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Execution Copy
FIFTH AMENDMENT AND WAIVER
FIFTH AMENDMENT AND WAIVER, dated as of February 15, 2001
(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 by (i) deleting "February 15, 2001"
where it appears in the definition of "Amendment Period" in such subsection and
(ii) inserting, in lieu thereof, "March 30, 2001".
3. 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.
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(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 decision by the
Borrower or any new lender not to pursue such alternative credit facility.
(e) The Borrower hereby agrees (i) to deliver to the
Administrative Agent, with a copy for each Lender, a revised, detailed budget
for 2001, promptly, but in any event, no later than ten Business Days after the
Amendment Effective Date and (ii) to use reasonable best efforts (A) to obtain
copies of all recent appraisals of real or other property of the Borrower and
its Subsidiaries (including any appraisals undertaken in connection with the
Borrower's discussions concerning entering into an alternative credit facility
that will replace the Credit Agreement), (B) to receive permission, if
necessary, to deliver such appraisals to the Administrative Agent and, if such
permission is obtained, to deliver such appraisals to the Administrative Agent
promptly, but in any event, no later than three Business Days after receipt
thereof.
(f) Failure to comply with the agreement contained in
paragraph (a) of this Section 3 shall constitute an Event of Default under
Section 10(a) of the Credit Agreement and failure to comply with the agreements
contained in paragraphs (b) and/or (c) of this Section 3 shall constitute an
Event of Default under Section 10(c) of the Credit Agreement. Failure to comply
with the agreements contained in paragraphs (d) and/or (e) of this Section 3
shall constitute an Event of Default, if such default shall continue unremedied
for a period of five Business Days.
4. 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
through and including September 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, 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 (A) the
Inventory adjustments disclosed in Holdings' Report on Form 10-Q filed for the
fiscal quarter ended September 30, 2000 and (B) the adjustments disclosed in the
preliminary results for the fourth quarter ended December 31, 2000 distributed
to the Administrative Agent and the Lenders by the date hereof.
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(b) For the Amendment Period, and in respect of the fiscal
year ended December 31, 2000 and the fiscal quarter ended December 31, 2000, 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, provided that the results for the fourth quarter ended
December 31, 2000 are not materially adverse from the preliminary results for
the fourth quarter ended December 31, 2000 distributed to the Administrative
Agent and the Lenders by the date hereof.
(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 4(a) of this Amendment.
(d) The Administrative Agent and the Lenders hereby agree that
the waivers contained in this Section 4 shall have effect for the Amendment
Period for purposes of Sections 10(b), (c) and (d) of the Credit Agreement.
5. Additional Agreement. The Borrower agrees that, if
requested by the Administrative Agent, the Borrower shall retain a consultant or
advisor (reasonably acceptable to the Administrative Agent and the Borrower) to
provide financial and other management assistance to the Borrower.
6. Conditions to Effectiveness. This Amendment shall be
effective on the date (the "Amendment Effective Date") that (a) the
Administrative Agent shall have received counterparts hereof, duly executed and
delivered by the Borrower, Holdings, the Administrative Agent, 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 costs and expenses payable, including the fees and disbursements of
counsel to the Administrative Agent, shall have been paid; and (d) no Default or
Event of Default shall have occurred and be continuing on the date hereof after
giving effect to this Amendment.
7. 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 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.
8. 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
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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.
9. 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.
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.
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.
12. 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.
(End of Page)
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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:
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XXX XXXX XX XXX XXXX,
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:
U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By:_________________________
Name:
Title:
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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:
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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:
