimbursement Agreement, dated as of April 30, 2015, by and between Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation and JL Properties, Inc.
   
Exhibit 10.53 Warrant, dated April 30, 2015, issued by Twinlab Consolidated Holdings, Inc. to JL Properties, Inc.
   
Exhibit 10.54 Warrant, dated April 30, 2015, issued by Twinlab Consolidated Holdings, Inc. to JL Properties, Inc.
   
Exhibit 10.55 Amendment No. 3 to Credit and Security Agreement and Limited Consent, dated as of April 30, 2015, by and among Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation, Twinlab Holdings, Inc., ISI Brands Inc., Twinlab Corporation, NutraScience Labs, Inc. and NutraScience Labs IP Corporation, and MidCap Funding X Trust.
   
Exhibit 10.56 Third Amendment to Note and Warrant Purchase Agreement and Consent, dated as of April 30, 2015, by and between Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation, Twinlab Holdings, Inc., ISI Brands Inc., Twinlab Corporation, NutraScience Labs, Inc., NutraScience Labs IP Corporation and Penta Mezzanine SBIC Fund I, L.P.
   
Exhibit 10.57 Second Amendment to Note and Warrant Purchase Agreement and Consent, dated as of April 30, 2015, by and between Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation, Twinlab Holdings, Inc., ISI Brands Inc., Twinlab Corporation, NutraScience Labs, Inc., NutraScience Labs IP Corporation and JL-BBNC Mezz Utah, LLC.  

 

5
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: May 6, 2015 TWINLAB CONSOLIDATED HOLDINGS, INC.
   
  By: /s/ Thomas A. Tolworthy
    Thomas A. Tolworthy
    President and Chief Executive Officer

 

6
 

EXHIBIT INDEX

 

Exhibit No. Description
   
Exhibit 10.52 Reimbursement Agreement, dated as of April 30, 2015, by and between Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation and JL Properties, Inc.
   
Exhibit 10.53 Warrant, dated April 30, 2015, issued by Twinlab Consolidated Holdings, Inc. to JL Properties, Inc.
   
Exhibit 10.54 Warrant, dated April 30, 2015, issued by Twinlab Consolidated Holdings, Inc. to JL Properties, Inc.
   
Exhibit 10.55 Amendment No. 3 to Credit and Security Agreement and Limited Consent, dated as of April 30, 2015, by and among Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation, Twinlab Holdings, Inc., ISI Brands Inc., Twinlab Corporation, NutraScience Labs, Inc. and NutraScience Labs IP Corporation, and MidCap Funding X Trust.
   
Exhibit 10.56 Third Amendment to Note and Warrant Purchase Agreement and Consent, dated as of April 30, 2015, by and between Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation, Twinlab Holdings, Inc., ISI Brands Inc., Twinlab Corporation, NutraScience Labs, Inc., NutraScience Labs IP Corporation and Penta Mezzanine SBIC Fund I, L.P.
   
Exhibit 10.57 Second Amendment to Note and Warrant Purchase Agreement and Consent, dated as of April 30, 2015, by and between Twinlab Consolidated Holdings, Inc., Twinlab Consolidation Corporation, Twinlab Holdings, Inc., ISI Brands Inc., Twinlab Corporation, NutraScience Labs, Inc., NutraScience Labs IP Corporation and JL-BBNC Mezz Utah, LLC.  

 

7

Exhibit 10.52

 

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

 

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

 

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

 

REIMBURSEMENT AGREEMENT

 

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

 

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

 

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

 

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

 

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

 

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

 

- 1 -
 

 

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

 

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

 

- 2 -
 

  

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

 

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

 

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

 

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

 

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

 

- 3 -
 

  

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

 

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

 

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

 

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

 

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

 

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

 

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

 

If to JL Properties, at:

 

JL Properties, Inc.

P.O. Box 202845

Anchorage, AK 99520-2845

Attention: Jonathan B. Rubini

Facsimile: (907) 279-8066

 

with a copy to:

 

Landye Bennett Blumstein LLP

701 West 8th Avenue, Suite 1200

Anchorage, Alaska 99501

Attention: Joshua D. Hodes, Esq.

Facsimile: (907) 276-8433

 

If to Tenant, at:

 

c/o Twinlab Consolidation Corporation

632 Broadway, Suite 201

New York, New York 10012

Facsimile: (212) 505-5413

E-mail: rneuwirth@twinlab.com

Attention: General Counsel

 

- 4 -
 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

 

 

- 5 -
 

 

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

 

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

 

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

 

- 6 -
 

 

EXHIBIT A

LETTER OF CREDIT

 

 

- 7 -
 

 

EXHIBIT B

FORM OF PENNY WARRANT

 

 

- 8 -
 

 

EXHIBIT C

FORM OF DOLLAR WARRANT

 

 

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Exhibit 10.53

 

THIS WARRANT AND THE EQUITY INTERESTS THAT MAY BE PURCHASED HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR TRANSFERRED, OR OFFERED FOR SALE OR TRANSFER, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION THEREUNDER OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.

 

TWINLAB CONSOLIDATED HOLDINGS, INC.

 

No. 2015-13 April 30, 2015
  (the "Effective Date")

 

Warrant

 

This Warrant (the " Warrant ") certifies that, for value received, JL PROPERTIES, INC., an Alaska corporation, and its permitted transferees, successors and assigns (the " Holder "), is entitled to purchase from TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (the " Company "), 465,880 shares of common stock of the Company (subject to any adjustments pursuant to Section 3.3) issuable upon the full exercise of this Warrant at the purchase price of $0.01 in the aggregate (the " Exercise Price "), at any time prior to 5:00 P.M. on April 30, 2020 (the " Expiration Date ").

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1 Definitions . As used in this Warrant, the following terms shall have the following meanings:

 

" Adjusted EBITDA " shall mean EBITDA plus any expenses relating to Acquisitions through the end of the first Fiscal Year following the Effective Date, plus severance payments and other costs relating to permanent headcount reductions, all as determined by GAAP.

 

" Applicable Law " means all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates or orders of any Governmental Authority applicable to the Person in question or any of its assets or property, and all judgments, injunctions, orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in question is a party or by which any of its assets or properties are bound.

 

" Assignment Form " shall mean the assignment form attached as Annex 2 hereto.

 

" Acquisition " means (a) the purchase or other acquisition by a Person of all or substantially all of the assets of (or any division or business line of) any other Person, or (b) the purchase or other acquisition (whether by means of a merger, consolidation, or otherwise) by a Person of all or substantially all of the Equity Interests of any other Person.

 

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" Affiliate " or " Affiliated " means, as applied to (i) any Person, directly or indirectly, in which such Person holds, beneficially or of record, ten percent (10%) or more of the equity of voting securities; (ii) any Person that holds, of record or beneficially, ten percent (10%) or more of the equity or voting securities of such Person; (iii) any director, officer, partner or individual holding a similar position in respect of such Person; (iv) as to any natural Person, any Person related by blood, marriage or adoption and any Person owned by such Persons, including any spouse, parent, grandparent, aunt, uncle, child, grandchild, sibling, cousin or in-law of such Person; or (v) any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

" Business Day " means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close.

 

" Capital Lease " means, as applied to any Person, any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.

 

" Conversion Ratio " shall have the meaning given to such term in Section 3.3.3(a) hereof.

 

" Company " shall have the meaning set forth in the Preamble.

 

" Current Holder’s Equity Interest " means 465,880 shares of common stock of the Company issuable upon the full exercise of this Warrant, minus any Equity Interest previously issued pursuant to the exercise of this Warrant.

 

" Delivery Date " shall have the meaning given to such term in Section 3.2 .

 

" EBITDA " shall mean Net Income, minus 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, plus non-cash extraordinary losses (including non-cash expenses with respect to stock option and stock based employee compensation programs), Interest Expense (including expenses relating to the warrant relating to the Penta Debt), income taxes, depreciation and amortization and increases in any change in LIFO reserves for such period, in each case, determined on a consolidated basis in accordance with GAAP.

 

" Equity Interest " shall mean the interest of (i) a shareholder in a corporation, (ii) a partner (whether general or limited) in a partnership (whether general, limited or limited liability), (iii) a member in a limited liability company, or (iv) any other Person having any other form of equity security or ownership interest in any Person.

 

" Exchange Act " shall mean the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

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" Exchange Form " shall mean the exchange form attached as Annex 3 hereto.

 

" Executive Officer " shall mean, with respect to the Company, its Chief Executive Officer, President, Chief Financial Officer or Chief Operating Officer.

 

" Exercise Form " shall mean the exercise form attached as Annex 1 hereto.

 

" Exercise Price " shall have the meaning set forth in the Preamble.

 

" Expiration Date " shall have the meaning set forth in the Preamble.

 

" Fiscal Year " means the fiscal year of the Company, ending December 31 of each year.

 

" GAAP " shall mean generally accepted accounting principles in the United States as of the relevant date in question, consistently applied.

 

" Governmental Authority " means any arbitrator or any governmental authority, agency, department, commission, bureau, board, instrumentality, court or quasi-governmental authority having jurisdiction or supervisory or regulatory authority over the Company.

 

" Holder " shall have the meaning set forth in the Preamble.

 

" Holder's Equity Interest " shall have the meaning given to such term in Section 3.3 .

 

" Indebtedness " as to any Person means, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes, or other similar instruments and all reimbursement or other obligations in respect of letters of credit, bankers acceptances, or other financial products, (c) all obligations of such Person as a lessee under Capital Leases, (d) all obligations or liabilities of others secured by a Lien on any asset of such Person, irrespective of whether such obligation or liability is assumed, (e) all obligations of such Person to pay the deferred purchase price of assets (other than trade payables incurred in the ordinary course of business and repayable in accordance with customary trade practices), (f) all obligations of such Person owing under hedge agreements (which amount shall be calculated based on the amount that would be payable by such Person if the hedge agreement were terminated on the date of determination), (g) any Prohibited Preferred Stock of such Person, and (h) any obligation of such Person guaranteeing or intended to guarantee (whether directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with recourse) any obligation of any other Person that constitutes Indebtedness under any of clauses (a) through (g) above. For purposes of this definition, (i) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness described in clause (d) above shall be the lower of the amount of the obligation and the fair market value of the assets of such Person securing such obligation.

 

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" Interest Expense " means, for any period, the aggregate of the interest expense of the Company and its Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP.

 

" Lien " shall mean any mortgage, deed of trust, pledge, hypothecation, assignment, security interest, lien (whether statutory or otherwise), charge, claim, encumbrance or preference, priority or other security agreement or preferential arrangement held or asserted in respect of any asset or property of any kind or nature whatsoever, including any conditional sale or other title retention agreement, any lease having substantially the same economic effect as any of the foregoing, and the filing of, or agreement to give, any financing statement under the UCC or comparable law of any jurisdiction.

 

" Maturity Date " means February 13, 2020.

 

" Net Income " shall mean the consolidated net income (or loss) of the Company and its Subsidiaries for the period in question, after giving effect to deduction of or 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 the Company (or any Subsidiary through which such Company owns the subject Subsidiary) is prohibited (by law, contract minority ownership rights or otherwise) from receiving a distribution of such Net Income from such Subsidiary.

 

" Organizational Documents " shall mean, with respect to any Person, each instrument or other document that (a) defines the existence of such Person, including its articles or certificate of incorporation, formation or organization, as filed or recorded with an applicable Governmental Authority or (ii) governs the internal affairs of such Person, including its by-laws or its operating, partnership or limited liability company agreement, in each case as amended, supplemented or restated.

 

" Penta " means Penta Mezzanine SBIC Fund I, L.P.

 

" Penta Debt " means Indebtedness pursuant to that certain Note and Warrant Purchase Agreement, as amended, dated November 13, 2014, among the Company, its Subsidiaries, and Penta, and the Notes and Warrant as defined therein.

