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): June 8, 2015 (June 2, 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.

  

David L. Van Andel Trust

 

On June 2, 2015, Twinlab Consolidated Holdings, Inc. (the “Company”), the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993 (the “Trust”), a Michigan Trust, and David L. Van Andel, a Director of the Company and the Trustee of the Trust, entered into a Stock Purchase Agreement (the “Trust SPA”). Pursuant to the Trust SPA, the Company sold the Trust 3,289,474 shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), at $0.76 per share or an aggregate price of $2,500,000.24. In addition, pursuant to the Trust SPA, Mr. Van Andel surrendered to the Company for cancellation that certain warrant, dated September 5, 2014, that had provided Mr. Van Andel the right to acquire an aggregate of 5,592,105 shares of Common Stock at $0.76 per share.

 

The Trust SPA also provided for the issuance to the Trust of two warrants to purchase shares of Common Stock. Pursuant to the first warrant (the “First Trust Warrant”), the Trust has the right to acquire an aggregate 3,289,474 shares of Common Stock at a price of $0.01 per share. 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 Trust Warrant shall be adjusted as follows: In the event that 50% of the Fair Market Value (as defined in the First Trust Warrant) of the Common Stock (i) in a private placement by the Company completed prior to December 31, 2018 (but excluding certain specified placements), (ii) as of December 31, 2018, or (iii) on the date of any partial or whole exercise of the First Trust Warrant prior to December 31, 2018, is less than $0.385 per share, then in each case the existing Current Holder’s Equity Interest (as defined in the First Trust Warrant) applicable to the First Trust Warrant at such time (or in the case of a partial exercise, then with respect to the number of shares so exercised) shall increase (but not decrease) to a new Current Holder’s Equity Interest pursuant to the following formula: New Holder’s Equity Interest = [(2 x Existing Current Holder’s Equity Interest) x ($0.385 ÷ 50% of FMV)] – Existing Current Holder’s Equity Interest.

 

Pursuant to the second warrant (the “Second Trust Warrant”), the Trust has the right to acquire an aggregate 12,987,012 shares of Common Stock at a price of $0.385 per share. 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 exercise price shall be subject to decrease (but not increase) as follows: In the event that prior to the September 30, 2017 expiration date, the Company completes a private placement of Common Stock (other than certain specified placements) and 50% of the Fair Market Value (as defined in the Second Trust Warrant) of such private placement is less than $0.385 per share, then the exercise price of the Second Trust Warrant shall automatically on such date be decreased (but not increased) to 50% of the Fair Market Value of such private placement. In the event the Trust exercises the Second Trust Warrant in whole or in part prior to the expiration date and 50% of the Fair Market Value on the date of such exercise is less than $0.385 per share (or in the event that the exercise price has previously been decreased in accordance with the immediately preceding sentence, less than the exercise price following such adjustment), then the exercise price shall be adjusted to 50% of such Fair Market Value for the shares so exercised.

 

The Company granted the Trust certain registration rights, commencing October 1, 2015, for the shares of Common Stock issuable upon exercise of the First Trust Warrant and Second Trust Warrant.

 

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

 

Little Harbor, LLC

 

On June 2, 2015, the Company and Little Harbor, LLC, a Nevada limited liability company (“LH”), entered into a Stock Purchase Agreement (the “LH SPA”). Pursuant to the LH SPA, the Company sold LH 3,289,474 shares of Common Stock at $0.76 per share or an aggregate price of $2,500,000.24. LH delivered to the Company the purchase price for the shares in the form of LH’s irrevocable agreement to accept the shares issued by the Company pursuant to the LH SPA in lieu of $2,500,000.24 worth of periodic payments otherwise due LH under that certain Debt Repayment Agreement, dated as of July 31, 2014, by and between LH and the Company’s subsidiary Twinlab Holdings, Inc. (the “Repayment Agreement”).

 

The LH SPA also provided for the issuance to LH of a warrant to purchase shares of Common Stock (the “LH Warrant”). Pursuant to the LH warrant, LH has the right to acquire an aggregate 3,289,474 shares of Common Stock at a price of $0.01 per share. 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 LH Warrant shall be adjusted as follows: In the event that 50% of the Fair Market Value (as defined in the LH Warrant) of the Common Stock (i) in a private placement by the Company completed prior to December 31, 2018 (but excluding certain specified placements), (ii) as of December 31, 2018, or (iii) on the date of any partial or whole exercise of the LH Warrant prior to December 31, 2018, is less than $0.385 per share, then in each case the existing Current Holder’s Equity Interest (as defined in the LH Warrant) applicable to the LH Warrant at such time (or in the case of a partial exercise, then with respect to the number of shares so exercised) shall increase (but not decrease) to a new Current Holder’s Equity Interest pursuant to the following formula: New Holder’s Equity Interest = [(2 x Existing Current Holder’s Equity Interest) x ($0.385 ÷ 50% of FMV)] – Existing Current Holder’s Equity Interest.

 

2
 

The Company granted LH certain registration rights, commencing October 1, 2015, for the shares of Common Stock issuable upon exercise of the LH Warrant.

 

Mr. Van Andel is the Manager of LH and owns 80.5% of the membership interest in LH.

 

The foregoing descriptions of the (i) LH SPA and (ii) LH Warrant are qualified in their entirety by reference to the full text of such documents, which documents are exhibits to this Report. The foregoing description of the Repayment Agreement is qualified in its entirety by reference to the full text of such document, which document was filed as an exhibit to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 22, 2014.

 

Item 3.02 Unregistered Sales of Equity Securities.

 

The information set forth in Item 1.01 regarding the (i) Trust SPA and (ii) LH SPA is hereby incorporated by reference in answer to Item 3.02.

 

The Company issued the above-referenced shares of Common Stock in reliance upon the exemption from registration under Section 4(a)(2) of 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 shares of Common Stock were exempt from the registration and prospectus delivery requirements of the Securities Act by virtue of Section 4(a)(2) of the Securities Act. The shares were issued directly by the Company and did not involve a public offering or general solicitation. Each of the purchasers were 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 each purchaser, immediately prior to the issuance of the above-referenced shares, 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. Each purchaser 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 above-referenced shares.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit 10.61 Stock Purchase Agreement, dated as of June 2, 2015, by and between Twinlab   Consolidated Holdings, Inc. and the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993.
Exhibit 10.62 Warrant, dated June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993.
Exhibit 10.63 Warrant, dated June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993.
Exhibit 10.64 Stock Purchase Agreement, dated as of June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and Little Harbor, LLC.
Exhibit 10.65 Warrant, dated June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and Little Harbor, LLC.

 

 

3
 

 

  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: June 8, 2015 TWINLAB CONSOLIDATED HOLDINGS, INC.
     
  By: /s/ Thomas A. Tolworthy
    Thomas A. Tolworthy
    President and Chief Executive Officer

 

 

4
 

 

 

EXHIBIT INDEX

 

 

 

Exhibit No. Description
   
Exhibit 10.61 Stock Purchase Agreement, dated as of June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993.
Exhibit 10.62 Warrant, dated June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993.
Exhibit 10.63 Warrant, dated June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993.
Exhibit 10.64 Stock Purchase Agreement, dated as of June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and Little Harbor, LLC.
Exhibit 10.65 Warrant, dated June 2, 2015, by and between Twinlab Consolidated Holdings, Inc. and Little Harbor, LLC.

 

 

5

 

 

 

 

Exhibit 10.61

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this " Agreement "), dated as of June 2, 2015, is entered into between Twinlab Consolidated Holdings, Inc., a Nevada corporation with its principal place of business at 632 Broadway, Suite 201, New York, New York 10012 (" Company "), the David L. Van Andel Trust, under Trust Agreement dated November 30, 1993, a Michigan trust with an address at 3133 Orchard Vista Drive SE, Grand Rapids, MI 49546, (" Purchaser "), and David L. Van Andel, an individual with an address at 3133 Orchard Vista Drive SE, Grand Rapids, MI 49546 (“ Van Andel ”).

