Item 1.01 Entry into a Material Definitive Agreement.
Amendments to Vitamin Shoppe Loan
Agreements
On May 22, 2020, Vitamin
Shoppe Industries, LLC, a New York limited liability company (“Vitamin Shoppe Industries”) and an indirect subsidiary
of Franchise Group, Inc., the direct and indirect subsidiaries of Vitamin Shoppe Industries (together with Vitamin Shoppe Industries,
collectively, the “Borrowers”) and Valor Acquisition, LLC (“Parent”), the direct parent of
Vitamin Shoppe Industries, entered into (i) an Amendment Number One to Loan and Security Agreement (the “Term Loan
Amendment”) with the Term Lenders (as defined below) party thereto and GACP Finance Co., LLC, as agent (the “Term
Loan Agent”), which amended that certain Loan and Security Agreement, dated as of December 16, 2019 (the “Existing
Term Loan Agreement”), by and among the Borrowers, Parent, various lenders from time to time party thereto (the “Term
Lenders”) and the Term Loan Agent and (ii) an Amendment Number One to Second Amended and Restated Loan and Security Agreement
(the “ABL Amendment”) with JPMorgan Chase Bank, N.A., as agent (the “ABL
Agent”) and an ABL Lender (as defined below), which amended that certain Second Amended and Restated Loan and
Security Agreement, dated as of December 16, 2019 (the “Existing ABL Agreement”), by and among the Borrowers,
Parent, various lenders from time to time party thereto (the “ABL Lenders”) and the ABL Agent.
The Term Loan Amendment
amended the Existing Term Loan Agreement to, among other things, (i) permit the assignment of $5,325,000 of the outstanding term
loan to Parent (the “Term Loan Assignment”), subject to certain conditions and certain limitations on Parent’s
rights as a lender, (ii) modify the minimum consolidated EBITDA covenant, (iii) prohibit the quarterly dividend payment by Parent
that would otherwise have been permitted in the second fiscal quarter of 2020 (by reference to certain financial calculations from
the first fiscal quarter of 2020) (the “Dividend Waiver”) and (iv) require that Parent and the Borrowers use
an anticipated tax refund to prepay $12,500,000 of the term loan upon receipt of such tax refund, along with a 2% prepayment fee,
plus (x) if the tax refund prepayment is not made by July 31, 2020, the Borrowers will be required to pay a fee of 0.5% of the
outstanding term loan (other than the portion of the term loan held by Parent) and (y) if the tax refund prepayment is not made
by September 25, 2020, the Borrowers will be required to pay additional amortization of $3,125,000 for each fiscal quarter (beginning
with the fiscal quarter ending on September 26, 2020) until the tax refund prepayment is made (which additional quarterly amortization
may be deducted from the required tax refund prepayment).
Pursuant to the ABL
Amendment, the ABL Agent and the ABL Lenders consented to the Term Loan Amendment. Further, the ABL Amendment amended the Existing
ABL Agreement to, among other things, (i) permit the Term Loan Assignment and (ii) provide for the Dividend Waiver.
The foregoing descriptions
are subject to, and qualified in their entirety by, the full texts of each of the Term Loan Amendment and the ABL Amendment, each
of which is incorporated herein by reference to Exhibits 10.1 - 10.2 to this Current Report on Form 8-K, respectively.