 

" Person " shall mean any individual, corporation, partnership, limited liability company, trust, unincorporated organization, or any other form of entity.

 

" Prohibited Preferred Stock " means any preferred Equity Interest that by its terms is mandatorily redeemable or subject to any other payment obligation (including any obligation to pay dividends, other than dividends of shares of preferred Equity Interest of the same class and series payable in kind or dividends of shares of common stock) on or before a date that is less than 1 year after the Maturity Date, or, on or before the date that is less than 1 year after the Maturity Date, is redeemable at the option of the holder thereof for cash or assets or securities (other than distributions in kind of shares of preferred Equity Interest of the same class and series or of shares of common stock).

 

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" Qualified Assignment " shall mean any of the following: (a) an assignment to a transferee acquiring at least 25% of the Equity Interests subject to the Warrant (subject to adjustment for stock splits, stock dividends, recapitalizations and similar events); or (b) an assignment to an Affiliate of the Holder.

 

" Rights Agreement " shall have the meaning given to such term in Section 4.1 .

 

" Securities Act " shall mean the Securities Act of 1933, as amended from time to time, and any successor statute.

 

" Subsidiary " shall mean a corporation or other entity any of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.

 

" Target EBITDA " shall have the meaning given to such term in Section 3.3.3(a) hereof.

 

" Taxes " means all taxes, charges, fees, levies or other assessments, however denominated and whether imposed by a taxing authority within or without the United States, including all net income, gross income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, custom duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority whether arising before, on or after the date hereof.

 

" Warrant " or " Warrants " shall mean this Warrant.

 

" Warrant Register " shall have the meaning given to such term in Section 2.1.

 

SECTION 1.2 Interpretation . Unless the context of this Warrant clearly requires otherwise, the masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so requires. Accounting terms used but not otherwise defined herein have the meanings given to them under GAAP. The terms "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The words "hereof," "herein," "hereunder," and similar terms in this Warrant refer to this Warrant as a whole and not to any particular provision of this Warrant. References to "Articles", "Sections," "Subsections," "Exhibits," "Preamble," "Annexes," and "Schedules" are to articles, sections, subsections, exhibits, preamble, annexes and schedules, respectively, of this Warrant, unless otherwise specifically provided. References to "days" and "months" refer to calendar days and calendar months unless otherwise expressly designated (i.e., business days or particular 30-day periods). The captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision of this Warrant. The term "dollars" or "$" means United States Dollars.

 

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ARTICLE II

FORM; EXCHANGE FOR WARRANTS; TRANSFER; TAXES

 

SECTION 2.1 Warrant Register . Each Warrant issued, exchanged or transferred shall be registered in a warrant register (the " Warrant Register "). The Warrant Register shall set forth the number of each Warrant, the name and address of the holder thereof, and the Current Holder’s Equity Interest for which the Warrant is then exercisable. The Warrant Register will be maintained by the Company and will be available for inspection by the Holder at the principal office of the Company or such other location as the Company may designate to the Holder in the manner set forth in Section 5.1 hereof. The Company shall be entitled to treat the Holder as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other Person.

 

SECTION 2.2 Exchange of Warrants for Warrants .

 

(a)                 The Holder may exchange this Warrant for another Warrant or Warrants of like kind and tenor representing in the aggregate the right to purchase the same Current Holder’s Equity Interest which could be purchased pursuant to the Warrant being so exchanged. In order to effect an exchange permitted by this Section 2.2 , the Holder shall deliver to the Company such Warrant accompanied by an Exchange Form in the form attached hereto as Annex 3 signed by the Holder thereof specifying the number and denominations of Warrants to be issued in such exchange and the names in which such Warrants are to be issued. Within ten (10) Business Days of receipt of such a request, the Company shall issue, register and deliver to the Holder thereof each Warrant to be issued in such exchange.

 

(b)                Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Holder, including indemnification reasonably acceptable to the Company) of the ownership and the loss, theft, destruction or mutilation of any Warrant or, in the case of any such mutilation, upon surrender of such Warrant, the Company shall (at its expense) execute and deliver in lieu of such Warrant a new Warrant of like kind and tenor representing the same rights represented by and dated the date of such lost, stolen, destroyed or mutilated Warrant. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by any Person.

 

(c)                 The Company shall pay all Taxes (other than any applicable income or similar Taxes payable by a Holder of a Warrant) attributable to an exchange of a Warrant pursuant to this Section 2.2 ; provided, however , that the Company shall not be required to pay any Tax which may be payable in respect of any transfer involved in the issuance of any Warrant in a name other than that of the Holder of the Warrant being exchanged.

 

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SECTION 2.3 Transfer of Warrant .

 

(a)                 Subject to Section 2.3(c) hereof, each Warrant and the rights thereunder may be transferred by the Holder thereof, in whole or in part, by delivering to the Company such Warrant accompanied by a properly completed Assignment Form in the form of Annex 2 . Within ten (10) Business Days of receipt of such Assignment Form the Company shall issue, register and deliver to the new Holder, subject to Section 2.3(c ) hereof a new Warrant or Warrants of like kind and tenor representing in the aggregate the right to purchase the same Current Holder’s Equity Interest which could be purchased pursuant to the Warrant being transferred. In all cases of transfer by an attorney, the original power of attorney, duly approved, or a copy thereof, duly certified, shall be deposited and remain with the Company. In case of a transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be produced and may be required to be deposited and remain with the Company in its discretion.

 

(b)                Each Warrant issued in accordance with this Section 2.3 shall bear the restrictive legend set forth on the face of this Warrant, unless the Holder or transferee thereof supplies to the Company an opinion of counsel, reasonably satisfactory to the Company, that the restrictions described in such legend are no longer applicable to such Warrant.

 

(c)                 The transfer of Warrants and any Equity Interest purchased thereunder shall be permitted, so long as such transfer is pursuant to a transaction that complies with, or is exempt from, the provisions of the Securities Act, and the Company may require an opinion of counsel in form and substance reasonably satisfactory to it to such effect prior to effecting any transfer of Warrants or any Equity Interest purchased thereunder.

 

ARTICLE III

EXERCISE OF WARRANT; EXCHANGE FOR EQUITY INTEREST

 

SECTION 3.1 Exercise of Warrants . On any Business Day before the Expiration Date, the Holder may exercise this Warrant, in whole or in part, by delivering to the Company this Warrant accompanied by a properly completed Exercise Form in the form of Annex 1 and a check in an aggregate amount equal to the applicable Exercise Price.

 

SECTION 3.2 Issuance of Equity Interest .

 

(a)                 The Company represents and warrants that the authorized Equity Interest of the Company consists solely of (i) 5,000,000,000 shares of common stock, par value $0.001 per share, of which only 220,000,000 common shares have been issued as of the date hereof and (ii) 500,000,000 shares of preferred stock, of which no preferred shares have been issued as of the date hereof. The shares of common stock of the Company issued and outstanding as of the date hereof are duly authorized, validly issued, fully paid and non-assessable. The delivery to the Holder of certificates representing the Equity Interest that the Holder purchases pursuant to the exercise of this Warrant shall grant to the Holder good and valid title to the Equity Interest represented by such certificate, free and clear of any and all liens, pledges, security interests, charges or encumbrances of any kind or nature or any option, warrant or trust having the practical effect of any of the foregoing.

 

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(b)                Immediately upon the exercise of this Warrant in accordance with Section 3.1 , the Company (the " Delivery Date ") shall issue the Equity Interest that the Holder has purchased pursuant to such exercise, deliver to the Holder the certificates representing such Equity Interest and reflect the issuance of such Equity Interest, which Equity Interest shall be duly authorized, validly issued, outstanding, fully paid and non-assessable, in the Company’s shareholder records (maintained by the Company or its duly appointed transfer agent), whereupon the Holder shall be deemed for all purposes, effective as of the Delivery Date, to be a holder of record and beneficial owner of the Equity Interest that it has purchased pursuant to such exercise.

 

(c)                 If a Holder shall exercise this Warrant for less than all of the Equity Interest which could be purchased or received hereunder, the Company shall issue to the Holder, within five (5) Business Days of the Delivery Date, a new Warrant of like kind and tenor to this Warrant evidencing the right to purchase the remaining Equity Interest represented by the Warrant. This Warrant shall be cancelled upon surrender thereof pursuant to Section 3.1 .

 

(d)                The Company shall pay all Taxes (other than any applicable income or similar Taxes payable by a Holder of a Warrant) attributable to the initial issuance of any Equity Interest upon the exercise or exchange of this Warrant or any successor Warrant; provided , however , that the Company shall not be required to pay any Tax which may be payable in respect of any transfer involved in the issuance of a successor to this Warrant in a name other than that of the Holder of the Warrant being exercised or exchanged.

 

(e)                 Except as set forth in any document that is un-redacted and publicly filed with the U.S. Securities and Exchange Commission, neither the Company nor its Subsidiaries has any liabilities or obligations of any nature (whether absolute, accrued, contingent or otherwise and whether due or to become due) which are not fully reflected or reserved against on the balance sheet as of June 30, 2014 in accordance with GAAP, except for liabilities and obligations incurred in the ordinary course of business and consistent with past practice since the date thereof.

 

SECTION 3.3 Adjustment of Holder’s Equity Interest . The Equity Interest issuable upon exercise of this Warrant (such Equity Interest is referred to herein as the " Holder's Equity Interest ") shall be subject to adjustment from time to time in accordance with this Section 3.3 .

 

SECTION 3.3.1   Issuance of Additional Equity Interest; Capital Reorganization or Capital Reclassifications . If, at any time after the date hereof, the Equity Interests of the Company shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation (including, without limitation, any subdivision or combination of Equity Interest), then in each case the Company shall cause effective provision to be made so that this Warrant shall, effective as of the effective date of such event retroactive to the record date, if any, of such event, be exercisable or exchangeable for the kind and number of equity securities, cash or other property to which a holder of the Equity Interest deliverable upon exercise or exchange of this Warrant would have been entitled upon such event and any such provision shall include adjustments in respect of such securities or other property that shall be equivalent to the adjustments provided for in this Warrant with respect to such Warrant.

 

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SECTION 3.3.2   Consolidations and Mergers; Dissolution .

 

(a)                 If, at any time after the date hereof, the Company shall consolidate with, merge with or into, or sell all or substantially all of its assets or property to, another Person, then the Company shall cause effective provision to be made so that each Warrant shall, effective as of the effective date of such event retroactive to the record date, if any, of such event, be exercisable or exchangeable for the kind and number of shares of stock, membership or other equity interests, other securities, cash or other property to which a holder of the Equity Interest deliverable upon exercise or exchange of such Warrant would have been entitled upon such event. The Company shall not consolidate or merge unless, prior to consummation, the successor corporation (if other than the Company) assumes the obligations of this paragraph by written instrument executed and mailed to the Holder at the Holder’s address set forth in Section 5.1. A sale or lease of all or substantially all the assets of the Company for a consideration (apart from the assumption of obligations) consisting primarily of securities is a consolidation or merger for the foregoing purposes.

 

(b)                In case a voluntary or involuntary dissolution, liquidation, or winding up of the Company (other than in connection with a consolidation or merger covered by subsection (a) above) is at any time proposed, the Company shall give at least 30 days’ prior written notice to the Holder. Such notice shall contain: (1) the date on which the transaction is to take place; (2) the record date (which shall be at least 30 days after the giving of the notice) as of which the Holder will be entitled to receive distributions as a result of the transaction; (3) a brief description of the transaction; (4) a brief description of the distributions to be made to the Holder as a result of the transaction and (5) an estimate of the fair value of the distributions. On the date of the transaction, if it actually occurs, this Warrant and all rights hereunder shall terminate.

