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EXHIBIT 10.46
THIRD AMENDMENT AND WAIVER
THIRD AMENDMENT AND WAIVER, dated as of November 14, 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:
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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 the Definition of Applicable Margin (Subsection
1.1 of the Credit Agreement). The definition of "Applicable Margin" appearing in
subsection 1.1 of the Credit Agreement is hereby amended by inserting at the end
thereof the following:
Notwithstanding the foregoing, during the period from and including the
Amendment Effective Date (as defined in the Third Amendment and Waiver
to this Agreement) to and including December 15, 2000, the Applicable
Margin shall be 2.00%, if such Loans are ABR Loans, and 3.00%, if such
Loans are Eurodollar Loans.
3. Amendment to Commitments and Other Fees (Subsection 2.3 of
the Credit Agreement). Subsection 2.3(a) of the Credit Agreement is hereby
amended by inserting at the end thereof the following:
Notwithstanding the foregoing, during the period from and including the
Amendment Effective Date (as defined in the Third Amendment and Waiver
to this Agreement) to and including December 15, 2000, the commitment
fee shall be computed at a rate of .50%.
4. Certain Agreements. (a) The Borrower, the Administrative
Agent and the Lenders hereby acknowledge and agree that, during the period from
and including the
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Amendment Effective Date (as defined below) to and including December 15, 2000,
the Lenders shall make Extensions of Credit only to the extent that such
Extensions of Credit do not exceed the lesser of (i) a borrowing base of 70% of
net accounts receivable and 40% of net inventory, in each case as the same shall
be calculated on a consolidated basis in accordance with GAAP, and (ii)
$47,000,000. During such period, the Borrower agrees to prepay forthwith the
Revolving Credit Commitments to the extent that the Extensions of Credit exceed
such lesser amount on any Business Day. The Borrower shall furnish to the
Administrative Agent 30 days after the end of each calendar month a report
setting forth in reasonable detail a calculation of such borrowing base and such
report shall be effective for purposes of this section until the next such
report is due to be furnished.
(b) The Borrower hereby also acknowledges and agrees that,
during the period from and including the Amendment Effective Date to and
including December 15, 2000, 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) Failure to comply with the prepayment requirements of this
section shall constitute an Event of Default under Section 10(a) of the Credit
Agreement, and failure to comply with the other agreements in this Section shall
constitute an Event of Default under Section 10(d) of the Credit Agreement.
5. Waivers. (a) From the Amendment Effective Date (as defined
below) to and including December 15, 2000, 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 related 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 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 the draft of Holdings' Report on Form 10-Q to be filed
for the fiscal quarter ended September 30, 2000, a copy of which draft has been
furnished to each Lender, with aggregate amounts with respect to such inventory
adjustments being substantially as disclosed therein.
(b) From the Amendment Effective Date to and including December
15, 2000, 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
5(a) of this Amendment.
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(c) 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.
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 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 equal to the product of
(i) 0.125% and (ii) such Lender's Commitment; and (c) no Default or Event of
Default shall have occurred and be continuing on the date hereof after giving
effect to this Amendment.
7. Additional Collateral. Pursuant to subsection 12.16(b) of
the Credit Agreement, the Borrower hereby agrees, as soon as reasonably
practicable, but no later than 15 business days after the date hereof, to, or
cause any Subsidiary to, execute a Mortgage or Mortgages in favor of the
Administrative Agent, for the ratable benefit of the Lenders, on its real
property located in New York State upon such terms and conditions as the
Administrative Agent shall reasonably request.
8. Additional Agreements. The Borrower hereby agrees to pay, or
reimburse the Administrative Agent (as the case may be), for (i) the reasonable
costs and expenses incurred in connection with the retention of a financial
consultant or advisor for the benefit of the Lenders and (ii) the reasonable
costs and expenses incurred in connection with a review of the accounts and
inventory of the Borrower and its Subsidiaries associated with the determination
of a prospective borrowing base to be applied after December 15, 2000, including
the fees and expenses of any collateral audit group or firm.
9. 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.
10. Notice of Effectiveness. The Administrative Agent shall
promptly advise the Lenders and the Borrower of the effectiveness of this
Amendment.
11. 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.
12. Counterparts. This Amendment may be executed by the parties
to this Amendment on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to be one and the same instrument.
13. 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.
14. 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.
15. 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:
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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:
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:
BRONSON 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:
