Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
Dated as of December 14, 2004
This FIRST AMENDMENT TO CREDIT AGREEMENT (together with all Exhibits,
Schedules and Annexes hereto, this "Amendment") is among GNC CORPORATION (f/k/a
General Nutrition Centers Holding Company), a Delaware corporation
("Holdings"), GENERAL NUTRITION CENTERS, INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions or entities
from time to time party to the Credit Agreement referred to below (the
"Lenders"), and XXXXXX COMMERCIAL PAPER INC., as administrative agent for the
Lenders (in such capacity, the "Administrative Agent").
PRELIMINARY STATEMENTS:
A. The Borrower, Holdings, the Lenders, the Administrative Agent and
Xxxxxx Brothers Inc. and X.X. Xxxxxx Securities Inc., as Arrangers, entered
into a Credit Agreement, dated as of December 5, 2003 (together with all
Annexes, Exhibits and Schedules thereto, the "Credit Agreement"; capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
such terms in the Credit Agreement); and
B. The Borrower has requested that the Lenders amend the Credit
Agreement to relax certain negative covenants and the Lenders have agreed to
such proposed amendments, subject to the other terms and conditions contained
herein.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of the
conditions set forth in Section 2 hereof, the Credit Agreement is amended as
follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical
position:
"Consolidated Senior Secured Leverage Ratio": as at
the last day of any period of four consecutive fiscal quarters, the
ratio of (a) Consolidated Senior Secured Total Debt on such day to (b)
Consolidated EBITDA of the Borrower and its Subsidiaries for such
period.
"Consolidated Senior Secured Total Debt": at any
date, the sum of (i) the aggregate principal amount of all Term Loans
then outstanding, (ii) the Total Revolving Extensions of Credit and
(iii) any other Consolidated Secured Total Debt that is not, by its
terms, subordinated to any other Indebtedness of the Borrower or any
of its Subsidiaries.
"First Amendment Effective Date": [_____ __, 200_].
"Indenture Restricted Payments": "Restricted Payments"
as defined in the Senior Subordinated Note Indenture as in effect
on the First Amendment Effective Date.
(b) The definition of "Available Cash" contained in Section 1.1 of
the Credit Agreement is hereby amended by deleting the phrase "Restricted
Payments under Section 7.6(d) (to the extent not so used)" and inserting
"Indenture Restricted Payments under Section 4.07 of the Senior Subordinated
Note Indenture as in effect on the First Amendment Effective Date" in lieu
thereof.
(c) The definition of "Consolidated Fixed Charges" contained in
Section 1.1 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
"Consolidated Fixed Charges": for any period, the
sum (without duplication) of (a) Consolidated Interest Expense of the
Borrower and its Subsidiaries for such period and (b) scheduled
amortization payments (but excluding prepayments) made during such
period on account of principal of Indebtedness of the Borrower or any
of its Subsidiaries, other than Non-Recourse Indebtedness of any
Income Restricted Subsidiary (including scheduled principal
amortization payments (but excluding prepayments) in respect of the
Term Loans).
(d) The definition of "Consolidated Net Income" contained in
Section 1.1 of the Credit Agreement is hereby amended by deleting the phrase ";
provided that for purposes of Section 7.6(d)(z), Consolidated Net Income may be
determined in the manner set forth in the Senior Subordinated Note Indenture as
of the date hereof if the Borrower provides the Lenders with a certificate
reasonably satisfactory to the Administrative Agent demonstrating such
calculation of Consolidated Net Income in reasonable detail; and provided
further that the costs referred to in clauses (f) and (g) shall be calculated
without giving effect to any tax benefit realized directly from such costs".
(e) Section 1.1 of the Credit Agreement is hereby amended by
deleting the following definitions: "Consolidated Secured Leverage Ratio", "ECF
Percentage", "Excess Cash Flow" and "Excess Cash Flow Application Date".
(f) Section 2.11 of the Credit Agreement is hereby amended by
inserting the following sentence at the end thereof:
Notwithstanding anything to the contrary in this Agreement,
in the event that the Term Loans are refinanced in whole or
in part with proceeds of Indebtedness prior to the first
anniversary of the First Amendment Effective Date, such
refinancing of the Term Loans shall be accompanied by a fee
equal to 1.0% of the aggregate principal amount of the amount
so refinanced.
(g) Section 2.12(c) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(c) [Intentionally Omitted]
(h) Section 7.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(a) Consolidated Senior Secured Leverage Ratio.
Permit the Consolidated Senior Secured Leverage Ratio as at the last
day of any period of four consecutive fiscal quarters of the Borrower
commencing with the fiscal quarter ending December 31, 2004 to exceed
2.25:1.00.
(b) Consolidated Fixed Charge Coverage Ratio. Permit
the Consolidated Fixed Charge Coverage Ratio for any period of four
consecutive fiscal quarters of the Borrower commencing with the fiscal
quarter ending December 31, 2004 to be less than 1.00:1.00.