 

RECITALS

 

A.          Company and Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), and Rule 506 of Regulation D (“ Regulation D ”) as promulgated by the United States Securities and Exchange Commission (the “ Commission ”) under the Securities Act.

 

B.          Purchaser wishes to purchase, and Company wishes to sell, upon the terms and conditions stated in this Agreement, an aggregate of 3,289,474 shares of common stock, par value $0.001 per share (the “ Common Stock ”), of Company, at a purchase price of $0.76 per share (the 3,289,474 shares of Common Stock to be purchased by Purchaser hereunder are referred to herein as the “ Shares ”).

 

C.          Van Andel, who serves as Trustee of Purchaser, is the holder of that certain Warrant Agreement, dated September 5, 2014, which was assumed by the Company on September 16, 2014 (the “ 2014 Warrant ”). Subject to the purchase and sale agreements between Purchaser and Company on the terms set forth herein, Van Andel wishes to surrender the 2014 Warrant for no additional consideration.

 

D.          Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Warrant Agreement, substantially in the form attached hereto as Exhibit A (the “ First Warrant Agreement ”), pursuant to which, among other things, Company is granting Purchaser the right to purchase an additional 3,289,474 shares of Common Stock at a price of $0.01 per share.

 

 
 

 

E.          Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Warrant Agreement, substantially in the form attached hereto as Exhibit B (the “ Second Warrant Agreement ” and collectively with the First Warrant Agreement, the “ Warrant Agreements ”), pursuant to which, among other things, Company is granting Purchaser the right to purchase an additional 12,987,012 shares of Common Stock at a price of $0.385 per share.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.            Purchase and Sale . Subject to the terms and conditions set forth herein, at the Closing (as defined in Section 2 ), Company shall issue and sell to Purchaser, and Purchaser shall purchase from Company, the Shares. The aggregate purchase price for the Shares shall be $2,500,000.24 (the " Purchase Price ").

 

2.            Surrender of 2014 Warrant . Subject to the terms and conditions set forth herein, at the Closing, Van Andel shall for no additional consideration surrender to the Company the 2014 Warrant.

 

3.            Closing . Subject to the terms and conditions contained in this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the " Closing ") to be held at 10:00 a.m. on June 2, 2015 (the " Closing Date ") at the offices of Wilk Auslander LLP, 1515 Broadway, 43 rd Floor, New York, New York 10036, or at such other place or on such other date as Purchaser and Company may mutually agree upon in writing. At the Closing, Company shall deliver to Purchaser a stock certificate or certificates evidencing the Shares, and Purchaser shall deliver to Company the Purchase Price by wire transfer of immediately available funds to an account designated in writing by Company to Purchaser.

 

4.            Closing Deliveries .

 

(a)           On or prior to the Closing, Company shall issue, deliver or cause to be delivered to Purchaser the following:

 

(i)          this Agreement, duly executed by Company; and

 

(ii)         the Warrant Agreements, duly executed by Company.

 

(b)           On or prior to the Closing, Purchaser shall deliver or cause to be delivered to Company the following:

 

(i)          this Agreement, duly executed by Purchaser; and

 

2
 

 

(ii)         the Purchase Price for the Shares in United States dollars and in immediately available funds, by wire transfer to Company’s account as previously provided to Purchaser.

 

(c)           On or prior to the Closing, Van Andel shall deliver or cause to be delivered to Company the following:

 

(i)          the original 2014 Warrant for surrender to and cancellation by Company.

 

5.            Closing Conditions .

 

(a)          The obligation of Company to issue and sell the Shares to Purchaser hereunder is subject to the satisfaction of the following conditions as of the Closing:

 

(i)           the representations and warranties of Purchaser and Van Andel in Section 7 hereof shall be true and correct on and as of the Closing Date with the same effect as though made at and as of such date;

 

(ii)          Purchaser and Van Andel shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date;

 

(iii)         Purchaser shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the transactions contemplated herein; and

 

(b)          The obligation of Purchaser to purchase the Shares from Company is subject to the satisfaction of the following conditions as of the Closing:

 

(i)           the representations and warranties of Company in Section 6 shall be true and correct on and as of the Closing Date with the same effect as though made at and as of such date;

 

(ii)          Company shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date;

 

(iii)         Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the transactions contemplated herein;

 

6.            Representations and Warranties of Company . Company hereby represents and warrants to Purchaser as follows:

 

3
 

 

(a)          Company is an entity duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with the requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Company is not in violation of any of the provisions of its articles of incorporation or bylaws. Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have a Material Adverse Effect. “ Material Adverse Effect ” means a material adverse effect on the results of operations, assets, business or financial condition of Company, except that any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect: (i) effects caused by changes or circumstances affecting general market conditions in the U.S. economy or which are generally applicable to the industry in which Company operates provided that such effects are not borne disproportionately by Company, (ii) effects resulting from or relating to the announcement or disclosure of the sale of the Shares or other transactions contemplated by this Agreement, or (iii) effects caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Agreement.

 

(b)          Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby (including, but not limited to, the sale and delivery of the Shares) have been duly authorized by all necessary corporate action on the part of Company, and no further corporate action is required by Company, its Board of Directors or its stockholders in connection therewith other than in connection with the Required Approvals (as hereinafter defined). This Agreement has been duly executed by the Company and is the legal, valid and binding obligation of the Company enforceable against Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application or insofar as indemnification and contribution provisions may be limited by applicable law.

 

4
 

 

(c)          The execution, delivery and performance by Company of this Agreement and the consummation by Company of the transactions contemplated hereby (including, without limitation, the issuance of the Shares) do not and will not (i) conflict with or violate any provisions of Company’s articles of incorporation or bylaws or otherwise result in a violation of the organizational documents of Company, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract or (iii) subject to the Required Approvals, result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Company is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by Purchaser herein, of any self regulatory organization to which Company or its securities are subject), or by which any property or asset of Company is bound or affected), except in the case of clause (ii) and clause (iii) such as would not individually have a Material Adverse Effect. “ Material Contract means any contract of Company that has been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K (including, for purposes hereof, any contracts that are required to be filed as an exhibit to a Form 10).

 

(d)          Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Company of the Transaction Documents (including the issuance of the Securities), other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) filing of a report on Form 8-K disclosing the Company’s entry into this Agreement and (v) those that have been made or obtained prior to the date of this Agreement (collectively, the “ Required Approvals ”).

 

(e)          The Shares have been duly authorized and, when issued and paid for in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable and free and clear of all Encumbrances suffered or permitted by Company, other than restrictions on transfer provided for in this Agreement or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. Assuming the accuracy of the representations and warranties of Purchaser in this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws.

 

(f)          There are no actions, suits, claims, investigations or other legal proceedings pending or, to the Company’s knowledge, threatened against or by Company that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. “ Company’s Knowledge ” means with respect to any statement made to the knowledge of Company, that the statement is based upon the actual knowledge of the officers of Company who, as of the date hereof, have responsibility for the matter or matters that are the subject of the statement.

 

5
 

 

(g)          Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), including pursuant to Section 13(a) or 15(d) thereof, for twelve (12) months preceding and including the date hereof (or such shorter period as Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”), on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.

 

(h)          The financial statements of Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“ GAAP ”) applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Company and its consolidated subsidiaries taken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.

 

(i)          Assuming the accuracy of Purchaser’s representations and warranties set forth in Section 6 of this Agreement (without giving effect to any materiality qualifiers therein), no registration under the Securities Act is required for the offer and sale of the Securities by Company to Purchaser under this Agreement.

 

(j)          No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Company.

 

7.            Representation and Warranties of Purchaser and Van Andel .

 

Purchaser represents and warrants as follows:

 

(a)          Purchaser is a trust duly organized, validly existing and in good standing under the laws of the State of Michigan.

 

(b)          Purchaser has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Purchaser of this Agreement, the performance by Purchaser of its obligations hereunder and the consummation by Purchaser of the transactions contemplated hereby have been duly authorized by all requisite action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and (assuming due authorization, execution and delivery by Company) this Agreement constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.

 

6
 

 

(c)          Purchaser is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Purchaser acknowledges that the Shares are not registered under the Securities Act, or any state securities laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.

 

(d)          No governmental, administrative or other third party consents or approvals are required by or with respect to Purchaser in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

 

(e)          There are no actions, suits, claims, investigations or other legal proceedings pending or, to the knowledge of Purchaser, threatened against or by Purchaser that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

 

(f)          Purchaser understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not with a view to, or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however , that by making the representations herein, Purchaser does not agree to hold any of the Shares for any minimum period of time and reserves the right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Shares (or any Shares which are derivatives thereof) to or through any person or entity; Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(g)          At the time Purchaser was offered the Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Purchaser has previously delivered an Accredited Investor Questionnaire to Company indicating that Purchaser is an “accredited investor.” As of the date of this Agreement, circumstances have not changed such that Purchaser would not be an “accredited investor.”

 

7
 

 

(h)          Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

(i)           Purchaser acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about Company and its respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of Purchaser or its representatives or counsel shall modify, amend or affect Purchaser’s right to rely on the truth, accuracy and completeness of Company’s representations and warranties contained in this Agreement. Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

(j)          Purchaser understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Shares.

 

(k)          Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

(l)           No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser.

 

Van Andel represents and warrants as follows:

 

(m)         Van Andel is an individual residing in the State of Michigan, and with respect solely to Van Andel’s obligation to surrender the 2014 Warrant pursuant hereto, Van Andel represents and warrants that he is the holder of the 2014 Warrant free and clear of any liens or encumbrances and he has all requisite power and authority to enter into this Agreement and surrender the 2014 Warrant pursuant hereto and on the terms hereof.

 

8
 

 

8.            Transfer Restrictions .

 

(a)           Notwithstanding any other provision of this Agreement, Purchaser covenants that the Shares may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to Company, (iii) to an Affiliate of Purchaser, (iv) pursuant to Rule 144 under the Securities Act (“ Rule 144 ”) ( provided that Purchaser provides Company with reasonable assurances (in the form of seller and broker representation letters if required) that the securities may be sold pursuant to such rule) or Rule 144A, (v) pursuant to Rule 144 without the requirement that Company be in compliance with the current public information requirements of Rule 144 and without other restriction following the applicable holding period or (vi) in connection with a bona fide pledge, Company may require the transferor thereof to provide to Company an opinion of counsel selected by the transferor and reasonably acceptable to Company, the form and substance of which opinion shall be reasonably satisfactory to Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of Purchaser under this Agreement.

 

(b)          Certificates evidencing the Shares shall bear any legend as required by the “Blue Sky” laws of any state and a restrictive legend in substantially the following form until such time as they are not required under Section 8(c) (and a stock transfer order may be placed against transfer of the certificates for the Shares):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO COMPANY.

 

In addition, if Purchaser is an Affiliate of Company, certificates evidencing the Shares issued to Purchaser shall bear a customary “affiliates” legend.

 

9
 

 

(c)          Subject to Company’s right to request an opinion of counsel as set forth in Section 8(a), the legend set forth in Section 8(b) above shall be removable and Company shall issue or cause to be issued a certificate without such legend or any other legend (except for any “affiliates” legend as set forth in Section 8(b)) to the holder of the applicable Shares upon which it is stamped if (i) such Shares are registered for resale under the Securities Act (provided that, if Purchaser is selling pursuant to the effective registration statement registering the Shares for resale, Purchaser agrees to only sell such Shares during such time that such registration statement is effective and not withdrawn or suspended, and only as permitted by such registration statement), (ii) such Shares are sold or transferred in compliance with Rule 144 (if the transferor is not an Affiliate of Company), including without limitation in compliance with the current public information requirements of Rule 144 if applicable to Company at the time of such sale or transfer, and the holder and its broker have delivered customary documents reasonably requested by Company’s transfer agent and/or Company counsel in connection with such sale or transfer, or (iii) such Shares are eligible for sale under Rule 144 without the requirement that Company be in compliance with the current public information requirements of Rule 144 and without other restriction and Company counsel has provided written confirmation of such eligibility to the transfer agent. Any fees (with respect to the transfer agent, Company counsel or otherwise) associated with the removal of such legend shall be borne by Company. At such time as a legend is no longer required for certain Shares, Company will no later than three (3) Business Days following the delivery by Purchaser to Company or the transfer agent (with concurrent notice and delivery of copies to Company) of a legended certificate representing such Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, and together with such other customary documents as the transfer agent and/or Company counsel shall reasonably request), deliver or cause to be delivered to the transferee of Purchaser or Purchaser, as applicable, a certificate representing such Shares that is free from all restrictive and other legends. Company may not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer set forth in this Section 8(c).

 

(d)          Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Shares or any interest therein without complying with the requirements of the Securities Act. Purchaser acknowledges that the delivery of the Shares and any removal of any legends from certificates representing the Shares as set forth in this Section 8 is predicated on Company’s reliance upon Purchaser’s acknowledgement in this Section 8(d).

 

9.            Survival . All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Closing hereunder.

 

10
 

 

10.           Indemnification . Company shall indemnify Purchaser and hold Purchaser harmless against and in respect of any and all losses, liabilities, damages, obligations, claims, Encumbrances, costs and expenses (including, without limitation, reasonable attorneys' fees) incurred by Purchaser resulting from any breach of any representation, warranty, covenant or agreement made by Company herein or in any instrument or document delivered to Purchaser pursuant hereto.

 

11.           Further Assurances . Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances, and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

 

12.           Termination . This Agreement may be terminated at any time prior to the Closing (a) by the mutual written consent of Purchaser and Company or (b) by either Purchaser or Company if (i) a breach of any provision of this Agreement has been committed by the other party and such breach has not been cured within 10 days following receipt by the breaching party of written notice of such breach, or (ii) the Closing does not occur by July 1, 2015. Upon termination, all further obligations of the parties under this Agreement shall terminate without liability of any party to the other parties to this Agreement, except that no such termination shall relieve any party from liability for any fraud or willful breach of this Agreement.

 

13.           Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

 

14.           Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a " Notice ") shall be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address that may be designated by the receiving party from time to time in accordance with this section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile or e-mail of a PDF document (with confirmation of transmission) or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only (a) upon receipt by the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

 

15.           Entire Agreement . This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

 

16.           Successor and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. No party may assign any of its rights or obligations hereunder without the prior written consent of the other parties hereto, which consent shall not be unreasonably withheld or delayed.

 

11
 

 

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

 

18.           Amendment and Modification; Waiver . This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

19.           Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

20.           Governing Law; Submission to Jurisdiction . This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction). Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of New York in each case located in the city of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

12
 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

 

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

 

 

DAVID L. VAN ANDEL TRUST, UNDER TRUST AGREEMENT DATED NOVEMBER 30, 1993

     
  By: /s/ David L. Van Andel
  Name: David L. Van Andel
  Title: Trustee

 

  Soley with respect to the provisions of this Agreement regarding surrender of the 2014 Warrant:

 

  /s/ David L. Van Andel
  David L. Van Andel, an individual

 

13

 

 

Exhibit 10.62

 

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. 2015-17 June 2, 2015

 

Warrant

 

This Warrant (the " Warrant ") certifies that, for value received, David L. Van Andel Trust, under Trust Agreement dated November 30, 1993, a Michigan trust , and its permitted transferees, successors and assigns (the " Holder "), is entitled to purchase from TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (the " Company "), 12,987,012 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 $0.385 per share (the " Exercise Price "), at any time prior to 5:00 P.M. Eastern Time on September 30, 2017 (the " Expiration Date "). For any exercise, the total price of such exercise shall be rounded up to the nearest whole penny.

 

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.

 

 
 

 

" 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 12,987,012 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, as adjusted by Section 3.3.3.

