GNC 2010 Annual Report Download - page 124

Table of Contents
GENERAL NUTRITION CENTERS, INC. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Credit Facility. Upon consummation of the Merger, the Company entered into a $735.0 million credit agreement, of which various Ares
fund portfolios, which are related to one of our sponsors, are investors. As of December 31, 2009 and 2008, certain affiliates of Ares
Management LLC held approximately $62.1 million and $63.9 million, respectively of term loans under the Company's 2007 Senior Credit
Facility.
Stock Purchase. During the third and fourth quarters of 2008, Axcel Partners III, LLC, of which an officer and director of the Company is a
member, purchased 273,215 shares of Common Stock of Holdings at a price of $6.82 per share, for an aggregate purchase price of
$1.9 million and 45,478 shares of Common Stock of Holdings at a price of $7.08 per share, for an aggregate purchase price of $0.3 million,
respectively and 110,151 and 18,710 shares of Preferred Stock of Holdings at a price of $5.00 per share plus accrued and unpaid dividends
through the dates of purchase, for an aggregate purchase price of $0.6 million and $0.1 million, respectively.
Lease Agreements. General Nutrition Centres Company, a wholly owned subsidiary of the Company, is party to 21 lease agreements, as
lessee, with Cadillac Fairview Corporation, as lessor, with respect to properties located in Canada. Cadillac Fairview Corporation is a direct,
wholly owned subsidiary of OTPP, one of the principal stockholders of Holdings. The aggregate value of the leases is approximately
$12.4 million, together with certain future landlord related costs, of which $2.4 million was paid for the year ended December 31, 2009,
$2.5 million for the year ended December 31, 2008 and $2.0 million for the period March 16 to December 31, 2007. Each lease was negotiated
in the ordinary course of business on an arm's length basis.
Product Purchases. During the Company's 2009 fiscal year, it purchased certain fish oil and probiotics products manufactured by Lifelong
Nutrition, Inc. ("Lifelong") for resale under the Company's proprietary brand name WELLbeING. Carmen Fortino, who serves as one of the
directors of the Company and its Parent, is the Managing Director, a member of the Board of Directors and a stockholder of Lifelong. The
aggregate value of the products the Company purchased from Lifelong was $3.3 million for the 2009 fiscal year.
Predecessor:
Management Service Fees. As of December 5, 2003, the Company and Parent entered into a management services agreement with
Apollo Management V. The agreement provides that Apollo Management V furnish certain investment banking, management, consulting,
financial planning, and financial advisory services on an ongoing basis and for any significant financial transactions that may have been
undertaken. The length of the agreement was ten years. There was an annual general services fee of $1.5 million, which was payable in
monthly installments. There were also major transaction services fees for services that Apollo Management V provided based on normal and
customary fees of like kind. In addition, the Company reimbursed expenses that were incurred and paid by Apollo Management V on behalf of
the Company. For the period from January 1, 2007 to March 15, 2007, $0.4 million was paid to Apollo Management V under the terms of this
agreement. In addition, as a result of the Merger, for the period from January 1, 2007 to March 15, 2007, $7.5 million was paid to Apollo
Management V as a one-time payment for the termination of the management services agreement.
118