 

SECTION 3.3.3   Adjustments to the Current Holder’s Equity Interest . Subject to the terms of this Section 3.3.3, the Current Holder’s Equity Interest (and the Warrant) shall be subject to increase (but not decrease) pursuant to the following:

 

(a)                 if the Company’s and its Subsidiaries’ audited Adjusted EBITDA for the Fiscal Year ending December 31, 2018 does not equal or exceed $19,250,000 (the " Target EBITDA "), the Current Holder’s Equity Interest applicable to the Warrant shall increase (but not decrease) by a percentage equal to the ratio (the " Conversion Ratio ") of (i)(a) the Target EBITDA, minus (b) the audited Adjusted EBITDA of the Company and its Subsidiaries for such Fiscal Year to (ii) the audited Adjusted EBITDA of the Company and its Subsidiaries for such Fiscal Year, provided, however, that in no event will an adjustment pursuant to this paragraph 3.3.3(a) result in the Current Holder's Equity Interest (and the Warrant) exceeding three and one-half (3.5) times the amount same would have been were it not for the adjustment under this paragraph 3.3.3(a).

 

(b)                Solely for the purposes of illustration, an example of the calculations described in this Section 3.3.3 is set forth on Schedule 3.3.3 attached hereto.

 

SECTION 3.3.4   Notice; Calculations; Etc . Whenever the Equity Interest issuable hereunder shall be adjusted as provided in this Section 3.3 , the Company shall provide to the Holder a statement, signed by an Executive Officer, describing in detail the facts requiring such adjustment and setting forth a calculation of the Equity Interest applicable to each Warrant after giving effect to such adjustment. All calculations under this Section 3.3 shall be made to the nearest one hundredth of a cent or to the nearest one-tenth of a unit, as the case may be.

 

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ARTICLE IV

CERTAIN OTHER RIGHTS

 

SECTION 4.1 Registration Rights.

 

(a) At any time at which this Warrant or the Equity Interest underlying the same remains outstanding, upon the request of the Holder, the Company will enter into a registration rights agreement with Holder (the " Rights Agreement "). Such Rights Agreement shall provide that beginning October 1, 2015, if the Company is eligible for the use of a registration statement on Form S-3, then the Holder shall have the right to request an initial registration and thereafter on a quarterly basis after such initial registration shall have been declared effective by the U.S. Securities and Exchange Commission, registration of its Equity Interests on Form S-3 or any similar short-form registration (each, a " Demand Registration "). The Rights Agreement will provide that each request for a Demand Registration shall specify the approximate number of Equity Interests requested to be registered and that the Company shall cause a registration statement on Form S-3 (or any successor form) to be filed within twenty (20) days after the date on which the initial request is given and shall use its reasonable best efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter. The Rights Agreement will provide that the Company may postpone for up to ninety (90) days the filing or effectiveness of a registration statement for a Demand Registration if the Company determines in its reasonable good faith judgment that such Demand Registration would (i) materially interfere with a significant acquisition, corporate reorganization or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act. The Rights Agreement shall contain such other terms and conditions applicable to the Holder no less favorable to the Holder than registration rights made available to any other holder of any Equity Interest or other equity security of the Company.

 

(b) The rights to cause the Company to register Equity Interests pursuant hereto may be assigned (but only with all related obligations) by the Holder in a Qualified Assignment; provided, that, (i) the Company is, upon or within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the securities with respect to which such registration rights are being assigned, (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Warrant, (iii) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by transferee or assignee is restricted under the Securities Act, and (iv) such assignment shall be effective only if immediately following such transfer such Equity Interests continue to be Equity Interests of the Company.

 

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ARTICLE V

MISCELLANEOUS

 

SECTION 5.1 Notices . Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and shall be made by electronic mail, personal service, facsimile or reputable courier service:

 

(a) If to the Company, to:

 

TWINLAB CONSOLIDATED CORPORATION

600 East Quality Drive

American Fork, UT 84003

Attention: Mark R. Jaggi, Chief Financial Officer

Facsimile: (801) 763-0789

e-mail: MJaggi@twinlab.com

 

and

 

TWINLAB CONSOLIDATED CORPORATION

632 Broadway, Suite 201

New York, NY 10012

Attention: Richard H. Neuwirth, Chief Legal Officer

Facsimile: (212) 260-1853

e-mail: MJaggi@twinlab.com

with a copy to: RNeuwirth@twinlab.com

 

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with a copy to:

 

WILK AUSLANDER LLP

1515 Broadway, 43 rd Floor

New York, New York 10036

Attention: Joel I. Frank, Esq.

Facsimile: (212) 752-6380

e-mail: jfrank@wilkaulsander.com

 

(b) If to the Holder, to:

 

JL PROPERTIES, INC.

P.O. Box 202845

Anchorage, AK 99520-2845

Attention: Jonathan B. Rubini

Facsimile: (907) 279-8066

e-mail: jrubini@jlproperties.com

 

with a copy to:

 

LANDYE BENNETT BLUMSTEIN LLP

701 West 8th Avenue, Suite 1200

Anchorage, Alaska 99501

Attention: Joshua D. Hodes, Esq.

e-mail: joshh@lbblawyers.com

 

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Unless otherwise specifically provided herein, any notice or other communication shall be deemed to have been given when delivered in person or by courier service, upon receipt of electronic mail or upon receipt of facsimile.

 

SECTION 5.2 No Voting Rights: Limitations of Liability . This Warrant shall not entitle the holder thereof to any voting rights or, except as otherwise provided or referenced herein, other rights of an equity owner of the Company. No provision hereof, in the absence of affirmative action by the Holder to purchase its Equity Interest, and no enumeration herein of the rights or privileges of the Holder shall give rise to any liability of the Holder for the Exercise Price of the Equity Interest acquirable by exercise hereunder or as a stockholder of the Company.

 

SECTION 5.3 Amendments and Waivers . Any provision of this Warrant may be amended or waived, but only pursuant to a written agreement signed by the Company and the Holder; provided , however , that, notwithstanding the foregoing, this Warrant will automatically be amended, without any further action required by the Company and the Holder under this Section 5.3, if the Current Holder’s Equity Interest is adjusted pursuant to Section 3.3.3.

 

SECTION 5.4 Severability . If any provision of this Warrant shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any way affect or render invalid or unenforceable any other provision of this Agreement, and such provision shall be deemed to be restated to reflect the parties' original intentions as nearly as possible in accordance with Applicable Law(s).

 

SECTION 5.5 Specific Performance . The Holder shall have the right to specific performance by the Company of the provisions of this Warrant, in addition to any other remedies it may have at law or in equity. The Company hereby irrevocably waives, to the extent that it may do so under Applicable Law, any defense based on the adequacy of a remedy at law which may be asserted as a bar to the remedy of specific performance in any action brought against the Company for specific performance of this Warrant by the Holder.

 

SECTION 5.6 Binding Effect . This Warrant shall be binding upon and inure to the benefit of the Company, the Holder and their respective successors and assigns.

 

SECTION 5.7 Counterparts . This Warrant may be executed in several counterparts, and/or by the execution of counterpart signature pages that may be attached to one or more counterparts of this Warrant, and all so executed shall constitute one agreement binding on all of the parties hereto, notwithstanding that all of the parties hereto are not signatory to the original or the same counterpart. In addition, any counterpart signature page may be executed by any party wherever such party is located, and may be delivered by telephone facsimile or by electronic mail in PDF format, and any such transmitted signature pages may be attached to one or more counterparts of this Warrant, and such faxed or sent by electronic mail signature(s) shall have the same force and effect, and be as binding, as if original signatures had been executed and delivered in person.

 

SECTION 5.8 Entire Agreement . This Warrant, together with the other documents and instruments entered into by the parties thereto in connection therewith, constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

 

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SECTION 5.9 Governing law . THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES AND PRINCIPLES. THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSE OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS WARRANT, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS WARRANT.

 

SECTION 5.10 Expenses . The Company will promptly (and in any event within thirty (30) days of receiving any statement or invoice therefor) pay all reasonable fees, expenses and costs relating hereto, including, but not limited to, (i) the cost of reproducing this Warrant, (ii) the fees and disbursements of counsel to the Holder in preparing this Warrant, (iii) all transfer, stamp, documentary or other similar Taxes, assessments or charges levied by any governmental or revenue authority in respect hereof or any other document referred to herein, (iv) fees and expenses (including, without limitation, reasonable attorneys' fees) incurred in respect of the enforcement by the Holder of the rights granted to the Holder under this Warrant, and (v) the expenses relating to the consideration, negotiation, preparation or execution of any amendments, waivers or consents requested by the Company pursuant to the provisions hereof, whether or not any such amendments, waivers or consents are executed.

 

SECTION 5.11 Attorneys' Fees . In any action or proceeding brought by a party to enforce any provision of this Warrant, the prevailing party shall be entitled to recover the reasonable costs and expenses incurred by it or him in connection therewith (including reasonable attorneys’ and paralegals’ fees and costs incurred before and at any trial or arbitration and at all appellate levels), as well as all other relief granted or awarded in such action or other proceeding.

 

SECTION 5.12 Filings . The Company shall, at its own expense, promptly execute and deliver, or cause to be executed and delivered, to the Holder all applications, certificates, instruments and all other documents and papers that the Holder may reasonably request in connection with the obtaining of any consent, approval, qualification, or authorization of any Federal, provincial, state or local government (or any agency or commission thereof) necessary or appropriate in connection with, or for the effective exercise of, the Warrant (and/or any successor Warrant(s) hereto).

 

SECTION 5.13 Other Transactions . Nothing contained herein shall preclude the Holder from engaging in any transaction, in addition to those contemplated by this Warrant with the Company or any of its Affiliates in which the Company or such Affiliate is not restricted hereby from engaging with any other Person.

 

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SECTION 5.14 Waiver of Jury Trial . THE HOLDER AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS WARRANT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE HOLDER OR THE COMPANY. THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER ENTERING INTO THIS WARRANT.

 

SECTION 5.15 Headings . Section titles and captions contained in this Warrant are inserted only as a matter of convenience and for reference. The titles and captions in no way define, limit, extend or describe the scope of this Warrant or the intent of any provision hereof.

 

SECTION 5.16 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.

 

[Remainder of page intentionally left blank; signatures on following page]

 

IN WITNESS WHEREOF, the undersigned has caused this Warrant to be duly executed and delivered by an authorized officer, all as of the date and year first above written.

 

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

 

 

 

 

 

 

 

 

 

Signature Page To JL-BBNC Warrant 2015-13

 

15
 

 

ACKNOWLEDGED AND AGREED:

 

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

 

 

 

 

 

  

 

 

 

 

Signature Page To JL-BBNC Warrant 2015-13

 

16
 

ANNEX 1

 

 

 

ELECTION TO EXERCISE FORM

 

(To Be Executed By the Holder of This Warrant

 

In Order to Exercise This Warrant)

 

The undersigned hereby irrevocably elects to exercise the right covered by this Warrant to purchase ____________________ of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, according to the conditions hereof and herewith makes payment in full of the Exercise Price with respect to such Equity Interest.

 

 

 

     
  Signature  
     
     
     
  Address  

 

Dated:    

 

17
 

ANNEX 2

 

 

 

ASSIGNMENT FORM

 

(To Be Executed By the Holder of This Warrant

 

In Order to Assign This Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _____________________________ this Warrant and all rights evidenced thereby and does irrevocably constitute and appoint ___________________, attorney, to transfer the said Warrant on the books of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation.

 

  

 

     
  Signature  
     
     
     
  Address  

 

Dated:    

 

18
 

ANNEX 3

 

 

 

EXCHANGE FORM

 

(To Be Executed By the Holder of This Warrant

 

In Order to Exchange and Assign This Warrant)

 

The undersigned hereby irrevocably elects to exchange this Warrant to purchase ________________, of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, for ___________ Warrants to purchase the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, set forth below to the Persons named and hereby sells, assigns and transfers unto such Persons that portion of this Warrant represented by such new Warrants and all rights evidenced thereby and does irrevocably constitute and appoint ____________________, attorney, to exchange and transfer this Warrant as aforesaid on the books of TWI NLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation.

  

Equity Interest   Assignee
     
       
     
       
     
     
    Signature
     
     
     
     
     
    Address

 

FOR USE BY THE COMPANY ONLY:

 

This Warrant No. __ cancelled (or transferred or exchanged) this ________ day of _____________, ____________ of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, issued therefor in the name of ____ ___________ Warrant No. ___ for ________, of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, in the name of _________________________.

 

 

Dated:    

 

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Schedule 3.3.3

 

Calculations for Adjustment of Current Holder’s Equity Interest

 

Section 3.3.3(a):

 

If the audited Adjusted EBITDA of the Company and its Subsidiaries for the Fiscal Year ending December 31, 2018 equals $15,000,000, the Current Holder’s Equity Interest is increased by a percentage equal to:

 

($19,250,000 - $15,000,000) / $15,000,000 = 0.28333333

 

Therefore, the Current Holder’s Equity Interest equals 465,880 shares * 1.28333333 = 597,879 shares; provided, however, that the Current Holder’s Equity Interest would not exceed three and one-half (3.5) times 465,880 shares, for a total number of shares of 1,630,580.

 

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Exhibit 10.54

 

THIS WARRANT AND THE EQUITY INTERESTS THAT MAY BE PURCHASED HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD OR TRANSFERRED, OR OFFERED FOR SALE OR TRANSFER, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION THEREUNDER OR PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS THEREOF.

 

TWINLAB CONSOLIDATED HOLDINGS, INC.

 

No. 2015-14 April 30, 2015

 

Warrant

 

This Warrant (the " Warrant ") certifies that, for value received, JL PROPERTIES, INC., an Alaska corporation , and its permitted transferees, successors and assigns (the " Holder "), is entitled to purchase from TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (the " Company "), 86,962 shares of common stock of the Company (subject to any adjustments pursuant to Section 3.3) issuable upon the full exercise of this Warrant at the purchase price of $1.00 per share (the " Exercise Price "), at any time prior to 5:00 P.M. on April 30, 2020 (the " Expiration Date ").

 

ARTICLE I

DEFINITIONS

 

SECTION 1.1 Definitions . As used in this Warrant, the following terms shall have the following meanings:

 

" Applicable Law " means all provisions of laws, statutes, ordinances, rules, regulations, permits, certificates or orders of any Governmental Authority applicable to the Person in question or any of its assets or property, and all judgments, injunctions, orders and decrees of all courts and arbitrators in proceedings or actions in which the Person in question is a party or by which any of its assets or properties are bound.

 

" Assignment Form " shall mean the assignment form attached as Annex 2 hereto.

 

" Affiliate " or " Affiliated " means, as applied to (i) any Person, directly or indirectly, in which such Person holds, beneficially or of record, ten percent (10%) or more of the equity of voting securities; (ii) any Person that holds, of record or beneficially, ten percent (10%) or more of the equity or voting securities of such Person; (iii) any director, officer, partner or individual holding a similar position in respect of such Person; (iv) as to any natural Person, any Person related by blood, marriage or adoption and any Person owned by such Persons, including any spouse, parent, grandparent, aunt, uncle, child, grandchild, sibling, cousin or in-law of such Person; or (v) any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, "control" (including, with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

 

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" Business Day " means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close.

 

" Company " shall have the meaning set forth in the Preamble.

 

" Current Holder’s Equity Interest " means 86,962 shares of common stock of the Company issuable upon the full exercise of this Warrant, minus any Equity Interest previously issued pursuant to the exercise of this Warrant.

 

" Delivery Date " shall have the meaning given to such term in Section 3.2 .

 

" Equity Interest " shall mean the interest of (i) a shareholder in a corporation, (ii) a partner (whether general or limited) in a partnership (whether general, limited or limited liability), (iii) a member in a limited liability company, or (iv) any other Person having any other form of equity security or ownership interest in any Person.

 

" Exchange Act " shall mean the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

 

" Exchange Form " shall mean the exchange form attached as Annex 3 hereto.

 

" Executive Officer " shall mean, with respect to the Company, its Chief Executive Officer, President, Chief Financial Officer or Chief Operating Officer.

 

" Exercise Form " shall mean the exercise form attached as Annex 1 hereto.

 

" Exercise Price " shall have the meaning set forth in the Preamble.

 

" Expiration Date " shall have the meaning set forth in the Preamble.

 

" GAAP " shall mean generally accepted accounting principles in the United States as of the relevant date in question, consistently applied.

 

" Governmental Authority " means any arbitrator or any governmental authority, agency, department, commission, bureau, board, instrumentality, court or quasi-governmental authority having jurisdiction or supervisory or regulatory authority over the Company.

 

" Holder " shall have the meaning set forth in the Preamble.

 

" Holder's Equity Interest " shall have the meaning given to such term in Section 3.3 .

 

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" Person " shall mean any individual, corporation, partnership, limited liability company, trust, unincorporated organization, or any other form of entity.

 

" Qualified Assignment " shall mean any of the following: (a) an assignment to a transferee acquiring at least 25% of the Equity Interests subject to the Warrant (subject to adjustment for stock splits, stock dividends, recapitalizations and similar events); or (b) an assignment to an Affiliate of the Holder.

 

" Rights Agreement " shall have the meaning given to such term in Section 4.1 .

 

" Securities Act " shall mean the Securities Act of 1933, as amended from time to time, and any successor statute.

 

" Subsidiary " shall mean a corporation or other entity any of whose Equity Interests having ordinary voting power (other than Equity Interests having such power only by reason of the happening of a contingency) to elect a majority of the directors of such corporation, or other Persons performing similar functions for such entity, are owned, directly or indirectly, by such Person.

 

" Taxes " means all taxes, charges, fees, levies or other assessments, however denominated and whether imposed by a taxing authority within or without the United States, including all net income, gross income, gross receipts, sales, use, ad valorem, goods and services, capital, transfer, franchise, profits, license, withholding, payroll, employment, employer health, excise, estimated, severance, stamp, occupation, property or other taxes, custom duties, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts imposed by any taxing authority whether arising before, on or after the date hereof.

 

" Warrant " or " Warrants " shall mean this Warrant.

 

" Warrant Register " shall have the meaning given to such term in Section 2.1.

 

SECTION 1.2 Interpretation . Unless the context of this Warrant clearly requires otherwise, the masculine, feminine or neuter gender and the singular or plural number shall be deemed to include the others whenever the context so requires. Accounting terms used but not otherwise defined herein have the meanings given to them under GAAP. The terms "include," "includes" and "including" shall be deemed to be followed by the phrase "without limitation." The words "hereof," "herein," "hereunder," and similar terms in this Warrant refer to this Warrant as a whole and not to any particular provision of this Warrant. References to "Articles", "Sections," "Subsections," "Exhibits," "Preamble," "Annexes," and "Schedules" are to articles, sections, subsections, exhibits, preamble, annexes and schedules, respectively, of this Warrant, unless otherwise specifically provided. References to "days" and "months" refer to calendar days and calendar months unless otherwise expressly designated (i.e., business days or particular 30-day periods). The captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision of this Warrant. The term "dollars" or "$" means United States Dollars.

 

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ARTICLE II

FORM; EXCHANGE FOR WARRANTS; TRANSFER; TAXES

 

SECTION 2.1 Warrant Register . Each Warrant issued, exchanged or transferred shall be registered in a warrant register (the " Warrant Register "). The Warrant Register shall set forth the number of each Warrant, the name and address of the holder thereof, and the Current Holder’s Equity Interest for which the Warrant is then exercisable. The Warrant Register will be maintained by the Company and will be available for inspection by the Holder at the principal office of the Company or such other location as the Company may designate to the Holder in the manner set forth in Section 5.1 hereof. The Company shall be entitled to treat the Holder as the owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such Warrant on the part of any other Person.

 

SECTION 2.2 Exchange of Warrants for Warrants .

 

(a)                 The Holder may exchange this Warrant for another Warrant or Warrants of like kind and tenor representing in the aggregate the right to purchase the same Current Holder’s Equity Interest which could be purchased pursuant to the Warrant being so exchanged. In order to effect an exchange permitted by this Section 2.2 , the Holder shall deliver to the Company such Warrant accompanied by an Exchange Form in the form attached hereto as Annex 3 signed by the Holder thereof specifying the number and denominations of Warrants to be issued in such exchange and the names in which such Warrants are to be issued. Within ten (10) Business Days of receipt of such a request, the Company shall issue, register and deliver to the Holder thereof each Warrant to be issued in such exchange.

 

(b)                Upon receipt of evidence reasonably satisfactory to the Company (an affidavit of the Holder, including indemnification reasonably acceptable to the Company) of the ownership and the loss, theft, destruction or mutilation of any Warrant or, in the case of any such mutilation, upon surrender of such Warrant, the Company shall (at its expense) execute and deliver in lieu of such Warrant a new Warrant of like kind and tenor representing the same rights represented by and dated the date of such lost, stolen, destroyed or mutilated Warrant. Any such new Warrant shall constitute an original contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable by any Person.

 

(c)                 The Company shall pay all Taxes (other than any applicable income or similar Taxes payable by a Holder of a Warrant) attributable to an exchange of a Warrant pursuant to this Section 2.2 ; provided, however , that the Company shall not be required to pay any Tax which may be payable in respect of any transfer involved in the issuance of any Warrant in a name other than that of the Holder of the Warrant being exchanged.

 

SECTION 2.3 Transfer of Warrant .

 

(a)                 Subject to Section 2.3(c) hereof, each Warrant and the rights thereunder may be transferred by the Holder thereof, in whole or in part, by delivering to the Company such Warrant accompanied by a properly completed Assignment Form in the form of Annex 2 . Within ten (10) Business Days of receipt of such Assignment Form the Company shall issue, register and deliver to the new Holder, subject to Section 2.3(c ) hereof a new Warrant or Warrants of like kind and tenor representing in the aggregate the right to purchase the same Current Holder’s Equity Interest which could be purchased pursuant to the Warrant being transferred. In all cases of transfer by an attorney, the original power of attorney, duly approved, or a copy thereof, duly certified, shall be deposited and remain with the Company. In case of a transfer by executors, administrators, guardians or other legal representatives, duly authenticated evidence of their authority shall be produced and may be required to be deposited and remain with the Company in its discretion.

 

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(b)                Each Warrant issued in accordance with this Section 2.3 shall bear the restrictive legend set forth on the face of this Warrant, unless the Holder or transferee thereof supplies to the Company an opinion of counsel, reasonably satisfactory to the Company, that the restrictions described in such legend are no longer applicable to such Warrant.

 

(c)                 The transfer of Warrants and any Equity Interest purchased thereunder shall be permitted, so long as such transfer is pursuant to a transaction that complies with, or is exempt from, the provisions of the Securities Act, and the Company may require an opinion of counsel in form and substance reasonably satisfactory to it to such effect prior to effecting any transfer of Warrants or any Equity Interest purchased thereunder.

 

ARTICLE III

EXERCISE OF WARRANT; EXCHANGE FOR EQUITY INTEREST

 

SECTION 3.1 Exercise of Warrants . On any Business Day before the Expiration Date, the Holder may exercise this Warrant, in whole or in part, by delivering to the Company this Warrant accompanied by a properly completed Exercise Form in the form of Annex 1 and a check in an aggregate amount equal to the applicable Exercise Price.

