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EXECUTION COPY
FOURTH AMENDMENT AND WAIVER
FOURTH AMENDMENT AND WAIVER, dated as of December 15, 2000
(this "Amendment"), to the Amended and Restated Credit and Guarantee Agreement,
dated as of November 15, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among Twinlab Corporation, a
Delaware corporation ("Holdings"), Twin Laboratories Inc., a Utah corporation
(the "Borrower"), the several banks and other financial institutions parties to
the Credit Agreement (the "Lenders"), The Bank of New York, as co-agent for the
Lenders thereunder (in such capacity, the "Co-Agent"), and The Chase Manhattan
Bank, as administrative agent for the Lenders thereunder (in such capacity, the
"Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Administrative
Agent and the Lenders amend the Credit Agreement and waive certain covenants and
defaults arising from the Borrower's failure to comply with certain covenants;
WHEREAS, the Administrative Agent and the Lenders are willing
to agree to the requested amendments and waivers on the terms and conditions
contained herein;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined
in the Credit Agreement shall have their defined meanings when used herein.
2. Amendment to Subsection 1.1 (Definitions). Subsection 1.1
of the Credit Agreement is hereby amended as follows:
(a) by adding the following definitions in their proper
alphabetical order:
"Accounts": all of the accounts, instruments, documents,
chattel paper and general intangibles of the Borrower or any of its
Domestic Subsidiaries, whether secured or unsecured, whether now
existing or hereafter created or arising, and whether or not
specifically assigned to the Administrative Agent for the ratable
benefit of the Lenders.
"Account Debtor": the Person obligated on an Account.
"Amendment Period": the period from and including the Fourth
Amendment Effective Date to and including February 15, 2001.
"Bad Debt Reserve": a reserve for bad debt calculated in
accordance with GAAP on the Borrower's financial statements.
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"Borrowing Base": on any date, the amount (calculated based on
the most recent Borrowing Base Certificate delivered pursuant to this
Agreement) that is equal to the sum of (a) 80% of the Eligible Accounts
Receivable plus (b) 40% of the Eligible Inventory. Borrowing Base
component definitions and reserves may be fixed and revised from time
to time by the Administrative Agent in its Permitted Discretion.
"Borrowing Base Certificate": a certificate substantially in
the form of Exhibit J hereto (with such changes therein as may be
required by the Administrative Agent to reflect the components of and
reserves against the Borrowing Base as provided for hereunder from time
to time), executed and certified by a Responsible Officer, which shall
include appropriate exhibits and schedules as referred to therein and
as provided for in subsection 6.2.
"Borrowing Base Effective Date": the date upon which a
Borrowing Base shall have been determined.
"Eligible Accounts Receivable": at the time of any
determination thereof, all Accounts that satisfy the following criteria
at the time of creation and continue to meet the same at the time of
such determination: (i) have been invoiced and represent the bona fide
sale and delivery from the Borrower or the Domestic Subsidiaries to the
purchaser of merchandise or services, in each case in the ordinary
course of business of the Borrower or the Domestic Subsidiaries in
connection with its trade operations and (ii) are not ineligible for
inclusion in the calculation of the Borrowing Base pursuant to any of
clauses (a) through (h) below or otherwise deemed by the Administrative
Agent in good faith to be ineligible for inclusion in the calculation
of the Borrowing Base as described below. Without limiting the
foregoing, to qualify as an Eligible Account Receivable, an Account
shall indicate as sole payee and as sole remittance party the Borrower
or any of the Domestic Subsidiaries. In determining the amount to be so
included, the face amount of Accounts shall be reduced by, without
duplication, to the extent not reflected in such face amount, (i) the
amount of all accrued and actual returns, discounts, claims, credits or
credits pending, charges, price adjustments, freight or finance charges
or other allowances (including any amount that the Borrower or the
Domestic Subsidiaries, as applicable, may be obligated to rebate to a
customer pursuant to the terms of any agreement or understanding
(written or oral)), (ii) the aggregate amount of all reserves, limits
and deductions provided for in this definition and elsewhere in this
Agreement, and (iii) the aggregate amount of all credits not yet
processed or applied by the Borrower or the applicable Domestic
Subsidiary to reduce the amount of the Accounts. Standards of
eligibility may be fixed from time to time by the Administrative Agent
in its Permitted Discretion, with any changes in such standards to be
effective 10 days after delivery of notice thereof to the Borrower.
Unless otherwise approved from time to time in writing by the
Administrative Agent, no Account shall be an Eligible Accounts
Receivable if, without duplication:
(a) the Borrower or the Domestic Subsidiaries do not
have sole lawful and absolute title to such Account; or
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(b) it arises out of a sale made by the Borrower or
any Domestic Subsidiary to an employee, officer, agent,
director, or Affiliate of the Borrower or any Subsidiary; or
(c) it is unpaid more than 90 days from the date of
invoice or, in the case of General Nutrition Centers, 120 days
from the date of invoice or 60 days from the due date; or
(d) it has been written off the books of the Borrower
or the Domestic Subsidiaries or has been otherwise designated
on such books as uncollectible as part of the Borrower's Bad
Debt Reserve; or
(e) the Account is not payable in Dollars or the
Account Debtor is either not incorporated or organized under
the laws of the United States of America, any state thereof or
the District of Columbia or is located outside or has its
principal place of business or substantially all of its assets
outside the United States of America, except to the extent the
Account is supported by an irrevocable letter of credit
reasonably satisfactory to the Administrative Agent (as to
form, substance and issuer) and assigned to and directly
drawable by the Administrative Agent; or
(f) the Account Debtor is the United States of
America or any department, agency or instrumentality thereof,
unless the Borrower or the relevant Domestic Subsidiary, duly
assigns its rights to payment of such Account to the
Administrative Agent pursuant to the Assignment of Claims Act
of 1940, as amended, which assignment and related documents
and filings shall be in form and substance reasonably
satisfactory to the Administrative Agent; or
(g) the Account does not comply in all material
respects with all applicable Requirements of Law, whether
Federal, state or local, including without limitation, all
usury laws, fair credit reporting and billing laws, fair debt
collection practices and rules, and regulations relating to
truth in lending and other similar matters; or
(h) (i) it is not subject to a valid and perfected
first priority Lien in favor of the Administrative Agent for
the benefit of the Lenders, subject to no other Liens other
than the Liens (if any) permitted by the Loan Documents or
(ii) it does not otherwise conform in all material respects to
the representations and warranties contained in the Loan
Documents relating to Accounts.
"Eligible Inventory": at the time of any determination
thereof, without duplication, all Inventory at the time of such
determination that is not ineligible for inclusion in the calculation
of the Borrowing Base pursuant to any of clauses (a) through (j) below
or otherwise deemed by the Administrative Agent in good faith to be
ineligible for inclusion in the calculation of the Borrowing Base as
described below. Without limiting the foregoing, to qualify as
"Eligible Inventory" no person other than the Borrower or the Domestic
Subsidiaries shall have any direct or indirect ownership
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interest or title to such Inventory and no person other than the
Borrower or the Domestic Subsidiaries shall be indicated on any
purchase order or invoice with respect to such Inventory as having or
purporting to have an interest therein. Standards of eligibility may be
fixed from time to time by the Administrative Agent in its Permitted
Discretion, with any changes in such standards to be effective 10 days
after delivery of notice thereof to the Borrower. Unless otherwise from
time to time approved in writing by the Administrative Agent, no
Inventory shall be deemed Eligible Inventory if, without duplication:
(a) the Borrower or the Domestic Subsidiaries do not
have sole and good, valid and unencumbered title thereto; or
(b) it is not located in the United States of
America; or
(c) it is not located on property owned or leased by
the Borrower or the Domestic Subsidiaries or in a contract
warehouse, and, except as otherwise approved by the
Administrative Agent, covered by an agreement reasonably
satisfactory in form and substance to the Administrative Agent
covering the Administrative Agent's access to such Inventory
and waiving the lessor's or contract warehouseman's Liens
therein and segregated or otherwise separately identifiable
from goods of all others, if any, stored on the premises; or
(d) in the case of Raw Materials, it is components
including all packaging materials such as bottles, labels,
caps, capsules, containers, dividers, cartons and display
items; or
(e) in the case of Work-in-Process, it is any item
other than Inventory stored in bulk awaiting packaging; or
(f) in the case of Finished Goods Inventory, those
items that are accrued returns which are not in the possession
of the Borrower or the Domestic Subsidiaries or those items
that are not in a readily saleable form; or
(g) it is packing or shipping materials or supplies;
or
(h) it is not subject to a valid and perfected first
priority Lien in favor of the Administrative Agent for the
benefit of the Lenders; or
(i) it is accounted for in the Borrower's or the
Domestic Subsidiaries' Inventory Reserves; or
(j) it is in transit from anywhere outside the United
States of America.