 

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

 

Fair Market Value ” shall, except in the event of a private placement by the Company of its common stock, mean (i) the trading volume weighted average closing price of the common stock of Company for the twenty (20) trading days immediately preceding the applicable date in question, as quoted on (a) a domestic securities exchange, (b) NASDAQ Stock Market or (c) a domestic over-the-counter market, which trades are reported by Pink OTC Markets Inc. or any similar successor organization or any other over-the-counter market in the United States, as the case may be; or (ii) in the event that the common stock of the Company is not trading on a market such that a value can be derived under subsection (i) of this definition as of the applicable date in question, a valuation per share of the common stock of the Company as determined in accordance with Generally Accepted Valuation Principles by an independent third-party valuation firm mutually agreed upon by the parties (and if the parties cannot mutually agree on a valuation firm, one of the “big four” accounting firms chosen by the Holder). In the event of a private placement by the Company of its common stock, “Fair Market Value” shall mean the average price per share of common stock in such private placement, including any warrants, options or other agreements providing the right to purchase shares of the Company’s common stock.

 

2
 

  

" 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 .

 

" 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.

 

3
 

  

" 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.

 

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.

 

4
 

  

(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.

 

(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.

 

5
 

  

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 220,657,895 common shares have been issued and 219,952,969 common shares remain outstanding 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 .

 

(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.

 

6
 

  

SECTION 3.3 Adjustment of Holder’s Equity Interest and/or Exercise Price . 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.

 

SECTION 3.3.3   Adjustments to Exercise Price . Subject to the terms of this Section 3.3.3, the Exercise Price shall be subject to decrease (but not increase) as follows:

 

7
 

  

(a)      In the event that prior to the Expiration Date, the Company completes a private placement of its common stock and 50% of the Fair Market Value of such private placement is less than $0.385 per share, then the Exercise Price of this Warrant shall automatically on such date be decreased (but not increased) to 50% of the Fair Market Value of such private placement.

 

(b)      In the event that Holder exercises the Warrant in whole or in part prior to the Expiration Date and 50% of the Fair Market Value on the date of such exercise is less than $0.385 per share (or less than the then current Exercise Price in the event that the Exercise Price has previously been decreased pursuant to Section 3.3.3(a) above), then the Exercise Price shall be decreased (but not increased) to 50% of such Fair Market Value for the shares so exercised.

 

(c)      The foregoing notwithstanding, the adjustment to Exercise Price provided for in this Section 3.3.3 shall not apply to any private placement completed by the Company on or prior to September 30, 2015 with (i) David L. Van Andel; (ii) David L. Van Andel Trust, under Trust Agreement dated November 30, 1993; (iii) Penta Mezzanine SBIC Fund I, L.P.; (iv) JL-BBNC Mezz Utah, LLC; (v) JL Properties, Inc.; or (vi) MidCap Funding X Trust, or any of the parent companies, subsidiaries, or affiliates of any of the foregoing persons or entities.

 

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.

 

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.

 

8
 

  

(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.

 

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 HOLDINGS, INC.

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 HOLDINGS, INC.

632 Broadway, Suite 201

New York, NY 10012

Attention: Richard H. Neuwirth, Chief Legal Officer

Facsimile: (212) 260-1853

e-mail: RNeuwirth@twinlab.com

 

9
 

 

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

 

(b) If to the Holder, to:

 

David L. Van Andel

3133 Orchard Vista Drive SE

Grand Rapids, MI 49546

Facsimile: ________________

e-mail: dva@vaegr.com

 

with a copy to:

 

Mark J. Bugge

3133 Orchard Vista Drive SE

Grand Rapids, MI 49546

Facsimile: ________________

e-mail: Mark.Bugge@vaegr.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.

 

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).

 

10
 

  

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.

 

11
 

  

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.

 

12
 

  

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]

 

13
 

 

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 Warrant 2015-17

 

14
 

 

ACKNOWLEDGED AND AGREED:

 

David L. Van Andel Trust, under Trust Agreement dated November 30, 1993

 

By: /s/ David L. Van Andel  
Name: David L. Van Andel  
Title: Trustee  

 

Signature Page To Warrant 2015- 17

 

15
 

  

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: ______________

  

 
 

  

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: ______________

  

 
 

 

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: _______________

 

 

 

Exhibit 10.63

 

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. 2015-16 June 2, 2015

 

Warrant

 

This Warrant (the " Warrant ") certifies that, for value received, David L. Van Andel Trust, under Trust Agreement dated November 30, 1993, a Michigan trust , and its permitted transferees, successors and assigns (the " Holder "), is entitled to purchase from TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (the " Company "), 3,289,474 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 per share (the " Exercise Price "), at any time prior to 5:00 P.M. Eastern Time on May 31, 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.

 

 
 

 

" 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 3,289,474 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.

 

Fair Market Value ” shall, except in the event of a private placement by the Company of its common stock, mean (i) the trading volume weighted average closing price of the common stock of Company for the twenty (20) trading days immediately preceding the applicable date in question, as quoted on (a) a domestic securities exchange, (b) NASDAQ Stock Market or (c) a domestic over-the-counter market, which trades are reported by Pink OTC Markets Inc. or any similar successor organization or any other over-the-counter market in the United States, as the case may be; or (ii) in the event that the common stock of the Company is not trading on a market such that a value can be derived under subsection (i) of this definition as of the applicable date in question, a valuation per share of the common stock of the Company as determined in accordance with Generally Accepted Valuation Principles by an independent third-party valuation firm mutually agreed upon by the parties (and if the parties cannot mutually agree on a valuation firm, one of the “big four” accounting firms chosen by the Holder). In the event of a private placement by the Company of its common stock, “Fair Market Value” shall mean the average price per share of common stock in such private placement, including any warrants, options or other agreements providing the right to purchase shares of the Company’s common stock.

 

2
 

 

" 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 .

 

" 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.

 

3
 

 

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.

 

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.

 

4
 

 

(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.

 

(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.

 

5
 

 

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 220,657,895 common shares have been issued and 219,952,969 common shares remain outstanding 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 .

 

(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.

 

6
 

 

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.

 

7
 

 

 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) as follows:

 

(a)          In the event that (i) prior to December 18, 2018 the Company completes a private placement of its common stock and 50% of the Fair Market Value of such private placement is less than $0.385 per share, or (ii) 50% of the Fair Market Value of the Company’s common stock as of December 31, 2018 is less than $0.385 per share, then in each case the existing Current Holder’s Equity Interest applicable to the Warrant at such time shall increase (but not decrease) to a new Current Holder’s Equity Interest pursuant to the following formula:

 

New Holder’s Equity Interest = [(2 x Existing Current Holder’s Equity Interest) x ($0.385 ÷ 50% of FMV)] – Existing Current Holder’s Equity Interest.

 

(b)          In the event that Holder exercises the Warrant in whole or in part prior to December 31, 2018 and Fair Market Value on the date of such exercise is less than $0.385 per share, then the Current Holder’s Equity Interest with respect solely to those shares being exercised shall increase (but not decrease) pursuant to the same formula set forth in Section 3.3.3(a) above, such that the formula would apply only to the shares being exercised, as follows:

 

New Holder’s Equity Interest for Exercised Shares = [(2 x Existing Current Holder’s Equity Interest in the Exercised Shares ) x ($0.385 ÷ 50% of FMV as of the Exercise Date )] – Existing Current Holder’s Equity Interest in the Exercised Shares

 

(c)          Solely for the purposes of illustration, examples of the calculations described in this Section 3.3.3 are set forth on Schedule 3.3.3 attached hereto .

 

(d)          The foregoing notwithstanding, the adjustment to Current Holder’s Equity Interest provided for in this Section 3.3.3 shall not apply to any private placement completed by the Company on or prior to September 30, 2015 with (i) David L. Van Andel; (ii) David L. Van Andel Trust, under Trust Agreement dated November 30, 1993; (iii) Penta Mezzanine SBIC Fund I, L.P.; (iv) JL-BBNC Mezz Utah, LLC; (v) JL Properties, Inc.; or (vi) MidCap Funding X Trust, or any of the parent companies, subsidiaries, or affiliates of any of the foregoing persons or entities.

 

 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.

 

8
 

 

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.

 

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:

 

9
 

  

(a) If to the Company, to:

 

TWINLAB CONSOLIDATED HOLDINGS, INC.

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 HOLDINGS, INC.

632 Broadway, Suite 201

New York, NY 10012

Attention: Richard H. Neuwirth, Chief Legal Officer

Facsimile: (212) 260-1853

e-mail: 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

 

(b) If to the Holder, to:

 

David L. Van Andel

3133 Orchard Vista Drive SE

Grand Rapids, MI 49546

Facsimile: ________________

e-mail: dva@vaegr.com

 

with a copy to:

 

Mark J. Bugge

3133 Orchard Vista Drive SE

Grand Rapids, MI 49546

Facsimile: ________________

e-mail: Mark.Bugge@vaegr.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.

 

10
 

 

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.

 

11
 

 

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.

 

12
 

 

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]

 

13
 

 

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 Warrant 2015-16

 

14
 

 

ACKNOWLEDGED AND AGREED:

 

David L. Van Andel Trust, under Trust Agreement dated November 30, 1993

 

By:  /s/ David L. Van Andel                                      
Name: David L. Van Andel  
Title: Trustee  

 

Signature Page To Warrant 2015- 16

 

15
 

 

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: _____________

 

 
 

 

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: _____________

 

 
 

 

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: _____________

 

 
 

 

Schedule 3.3.3

 

Calculations for Adjustment of Current Holder’s Equity Interest

 

Section 3.3.3(a)

 

If 50% of the Fair Market Value (“FMV”) of the Company’s common stock as of December 31, 2018 or in a private placement by the Company closed prior to December 31, 2018 is less than $0.385 per share, then the existing Current Holder’s Equity Interest under this Warrant at that time shall be increased (but not decreased) to a new Current Holder’s Equity Interest applying the following formula:

 

New Current Holder’s Equity Interest = [(2 x Existing Current Holder’s Equity Interest) x ($0.385 ÷ 50% of FMV)] – Existing Current Holder’s Equity Interest.

 

Example Where Warrant Has Remained Unexercised as of December 31, 2018

 

Assume original investment of 760,000 at $0.76/share, for 1,000,000 shares, which would also be the Holder’s Current Holder’s Equity Interest on December 31, 2018, assuming no exercises under the Warrant through that date. Also, assume the FMV of the Company’s common stock as of December 31, 2018 is $0.50/share. The New Current Holder’s Equity Interest (“CHEI”) under this Warrant, would be calculated as follows:

 

New CHEI = [(2 x 1,000,000) x (0.385 ÷ 0.25)] – 1,000,000
  = [2,000,000 x 1.54] – 1,000,000
  = 3,080,000 – 1,000,000
  = 2,080,000 (an increase of 1,080,000 over the original CHEI)

 

At a $0.01/share exercise price, to fully-exercise the New CHEI would cost $20,800.

Together with the original investment of $760,000, the Holder’s total investment would equal $780,800 for 3,080,000 shares or $0.25/share.

 

Example Assuming Warrant is Partially Exercised Prior to December 31, 2018 . This example assumes a partial exercise of 750,000 warrant shares prior to December 18, 2018, when the Fair Market Value as of the Date of Exercise is $0.50/share. The blended rate is brought to 50% of Fair Market Value for both the exercised shares as well as the corresponding number of original investment shares.

 

Same facts as above, but assume 750,000 shares exercised.

 

New CHEI = [(2 x 750,000) x (0.385 ÷ 0.25)] – 750,000
  = [1,500,000 x 1.54] – 750,000
  = 2,310,000 – 750,000
  = 1,560,000 (an increase of 756,000 over existing CHEI at 12/31/18)

 

At a $0.01/share exercise price, the purchase price for the expanded number of exercise shares is $15,600.

 

2
 

 

Together with the original investment of $570,000 for the corresponding number of original investment shares (i.e., 750,000 shares at $0.76/share), the Holder’s total investment for the exercised warrant shares and an equivalent amount of original investment shares would equal $585,600 for 2,310,000 shares, or $0.25/share.

 

3

 

 

Exhibit 10.64

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (this " Agreement "), dated as of June 2, 2015, is entered into between Twinlab Consolidated Holdings, Inc., a Nevada corporation with its principal place of business at 632 Broadway, Suite 201, New York, New York 10012 (" Company "), and Little Harbor, LLC, a Nevada limited liability company with an address at 3133 Orchard Vista Drive SE, Grand Rapids, MI 49546 (" Purchaser ").

 

RECITALS

 

A.           Company and Purchaser are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “ Securities Act ”), and Rule 506 of Regulation D (“ Regulation D ”) as promulgated by the United States Securities and Exchange Commission (the “ Commission ”) under the Securities Act.

 

B.           Purchaser wishes to purchase, and Company wishes to sell, upon the terms and conditions stated in this Agreement, an aggregate of 3,289,474 shares of common stock, par value $0.001 per share (the “ Common Stock ”), of Company, at a purchase price of $0.76 per share (the 3,289,474 shares of Common Stock to be purchased by Purchaser hereunder are referred to herein as the “ Shares ”).

 

C.           Contemporaneously with the execution and delivery of this Agreement, the parties hereto are executing and delivering a Warrant Agreement, substantially in the form attached hereto as Exhibit A (the “ First Warrant Agreement ”), pursuant to which, among other things, Company is granting Purchaser the right to purchase an additional 3,289,474 shares of Common Stock at a price of $0.01 per share.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

1.            Purchase and Sale . Subject to the terms and conditions set forth herein, at the Closing (as defined in Section 2 ), Company shall issue and sell to Purchaser, and Purchaser shall purchase from Company, the Shares. The aggregate purchase price for the Shares shall be $2,500,000.24 (the " Purchase Price "), to be provided by Purchaser in the form of Purchaser’s agreements set forth in Section 3 hereof.

 

 
 

 

2.           Closing . Subject to the terms and conditions contained in this Agreement, the purchase and sale of the Shares contemplated hereby shall take place at a closing (the " Closing ") to be held at 10:00 a.m. on June 2, 2015 (the " Closing Date ") at the offices of Wilk Auslander LLP, 1515 Broadway, 43 rd Floor, New York, New York 10036, or at such other place or on such other date as Purchaser and Company may mutually agree upon in writing. At the Closing, Company shall deliver to Purchaser a stock certificate or certificates evidencing the Shares, and Purchaser shall have delivered to Company the Purchase Price in the form of Purchaser’s irrevocable agreement provided in Section 3 below to accept the Shares issued by the Company pursuant hereto in lieu of $2,500,000.24 worth of periodic payments otherwise due Purchaser under that certain Debt Repayment Agreement, dated as of July 31, 2014, by and between Purchaser and the Company’s subsidiary Twinlab Holdings, Inc. (formerly known as “ Idea Sphere Inc. ”) (the “ Repayment Agreement ”).

 

3.           Agreement to Accept Shares in Lieu of Payments under Repayment Agreement . Purchaser hereby irrevocably agrees to accept the Shares issued to Purchaser by Company pursuant to this Agreement in lieu and in complete satisfaction of the obligation of the Company’s subsidiary Twinlab Holdings, Inc. to make periodic cash payments otherwise due Purchaser under the Repayment Agreement in an aggregate amount equal to the Purchase Price, beginning with the periodic payment that was due under the Repayment Agreement on April 25, 2015 and continuing with each immediately subsequent periodic payment thereafter due under the Repayment Agreement until the total amount of periodic payment obligations so satisfied shall have amounted to $2,500,000.24. In the event that the remainder of the aggregate Purchase Price then available to be applied pursuant hereto towards a final periodic payment under the Repayment Agreement is insufficient to satisfy the entire amount due for such period under the Repayment Agreement, then the excess amount then due for such periodic payment above the amount satisfied hereby shall continue to be due and payable in cash by Twinlab Holdings, Inc. in accordance with the terms of the Repayment Agreement. Except for Purchaser’s agreement, on the terms set forth herein, to accept the Shares issued pursuant to this Agreement in lieu of cash payments otherwise due Purchaser under the Repayment Agreement in an aggregate amount equal to the Purchase Price, nothing herein is intended to modify in any way the Repayment Agreement, which shall remain in full force and effect.

 

4.           Closing Deliveries .

 

(a)           On or prior to the Closing, Company shall issue, deliver or cause to be delivered to Purchaser the following:

 

(i)          this Agreement, duly executed by Company; and

 

(ii)         the First Warrant Agreement, duly executed by Company.

 

2
 

 

(b)           On or prior to the Closing, Purchaser shall deliver or cause to be delivered to Company the following:

 

(i)          this Agreement, duly executed by Purchaser

 

5.            Closing Conditions .

 

(a)          The obligation of Company to issue and sell the Shares to Purchaser hereunder is subject to the satisfaction of the following conditions as of the Closing:

 

(i)          the representations and warranties of Purchaser in Section 7 hereof shall be true and correct on and as of the Closing Date with the same effect as though made at and as of such date;

 

(ii)         Purchaser shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date; and

 

(iii)        Purchaser shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the transactions contemplated herein.

 

(b)          The obligation of Purchaser to purchase the Shares from Company is subject to the satisfaction of the following conditions as of the Closing:

 

(i)          the representations and warranties of Company in Section 6 shall be true and correct on and as of the Closing Date with the same effect as though made at and as of such date;

 

(ii)         Company shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it prior to or on the Closing Date; and

 

(iii)        Company shall have obtained any and all consents, permits, approvals, registrations and waivers necessary or appropriate for consummation of the transactions contemplated herein.

 

6.            Representations and Warranties of Company . Company hereby represents and warrants to Purchaser as follows:

 

3
 

 

(a)          Company is an entity duly incorporated, validly existing and in good standing under the laws of the State of Nevada, with the requisite corporate power and authority to own or lease and use its properties and assets and to carry on its business as currently conducted. Company is not in violation of any of the provisions of its articles of incorporation or bylaws. Company is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have a Material Adverse Effect. “ Material Adverse Effect ” means a material adverse effect on the results of operations, assets, business or financial condition of Company, except that any of the following, either alone or in combination, shall not be deemed a Material Adverse Effect: (i) effects caused by changes or circumstances affecting general market conditions in the U.S. economy or which are generally applicable to the industry in which Company operates provided that such effects are not borne disproportionately by Company, (ii) effects resulting from or relating to the announcement or disclosure of the sale of the Shares or other transactions contemplated by this Agreement, or (iii) effects caused by any event, occurrence or condition resulting from or relating to the taking of any action in accordance with this Agreement.

 

(b)          Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby (including, but not limited to, the sale and delivery of the Shares) have been duly authorized by all necessary corporate action on the part of Company, and no further corporate action is required by Company, its Board of Directors or its stockholders in connection therewith other than in connection with the Required Approvals (as hereinafter defined). This Agreement has been duly executed by the Company and is the legal, valid and binding obligation of the Company enforceable against Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application or insofar as indemnification and contribution provisions may be limited by applicable law.

 

(c)          The execution, delivery and performance by Company of this Agreement and the consummation by Company of the transactions contemplated hereby (including, without limitation, the issuance of the Shares) do not and will not (i) conflict with or violate any provisions of Company’s articles of incorporation or bylaws or otherwise result in a violation of the organizational documents of Company, (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Encumbrance upon any of the properties or assets of Company or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any Material Contract or (iii) subject to the Required Approvals, result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which Company is subject (including federal and state securities laws and regulations and the rules and regulations, assuming the correctness of the representations and warranties made by Purchaser herein, of any self regulatory organization to which Company or its securities are subject), or by which any property or asset of Company is bound or affected), except in the case of clause (ii) and clause (iii) such as would not individually have a Material Adverse Effect. “ Material Contract means any contract of Company that has been filed as an exhibit to the SEC Reports pursuant to Item 601(b)(4) or Item 601(b)(10) of Regulation S-K (including, for purposes hereof, any contracts that are required to be filed as an exhibit to a Form 10).

 

4
 

 

(d)          Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by Company of the Transaction Documents (including the issuance of the Securities), other than (i) the filing with the Commission of one or more Registration Statements in accordance with the requirements of the Registration Rights Agreement, (ii) filings required by applicable state securities laws, (iii) the filing of a Notice of Sale of Securities on Form D with the Commission under Regulation D of the Securities Act, (iv) a report on Form 8-K disclosing the Company’s entry into this Agreement and (v) those that have been made or obtained prior to the date of this Agreement (collectively, the “ Required Approvals ”).

 

(e)          The Shares have been duly authorized and, when issued and paid for in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable and free and clear of all Encumbrances suffered or permitted by Company, other than restrictions on transfer provided for in this Agreement or imposed by applicable securities laws, and shall not be subject to preemptive or similar rights. Assuming the accuracy of the representations and warranties of Purchaser in this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws.

 

(f)          There are no actions, suits, claims, investigations or other legal proceedings pending or, to the Company’s knowledge, threatened against or by Company that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement. “ Company’s Knowledge ” means with respect to any statement made to the knowledge of Company, that the statement is based upon the actual knowledge of the officers of Company who, as of the date hereof, have responsibility for the matter or matters that are the subject of the statement.

 

(g)          Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), including pursuant to Section 13(a) or 15(d) thereof, for twelve (12) months preceding and including the date hereof (or such shorter period as Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”), on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.

 

5
 

 

(h)          The financial statements of Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles (“ GAAP ”) applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of Company and its consolidated subsidiaries taken as a whole as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, year-end audit adjustments.

 

(i)          Assuming the accuracy of Purchaser’s representations and warranties set forth in Section 7 of this Agreement (without giving effect to any materiality qualifiers therein), no registration under the Securities Act is required for the offer and sale of the Securities by Company to Purchaser under this Agreement.

 

(j)          No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Company.

 

7.            Representation and Warranties of Purchaser .

 

(a)          Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Nevada.

 

(b)          Purchaser has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by Purchaser of this Agreement, the performance by Purchaser of its obligations hereunder and the consummation by Purchaser of the transactions contemplated hereby have been duly authorized by all requisite limited liability company action on the part of Purchaser. This Agreement has been duly executed and delivered by Purchaser and (assuming due authorization, execution and delivery by Company) this Agreement constitutes a legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms.

 

(c)          Purchaser is acquiring the Shares solely for its own account for investment purposes and not with a view to, or for offer or sale in connection with, any distribution thereof. Purchaser acknowledges that the Shares are not registered under the Securities Act, or any state securities laws, and that the Shares may not be transferred or sold except pursuant to the registration provisions of the Securities Act or pursuant to an applicable exemption therefrom and subject to state securities laws and regulations, as applicable.

 

6
 

 

(d)          No governmental, administrative or other third party consents or approvals are required by or with respect to Purchaser in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby.

 

(e)          There are no actions, suits, claims, investigations or other legal proceedings pending or, to the knowledge of Purchaser, threatened against or by Purchaser that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement.

 

(f)          Purchaser understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal for its own account and not with a view to, or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities laws, provided, however , that by making the representations herein, Purchaser does not agree to hold any of the Shares for any minimum period of time and reserves the right, subject to the provisions of this Agreement, at all times to sell or otherwise dispose of all or any part of such Shares pursuant to an effective registration statement under the Securities Act or under an exemption from such registration and in compliance with applicable federal and state securities laws. Purchaser is acquiring the Shares hereunder in the ordinary course of its business. Purchaser does not presently have any agreement, plan or understanding, directly or indirectly, with any Person to distribute or effect any distribution of any of the Shares (or any Shares which are derivatives thereof) to or through any person or entity; Purchaser is not a registered broker-dealer under Section 15 of the Exchange Act or an entity engaged in a business that would require it to be so registered as a broker-dealer.

 

(g)          At the time Purchaser was offered the Shares, it was, and at the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. Purchaser has previously delivered an Accredited Investor Questionnaire to Company indicating that Purchaser is an “accredited investor.” As of the date of this Agreement, circumstances have not changed such that Purchaser would not be an “accredited investor.”

 

(h)          Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Purchaser is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

7
 

 

(i)          Purchaser acknowledges that it has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; (ii) access to information about Company and its respective financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Neither such inquiries nor any other investigation conducted by or on behalf of Purchaser or its representatives or counsel shall modify, amend or affect Purchaser’s right to rely on the truth, accuracy and completeness of Company’s representations and warranties contained in this Agreement. Purchaser has sought such accounting, legal and tax advice as it has considered necessary to make an informed decision with respect to its acquisition of the Shares.

 

(j)          Purchaser understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that Company is relying in part upon the truth and accuracy of, and Purchaser’s compliance with, the representations, warranties, agreements, acknowledgements and understandings of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire the Shares.

 

(k)          Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares or the fairness or suitability of the investment in the Shares nor have such authorities passed upon or endorsed the merits of the offering of the Shares.

 

(l)          No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Purchaser.

 

8.            Transfer Restrictions .

 

(a)           Notwithstanding any other provision of this Agreement, Purchaser covenants that the Shares may be disposed of only pursuant to an effective registration statement under, and in compliance with the requirements of, the Securities Act, or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act, and in compliance with any applicable state and federal securities laws. In connection with any transfer of the Shares other than (i) pursuant to an effective registration statement, (ii) to Company, (iii) to an Affiliate of Purchaser, (iv) pursuant to Rule 144 under the Securities Act (“ Rule 144 ”) ( provided that Purchaser provides Company with reasonable assurances (in the form of seller and broker representation letters if required) that the securities may be sold pursuant to such rule) or Rule 144A, (v) pursuant to Rule 144 without the requirement that Company be in compliance with the current public information requirements of Rule 144 and without other restriction following the applicable holding period or (vi) in connection with a bona fide pledge, Company may require the transferor thereof to provide to Company an opinion of counsel selected by the transferor and reasonably acceptable to Company, the form and substance of which opinion shall be reasonably satisfactory to Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of Purchaser under this Agreement.

 

8
 

 

(b)          Certificates evidencing the Shares shall bear any legend as required by the “Blue Sky” laws of any state and a restrictive legend in substantially the following form until such time as they are not required under Section 8(c) (and a stock transfer order may be placed against transfer of the certificates for the Shares):

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OR (B) AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL REASONABLY SATISFACTORY TO COMPANY.

 

In addition, if Purchaser is an Affiliate of Company, certificates evidencing the Shares issued to Purchaser shall bear a customary “affiliates” legend.

 

(c)          Subject to Company’s right to request an opinion of counsel as set forth in Section 8(a), the legend set forth in Section 8(b) above shall be removable and Company shall issue or cause to be issued a certificate without such legend or any other legend (except for any “affiliates” legend as set forth in Section 8(b)) to the holder of the applicable Shares upon which it is stamped if (i) such Shares are registered for resale under the Securities Act (provided that, if Purchaser is selling pursuant to the effective registration statement registering the Shares for resale, Purchaser agrees to only sell such Shares during such time that such registration statement is effective and not withdrawn or suspended, and only as permitted by such registration statement), (ii) such Shares are sold or transferred in compliance with Rule 144 (if the transferor is not an Affiliate of Company), including without limitation in compliance with the current public information requirements of Rule 144 if applicable to Company at the time of such sale or transfer, and the holder and its broker have delivered customary documents reasonably requested by Company’s transfer agent and/or Company counsel in connection with such sale or transfer, or (iii) such Shares are eligible for sale under Rule 144 without the requirement that Company be in compliance with the current public information requirements of Rule 144 and without other restriction and Company counsel has provided written confirmation of such eligibility to the transfer agent. Any fees (with respect to the transfer agent, Company counsel or otherwise) associated with the removal of such legend shall be borne by Company. At such time as a legend is no longer required for certain Shares, Company will no later than three (3) Business Days following the delivery by Purchaser to Company or the transfer agent (with concurrent notice and delivery of copies to Company) of a legended certificate representing such Shares (endorsed or with stock powers attached, signatures guaranteed, and otherwise in form necessary to affect the reissuance and/or transfer, and together with such other customary documents as the transfer agent and/or Company counsel shall reasonably request), deliver or cause to be delivered to the transferee of Purchaser or Purchaser, as applicable, a certificate representing such Shares that is free from all restrictive and other legends. Company may not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer set forth in this Section 8(c).

 

9
 

 

(d)          Purchaser hereunder acknowledges its primary responsibilities under the Securities Act and accordingly will not sell or otherwise transfer the Shares or any interest therein without complying with the requirements of the Securities Act. Purchaser acknowledges that the delivery of the Shares and any removal of any legends from certificates representing the Shares as set forth in this Section 8 is predicated on Company’s reliance upon Purchaser’s acknowledgement in this Section 8(d).

 

9.             Survival . All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Closing hereunder.

 

10.           Indemnification . Company shall indemnify Purchaser and hold Purchaser harmless against and in respect of any and all losses, liabilities, damages, obligations, claims, Encumbrances, costs and expenses (including, without limitation, reasonable attorneys' fees) incurred by Purchaser resulting from any breach of any representation, warranty, covenant or agreement made by Company herein or in any instrument or document delivered to Purchaser pursuant hereto.

 

11.           Further Assurances . Following the Closing, each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances, and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

 

12.           Termination . This Agreement may be terminated at any time prior to the Closing (a) by the mutual written consent of Purchaser and Company or (b) by either Purchaser or Company if (i) a breach of any provision of this Agreement has been committed by the other party and such breach has not been cured within 10 days following receipt by the breaching party of written notice of such breach, or (ii) the Closing does not occur by July 1, 2015. Upon termination, all further obligations of the parties under this Agreement shall terminate without liability of any party to the other parties to this Agreement, except that no such termination shall relieve any party from liability for any fraud or willful breach of this Agreement.

 

10
 

 

13.          Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

 

14.          Notices . All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a " Notice ") shall be in writing and addressed to the parties at the addresses set forth on the first page of this Agreement (or to such other address that may be designated by the receiving party from time to time in accordance with this section). All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile or e-mail of a PDF document (with confirmation of transmission) or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in this Agreement, a Notice is effective only (a) upon receipt by the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

 

15.          Entire Agreement . This Agreement constitutes the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter.

 

16.          Successor and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. No party may assign any of its rights or obligations hereunder without the prior written consent of the other parties hereto, which consent shall not be unreasonably withheld or delayed.

 

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

 

18.          Amendment and Modification; Waiver . This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. Except as otherwise set forth in this Agreement, no failure to exercise, or delay in exercising, any rights, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

 

11
 

 

19.          Severability . If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

 

20.          Governing Law; Submission to Jurisdiction . This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule (whether of the State of New York or any other jurisdiction). Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the federal courts of the United States or the courts of the State of New York in each case located in the city of New York and County of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Service of process, summons, notice or other document by mail to such party's address set forth herein shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or any proceeding in such courts and irrevocably waive and agree not to plead or claim in any such court that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

 

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

 

[SIGNATURE PAGE FOLLOWS]

 

12
 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date first written above.

 

  TWINLAB CONSOLIDATED HOLDINGS, INC.
   
  By: /s/ Thomas A. Tolworthy  
  Name: Thomas A. Tolworthy
  Title: Chief Executive Officer and President
     
  LITTLE HARBOR LLC
   
  By: /s/ Mark J. Bugge  
  Name: Mark J. Bugge
  Title: Secretary & Treasurer

 

13

 

Exhibit 10.65

 

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. 2015-15 June 2, 2015

 

Warrant

 

This Warrant (the " Warrant ") certifies that, for value received, LITTLE HARBOR, LLC, an Nevada company , and its permitted transferees, successors and assigns (the " Holder "), is entitled to purchase from TWINLAB CONSOLIDATED HOLDINGS, INC., a Nevada corporation (the " Company "), 3,289,474 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 per share (the " Exercise Price "), at any time prior to 5:00 P.M. Eastern Time on May 31, 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.

 

 
 

  

" 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 3,289,474 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.

 

Fair Market Value ” shall, except in the event of a private placement by the Company of its common stock, mean (i) the trading volume weighted average closing price of the common stock of Company for the twenty (20) trading days immediately preceding the applicable date in question, as quoted on (a) a domestic securities exchange, (b) NASDAQ Stock Market or (c) a domestic over-the-counter market, which trades are reported by Pink OTC Markets Inc. or any similar successor organization or any other over-the-counter market in the United States, as the case may be; or (ii) in the event that the common stock of the Company is not trading on a market such that a value can be derived under subsection (i) of this definition as of the applicable date in question, a valuation per share of the common stock of the Company as determined in accordance with Generally Accepted Valuation Principles by an independent third-party valuation firm mutually agreed upon by the parties (and if the parties cannot mutually agree on a valuation firm, one of the “big four” accounting firms chosen by the Holder). In the event of a private placement by the Company of its common stock, “Fair Market Value” shall mean the average price per share of common stock in such private placement, including any warrants, options or other agreements providing the right to purchase shares of the Company’s common stock.

 

2
 

  

" 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 .

 

" 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.

 

3
 

  

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.

 

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.

 

4
 

  

(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.

 

(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.

 

5
 

  

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 220,657,895 common shares have been issued and 219,952,969 common shares remain outstanding 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 .

 

(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.

 

6
 

  

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.

 

7
 

  

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) as follows:

 

(a)          In the event that (i) prior to December 18, 2018 the Company completes a private placement of its common stock and 50% of the Fair Market Value of such private placement is less than $0.385 per share, or (ii) 50% of the Fair Market Value of the Company’s common stock as of December 31, 2018 is less than $0.385 per share, then in each case the existing Current Holder’s Equity Interest applicable to the Warrant at such time shall increase (but not decrease) to a new Current Holder’s Equity Interest pursuant to the following formula:

 

New Holder’s Equity Interest = [(2 x Existing Current Holder’s Equity Interest) x ($0.385 ÷ 50% of FMV)] – Existing Current Holder’s Equity Interest.

 

(b)          In the event that Holder exercises the Warrant in whole or in part prior to December 31, 2018 and Fair Market Value on the date of such exercise is less than $0.385 per share, then the Current Holder’s Equity Interest with respect solely to those shares being exercised shall increase (but not decrease) pursuant to the same formula set forth in Section 3.3.3(a) above, such that the formula would apply only to the shares being exercised, as follows:

 

New Holder’s Equity Interest for Exercised Shares = [(2 x Existing Current Holder’s Equity Interest in the Exercised Shares ) x ($0.385 ÷ 50% of FMV as of the Exercise Date )] – Existing Current Holder’s Equity Interest in the Exercised Shares

 

(c)          Solely for the purposes of illustration, examples of the calculations described in this Section 3.3.3 are set forth on Schedule 3.3.3 attached hereto .

 

(d)          The foregoing notwithstanding, the adjustment to Current Holder’s Equity Interest provided for in this Section 3.3.3 shall not apply to any private placement completed by the Company on or prior to September 30, 2015 with (i) David L. Van Andel; (ii) David L. Van Andel Trust, under Trust Agreement dated November 30, 1993; (iii) Penta Mezzanine SBIC Fund I, L.P.; (iv) JL-BBNC Mezz Utah, LLC; (v) JL Properties, Inc.; or (vi) MidCap Funding X Trust, or any of the parent companies, subsidiaries, or affiliates of any of the foregoing persons or entities.

 

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.

 

8
 

  

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.

 

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:

 

9
 

  

(a)          If to the Company, to:

 

TWINLAB CONSOLIDATED HOLDINGS, INC.

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 HOLDINGS, INC.

632 Broadway, Suite 201

New York, NY 10012

Attention: Richard H. Neuwirth, Chief Legal Officer

Facsimile: (212) 260-1853

e-mail: 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

 

(b)          If to the Holder, to:

 

LITTLE HARBOR, LLC

3133 Orchard Vista Drive SE

Grand Rapids, MI 49546

Attention: David L. Van Andel

Facsimile: ________________

e-mail: dva@vaegr.com

 

with a copy to:

 

LITTLE HARBOR, LLC

3133 Orchard Vista Drive SE

Grand Rapids, MI 49546

Attention: Mark J. Bugge

Facsimile: ________________

e-mail: Mark.Bugge@vaegr.com

 

10
 

  

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.

 

11
 

  

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.

 

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).

 

12
 

  

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.

 

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]

 

13
 

 

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 Warrant 2015-15

 

14
 

   

ACKNOWLEDGED AND AGREED:

 

LITTLE HARBOR, LLC

 

By: /s/ Mark J. Bugge  
Name: Mark J. Bugge  
Title: Secretary & Treasurer  

 

Signature Page To Warrant 2015- 15

 

15
 

  

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: ___________________

 

 
 

  

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: ___________________

 

 
 

  

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: __________________

 

 
 

  

Schedule 3.3.3

 

Calculations for Adjustment of Current Holder’s Equity Interest

 

Section 3.3.3(a)

 

If 50% of the Fair Market Value (“FMV”) of the Company’s common stock as of December 31, 2018 or in a private placement by the Company closed prior to December 31, 2018 is less than $0.385 per share, then the existing Current Holder’s Equity Interest under this Warrant at that time shall be increased (but not decreased) to a new Current Holder’s Equity Interest applying the following formula:

 

New Current Holder’s Equity Interest = [(2 x Existing Current Holder’s Equity Interest) x ($0.385 ÷ 50% of FMV)] – Existing Current Holder’s Equity Interest.

 

Example Where Warrant Has Remained Unexercised as of December 31, 2018

 

Assume original investment of 760,000 at $0.76/share, for 1,000,000 shares, which would also be the Holder’s Current Holder’s Equity Interest on December 31, 2018, assuming no exercises under the Warrant through that date. Also, assume the FMV of the Company’s common stock as of December 31, 2018 is $0.50/share. The New Current Holder’s Equity Interest (“CHEI”) under this Warrant, would be calculated as follows:

 

New CHEI = [(2 x 1,000,000) x (0.385 ÷ 0.25)] – 1,000,000
  = [2,000,000 x 1.54] – 1,000,000
  = 3,080,000 – 1,000,000
  = 2,080,000 (an increase of 1,080,000 over the original CHEI)

 

At a $0.01/share exercise price, to fully-exercise the New CHEI would cost $20,800.

Together with the original investment of $760,000, the Holder’s total investment would equal $780,800 for 3,080,000 shares or $0.25/share.

 

Example Assuming Warrant is Partially Exercised Prior to December 31, 2018 . This example assumes a partial exercise of 750,000 warrant shares prior to December 18, 2018, when the Fair Market Value as of the Date of Exercise is $0.50/share. The blended rate is brought to 50% of Fair Market Value for both the exercised shares as well as the corresponding number of original investment shares.

 

Same facts as above, but assume 750,000 shares exercised.

 

New CHEI = [(2 x 750,000) x (0.385 ÷ 0.25)] – 750,000
  = [1,500,000 x 1.54] – 750,000
  = 2,310,000 – 750,000
  = 1,560,000 (an increase of 756,000 over existing CHEI at 12/31/18)

 

At a $0.01/share exercise price, the purchase price for the expanded number of exercise shares is $15,600.

 

2
 

  

Together with the original investment of $570,000 for the corresponding number of original investment shares (i.e., 750,000 shares at $0.76/share), the Holder’s total investment for the exercised warrant shares and an equivalent amount of original investment shares would equal $585,600 for 2,310,000 shares, or $0.25/share.

 

3