 

SECTION 3.2 Issuance of Equity Interest .

 

(a)                 The Company represents and warrants that the authorized Equity Interest of the Company consists solely of (i) 5,000,000,000 shares of common stock, par value $0.001 per share, of which only 220,000,000 common shares have been issued as of the date hereof and (ii) 500,000,000 shares of preferred stock, of which no preferred shares have been issued as of the date hereof. The shares of common stock of the Company issued and outstanding as of the date hereof are duly authorized, validly issued, fully paid and non-assessable. The delivery to the Holder of certificates representing the Equity Interest that the Holder purchases pursuant to the exercise of this Warrant shall grant to the Holder good and valid title to the Equity Interest represented by such certificate, free and clear of any and all liens, pledges, security interests, charges or encumbrances of any kind or nature or any option, warrant or trust having the practical effect of any of the foregoing.

 

(b)                Immediately upon the exercise of this Warrant in accordance with Section 3.1 , the Company (the " Delivery Date ") shall issue the Equity Interest that the Holder has purchased pursuant to such exercise, deliver to the Holder the certificates representing such Equity Interest and reflect the issuance of such Equity Interest, which Equity Interest shall be duly authorized, validly issued, outstanding, fully paid and non-assessable, in the Company’s shareholder records (maintained by the Company or its duly appointed transfer agent), whereupon the Holder shall be deemed for all purposes, effective as of the Delivery Date, to be a holder of record and beneficial owner of the Equity Interest that it has purchased pursuant to such exercise.

 

(c)                 If a Holder shall exercise this Warrant for less than all of the Equity Interest which could be purchased or received hereunder, the Company shall issue to the Holder, within five (5) Business Days of the Delivery Date, a new Warrant of like kind and tenor to this Warrant evidencing the right to purchase the remaining Equity Interest represented by the Warrant. This Warrant shall be cancelled upon surrender thereof pursuant to Section 3.1 .

 

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(d)                The Company shall pay all Taxes (other than any applicable income or similar Taxes payable by a Holder of a Warrant) attributable to the initial issuance of any Equity Interest upon the exercise or exchange of this Warrant or any successor Warrant; provided , however , that the Company shall not be required to pay any Tax which may be payable in respect of any transfer involved in the issuance of a successor to this Warrant in a name other than that of the Holder of the Warrant being exercised or exchanged.

 

(e)                 Except as set forth in any document that is un-redacted and publicly filed with the U.S. Securities and Exchange Commission, neither the Company nor its Subsidiaries has any liabilities or obligations of any nature (whether absolute, accrued, contingent or otherwise and whether due or to become due) which are not fully reflected or reserved against on the balance sheet as of June 30, 2014 in accordance with GAAP, except for liabilities and obligations incurred in the ordinary course of business and consistent with past practice since the date thereof.

 

SECTION 3.3 Adjustment of Holder’s Equity Interest . The Equity Interest issuable upon exercise of this Warrant (such Equity Interest is referred to herein as the " Holder's Equity Interest ") shall be subject to adjustment from time to time in accordance with this Section 3.3 .

 

SECTION 3.3.1   Issuance of Additional Equity Interest; Capital Reorganization or Capital Reclassifications . If, at any time after the date hereof, the Equity Interests of the Company shall be changed into or exchanged for a different number or kind of shares of stock or other securities of the Company or of another corporation, whether through reorganization, recapitalization, stock split-up, combination of shares, merger or consolidation (including, without limitation, any subdivision or combination of Equity Interest), then in each case the Company shall cause effective provision to be made so that this Warrant shall, effective as of the effective date of such event retroactive to the record date, if any, of such event, be exercisable or exchangeable for the kind and number of equity securities, cash or other property to which a holder of the Equity Interest deliverable upon exercise or exchange of this Warrant would have been entitled upon such event and any such provision shall include adjustments in respect of such securities or other property that shall be equivalent to the adjustments provided for in this Warrant with respect to such Warrant.

 

SECTION 3.3.2   Consolidations and Mergers; Dissolution .

 

(a)                 If, at any time after the date hereof, the Company shall consolidate with, merge with or into, or sell all or substantially all of its assets or property to, another Person, then the Company shall cause effective provision to be made so that each Warrant shall, effective as of the effective date of such event retroactive to the record date, if any, of such event, be exercisable or exchangeable for the kind and number of shares of stock, membership or other equity interests, other securities, cash or other property to which a holder of the Equity Interest deliverable upon exercise or exchange of such Warrant would have been entitled upon such event. The Company shall not consolidate or merge unless, prior to consummation, the successor corporation (if other than the Company) assumes the obligations of this paragraph by written instrument executed and mailed to the Holder at the Holder’s address set forth in Section 5.1. A sale or lease of all or substantially all the assets of the Company for a consideration (apart from the assumption of obligations) consisting primarily of securities is a consolidation or merger for the foregoing purposes.

 

(b)                In case a voluntary or involuntary dissolution, liquidation, or winding up of the Company (other than in connection with a consolidation or merger covered by subsection (a) above) is at any time proposed, the Company shall give at least 30 days’ prior written notice to the Holder. Such notice shall contain: (1) the date on which the transaction is to take place; (2) the record date (which shall be at least 30 days after the giving of the notice) as of which the Holder will be entitled to receive distributions as a result of the transaction; (3) a brief description of the transaction; (4) a brief description of the distributions to be made to the Holder as a result of the transaction and (5) an estimate of the fair value of the distributions. On the date of the transaction, if it actually occurs, this Warrant and all rights hereunder shall terminate.

 

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SECTION 3.3.3   Notice; Calculations; Etc . Whenever the Equity Interest issuable hereunder shall be adjusted as provided in this Section 3.3 , the Company shall provide to the Holder a statement, signed by an Executive Officer, describing in detail the facts requiring such adjustment and setting forth a calculation of the Equity Interest applicable to each Warrant after giving effect to such adjustment. All calculations under this Section 3.3 shall be made to the nearest one hundredth of a cent or to the nearest one-tenth of a unit, as the case may be.

 

ARTICLE IV

CERTAIN OTHER RIGHTS

 

SECTION 4.1 Registration Rights.

 

(a) At any time at which this Warrant or the Equity Interest underlying the same remains outstanding, upon the request of the Holder, the Company will enter into a registration rights agreement with Holder (the " Rights Agreement "). Such Rights Agreement shall provide that beginning October 1, 2015, if the Company is eligible for the use of a registration statement on Form S-3, then the Holder shall have the right to request an initial registration and thereafter on a quarterly basis after such initial registration shall have been declared effective by the U.S. Securities and Exchange Commission, registration of its Equity Interests on Form S-3 or any similar short-form registration (each, a " Demand Registration "). The Rights Agreement will provide that each request for a Demand Registration shall specify the approximate number of Equity Interests requested to be registered and that the Company shall cause a registration statement on Form S-3 (or any successor form) to be filed within twenty (20) days after the date on which the initial request is given and shall use its reasonable best efforts to cause such Registration Statement to be declared effective by the Commission as soon as practicable thereafter. The Rights Agreement will provide that the Company may postpone for up to ninety (90) days the filing or effectiveness of a registration statement for a Demand Registration if the Company determines in its reasonable good faith judgment that such Demand Registration would (i) materially interfere with a significant acquisition, corporate reorganization or other similar transaction involving the Company; (ii) require premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (iii) render the Company unable to comply with requirements under the Securities Act or Exchange Act. The Rights Agreement shall contain such other terms and conditions applicable to the Holder no less favorable to the Holder than registration rights made available to any other holder of any Equity Interest or other equity security of the Company.

 

(b) The rights to cause the Company to register Equity Interests pursuant hereto may be assigned (but only with all related obligations) by the Holder in a Qualified Assignment; provided, that, (i) the Company is, upon or within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee and the securities with respect to which such registration rights are being assigned, (ii) such transferee or assignee agrees in writing to be bound by and subject to the terms and conditions of this Warrant, (iii) such assignment shall be effective only if immediately following such transfer the further disposition of such securities by transferee or assignee is restricted under the Securities Act, and (iv) such assignment shall be effective only if immediately following such transfer such Equity Interests continue to be Equity Interests of the Company.

 

7
 

 

ARTICLE V

MISCELLANEOUS

 

SECTION 5.1 Notices . Unless otherwise specifically provided herein, any notice or other communication herein required or permitted to be given shall be in writing and shall be made by electronic mail, personal service, facsimile or reputable courier service:

 

(a) If to the Company, to:

 

TWINLAB CONSOLIDATED CORPORATION

600 East Quality Drive

American Fork, UT 84003

Attention: Mark R. Jaggi, Chief Financial Officer

Facsimile: (801) 763-0789

e-mail: MJaggi@twinlab.com

 

and

 

TWINLAB CONSOLIDATED CORPORATION

632 Broadway, Suite 201

New York, NY 10012

Attention: Richard H. Neuwirth, Chief Legal Officer

Facsimile: (212) 260-1853

e-mail: MJaggi@twinlab.com

with a copy to: RNeuwirth@twinlab.com

 

with a copy to:

 

WILK AUSLANDER LLP

1515 Broadway

New York, New York 10036

Attention: Joel I. Frank, Esq.

Facsimile: (212) 762-6380

e-mail: jfrank@wilkauslander.com

 

8
 

 

(b) If to the Holder, to:

 

JL PROPERTIES, INC.

P.O. Box 202845

Anchorage, AK 99520-2845

Attention: Jonathan B. Rubini

Facsimile: (907) 279-8066

e-mail: jrubini@jlproperties.com

 

with a copy to:

 

LANDYE BENNETT BLUMSTEIN LLP

701 West 8th Avenue, Suite 1200

Anchorage, Alaska 99501

Attention: Joshua D. Hodes, Esq.

e-mail: joshh@lbblawyers.com

 

Unless otherwise specifically provided herein, any notice or other communication shall be deemed to have been given when delivered in person or by courier service, upon receipt of electronic mail or upon receipt of facsimile.

 

SECTION 5.2 No Voting Rights: Limitations of Liability . This Warrant shall not entitle the holder thereof to any voting rights or, except as otherwise provided or referenced herein, other rights of an equity owner of the Company. No provision hereof, in the absence of affirmative action by the Holder to purchase its Equity Interest, and no enumeration herein of the rights or privileges of the Holder shall give rise to any liability of the Holder for the Exercise Price of the Equity Interest acquirable by exercise hereunder or as a stockholder of the Company.

 

SECTION 5.3 Amendments and Waivers . Any provision of this Warrant may be amended or waived, but only pursuant to a written agreement signed by the Company and the Holder; provided , however , that, notwithstanding the foregoing, this Warrant will automatically be amended, without any further action required by the Company and the Holder under this Section 5.3, if the Current Holder’s Equity Interest is adjusted pursuant to Section 3.3.3.

 

9
 

 

SECTION 5.4 Severability . If any provision of this Warrant shall be held to be invalid or unenforceable, such invalidity or unenforceability shall attach only to such provision and shall not in any way affect or render invalid or unenforceable any other provision of this Agreement, and such provision shall be deemed to be restated to reflect the parties' original intentions as nearly as possible in accordance with Applicable Law(s).

 

SECTION 5.5 Specific Performance . The Holder shall have the right to specific performance by the Company of the provisions of this Warrant, in addition to any other remedies it may have at law or in equity. The Company hereby irrevocably waives, to the extent that it may do so under Applicable Law, any defense based on the adequacy of a remedy at law which may be asserted as a bar to the remedy of specific performance in any action brought against the Company for specific performance of this Warrant by the Holder.

 

SECTION 5.6 Binding Effect . This Warrant shall be binding upon and inure to the benefit of the Company, the Holder and their respective successors and assigns.

