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Exhibit 10.44
ORIGINAL
FIRST AMENDMENT AND WAIVER
FIRST AMENDMENT AND WAIVER, dated as of March 22, 1999 (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 documentation agent
for the Lenders thereunder (in such capacity, the "Documentation 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 (i) to allow Holdings to repurchase
up to 5 million shares of its common stock in the open market or in privately
negotiated transactions for an aggregate amount of up to $40,000,000; and (ii)
to waive certain covenants and defaults arising from the Borrower's failure to
deliver certain financial statements in accordance with GAAP or to give prompt
notice of pending or threatened claims, litigations and proceedings, and confirm
that the terms of the financing from Zions First National Bank are reasonably
satisfactory to them;
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. Amendments to the Credit Agreement. (a) Subsection 4.2 of the
Credit Agreement is hereby amended by changing the date in clause (a) thereof to
the following:
"September 30, 1998 (after giving effect to the restatement of the
consolidated financial statements of the Borrower for the fiscal quarter
then ended as described in the press release of Holdings dated February
24, 1999)."
(b) Subsection 4.6 of the Credit Agreement is hereby amended by
inserting the phrase "and Schedule 4.6A" immediately following the phrase
"Schedule 4.6" therein.
(c) Subsection 4.16 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing immediately prior to subclause (iv) of said
subsection; (ii)
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inserting a ";" at the end of subclause (iii) of said subsection; (iii)
replacing the period at the end of subclause (iv) of said subsection with a ";"
and (iv) inserting the following new clause following subclause (iv) of said
subsection:
"and (v) amounts used to make Restricted Payments pursuant to
subsection 7.7(f)."
(d) Section 4 of the Credit Agreement is hereby amended by adding
the following subsection after subsection 4.22:
"4.23 Year 2000 Matters. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning
would otherwise be impaired by the occurrence of the year 2000) in and
following the year 2000 of computer systems and other equipment containing
embedded microchips, in either case owned or operated by the Borrower or
any of its Subsidiaries in the conduct of their business (including any
such systems and other equipment supplied by others), and the testing of
all such systems and other equipment as so reprogrammed, will be completed
by September 30, 1999. The costs to the Borrower and its Subsidiaries that
have not been incurred as of the date hereof for such reprogramming and
testing and for the other reasonably foreseeable consequences to them of
any improper functioning of other computer systems and equipment
containing embedded microchips due to the occurrence of the year 2000
could not reasonably be expected to result in a Default or Event of
Default or to have a Material Adverse Effect. Except for any reprogramming
referred to above, the computer systems of the Borrower and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Credit Agreement to be, sufficient in all
material aspects for the conduct of their business as currently
conducted."
(e) Subsection 7.7 of the Credit Agreement is hereby amended by (i)
inserting "or Holdings" immediately before the phrase "or any warrants or
options to purchase any such Stock" in the introductory paragraph of said
subsection; and (ii) inserting the following phrase immediately before the
phrase "except that" in the introductory paragraph of said subsection:
"or enter into any derivatives or other transaction with any financial
institution, commodities or stock exchange or clearinghouse (a
"Derivatives Counterparty") obligating it to make payments to such
Derivatives Counterparty as a result of any change in market value of any
such Capital Stock (any such transaction, an "Equity Derivatives
Transaction"),"
(f) Subsection 7.7 of the Credit Agreement is further amended by (i)
deleting the word "and" appearing immediately prior to subclause (e) of said
subsection, (ii) replacing the period at the end of subclause (e) with "; and"
and (iii) inserting the following new clause following subclause (e):
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"(f) the Borrower may make any Restricted Payment to enable Holdings
to repurchase its common stock, provided that, after giving effect to any
such Restricted Payment: (i) no Default or Event of Default shall have
occurred and be continuing; (ii) the Restricted Payments made under this
paragraph (f) after the Amendment Effective Date (as defined in the First
Amendment and Waiver to this Credit Agreement) do not exceed $40,000,000;
(iii) the amount available for borrowing by the Borrower under the
Revolving Credit Commitments is not less than $15,000,000 and (iv) the
Borrower shall be in pro forma compliance with the covenants in subsection
7.1 as of the end of the most recent fiscal quarter for which financial
statements are available (assuming that the Restricted Payments made under
this paragraph (f) had been made as of the first day of the four-fiscal
quarter period ended with such most recent fiscal quarter).
(g) Subsection 8.1 of the Credit Agreement is hereby amended by
inserting the following phrase before the word "and" that appears immediately
before subclause (iii)(E) of said subsection:
", and the repurchase of its common stock in respect of which Restricted
Payments were or may be made by the Borrower under subsection 7.7(f) in an
amount sufficient to cover the maximum amount payable by Holdings
thereunder."
(h) The Credit Agreement is hereby amended by adding thereto a new
Schedule 4.6A as set forth in Annex A to this Amendment setting forth certain
additional litigation (the "New Scheduled Litigation").
3. Waivers to the Credit Agreement. (a) Waiver of Covenants. The
Administrative Agent and the Lenders hereby waive compliance by the Borrower
with the provisions of subsections 6.1, 6.2, 6.6 and 6.7 of the Credit
Agreement, solely insofar as the Borrower's failure to (i) deliver monthly or
quarterly financial statements in accordance with GAAP for the first three
fiscal quarters of its 1998 fiscal year or (ii) give prompt notice to the
Administrative Agent of pending or threatened claims, litigations or proceedings
affecting the Borrower and Holdings as disclosed on Schedule 4.6A might
otherwise be deemed to result in a breach of any of the covenants contained in
such subsections.
(b) Waiver of Representations and Warranties. 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 3(a) of this
Amendment or the New Scheduled Litigation.
(c) Waiver of Certain Defaults. The Administrative Agent and the
Lenders hereby agree that the waivers contained in Sections 3(a) and 3(b) of
this Amendment shall have effect for purposes of subsections 10(b) and 10(d) of
the Credit Agreement.
4. Agreement of Required Lenders. By their execution of this
Amendment, the Required Lenders confirm (a) for purposes of subsection 7.2(1) of
the Credit Agreement, that the terms of the financing from Zions First National
Bank described in the term sheet attached
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hereto as Annex B to this Amendment are reasonably satisfactory to them and (b)
that the Administrative Agent is authorized in its discretion to enter into a
subordination agreement on terms acceptable to the Administrative Agent
subordinating the lien benefitting the Administrative Agent and the lenders on
the property referred to in said term sheet to a lien thereon benefitting Zions
First National Bank and securing its financing.
5. Conditions to Effectiveness. This Amendment shall be effective on
the conditions that (a) the Administrative Agent shall have received
counterparts hereof, duly executed and delivered by the Borrower and Holdings
and consented to by the Required Lenders and the Grantors under the Guarantee
and Collateral Agreement dated as of May 7, 1996 (the "Guarantee and Collateral
Agreement") among Holdings, the Borrower, the Subsidiary Guarantors named
therein and the Administrative Agent; (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 of $7,500 per Lender; (c) no Default
or Event of Default shall have occurred and be continuing on the date hereof
after giving effect to this Amendment; and (d) the Administrative Agent shall
have received drafts of restated consolidated financial statements for the first
three fiscal quarters of the 1998 fiscal year of the Borrower, together with
certificates with respect thereto, as contemplated by subsection 6.2(b) of the
Credit Agreement, and such financial statements shall be consistent with the
press release of Holdings dated February 24, 1999. The date on which all of the
above conditions are met shall be the date of effectiveness of this Amendment
(the "Amendment Effective Date").
6. 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 (a) 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 Amendment Effective Date (after giving effect hereto) as if made
on and as of the 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; and (b) the financial statements delivered to the Administrative
Agent and the Lenders pursuant to Section 5(d) of this Amendment will present
fairly in accordance with GAAP the consolidated financial conditions of the
Borrower and Holdings as at such date and the consolidated results of their
operations for the fiscal quarter then ended.
7. Notice of Effectiveness. The Administrative Agent shall promptly
advise the Lenders and the Borrower that this Amendment has become effective.
8. Applicable Law and Jurisdiction. This Amendment has been executed
and delivered in New York, New York, and the rights and obligations of the
parties hereto shall be governed by, and shall be construed and enforced in
accordance with, the laws of the State of New York.
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9. Counterparts. This Amendment may be executed by the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
10. 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 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.
11. 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.
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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:
Consented to:
THE BANK OF NEW YORK, as Co-Agent and as a Lender
By:
------------------------------
Name:
Title:
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THE FIRST NATIONAL BANK OF BOSTON, 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:
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:
------------------------------
Name:
Title:
EUROPEAN AMERICAN BANK, as a Lender
By:
------------------------------
Name:
Title:
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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:
ADVANCED RESEARCH PRESS, INC., as a Grantor
By:
------------------------------
Name:
Title:
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ANNEX A
Schedule 4.6A
New Scheduled Litigation
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ANNEX B
Financing from Zions First National Bank
[See Attached Term Sheet]
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THE FIRST NATIONAL BANK OF BOSTON, 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:
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:
------------------------------
Name:
Title:
EUROPEAN AMERICAN BANK, as a Lender
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
Title: Vice President
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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:
Consented to:
THE BANK OF NEW YORK, as Co-Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
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THE FIRST NATIONAL BANK OF BOSTON, as a Lender
By:
-----------------------------------------
Name:
Title:
DRESDNER BANK AG, NEW YORK BRANCH AND GRAND CAYMAN BRANCH, as a
Lender
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------------
Name: XXXX X. XXXXXXX
Title: ASSISTANT VICE PRESIDENT
By: /s/ Xxxxxxx X. Xxxxx
-----------------------------------------
Name: XXXXXXX X. XXXXX
Title: VICE PRESIDENT
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By:
-----------------------------------------
Name:
Title:
EUROPEAN AMERICAN BANK, as a Lender
By:
-----------------------------------------
Name:
Title:
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THE FIRST NATIONAL BANK OF BOSTON, 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:
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ Xxxx X. Xxxxxxxx
------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
EUROPEAN AMERICAN BANK, as a Lender
By:
-----------------------------------------
Name:
Title:
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GIROCREDIT BANK AKTIENGESELLSCHAFT DER SPARKASSEN, GRAND CAYMAN
ISLAND BRANCH, as a Lender
By:
-----------------------------------------
Name:
Title:
ZIONS FIRST NATIONAL BANK, as a Lender
By: /s/ P. Xxxx Xxxxx
-----------------------------------------
Name: P. Xxxx Xxxxx
Title: Vice President
ADVANCED RESEARCH PRESS, INC., as a Grantor
By:
-----------------------------------------
Name:
Title:
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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: /s/ Xxxx Xxx Xxx
-------------------------------------------
Name: Xxxx Xxx Xxx
Title: Vice President
Consented to:
THE BANK OF NEW YORK, as Co-Agent and as a Lender
By:
------------------------------
Name:
Title:
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THE FIRST NATIONAL BANK OF BOSTON, as a Lender
By: /s/ Xxxxx X.X. Alto
---------------------------------
Name: XXXXX E.C. ALTO
Title: VP
DRESDNER BANK A.G. NEW YORK BRANCH AND GRAND CAYMAN BRANCH, as a
Lender
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
FIRST BANK NATIONAL ASSOCIATION, as a Lender
By:
------------------------------
Name:
Title:
EUROPEAN AMERICAN BANK, as a Lender
By:
------------------------------
Name:
Title:
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ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG, GRAND CAYMAN ISLAND
BRANCH, as a Lender
By: /s Xxxx Xxxxxxxxxx /s/ Xxxx X. Xxxxxxx
--------------------------------------------
Name: XXXX XXXXXXXXXX XXXX X. XXXXXXX
Title: Vice President FIRST VICE PRESIDENT
ZIONS FIRST NATIONAL BANK, as a Lender
By:
-------------------------------------------
Name:
Title:
ADVANCED RESEARCH PRESS, INC., as a Grantor
By:
-------------------------------------------
Name:
Title:
