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Item 1.01.
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Entry into a Material Definitive Agreement
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On May 15, 2020, General Nutrition Centers, Inc. (“Borrower”) entered into (i) the First Amendment (the “TL Amendment”) to the Amended and Restated Term Loan Agreement, dated as of February 28, 2018, among GNC Corporation (“Parent”), the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (as amended by the TL Amendment, the “Term Loan Agreement”) and (ii) the Second Amendment (the “ABL Amendment”, and together with the TL Amendment, the “Amendments”) to the ABL Credit Agreement, dated as of February 28, 2018, among Parent, Borrower, the other subsidiary borrowers party thereto, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (as amended by the ABL Amendment, the “ABL Credit Agreement”).
The Amendments will, among other things, extend the respective springing maturity dates for the term loan facility under the Term Loan Agreement and the FILO credit facility and revolving credit facility under the ABL Credit Agreement to August 10, 2020 (or if later, the date that is 91 days prior to the maturity date of any debt that refinances the outstanding convertible notes of GNC Holdings, Inc. (the “Company”)) (such date, the “Extended Springing Maturity Dates”). Under the Amendments, the Extended Springing Maturity Dates will accelerate from August 10, 2020 to June 15, 2020 if (i) the Borrower’s liquidity is less than $100 million on June 15, 2020 or any date thereafter, and (ii) the holders of more than 25% of any class of credit facility debt elect to so accelerate (and if any particular class elects to accelerate, the Extended Springing Maturity Dates shall accelerate to June 15, 2020 for all classes of debt).
In addition to the extension of the springing maturity dates, each of the Amendments includes the following new covenants: (i) certain new disclosure requirements regarding new payments to, or employment arrangements with, executive officers of Parent, Borrower or any guarantor subsidiary, (ii) certain new limits on restricted payments, (iii) certain new limits on voluntary prepayments of the Company’s outstanding convertible notes, or any material subordinated debt, unsecured debt or junior lien debt of the Borrower and its subsidiaries, and (iv) delivery of a rolling 13-week budget, commencing with the 13 weeks beginning May 9, 2020. The ABL Amendment further includes the following new covenants: (a) a $66 million cap on revolving borrowings and letters of credit, (b) certain new limits on voluntary prepayments of the debt under the Term Loan Agreement, (c) delivery of bi-weekly borrowing base certificates, beginning May 27, 2020, and (d) certain limitations on the ability to use cash.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the full text of the TL Amendment and the ABL Amendment, copies of which are attached hereto as Exhibit 10.1 and Exhibit 10.2, respectively, and are incorporated into this Current Report on Form 8-K by reference.