 

SECTION 5.7 Counterparts . This Warrant may be executed in several counterparts, and/or by the execution of counterpart signature pages that may be attached to one or more counterparts of this Warrant, and all so executed shall constitute one agreement binding on all of the parties hereto, notwithstanding that all of the parties hereto are not signatory to the original or the same counterpart. In addition, any counterpart signature page may be executed by any party wherever such party is located, and may be delivered by telephone facsimile or by electronic mail in PDF format, and any such transmitted signature pages may be attached to one or more counterparts of this Warrant, and such faxed or sent by electronic mail signature(s) shall have the same force and effect, and be as binding, as if original signatures had been executed and delivered in person.

 

SECTION 5.8 Entire Agreement . This Warrant, together with the other documents and instruments entered into by the parties thereto in connection therewith, constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersedes any prior agreements, written or oral, with respect thereto.

 

SECTION 5.9 Governing law . THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS RULES AND PRINCIPLES. THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK FOR THE PURPOSE OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS WARRANT, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE PARTIES HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS WARRANT.

 

10
 

 

SECTION 5.10 Expenses . The Company will promptly (and in any event within thirty (30) days of receiving any statement or invoice therefor) pay all reasonable fees, expenses and costs relating hereto, including, but not limited to, (i) the cost of reproducing this Warrant, (ii) the fees and disbursements of counsel to the Holder in preparing this Warrant, (iii) all transfer, stamp, documentary or other similar Taxes, assessments or charges levied by any governmental or revenue authority in respect hereof or any other document referred to herein, (iv) fees and expenses (including, without limitation, reasonable attorneys' fees) incurred in respect of the enforcement by the Holder of the rights granted to the Holder under this Warrant, and (v) the expenses relating to the consideration, negotiation, preparation or execution of any amendments, waivers or consents requested by the Company pursuant to the provisions hereof, whether or not any such amendments, waivers or consents are executed.

 

SECTION 5.11 Attorneys' Fees . In any action or proceeding brought by a party to enforce any provision of this Warrant, the prevailing party shall be entitled to recover the reasonable costs and expenses incurred by it or him in connection therewith (including reasonable attorneys’ and paralegals’ fees and costs incurred before and at any trial or arbitration and at all appellate levels), as well as all other relief granted or awarded in such action or other proceeding.

 

SECTION 5.12 Filings . The Company shall, at its own expense, promptly execute and deliver, or cause to be executed and delivered, to the Holder all applications, certificates, instruments and all other documents and papers that the Holder may reasonably request in connection with the obtaining of any consent, approval, qualification, or authorization of any Federal, provincial, state or local government (or any agency or commission thereof) necessary or appropriate in connection with, or for the effective exercise of, the Warrant (and/or any successor Warrant(s) hereto).

 

SECTION 5.13 Other Transactions . Nothing contained herein shall preclude the Holder from engaging in any transaction, in addition to those contemplated by this Warrant with the Company or any of its Affiliates in which the Company or such Affiliate is not restricted hereby from engaging with any other Person.

 

SECTION 5.14 Waiver of Jury Trial . THE HOLDER AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS WARRANT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE HOLDER OR THE COMPANY. THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE HOLDER ENTERING INTO THIS WARRANT.

 

11
 

 

 

SECTION 5.15 Headings . Section titles and captions contained in this Warrant are inserted only as a matter of convenience and for reference. The titles and captions in no way define, limit, extend or describe the scope of this Warrant or the intent of any provision hereof.

 

SECTION 5.16 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.

 

[Remainder of page intentionally left blank; signatures on following page]

 

 

 

 

 

12
 

 

IN WITNESS WHEREOF, the undersigned has caused this Warrant to be duly executed and delivered by an authorized officer, all as of the date and year first above written.

 

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

 

 

 

 

 

 

 

 

 

Signature Page To JL-BBNC Warrant 2015-14

 

 

13
 

 

ACKNOWLEDGED AND AGREED:

 

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

 

 

 

 

 

  

 

 

Signature Page To JL-BBNC Warrant 2015-14

 

14
 

ANNEX 1

 

 

 

ELECTION TO EXERCISE FORM

 

(To Be Executed By the Holder of This Warrant

 

In Order to Exercise This Warrant)

 

The undersigned hereby irrevocably elects to exercise the right covered by this Warrant to purchase ____________________ of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, according to the conditions hereof and herewith makes payment in full of the Exercise Price with respect to such Equity Interest.

 

 

  

     
  Signature  
     
     
     
  Address  

 

Dated:    

 

15
 

ANNEX 2

 

 

 

ASSIGNMENT FORM

 

(To Be Executed By the Holder of This Warrant

 

In Order to Assign This Warrant)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto _____________________________ this Warrant and all rights evidenced thereby and does irrevocably constitute and appoint ___________________, attorney, to transfer the said Warrant on the books of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation.

 

 

 

 

     
  Signature  
     
     
     
  Address  

 

Dated:    

 

 

16
 

ANNEX 3

 

 

 

EXCHANGE FORM

 

(To Be Executed By the Holder of This Warrant

 

In Order to Exchange and Assign This Warrant)

 

The undersigned hereby irrevocably elects to exchange this Warrant to purchase ________________, of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, for ___________ Warrants to purchase the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, set forth below to the Persons named and hereby sells, assigns and transfers unto such Persons that portion of this Warrant represented by such new Warrants and all rights evidenced thereby and does irrevocably constitute and appoint ____________________, attorney, to exchange and transfer this Warrant as aforesaid on the books of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation.

 

Equity Interest   Assignee
     
       
     
       
     
     
    Signature
     
     
     
     
     
    Address

  

FOR USE BY THE COMPANY ONLY:

 

This Warrant No. __ cancelled (or transferred or exchanged) this ________ day of _____________, ____________ of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, issued therefor in the name of ____ ___________ Warrant No. ___ for ________, of the Equity Interest of TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation, in the name of _________________________.

 

 

Dated:    

 

17

Exhibit 10.55

 

AMENDMENT NO. 3 TO CREDIT AND SECURITY AGREEMENT

AND LIMITED CONSENT

 

THIS AMENDMENT NO. 3 TO CREDIT AND SECURITY AGREEMENT AND LIMITED CONSENT (this “ Amendment ”) is made as of this 30th day of April, 2015, by and among TWINLAB CONSOLIDATED HOLDINGS, INC. , a Nevada corporation (“ TCHI ”), TWINLAB CONSOLIDATION CORPORATION , a Delaware corporation (“ TCC ”), 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.), and NUTRASCIENCE LABS IP CORPORATION , a Delaware corporation (formerly known as TCC CM Subco II, Inc.) (each of the foregoing Persons being referred to herein individually as a “ Borrower ”, and collectively as “ Borrowers ”), and MIDCAP FUNDING X TRUST, a Delaware statutory trust, as successor-by-assignment from MidCap Financial 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 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 (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 dated as of April 7, 2015, as further amended hereby and as it may be further amended, modified and restated from time to time, the “ Credit Agreement ”), Agent and Lenders agreed to make available to Borrowers a secured revolving credit facility in a principal amount of up to $15,000,000 from time to time (as amended, modified, supplemented, extended and restated from time to time, collectively, the “ Loans ”). Capitalized terms used but not otherwise defined in this Amendment shall have the meanings set forth in the Credit Agreement.

 

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. Limited Consent for JL Properties Reimbursement Agreement. At the request of and as an accommodation to Borrowers and subject to the strict compliance with the terms, conditions and requirements set forth herein (including, without limitation, satisfaction of each of the conditions set forth in Section 7 below), Agent and Lenders hereby consent to the JL Properties Reimbursement Agreement (as defined below) and the First Tower Central Letter of Credit (as defined below). The limited consent set forth in this Section 2 is effective solely for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) except as expressly provided herein, be a consent to any amendment, waiver or modification of any term or condition of the 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; (c) waive any Event of Default that exists as of the date hereof; or (d) establish a custom or course of dealing among any of the Credit Parties, on the one hand, or Agent or any Lender, on the other hand.

 

3. Amendment to Credit Agreement.

 

(a)                 Section 1.1 – Additional Defined Terms . Section 1.1 of the Credit Agreement is hereby amended to add the following defined terms in their alphabetical order:

 

First Central Tower Letter of Credit ” shall mean that certain Letter of Credit to be issued by Wells Fargo Bank, National Association or such other letter of credit issuer as permitted under the Florida Lease, as issuing bank for the account of JL Properties, Inc. to be provided to First Central Tower, Limited Partnership or its mortgagee for the benefit of TCC and Parent, in a principal amount of $1,000,000 as a security deposit for, and in connection with, the Florida Lease on terms and conditions satisfactory to Agent.

 

1
 

 

JL Properties Reimbursement Agreement ” means that certain Reimbursement Agreement by and among JL Properties, Inc., TCC and Parent, on terms and conditions satisfactory to Agent. All indebtedness, obligations, and liabilities owing under the JL Properties Reimbursement Agreement shall be subject to a Subordination Agreement with the Agent.

 

(b)                Section 1.1 – Definition of Permitted Debt . The defined term “Permitted Debt” in Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety as follows:

 

Permitted Debt ” means: (a) Borrowers’ and its Subsidiaries’ Debt to Agent and each Lender under this Agreement and the other Financing Documents; (b) Debt incurred as a result of endorsing negotiable instruments received in the Ordinary Course of Business; (c) purchase money Debt with respect to equipment, Debt listed on Schedule 5.1, and such other Debt (other than the Essex Lease) not to exceed $3,000,000 at any time (whether in the form of a loan or a Capital Lease) used solely to acquire equipment used in the Ordinary Course of Business and secured only by such equipment; (d) Debt existing on the date of this Agreement and described on Schedule 5.1 and any Refinancing Debt; (e) Debt in the form of insurance premiums financed through the applicable insurance company; (f) trade accounts payable arising and paid on a timely basis and in the Ordinary Course of Business; (g) Subordinated Debt, (h) the Essex Lease; (i) the Nutricap Seller Notes and (j) the JL Properties Reimbursement Agreement.

 

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 Credit Agreement are true and correct with respect to such Borrower as of the date hereof, and (b) covenants to perform its respective obligations under the 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.

 

5. Enforceability. This Amendment constitutes the legal, valid and binding obligation of each Borrower, and is enforceable against each Borrower 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.

 

2
 

 

6. Costs and Fees . 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 6 from the proceeds of one or more Revolving Loans made under the Credit Agreement.

 

7. 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) [Reserved.];

 

(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);

 

(d) [Reserved.];

 

(e) Agent shall have received from Borrowers of all of the fees owing pursuant to this Amendment and Agent’s reasonable out-of-pocket legal fees and expenses;

 

(f) Borrowers shall have delivered to Agent fully executed copies of the JL Properties Reimbursement Agreement and a Subordination Agreement with respect to all indebtedness, obligations, and liabilities owing under the JL Properties Reimbursement Agreement.

 

3
 

 

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 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 as a waiver of any existing Defaults or Events of Default under the 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 Credit Agreement.

 

10. Affirmation. Except as specifically amended pursuant to the terms hereof, the 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 Credit Agreement (as amended 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. Post-Closing Obligations . On or before May 1, 2015, Borrowers shall deliver to Agent a copy of the fully executed First Tower Central Letter of Credit in the form attached to the JL Properties Reimbursement Agreement and the Warrants (as defined in the JL Properties Reimbursement Agreement and in the form attached thereto).

 

4
 

 

12. Miscellaneous.

 

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

 

 

 

[SIGNATURES APPEAR ON FOLLOWING PAGES]

5
 

 

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 X 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 X 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

 

6
 

 

BORROWERS:   TWINLAB CONSOLIDATION CORPORATION
    By: /s/ Thomas A. Tolworthy (Seal)
    Name: Thomas A. Tolworthy
    Title: Chief Executive Officer and President
     

TWINLAB CONSOLIDATED HOLDINGS, INC.

 

 

TWINLAB HOLDINGS, INC.

 

By: /s/ Thomas A. Tolworthy (Seal)   By: /s/ Thomas A. Tolworthy (Seal)
Name: Thomas A. Tolworthy       Name: Thomas A. Tolworthy
Title: Chief Executive Officer and President   Title:  Chief Executive Officer and President
     

TWINLAB CORPORATION

 

 

ISI BRANDS INC.

 

By: /s/ Thomas A. Tolworthy (Seal)   By: /s/ Thomas A. Tolworthy (Seal)
Name:   Thomas A. Tolworthy   Name: Thomas A. Tolworthy
Title: Title: Chief Executive Officer and President   Title: Chief Executive Officer and President
     

NUTRASCIENCE LABS, INC.

 

  NUTRASCIENCE LABS IP CORPORATION
By: /s/ Thomas A. Tolworthy (Seal)   By: /s/ Thomas A. Tolworthy (Seal)
Name:   Thomas A. Tolworthy   Name:   Thomas A. Tolworthy
Title: Title: Chief Executive Officer and President   Title:  Chief Executive Officer and President

 

7

 

Exhibit 10.56

 

THIRD AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND CONSENT

 

This THIRD AMENDMENT TO NOTE AND WARRANT AGREEMENT AND CONSENT (this “ Amendment ”), dated as of April 30, 2015, is made by and between TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (“ Parent ”), TWINLAB CONSOLIDATION CORPORATION, a Delaware corporation (“ TCC ”), TWINLAB HOLDINGS, INC., a Michigan corporation (“ Twinlab Holdings ”), ISI BRANDS INC., a Michigan corporation (“ ISI Brands ”), and TWINLAB CORPORATION, a Delaware corporation (“ Twinlab Corporation ”), NUTRASCIENCE LABS, INC., a Delaware corporation (formerly known as TCC CM Subco I, Inc.), NUTRASCIENCE LABS IP CORPORATION., a Delaware corporation (formerly known as TCC CM Subco II, Inc.) (each of the foregoing Persons being referred to herein individually as a “ Company ” and collectively as the “ Companies ”), and PENTA MEZZANINE SBIC FUND I, L.P., a Delaware limited partnership (the “ Purchaser ”).

 

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

 

WHEREAS, (a) the Companies have requested that the Purchaser (i) consent to the JL Properties Reimbursement Agreement (as defined below) and the First Tower Central Letter of Credit (as defined below) and (ii) amend certain provisions of the Note Purchase Agreement, and (b) the Purchaser has agreed to do so subject to the terms and conditions set forth herein.

 

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

 

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

 

2. Limited Consent for JL Properties Reimbursement Agreement . At the request of and as an accommodation to the Companies and subject to the strict compliance with the terms, conditions and requirements set forth herein (including, without limitation, satisfaction of each of the conditions set forth in Section 6 below), the Purchaser hereby consents to the JL Properties Reimbursement Agreement and the First Tower Central Letter of Credit. The limited consent set forth in this Section 2 is effective solely for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) except as expressly provided herein, be a consent to any amendment, waiver or modification of any term or condition of the Note Purchase Agreement or of any other Transaction Document; (b) prejudice any right that the Purchaser have or may have in the future under or in connection with the Note Purchase Agreement or any other Transaction Document; (c) waive any Event of Default that exists as of the date hereof; or (d) establish a custom or course of dealing among any of the Companies, on the one hand, or the Purchaser on the other hand.

 

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

 

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

 

First Central Tower Letter of Credit ” shall mean that certain Letter of Credit to be issued by Wells Fargo Bank, National Association or such other letter of credit issuer as permitted under the Florida Lease, as issuing bank for the account of JL Properties, Inc. to be provided to First Central Tower, Limited Partnership or its mortgagee for the benefit of TCC and Parent, in a principal amount of $1,000,000 as a security deposit for, and in connection with, the Florida Lease on terms and conditions satisfactory to the Purchaser.

 

Florida Lease ” means that certain Lease Agreement dated as of April 7, 2015, between First Central Tower, Limited Partnership, a Delaware limited partnership, as lessor, and TCC and Parent, as co-tenants, covering the Florida Property, and all easements, agreements and other rights ancillary to TCC’s and Parent’s use and enjoyment of such real property.

 

Florida Property ” means the real property consisting of the entire rentable area of the 5th Floor (Suite 500), and, following the First Expansion Premises Commencement Date (as defined in the Florida Lease), the 6th Floor (Suite 600) located at First Central Tower, 360 Central Avenue, St. Petersburg, Florida 33701 and as further identified in the Florida Lease as the “Premises”.

 

JL Properties Reimbursement Agreement ” means that certain Reimbursement Agreement by and among JL Properties, Inc., TCC and Parent, on terms and conditions satisfactory to the Purchaser. All indebtedness, obligations, and liabilities owing under the JL Properties Reimbursement Agreement shall be subject to a Subordination Agreement with the Purchaser.

 

JL Properties Subordination Agreement ” means the Subordination Agreement dated as of April 30, 2015 between the Purchaser and JL Properties, Inc. and acknowledged by the Companies, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

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

 

6.7 Indebtedness .

 

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

 

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

 

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6.11 Entering Into or Modification of Certain Agreements

 

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

 

3.4. Amendment to Section 12.3 . From and after the Delivery Date (as defined in the Florida Lease), Section 12.3(b) of the Note Purchase Agreement shall be replaced in its entirety with the following:

 

“(b) If to the Companies, to Twinlab Consolidation Corporation, 360 Central Avenue, 5 th Floor, St. Petersburg, Florida 33701, Attention: Mark Jaggi, Chief Financial Officer, Facsimile: __________, e-mail: mjaggi@twinlab.com, and to Twinlab Consolidation Corporation, 632 Broadway, Suite 201, New York, NY 10012, Attention: Richard Neuwirth, Chief Legal Officer, Facsimile: (212) 260-1853, e-mail: Rneuwirth@twinlab.com or such other address as shall be designated in a written notice delivered to the other parties hereto, with copies to Varnum LLP, Bridgewater Place, P.O. Box 352, Grand Rapids, MI 49501, Attention: Mary Kay Shaver, Facsimile: (616) 336-7000, e-mail: mkshaver@varnumlaw.com.”

 

3.5. Amendment to Schedule 3.1 – Premises and Leases . From and after the Delivery Date (as defined in the Florida Lease), Schedule 3.1 of the Note Purchase Agreement is hereby amended and restated as set forth on Schedule 3.1 attached to and made a part of this Amendment.

 

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

 

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

 

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

 

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

 

5. Ratification and Confirmation . The Companies hereby ratify and confirm all of the terms and provisions of the Note Purchase Agreement and the other Transaction Documents and agree that all of such terms and provisions, as amended hereby, remain in full force and effect.

 

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

 

6.1. The Purchaser shall have received (i) a fully executed copy of this Amendment, (ii) a fully executed amendment to the documents evidencing the Permitted Senior Debt, (iii) a fully executed amendment to the Subordinated Loan Agreement, (iv) a fully executed copy of the JL Properties Reimbursement Agreement and (v) a fully executed copy of the JL Properties Subordination Agreement, in each case in form and substance reasonably satisfactory to the Purchaser.

 

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

 

6.3. The Purchaser shall have received all fees and other amounts due and payable to the Purchaser and its counsel in connection with this Amendment, and to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Companies under the Note Purchase Agreement.

 

7. Post-Closing Obligations . On or before May 1, 2015, the Companies shall deliver to the Purchaser a copy of the fully executed First Tower Central Letter of Credit in the form attached to the JL Properties Reimbursement Agreement and the Warrants (as defined in the JL Properties Reimbursement Agreement and in the form attached thereto).

 

8. Miscellaneous .

 

8.1. Except as otherwise expressly set forth herein, nothing herein shall be deemed to constitute an amendment, modification or waiver of any of the provisions of the Note Purchase Agreement, the Security Agreement or the other Transaction Documents, all of which remain in full force and effect as of the date hereof and are hereby ratified and confirmed. Each Company hereby acknowledges and agrees that nothing contained herein shall be deemed to entitle any Company to consent to, or a waiver, amendment or modification of, any of the terms, conditions, obligations, covenants or agreements contained in the Transaction Documents in similar or different circumstances. This Amendment (together with any other document executed in connection herewith) is not intended to be, nor shall it be construed as, a novation of the Note Purchase Agreement.

 

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

 

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

 

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

 

8.5. Each Company, voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself and all of its respective parents, subsidiaries, affiliates, members, managers, predecessors, successors, and assigns, and each of their respective current and former directors, officers, shareholders, agents, and employees (collectively, “ Releasing Parties ”), does hereby fully and completely release, acquit and forever discharge each Indemnified Party of and from any and all actions, causes of action, suits, debts, disputes, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, whether matured or unmatured, liquidated or unliquidated, vested or contingent, choate or inchoate, known or unknown that the Releasing Parties (or any of them) has against the Indemnified Parties (or any of them) that directly or indirectly arise out of, are based upon or are in any manner connected with any Prior Related Event. “ Prior Related Event ” means any transaction, event, circumstance, action, failure to act, occurrence of any type or sort, whether known or unknown, which occurred, existed, was taken, was permitted or begun in accordance with, pursuant to or by virtue of (a) any of the terms of this Amendment or any other Transaction Document, (b) any actions, transactions, matters or circumstances related hereto or thereto, (c) the conduct of the relationship between the Purchaser and any Company, or (d) any other actions or inactions by the Purchaser, all on or prior to the date hereof. Each Company acknowledges that the foregoing release is a material inducement to the Purchaser’s decision to enter into this Amendment and to agree to the modifications contemplated hereunder.

 

 

 

[Signature Pages Follow.]

 

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

 

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

 

 

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

 

 
 

 

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

 

 

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

 

 
 

  

 

PURCHASER :

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

  

 

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

 

 
 

 

SCHEDULE 3.1 – PREMISES AND LEASES

 

1. The “Premises” consists of the premises leased to any Company in accordance with the various leases, between any Company, as tenant, and the various landlords, as amended and supplemented.

 

The Premises are:

 

(a) Twinlab Corporation's manufacturing facility located at 600 East Quality Drive, American Fork, UT 84003

 

(b) Twinlab Corporation corporate offices at 632 Broadway, Suite 201, New York, NY 10012

 

(c) Twinlab Corporation corporate offices at 3133 Orchard Vista Drives SE, Grand Rapids, MI 49546

 

(d) Twinlab Consolidated Holdings, Inc. and Twinlab Consolidation Corporation corporate offices at 360 Central Avenue, 5th Floor, St. Petersburg, Florida 33701

 

2. Leases:

 

(a) 600 E. Quality Drive: Fifteen (15) year lease agreement, dated February 6, 2013, between Utah Lab, LLC and Twinlab Corporation.

 

(b) 632 Broadway: (i) Lease Agreement, dated February 22, 2011 between Twinlab Corporation and Renaissance 632 Broadway LLC, expires June 2016; and (ii) Sublease Agreement dated December 7, 2012 between Twinlab Corporation (as Sublandlord) and Accordian Partners LLC (as subtenant), subleasing approximately 50% of the space lease by Twinlab, expires May 2016.

 

(c) 3133 Orchard Vista Road – Sublease Agreement, dated August 21, 2008, between Twinlab Corporation and, by assignment, VA Holdings, LLC. In one-year renewal term that expires on August 31, 2014 (and, will renew for an additional one-year term thereafter unless terminated by notice at least 60 days prior to expiration of current term).

 

(d) 360 Central Avenue: Lease Agreement dated as of April 7, 2015, between First Central Tower, Limited Partnership, a Delaware limited partnership, as lessor, and Twinlab Consolidated Holdings, Inc. and Twinlab Consolidation Corporation.