(i) Section 7.2(i) of the Credit Agreement is hereby amended by (i)
deleting the word "subordinated" on the first line, (ii) deleting the figure
"$150,000,000" and inserting "$225,000,000" in lieu thereof and (iii) deleting
the phrase "(including subordination terms reasonably acceptable to the
Administrative Agent)".
(j) Section 7.6 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
7.6 Limitation on Restricted Payments. Declare or
pay any dividend on (other than dividends payable solely in common
stock of the Person making the dividend so long as the ownership
interest of any Guarantor in such Person is not diluted), or make any
payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement
or other acquisition of, any Capital Stock of Holdings, the Borrower
or any of its Subsidiaries, whether now or hereafter outstanding, or
make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of Holdings,
the Borrower or any of its Subsidiaries (collectively, "Restricted
Payments"), except that Borrower and its Subsidiaries may make
Indenture Restricted Payments so long as (a) no Event of Default has
occurred and is continuing or would occur as a result of the making of
such Restricted Payment and (b) the Borrower would be in pro forma
compliance with Section 7.1 as if such Restricted Payment had been
made on the first day of the most recently ended fiscal quarter of the
Borrower.
(k) Section 7.7 of the Credit Agreement is hereby amended by
deleting the phrase "Sections 7.6(d) or (f)" and inserting "Section 7.6" in
lieu thereof.
(l) Section 7.8(i)(iv) of the Credit Agreement is hereby amended by
deleting the phrase "Sections 7.6(d) or (f)" and inserting "Section 7.6" in
lieu thereof.
(m) Section 7.8(l) of the Credit Agreement is hereby amended by
deleting the phrase "Sections 7.6(d) or (f)" and inserting "Section 7.6" in
lieu thereof.
(n) Section 7.8(m) of the Credit Agreement is hereby amended by
deleting the phrase "Sections 7.6(d) or (f)" and inserting "Section 7.6" in
lieu thereof.
(o) Clause (i) Section 7.8(p) of the Credit Agreement is hereby
amended by deleting the phrase "Sections 7.6(d) or (f)" and inserting "Section
7.6" in lieu thereof.
(p) Section 7.9(a) of the Credit Agreement is hereby amended by
deleting the phrase "Sections 7.6(d) or (f)" and inserting "Section 7.6" in
lieu thereof.
2. CONDITIONS TO EFFECTIVENESS. The effectiveness of all the amendments
contained in Section 1 of this Amendment are conditioned upon satisfaction of
the following conditions precedent (the date on which all such conditions
precedent have been satisfied being referred to herein as the "Amendment
Effective Date"):
(a) the Administrative Agent shall have received signed written
authorization from the Required Lenders to execute this Amendment, and shall
have received counterparts of this Amendment signed by each of the Borrower,
Holdings and the Administrative Agent;
(b) the Administrative Agent shall have received counterparts of
the consent of the Guarantors attached hereto as Annex I (the "Consent")
executed by each of the Guarantors;
(c) each of the representations and warranties in Section 3 below
shall be true and correct in all material respects on and as of the Amendment
Effective Date;
(d) the Administrative Agent shall have received payment in
immediately available funds of all expenses incurred by the Administrative
Agent (including, without limitation, legal fees) reimbursable under the Credit
Agreement and for which invoices have been presented;
(e) the Administrative Agent shall have received such other
documents, instruments, certificates, opinions and approvals as it may
reasonably request;
(f) the Borrower shall have prepaid the Term Loans in an amount not
less than $185,000,000 no later than January 31, 2005; and
(g) the Borrower shall have paid to each of the Lenders authorizing
the Administrative Agent to execute this Amendment by 12:00 p.m. (noon),
Tuesday, December 14, 2004, an amendment fee equal to the product of 0.05%
multiplied by the sum of such Lender's Revolving Credit Commitment plus the
principal amount of such Lender's Term Loans outstanding immediately prior to
the prepayment of the Term Loans described in Section 2(f) of this Amendment.
3. REPRESENTATIONS AND WARRANTIES. Each of the Borrower and Holdings represents
and warrants jointly and severally to the Administrative Agent and the Lenders
as follows:
(a) Authority. Each of the Borrower and Holdings has the corporate
or other organizational power and authority, and the legal right, to make,
deliver and perform this Amendment and to perform its obligations hereunder and
under the Credit Agreement (as amended hereby). Each of the Guarantors has the
corporate or other organizational power and authority, and the legal right, to
make and deliver the Consent. The execution, delivery and performance (i) by
the Borrower and Holdings of this Amendment and the Credit Agreement (as
amended hereby) and the transactions contemplated hereby and thereby and (ii)
by the Guarantors of the Consent, in each case, have been authorized by all
necessary corporate or other action of such Person. No material consent or
authorization of, filing with, notice to or other act by or in respect of, any
governmental Authority or any other Person is required in connection with the
execution, delivery, performance, validity or enforceability of this Amendment
or the Consent.
(b) Enforceability. Each of the Consent, this Amendment, and, after
giving effect to this Amendment, the Credit Agreement and the other Loan
Documents has been duly executed and delivered on behalf of each Loan Party
that is party thereto. Each of the Consent, this Amendment and the Credit
Agreement as amended hereby (i) constitutes a legal, valid and binding
obligation of each Loan Party hereto, enforceable against each such Loan Party
in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law) and (ii) is in full force and effect. Neither the execution, delivery
or performance of the Consent or this Amendment or the performance of the
Credit Agreement (as amended hereby), nor the performance of the transactions
contemplated hereby or thereby, will adversely affect the validity, perfection
or priority of the Administrative Agent's Lien on any of the Collateral or its
ability to realize thereon. This Amendment is effective to amend the Credit
Agreement as provided therein.
(c) Representations and Warranties. After giving effect to this
Amendment, the representations and warranties contained in the Credit Agreement
and the other Loan Documents (other than any such representations and
warranties that, by their terms, are specifically made as of an earlier date)
are true and correct in all material respects on and as of the date hereof as
though made on and as of the date hereof.
(d) No Conflicts. Neither the execution, delivery and performance
of the Consent, this Amendment, nor the performance of and compliance with the
terms and provisions hereof or of the Credit Agreement (as amended hereby) by
any Loan Party will, at the time of such performance, (a) violate any
Requirement of Law or any material Contractual Obligation of any Loan Party
(including, without limitation, the Senior Subordinated Note Indenture) or (b)
result in, or require, the creation or imposition of any Lien (other than Liens
created by the Loan Documents) on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation.
(e) No Default. Both before and after giving effect to this
Amendment, no event has occurred and is continuing that constitutes a Default
or Event of Default.
4. REFERENCE TO AND EFFECT ON CREDIT AGREEMENT.
(a) Upon and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby. This Amendment is a Loan
Document.
(b) Except as specifically amended above, the Credit Agreement and
the other Loan Documents are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed. Without limiting the
generality of the foregoing, the Security Documents and all of the Collateral
described therein do and shall continue to secure the payment of all
Obligations under and as defined therein.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of any Secured Party under any of the Loan Documents,
nor, except as expressly provided herein, constitute a waiver or amendment of
any provision of any of the Loan Documents.
5. COUNTERPARTS. This Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment by facsimile shall be
effective as delivery of a manually executed counterpart of this Amendment.
6. SEVERABILITY. Any provision of this Amendment that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
[Signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first written above.
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
GENERAL NUTRITION CENTERS INC., as Borrower
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Legal Officer and Secretary
GNC CORPORATION (f/k/a General Nutrition
Centers Holding Company)
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Legal Officer and Secretary
ANNEX I
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CONSENT OF GUARANTORS
Each of the undersigned is a Guarantor of the Obligations of the
Borrower under the Credit Agreement and hereby (a) consents to the foregoing
Amendment, (b) acknowledges that notwithstanding the execution and delivery of
the foregoing Amendment, the obligations of each of the undersigned Guarantors
are not impaired or affected and all guaranties given to the holders of
Obligations and all Liens granted as security for the Obligations continue in
full force and effect, and (c) confirms and ratifies its obligations under the
Guarantee and Collateral Agreement and each other Loan Document executed by it.
Capitalized terms used herein without definition shall have the meanings given
to such terms in the Amendment to which this Consent is attached or in the
Credit Agreement referred to therein, as applicable.
IN WITNESS WHEREOF, each of the undersigned has executed and
delivered this Consent of Guarantors as of December 14, 2004.
[Signature pages follow]
GENERAL NUTRITION CENTERS, INC.
GENERAL NUTRITION, INCORPORATED
GENERAL NUTRITION CORPORATION
NUTRA MANUFACTURING, INC. (f/k/a Nutricia
Manufacturing USA, Inc.)
GNC FRANCHISING, LLC (f/k/a GNC Franchising, Inc.)
GENERAL NUTRITION INTERNATIONAL, INC.
GENERAL NUTRITION INVESTMENT COMPANY
GENERAL NUTRITION SYSTEMS, INC.
GENERAL NUTRITION DISTRIBUTION COMPANY
GNC CANADA LIMITED (F/K/A GNC, Limited)
GNC (CANADA) HOLDING COMPANY
INFORMED NUTRITION, INC.
GENERAL NUTRITION GOVERNMENT SERVICES, INC.
GN INVESTMENT, INC.
NUTRA SALES CORPORATION (f/k/a General Nutrition
Sales Corporation)
GNC US DELAWARE, INC.
GNC CORPORATION (f/k/a General Nutrition Centers
Holding Company)
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Legal Officer and Secretary
for each of the above named Credit
Parties
[Signature pages continued next page]
GENERAL NUTRITION DISTRIBUTION, L.P.
By: General Nutrition Incorporated, its general partner
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Legal Officer and Secretary
GENERAL NUTRITION COMPANIES, INC.
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President, Chief
Legal Officer and Secretary
