EXHIBIT 10.65
THE CIT GROUP/BUSINESS CREDIT, INC.
1211 Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dated as of
November 8, 2002
Re: Waiver and Amendment Number Six
to Financing Agreement and Loan Documents
TWIN LABORATORIES INC.
000 Xxxxx Xxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Financing Agreement between The CIT
Group/Business Credit, Inc. as lender and agent thereunder ("Agent"), the other
lenders party thereto ("Lenders"), and Twin Laboratories Inc. ("Twinlab") and
certain of its subsidiaries, as borrowers thereunder (collectively, the
"Companies"), dated as of March 29, 2001 (as amended and modified, from time to
time, the "Financing Agreement"). Initially capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Financing Agreement.
Agent, Lenders and the Companies wish to amend certain provisions of
the Loan Documents.
Therefore, pursuant to mutual agreement, it is hereby agreed as
follows:
I. AMENDMENT TO DEFINITION OF EBITDA. The definition of "EBITDA"
set forth in Section 1 of the Financing Agreement is hereby amended to read as
follows:
"EBITDA shall mean, in any period, all consolidated earnings
of the Companies and their consolidated Subsidiaries before all (i)
interest and tax obligations, (ii) depreciation and (iii) amortization
for said period, all determined in accordance with GAAP on a consistent
basis with the latest audited financial statements of the Companies,
but excluding (a) the effect of extraordinary and/or non-reoccurring
gains or losses for such period, (b) for the period commencing
September, 2002 through December, 2002, reclamation charges to the
extent actually recorded in an amount not to exceed $8,800,000, and
(c) any and all restructuring charges."
II. AMENDMENT TO DEFINITION OF LINE OF CREDIT. The definition of
"Line of Credit" set forth in Section 1 of the Financing Agreement is hereby
amended to read as follows:
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"LINE OF CREDIT shall mean the aggregate commitment of the
Lenders to (a) make Revolving Loans pursuant to Section 3 of this
Financing Agreement, (b) assist any of the Companies in opening Letters
of Credit pursuant to Section 14 of this Financing Agreement, and (c)
make the Term Loan pursuant to Section 4 of this Financing Agreement,
in the aggregate amount equal to $50,000,000, provided that nothing
herein shall be deemed to increase any Lender's commitment hereunder,
which commitment shall be set forth opposite such Lender's name on the
signature pages hereof, or in the Assignment and Transfer Agreement
executed by such Lender by which it becomes a Lender hereunder, as such
pro rata share may be adjusted pursuant to Assignment and Transfer
Agreements executed pursuant to Section 12.9 hereof."
III. AMENDMENT TO DEFINITION OF LINE OF CREDIT FEE. The
definition of "Line of Credit Fee" set forth in Section 1 of the Financing
Agreement is hereby amended to read as follows:
"LINE OF CREDIT FEE shall: (a) mean the fee due the Agent at
the end of each month for the Revolving Line of Credit, and (b) be
determined by multiplying the difference between (i) the Revolving
Line of Credit, and (ii) the average daily balance of (x) Revolving
Loans and the Term Loan plus (y) Letters of Credit outstanding for
said month, by one-half percent (0.50%) per annum for the number of
days in said month during which this Financing Agreement is in
effect."
IV. AMENDMENT TO DEFINITION OF REVOLVING LINE OF CREDIT. The
definition of "Revolving Line of Credit" set forth in Section 1 of the
Financing Agreement is hereby amended to read as follows:
"REVOLVING LINE OF CREDIT shall mean the aggregate commitment
of the Lenders to make loans and advances pursuant to Section 3 of
this Financing Agreement to the Companies, and issue Letters of Credit
Guaranties pursuant to Section 14 hereof to the Companies, in the
aggregate amount of up to $50,000,000 including the amount of the Term
Loan."
V. WAIVER AND AMENDMENT OF LOAN DOCUMENTS. The Financing
Agreement and the other Loan Documents are hereby amended as of July 15, 2002,
to permit the Companies to pay the following amounts, no more frequently than
quarterly, to the Blechmans who are account parties with respect to such
Blechmans Letters of Credit, so long as (a) any Blechmans Letters of Credit
remain outstanding, (b) the aggregate amount of such Blechmans Letters of
Credit is not less than $15,000,000, and (c) no Event of Default has occurred
and is continuing or would be caused after giving effect to any such payment:
(i) amounts paid in capital stock in any calendar year in an aggregate amount
not to exceed 75,000 shares to each such Blechmans and 375,000 shares to all
such Blechmans; and (ii) amounts paid in cash in any calendar year in an
aggregate amount not to exceed $75,000 to each such Blechmans and $375,000 to
all such Blechmans.
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VI. AMENDMENT OF SECTION 6.11(a). Section 6.11(a) of the
Financing Agreement is hereby amended to read as follows:
"(a) maintain at the end of each month, on a rolling,
trailing 12-month basis, EBITDA of not less than the amounts set forth
below for the applicable period:
PERIOD AMOUNT
------ ------
Calculated as of month-end, September, 2002 $400,000
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Calculated as of month-end, October, 2002 ($500,000)
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Calculated as of month-end, November, 2002 $300,000
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Calculated as of month-end, December, 2002 $1,900,000
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Calculated as of month-end, January, 2003 $2,050,000
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Calculated as of month-end, February, 2003 $2,400,000
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Calculated as of month-end, March, 2003 $3,700,000
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Calculated as of month-end, April, 2003 $4,200,000
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Calculated as of month-end, May, 2003 $3,800,000
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Calculated as of month-end, June, 2003 $4,500,000
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Calculated as of month-end, July, 2003 $4,450,000
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Calculated as of month-end, August, 2003 $4,900,000
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Calculated as of month-end, September, 2003 $7,400,000
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Calculated as of month-end, October, 2003 $8,200,000
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Calculated as of month-end, November, 2003 $9,200,000
------------------------------------------------------------------------------
Calculated as of month-end, December, 2003 $9,900,000
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Calculated as of each month end thereafter $15,000,000
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VII. CONFIRMATION OF GUARANTIES. By execution below, the
Companies and the other parties constituting Guarantors hereby each confirm
that each of their respective guaranties executed and delivered in connection
with the Financing Agreement remains in full force and effect notwithstanding
the execution, delivery and performance by the Companies of this Letter
Amendment and the Financing Agreement as amended hereby.
VIII. GENERAL TERMS.
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1. To the extent any of the terms and provisions of the
Financing Agreement and/or the Loan Documents conflict or are inconsistent with
the terms hereof, the terms of this Amendment shall govern.
2. The effectiveness of this Amendment is conditioned upon
receipt by Agent of:
(a) an executed counterpart of this Amendment executed by
each Company and Guarantor;
(b) evidence of notification, in writing, by Agent or
Twinlab to the Blechmans of the terms and execution of this Amendment; and
(c) payment, for the account of Lenders, of a fully earned
and non-refundable fee of $250,000 in consideration of this Amendment.
3. This Amendment may be executed in two or more counterparts,
each of which shall constitute an original but all of which when taken together
shall constitute but one agreement, and shall become effective when copies
hereof which, when taken together, bear the original signatures of each of the
parties hereto are delivered to Agent.
4. Except as set forth herein no other change in the terms or
provisions of the Financing Agreement or any other Loan Document is intended or
implied. If the foregoing is in accordance with your understanding, please so
indicate by signing and returning the enclosed copy of this Amendment.
Very truly yours,
THE CIT GROUP/BUSINESS CREDIT, INC.
By: _______________________________
Title: ____________________________
CONGRESS FINANCIAL CORPORATION
By: _______________________________
Title: ____________________________
GMACC COMMERCIAL CREDIT, LLC
By: _______________________________
Title: ____________________________
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AGREED AND ACCEPTED BY:
TWIN LABORATORIES INC.,
a Utah corporation
By: _______________________________
Title: ____________________________
XXXXXXX LABORATORIES, INC.,
a Delaware corporation
By: _______________________________
Title: ____________________________
TWINLAB CORPORATION,
a Delaware corporation
By: _______________________________
Title: ____________________________
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