 

Schedule 3.1

 

 

Exhibit 10.57

 

SECOND AMENDMENT TO NOTE AND WARRANT PURCHASE AGREEMENT AND CONSENT

 

This SECOND AMENDMENT TO NOTE AND WARRANT AGREEMENT AND CONSENT (this “ Amendment ”), dated as of April 30, 2015, is made by and between TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (“ Parent ”), TWINLAB CONSOLIDATION CORPORATION, a Delaware corporation (“ TCC ”), TWINLAB HOLDINGS, INC., a Michigan corporation (“ Twinlab Holdings ”), ISI BRANDS INC., a Michigan corporation (“ ISI Brands ”), and TWINLAB CORPORATION, a Delaware corporation (“ Twinlab Corporation ”), NUTRASCIENCE LABS, INC., a Delaware corporation (formerly known as TCC CM Subco I, Inc.), NUTRASCIENCE LABS IP CORPORATION., a Delaware corporation (formerly known as TCC CM Subco II, Inc.) (each of the foregoing Persons being referred to herein individually as a “ Company ” and collectively as the “ Companies ”), and JL-BBNC MEZZ UTAH, LLC, an Alaska limited liability company (the “ Purchaser ”).

 

WHEREAS, the Companies and the Purchaser are parties to a Note and Warrant Purchase Agreement dated as of January 22, 2014, as amended by that certain First Amendment to Note and Warrant Purchase Agreement and Consent dated as of February 4, 2015 (as the same may be further amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Note Purchase Agreement ”); and

 

WHEREAS, (a) the Companies have requested that the Purchaser (i) consent to the JL Properties Reimbursement Agreement (as defined below) and the First Tower Central Letter of Credit (as defined below) and (ii) amend certain provisions of the Note Purchase Agreement, and (b) the Purchaser has agreed to do so subject to the terms and conditions set forth herein.

 

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

 

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

 

2.                   Limited Consent for JL Properties Reimbursement Agreement . At the request of and as an accommodation to the Companies and subject to the strict compliance with the terms, conditions and requirements set forth herein (including, without limitation, satisfaction of each of the conditions set forth in Section 6 below), the Purchaser hereby consents to the JL Properties Reimbursement Agreement and the First Tower Central Letter of Credit. The limited consent set forth in this Section 2 is effective solely for the purposes set forth herein and shall be limited precisely as written and shall not be deemed to (a) except as expressly provided herein, be a consent to any amendment, waiver or modification of any term or condition of the Note Purchase Agreement or of any other Transaction Document; (b) prejudice any right that the Purchaser have or may have in the future under or in connection with the Note Purchase Agreement or any other Transaction Document; (c) waive any Event of Default that exists as of the date hereof; or (d) establish a custom or course of dealing among any of the Companies, on the one hand, or the Purchaser on the other hand.

 

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

 

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

 

First Central Tower Letter of Credit ” shall mean that certain Letter of Credit to be issued by Wells Fargo Bank, National Association or such other letter of credit issuer as permitted under the Florida Lease, as issuing bank for the account of JL Properties, Inc. to be provided to First Central Tower, Limited Partnership or its mortgagee for the benefit of TCC and Parent, in a principal amount of $1,000,000 as a security deposit for, and in connection with, the Florida Lease on terms and conditions satisfactory to the Purchaser.

 

Florida Lease ” means that certain Lease Agreement dated as of April 7, 2015, between First Central Tower, Limited Partnership, a Delaware limited partnership, as lessor, and TCC and Parent, as co-tenants, covering the Florida Property, and all easements, agreements and other rights ancillary to TCC’s and Parent’s use and enjoyment of such real property.

 

Florida Property ” means the real property consisting of the entire rentable area of the 5th Floor (Suite 500) and, following the First Expansion Premises Commencement Date (as defined in the Florida Lease), the 6th Floor (Suite 600) located at First Central Tower, 360 Central Avenue, St. Petersburg, Florida 33701 and as further identified in the Florida Lease as the “Premises.”

 

JL Properties Reimbursement Agreement ” means that certain Reimbursement Agreement by and among JL Properties, Inc., TCC and Parent, on terms and conditions satisfactory to the Purchaser. All indebtedness, obligations, and liabilities owing under the JL Properties Reimbursement Agreement shall be subject to a Subordination Agreement with the Purchaser.

 

JL Properties Subordination Agreement ” means the Subordination Agreement dated as of April 30, 2015 between the Purchaser and JL Properties, Inc. and acknowledged by the Companies, as the same may be amended, restated, amended and restated, supplemented or otherwise modified from time to time.

 

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

 

6.7 Indebtedness .

 

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

 

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

 

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6.11 Entering Into or Modification of Certain Agreements

 

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

 

3.4.             Amendment to Section 12.3 . From and after the Delivery Date (as defined in the Florida Lease), Section 12.3(b) of the Note Purchase Agreement shall be replaced in its entirety with the following:

 

“(b) If to the Companies, to Twinlab Consolidation Corporation, 360 Central Avenue, 5 th Floor, St. Petersburg, Florida 33701, Attention: Mark Jaggi, Chief Financial Officer, Facsimile: [__________], e-mail: mjaggi@twinlab.com, and to Twinlab Consolidation Corporation, 632 Broadway, Suite 201, New York, NY 10012, Attention: Richard Neuwirth, Chief Legal Officer, Facsimile: (212) 260-1853, e-mail: Rneuwirth@twinlab.com or such other address as shall be designated in a written notice delivered to the other parties hereto, with copies to Varnum LLP, Bridgewater Place, P.O. Box 352, Grand Rapids, MI 49501, Attention: Mary Kay Shaver, Facsimile: (616) 336-7000, e-mail: mkshaver@varnumlaw.com.”

  

3.5.             Amendment to Schedule 3.1 – Premises and Leases . From and after the Delivery Date (as defined in the Florida Lease), Schedule 3.1 of the Note Purchase Agreement is hereby amended and restated as set forth on Schedule 3.1 attached to and made a part of this Amendment.

 

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

 

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

 

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

 

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

 

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5.                   Ratification and Confirmation . The Companies hereby ratify and confirm all of the terms and provisions of the Note Purchase Agreement and the other Transaction Documents and agree that all of such terms and provisions, as amended hereby, remain in full force and effect.

 

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

 

6.1.             The Purchaser shall have received (i) a fully executed copy of this Amendment, (ii) a fully executed amendment to the documents evidencing the Permitted Senior Debt, (iii) a fully executed amendment to the Subordinated Loan Agreement, (iv) a fully executed copy of the JL Properties Reimbursement Agreement and (v) a fully executed copy of the JL Properties Subordination Agreement, in each case in form and substance reasonably satisfactory to the Purchaser.

 

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

 

6.3.             The Purchaser shall have received all fees and other amounts due and payable to the Purchaser and its counsel in connection with this Amendment, and to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Companies under the Note Purchase Agreement.

 

7.                   Post-Closing Obligations . On or before May 1, 2015, the Companies shall deliver to the Purchaser a copy of the fully executed First Tower Central Letter of Credit in the form attached to the JL Properties Reimbursement Agreement and the Warrants (as defined in the JL Properties Reimbursement Agreement and in the form attached thereto).

 

8.                   Miscellaneous .

 

8.1.             Except as otherwise expressly set forth herein, nothing herein shall be deemed to constitute an amendment, modification or waiver of any of the provisions of the Note Purchase Agreement, the Security Agreement or the other Transaction Documents, all of which remain in full force and effect as of the date hereof and are hereby ratified and confirmed. Each Company hereby acknowledges and agrees that nothing contained herein shall be deemed to entitle any Company to consent to, or a waiver, amendment or modification of, any of the terms, conditions, obligations, covenants or agreements contained in the Transaction Documents in similar or different circumstances. This Amendment (together with any other document executed in connection herewith) is not intended to be, nor shall it be construed as, a novation of the Note Purchase Agreement.

 

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

 

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

 

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

 

4
 

 

8.5.             Each Company, voluntarily, knowingly, unconditionally and irrevocably, with specific and express intent, for and on behalf of itself and all of its respective parents, subsidiaries, affiliates, members, managers, predecessors, successors, and assigns, and each of their respective current and former directors, officers, shareholders, agents, and employees (collectively, “ Releasing Parties ”), does hereby fully and completely release, acquit and forever discharge each Indemnified Party of and from any and all actions, causes of action, suits, debts, disputes, damages, claims, obligations, liabilities, costs, expenses and demands of any kind whatsoever, at law or in equity, whether matured or unmatured, liquidated or unliquidated, vested or contingent, choate or inchoate, known or unknown that the Releasing Parties (or any of them) has against the Indemnified Parties (or any of them) that directly or indirectly arise out of, are based upon or are in any manner connected with any Prior Related Event. “ Prior Related Event ” means any transaction, event, circumstance, action, failure to act, occurrence of any type or sort, whether known or unknown, which occurred, existed, was taken, was permitted or begun in accordance with, pursuant to or by virtue of (a) any of the terms of this Amendment or any other Transaction Document, (b) any actions, transactions, matters or circumstances related hereto or thereto, (c) the conduct of the relationship between the Purchaser and any Company, or (d) any other actions or inactions by the Purchaser, all on or prior to the date hereof. Each Company acknowledges that the foregoing release is a material inducement to the Purchaser’s decision to enter into this Amendment and to agree to the modifications contemplated hereunder.

 

 

 

[Signature Pages Follow.]

 

5
 

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

 

 

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

 

 

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

 

 

 

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

 

 

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

 

 

 

 

  PURCHASER :

   
  JL-BBNC MEZZ UTAH, LLC, an Alaska limited liability company
   
  By: /s/ Jonathan B. Rubini
  Name: Jonathan B. Rubini
  Title: Managing Member

 

 

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

 

 

SCHEDULE 3.1 – PREMISES AND LEASES

 

1. The “Premises” consists of the premises leased to any Company in accordance with the various leases, between any Company, as tenant, and the various landlords, as amended and supplemented.

 

The Premises are:

 

(a) Twinlab Corporation's manufacturing facility located at 600 East Quality Drive, American Fork, UT 84003

 

(b) Twinlab Corporation corporate offices at 632 Broadway, Suite 201, New York, NY 10012

 

(c) Twinlab Corporation corporate offices at 3133 Orchard Vista Drives SE, Grand Rapids, MI 49546

 

(d) Twinlab Consolidated Holdings, Inc. and Twinlab Consolidation Corporation corporate offices at 360 Central Avenue, 5th Floor, St. Petersburg, Florida 33701

 

2. Leases:

 

(a) 600 E. Quality Drive: Fifteen (15) year lease agreement, dated February 6, 2013, between Utah Lab, LLC and Twinlab Corporation.

 

(b) 632 Broadway: (i) Lease Agreement, dated February 22, 2011 between Twinlab Corporation and Renaissance 632 Broadway LLC, expires June 2016; and (ii) Sublease Agreement dated December 7, 2012 between Twinlab Corporation (as Sublandlord) and Accordian Partners LLC (as subtenant), subleasing approximately 50% of the space lease by Twinlab, expires May 2016.

 

(c) 3133 Orchard Vista Road – Sublease Agreement, dated August 21, 2008, between Twinlab Corporation and, by assignment, VA Holdings, LLC. In one-year renewal term that expires on August 31, 2014 (and, will renew for an additional one-year term thereafter unless terminated by notice at least 60 days prior to expiration of current term).

 

(d) 360 Central Avenue: Lease Agreement dated as of April 7, 2015, between First Central Tower, Limited Partnership, a Delaware limited partnership, as lessor, and Twinlab Consolidated Holdings, Inc. and Twinlab Consolidation Corporation.

 

 

Schedule 3.1