Without limiting the foregoing, Inventory shall not be
Eligible Inventory if the purchase order, invoice or any other document
in connection therewith indicates that any Person other than the
Borrower or the Domestic Subsidiaries has any ownership interest
therein.
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"Finished Goods": goods to be sold by the Borrower or the
Domestic Subsidiaries in the ordinary course of business.
"Fourth Amendment Effective Date": as defined in the Fourth
Amendment and Waiver to this Agreement, dated as of December 15, 2000.
"Inventory": all Raw Materials, Work-in-Process, and Finished
Goods held by the Borrower or the Domestic Subsidiaries in the normal
course of business.
"Inventory Reserves": the Inventory Value of all Inventory
that (i) is inactive, experimental, seconds or thirds or stale (past
best-used date), obsolete, excess, slow-moving, discontinued, or
unmerchantable, (ii) is damaged or not in good condition or designated
as close-out Inventory; (iii) is a sample; (iv) is not readily usable
or salable under the customary terms upon which it usually is sold or
at prices approximating at least the cost thereof (after giving effect
to any write downs applicable thereto); or (v) does not otherwise
conform to the representations and warranties contained in the Loan
Documents.
"Inventory Value": a dollar amount equal to the lesser of (i)
the standard cost of Inventory determined on a basis consistent with
GAAP and with the Borrower's current and historical accounting practice
or (ii) the market value of such Inventory.
"Permitted Discretion": the Administrative Agent's reasonable
judgment exercised in good faith and based upon its standard practice.
"Raw Materials": materials used or consumed in the
manufacture, packing or shipping of goods to be sold by the Borrower or
the Domestic Subsidiaries in the normal course of business.
"Work-in-Process": goods which are currently in the process of
being manufactured to be sold as Finished Goods.
(b) by amending the definition of "Applicable Margin" by
inserting at the end thereof the following:
Notwithstanding the foregoing, during the Amendment Period,
the Applicable Margin shall be 2.50%, if such Loans are ABR
Loans, and 3.50%, if such Loans are Eurodollar Loans.
(c) by amending the definition of "Interest Payment Date" by
(i) deleting the words "the last day of each April, July, October and January"
appearing in clause (a) therein and (ii) inserting, in lieu thereof, "the last
day of each calendar month".
(d) by amending the definition of "Interest Period" by
inserting at the end thereof the following:
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Notwithstanding the foregoing, the Borrower hereby
acknowledges and agrees that, during the Amendment Period, it
shall not request a Eurodollar Loan with an Interest Period in
excess of one month.
(e) by amending the definition of "Swing Line Commitment" by
inserting at the end thereof before the period xxxx the following:
; provided that during the Amendment Period, such Swing Line
Commitment shall be equal to $0
3. Amendment to Subsection 2.1 (Revolving Credit Commitments).
Subsection 2.1 of the Credit Agreement is hereby amended by adding immediately
prior to the period xxxx at the end of the first sentence of paragraph (a) the
following:
; provided that no Lender shall be required to make any
Revolving Credit Loan if, after giving effect to the making of
such Revolving Credit Loan, the Extensions of Credit at such
time would exceed the Borrowing Base at such time.
4. Amendments to Subsection 2.3 (Commitment and Other Fees).
Subsection 2.3 of the Credit Agreement is hereby amended as follows:
(a) by (i) deleting "quarterly in arrears on the last day of
each April, July, October and January" where such words appear in paragraph (a)
and (ii) inserting, in lieu thereof, "on the last day of each calendar month";
and
(b) by inserting at the end of paragraph (a) thereof the
following:
Notwithstanding the foregoing, during the Amendment Period,
the commitment fee shall be computed at a rate of .50% per
annum.
5. Amendment to Subsection 2.6 (Swing Line Commitment).
Subsection 2.6 of the Credit Agreement is hereby amended by adding immediately
prior to the period xxxx at the end of the first sentence the following:
; provided, further, that the Borrower shall not request, and
the Swing Line Lender shall not make, any Swing Line Loan if,
after giving effect to the making of such Swing Line Loan, the
Extensions of Credit at such time would exceed the Borrowing
Base at such time
6. Amendment to Subsection 2.10(a) (L/C Commitment).
Subsection 2.10(a) of the Credit Agreement is hereby amended by adding
immediately prior to the period xxxx at the end thereof the following:
or (iii) the Extensions of Credit at such time would exceed
the Borrowing Base at such time; provided, further, that the
Issuing Bank shall have no obligation to issue any Letter of
Credit during the Amendment Period
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7. Amendment to Subsection 2.12(a) (Fees, Commissions and
Other Charges). Subsection 2.12(a) of the Credit Agreement is hereby amended by
(i) deleting "1/5" where it appears therein and (ii) inserting, in lieu thereof,
"1/4".
8. Amendment to Subsection 3.1 (Optional and Mandatory
Prepayments). Subsection 3.1 of the Credit Agreement is hereby amended as
follows:
(a) by (i) deleting paragraph (b) thereof in its entirety and
(ii) inserting, in lieu thereof, the following new paragraph (b):
(b) Unless the Required Lenders otherwise agree, the Revolving
Credit Commitments shall be permanently reduced with (i) 100%
of the Net Proceeds of any Equity Offering by Holdings or any
incurrence of Indebtedness by any Loan Party on or after the
Fourth Amendment Effective Date (other than any Indebtedness
permitted pursuant to subsection 7.2); (ii) 100% of the Net
Proceeds of any Asset Sale by the Borrower or any of its
Subsidiaries pursuant to subsection 7.6 and (iii) 100% of
federal and state tax refunds received. Each such reduction
shall be made on or before the date that is three Business
Days after the date any Loan Party receives such Net Proceeds
or such tax refunds.
(b) by adding the following new paragraph (d):
(d) If, at any time, the Extensions of Credit at such time
exceed the Borrowing Base at such time, the Borrower shall,
without notice or demand, immediately repay Swing Line Loans
then outstanding and/or, after the Swing Line Loans have been
paid in full, Revolving Loans in an aggregate principal amount
equal to the lesser of (i) the amount of such excess and (ii)
the aggregate principal amount of Swing Line Loans and
Revolving Loans then outstanding, together with interest
accrued to the date of such payment or prepayment on the
principal so prepaid and any amounts payable under subsection
3.11 in connection therewith.
(c) by adding the following new paragraph (e):
(e) If, on any Friday, the aggregate amount of cash and Cash
Equivalents held and available for use by the Borrower and its
Subsidiaries exceeds $5,000,000, the Borrower shall without
notice or demand, immediately repay Swing Line Loans then
outstanding and/or after Swing Line Loans have been paid in
full, Revolving Loans in an aggregate principal amount equal
to such excess.
9. Amendment to Subsection 5.2 (Conditions to Each Extension
of Credit). Subsection 5.2 of the Credit Agreement is hereby amended as follows:
(a) by adding the following new subsection (e):
(e) Borrowing Base Compliance. After giving effect to the
Extension of Credit requested to be made on any such date and
the use of the proceeds thereof,
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the Extensions of Credit of all Lenders at such time shall not
exceed the Borrowing Base on such date.
(b) by inserting "and (e)" after the words "clauses (a) and
(b)" where such words appear in the last sentence of such subsection.
10. Amendment to Subsection 6.2 (Certificates; Other
Information). Subsection 6.2 of the Credit Agreement is hereby amended by (i)
deleting "and" where it appears after the semi-colon at the end of paragraph
(e); (ii) deleting the period xxxx where it appears at the end of paragraph (f)
and inserting, in lieu thereof, a semi-colon; and (iii) adding the following new
paragraph (g) and paragraph (h) thereto:
(g) within 20 days after the end of each calendar month (i) a
Borrowing Base Certificate showing the Borrowing Base as of
the close of business on the last day of such calendar month,
each such Borrowing Base Certificate to be certified as
complete and correct in all material respects on behalf of the
Borrower by a Responsible Officer, and (ii) such other
supporting documentation and additional reports with respect
to the Borrowing Base as the Administrative Agent shall
reasonably request, including, but not limited to, such
supporting documentation as listed in Exhibit J; provided that
the Borrower shall supplement the Borrowing Base Certificate
delivered with respect to the month ending December 31, 2000,
to reflect any adjustments necessary as a result of the
Borrower's year-end physical inventory; and
(h) on the first and third Friday of each calendar month, (i)
a cash receipts and disbursements budget updated for an 8 week
period and (ii) a comparison of the actual and previously
budgeted cash receipts and disbursements, including an
explanation of significant variances.
11. Amendment to Subsection 6.6 (Inspection of Property; Books
and Records; Discussions). Subsection 6.6 of the Credit Agreement is hereby
amended by (i) inserting subsection "(a)" prior to the first sentence thereof
and (ii) adding the following new subsection (b), subsection (c) and subsection
(d) thereto:
(b) The Borrower and its Subsidiaries, from time to time upon
the request of the Administrative Agent or the Required
Lenders through the Administrative Agent, shall permit the
Administrative Agent, accompanied by one or more Lenders and
professionals (including investment bankers, consultants,
accountants, lawyers and appraisers) retained by the
Administrative Agent (or its counsel) to conduct evaluations
and appraisals of (i) the Borrower's practices in the
computation of the Borrowing Base and (ii) the assets included
in the Borrowing Base (it being understood and agreed that the
Administrative Agent will conduct such evaluations and
appraisals not less than once per fiscal year of the Borrower)
and pay the reasonable fees and expenses of the Administrative
Agent incurred in connection therewith (including the fees and
expenses of the Administrative Agent's Collateral Monitoring
Department), the Lenders or such professionals with respect to
all such appraisals; provided, however, that the
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Administrative Agent shall not be entitled to conduct such
evaluations and appraisals of assets more frequently than
twice per year unless (x) a Default or Event of Default has
occurred and is continuing or (y) the Administrative Agent, or
the Required Lenders through the Administrative Agent,
determines that any material event or material change has
occurred with respect to the Borrower or its Subsidiaries,
their Inventory or receivables practices or the performance of
the Collateral and that as a result of such event or change
more frequent evaluations or appraisals are required to
effectively monitor the Borrowing Base, in which case the
Borrower will permit the Administrative Agent to conduct such
evaluations and appraisals at such reasonable times and as
often (not to exceed four times per year) as may be reasonably
requested by the Administrative Agent.
(c) The Borrower will, and will cause each of its Subsidiaries
to, in connection with any evaluation and appraisal relating
to the computation of the Borrowing Base, maintain such
additional reserves (for purposes of computing the Borrowing
Base) in respect of Eligible Accounts Receivables and Eligible
Inventory and make such other adjustments to the parameters
for including Eligible Inventory in the Borrowing Base as the
Administrative Agent or the Required Lenders through the
Administrative Agent shall reasonably require based upon the
result of such evaluation and appraisal.
12. Amendment to Section 6 (Blocked Account Agreement).
Section 6 is hereby amended by adding the following new subsection 6.14:
6.14 Blocked Account Agreement. (i) Within 15 Business Days
after the Fourth Amendment Effective Date, enter into a
blocked account agreement with any financial institution
reasonably requested by the Administrative Agent at any time,
in a form and substance reasonably satisfactory to the
Administrative Agent, the Borrower and the applicable
financial institution; and (ii) maintain substantially all of
its cash with a financial institution with which it has
entered into a blocked account agreement.
13. Amendments to Subsection 7.2 (Limitations on
Indebtedness). Subsection 7.2 is hereby amended as follows:
(a) in clause (iv) of paragraph (b) thereof, by (1) deleting
"(x)" where it appears therein; (2) deleting "plus"; and (3) deleting clause (y)
in its entirety;
(b) in paragraph (c) thereof, by (i) deleting "$10,000,000 at
any time outstanding" where it appears therein and (ii) inserting, in lieu
thereof, "the aggregate amount outstanding on the Fourth Amendment Effective
Date";
(c) in paragraph (e) thereof, by (i) deleting "$5,000,000
pursuant to this clause (e) in aggregate principal amount at any one time
outstanding" where it appears therein and (ii) inserting, in lieu thereof, "the
aggregate principal amount outstanding on the Fourth Amendment Effective Date
plus $2,500,000";
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(d) in paragraph (h) thereof, by (i) inserting "in an
aggregate amount not to exceed $500,000" after the words "ordinary course of
business" where such words appear therein and (ii) deleting "five" where it
appears therein and inserting, in lieu thereof, "three";
(e) in paragraph (k) thereof, by (i) deleting "an aggregate
principal amount of $2,000,000 per annum," where it appears therein and
inserting, in lieu thereof, "the aggregate principal amount outstanding on the
Fourth Amendment Effective Date plus $1,000,000"; and (ii) deleting the second
proviso in its entirety;
(f) in paragraph (l) thereof, by (i) deleting "$15,000,000 at
any time outstanding" where it appears therein and (ii) inserting, in lieu
thereof, "the amount outstanding on the Fourth Amendment Effective Date";
(g) in paragraph (n), by (i) deleting "$2,500,000 at any one
time outstanding", (ii) inserting, in lieu thereof, "the amount outstanding on
the Fourth Amendment Effective Date" and (iii) adding "and" at the end thereof;
(h) in paragraph (o) thereof, by (i) deleting "$3,000,000
where it appears therein and inserting, in lieu thereof, "$1,500,000" and (ii)
deleting "; and" where it appears after the semi-colon at the end of such
paragraph and inserting, in lieu thereof, a period xxxx; and
(i) by deleting paragraph (p) in its entirety.
14. Amendments to Subsection 7.6 (Limitations on Sale of
Assets). Subsection 7.6 is hereby amended by (i) deleting "$10,000,000" where it
appears in paragraph (b) thereof and (ii) inserting, in lieu thereof,
"$1,000,000".
15. Subsection 7.8 (Limitation on Capital Expenditures).
Subsection 7.8 is hereby amended as follows:
(a) (i) by deleting the semi-colon at the end of clause (iii);
(ii) by deleting the proviso that follows clause (iii) in its entirety and (iv)
by inserting, in lieu thereof, a period xxxx; and
(b) by inserting at the end thereof the following:
During the Amendment Period, the Borrower agrees that it shall
not, and shall not permit its Subsidiaries to, make Capital
Expenditures other than Capital Expenditures in an aggregate
amount not to exceed $1,000,000.
16. Subsection 7.9 (Limitation on Investments, Loans and
Advances). Subsection 7.9 of the Credit Agreement is hereby amended as follows:
(a) in clause (iv) of paragraph (d) thereof, by (1) deleting
"(x)" where it appears therein; (2) deleting "plus"; and (3) deleting clause (y)
in its entirety;
(b) by deleting the text in its entirety in paragraph (g)
thereof and inserting, in lieu thereof "Intentionally Omitted"; and
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(c) in paragraph (j) thereof, by (i) deleting "plus (i)" where
it appears therein and (ii) deleting "and (ii) any Available Excess Equity
Proceeds".
17. Amendment to Section 10(c) (Events of Default). Section
10(c) of the Credit Agreement is hereby amended by inserting "or subsection
6.2(d)" after the words "contained in Section 7 or Section 8".
18. Addition of Exhibit J (Form of Borrowing Base
Certificate). A new Exhibit J to the Credit Agreement in the form of Annex A to
this Amendment shall be added to the Credit Agreement.
19. Certain Agreements. (a) The Borrower, the Administrative
Agent and the Lenders acknowledge and agree that, during the Amendment Period,
the Lenders shall make Extensions of Credit only to the extent that such
Extensions of Credit do not exceed the lesser of (i) the Borrowing Base and (ii)
$47,000,000.
(b) The Borrower hereby acknowledges and agrees that, during
the Amendment Period, the Borrower shall not, and shall not permit any of its
Subsidiaries to, make any Restricted Payments on any class of the Capital Stock
of the Borrower (other than as permitted under subsections 7.7(a), (b) and (c)
of the Credit Agreement) or make any optional payment or prepayment or
redemption, defeasance or purchase of any Senior Subordinated Notes or any other
Subordinated Indebtedness (if any) of the Borrower.
(c) The Borrower hereby acknowledges and agrees that, during
the Amendment Period, the Borrower shall not, and shall not permit any of its
Subsidiaries to, make any Permitted Acquisitions.
(d) The Borrower hereby agrees to keep the Administrative
Agent and the Lenders informed of the progress of the status of the Borrower's
discussions concerning entering into an alternative credit facility that will
replace the Credit Agreement, including, without limitation, prompt notice of
the receipt and execution of any commitment letter, the completion by the
relevant lender of its due diligence and collateral audit review, and the
setting of any closing date, or, as the case may be, the Borrower's decision not
to pursue such alternative credit facility.
(e) The Borrower hereby agrees to deliver a detailed budget to
the Administrative Agent, with a copy for each Lender, on or before December 31,
2000.
(f) Failure to comply with the agreements contained in
paragraphs (d) and (e) of this Section 19 shall constitute an Event of Default,
if such default shall continue unremedied for a period of five Business Days.
20. Waivers. (a) For the Amendment Period, the Administrative
Agent and the Lenders hereby waive (i) the Borrower's non-compliance with the
provisions of subsections 6.1, 6.2, 6.6 and 6.7 of the Credit Agreement, solely
insofar as such non-compliance relates to the Borrower's failure to deliver
financial statements in accordance with GAAP in respect of its 1998 and 1999
fiscal years and of periods included in its 1998, 1999 and 2000 fiscal years
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through and including June 30, 2000, and (ii) the Borrower's non-compliance with
the financial covenants contained in subsection 7.1(a) and 7.1(b) of the Credit
Agreement (to the extent that there would be non-compliance with the interest
coverage ratio contained in subsection 7.1(b) of the Credit Agreement, but only
to the extent that such interest coverage ratio is not less than 2.95 to 1.00),
solely insofar as such non-compliance relates to its 1998 and 1999 fiscal years
and to fiscal quarters in its 1998, 1999 and 2000 fiscal years through and
including the fiscal quarter ended September 30, 2000, but in each case only to
the extent such non-compliance arises out of or relates to the Inventory
adjustments disclosed in Holdings' Report on Form 10-Q filed for the fiscal
quarter ended September 30, 2000.
(b) For the Amendment Period, the Administrative Agent and the
Lenders hereby waive the Borrower's non-compliance with the financial covenants
contained in subsection 7.1(a) and 7.1(b) of the Credit Agreement (to the extent
that (x) the leverage ratio contained in subsection 7.1(a) is not greater than
7.50 to 1.00 and (y) the interest coverage ratio contained in subsection 7.1(b)
is not less than 1.50 to 1.00), solely in so far as such non-compliance relates
to the fiscal quarter ending December 31, 2000.
(c) For the Amendment Period, the Administrative Agent and the
Lenders hereby waive any breach by the Borrower of any representation or
warranty made or deemed to be made by it pursuant to subsection 5.2 of the
Credit Agreement, solely insofar as such breach arises out of the matters
described in clauses (i) and (ii) of Section 20(a) of this Amendment.
(d) The Administrative Agent and the Lenders hereby agree that
the waivers contained in this Amendment shall have effect for purposes of
Sections 10(b), (c) and (d) of the Credit Agreement.
21. Conditions to Effectiveness. This Amendment shall be
effective on the date (the "Fourth Amendment Effective Date") that (a) the
Administrative Agent shall have received counterparts hereof, duly executed and
delivered by the Borrower, Holdings, the Required Lenders and the Grantors under
the Guarantee and Collateral Agreement; (b) the Administrative Agent shall have
received, for the account of each Lender which executes and delivers this
Amendment, an amendment fee in the amount equal to the product of (i) 0.25% and
(ii) such Lender's Commitment; (c) all other reasonable fees payable, including
the fees and disbursement of counsel to the Administrative Agent and the fees
and expenses incurred in connection with the retention of a financial advisor,
shall have been paid; (d) the Borrower shall have delivered to the
Administrative Agent a Borrowing Base Certificate showing the Borrowing Base as
of the close of business on October 31, 2000 and executed by a Responsible
Officer, substantially in the form of Exhibit J to the Credit Agreement, and in
a form reasonably satisfactory to the Administrative Agent, including the
appropriate insertions, attachments and schedules referred to in such Exhibit J;
and (e) no Default or Event of Default shall have occurred and be continuing on
the date hereof after giving effect to this Amendment.
22. Representations and Warranties. In order to induce the
Administrative Agent and the Lenders to enter into this Amendment, the Borrower
and Holdings hereby represent and warrant to the Administrative Agent and the
Lenders that the representations and warranties of the Borrower and Holdings
contained in the Loan Documents are true and correct in all material respects on
and as of the Fourth Amendment Effective Date (after giving effect hereto) as if
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made on and as of the Fourth Amendment Effective Date (except where such
representations and warranties expressly relate to an earlier date in which case
such representations and warranties were true and correct in all material
respects as of such earlier date); provided that all references to the "Credit
Agreement" in any Loan Document shall be and are deemed to mean the Credit
Agreement as amended hereby.
23. Notice of Effectiveness. The Administrative Agent shall
promptly advise the Lenders and the Borrower of the effectiveness of this
Amendment.
24. Payment of Expenses. The Borrower agrees to pay or
reimburse the Administrative Agent for all of its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of this Amendment and any other documents prepared in connection herewith, and
the consummation and administration of the transactions contemplated hereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent and the reasonable fees and disbursements of the
Administrative Agent's Collateral Monitoring Department.
25. Counterparts. This Amendment may be executed by the
parties to this Amendment on any number of separate counterparts (which may
include counterparts delivered by facsimile transmission), and all of said
counterparts taken together shall be deemed to be one and the same instrument.
Any executed counterpart delivered by facsimile transmission shall be effective
for all purposes hereof.
26. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the Borrower and Holdings and their respective
successors and assigns, and upon the Administrative Agent and the Lenders and
their successors and assigns. The execution and delivery of this Amendment by
any Lender prior to the Fourth Amendment Effective Date shall be binding upon
its successors and assigns and shall be effective as to any loans or commitments
assigned to it after such execution and delivery.
27. Continuing Effect. Except as expressly amended hereby, the
Credit Agreement as amended by this Amendment shall continue to be and shall
remain in full force and effect in accordance with its terms. This Amendment
shall not constitute an amendment or waiver of any provision of the Credit
Agreement not expressly referred to herein and shall not be construed as an
amendment, waiver or consent to any action on the part of the Borrower and
Holdings that would require an amendment, waiver or consent of the
Administrative Agent or the Lenders except as expressly stated herein. Any
reference to the "Credit Agreement" in the Loan Documents or any related
documents shall be deemed to be a reference to the Credit Agreement as amended
by this Amendment.
28. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and delivered by their respective duly authorized officers as of the
day and year first above written.
TWINLAB CORPORATION
By:_________________________
Name:
Title:
TWIN LABORATORIES INC.
By:_________________________
Name:
Title:
THE CHASE MANHATTAN BANK as
Administrative Agent,
Issuing Bank, Swing Line
Lender and as a Lender
By:_________________________
Name:
Title:
15
Fourth Amendment and Waiver
to the Amended and Restated
Credit and Guarantee Agreement
THE BANK OF NEW YORK,
as Co-Agent and as a Lender
By:_________________________
Name:
Title:
FLEETBOSTON,
as a Lender
By:_________________________
Name:
Title:
DRESDNER BANK AG, NEW YORK BRANCH
AND GRAND CAYMAN BRANCH,
as a Lender
By:_________________________
Name:
Title:
By:_________________________
Name:
Title:
16
Fourth Amendment and Waiver
to the Amended and Restated
Credit and Guarantee Agreement
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:_________________________
Name:
Title:
EUROPEAN AMERICAN BANK,
as a Lender
By:_________________________
Title:
ERSTE BANK DER OESTERREICHISCHEN
SPARKASSEN AG, GRAND CAYMAN ISLAND
BRANCH, as a Lender
By:_________________________
Name:
Title:
ZIONS FIRST NATIONAL BANK,
as a Lender
By:_________________________
Name:
Title:
17
Fourth Amendment and Waiver
to the Amended and Restated
Credit and Guarantee Agreement
ADVANCED RESEARCH PRESS, INC.,
as a Grantor
By:_________________________
Name:
Title:
XXXXXXX LABORATORIES, INC.,
as a Grantor
By:_________________________
Name:
Title:
CHANGES INTERNATIONAL, INC.,
as a Grantor
By:_________________________
Name:
Title:
HEALTH FACTORS INTERNATIONAL, INC.
as a Grantor
By:_________________________
Name:
Title:
PR NUTRITION, INC.,
as a Grantor
By:_________________________
Name:
Title:
