8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): April 21, 2010

Vitamin Shoppe, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-34507	11-3664322
(State or Other Jurisdiction of Incorporation or Organization)	(Commission File Number)	(IRS Employer Identification No.)

2101 91st Street

North Bergen, New Jersey 07047

(Addresses of Principal Executive Offices, including Zip Code)

(800) 223-1216

(Registrant’s Telephone Number, Including Area Code)

(Formerly VS Holdings, Inc.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 Entry into a Material Definitive Agreement

On April 21, 2010, Vitamin Shoppe, Inc. as Guarantor, and its subsidiaries, Vitamin Shoppe Industries Inc. and VS Direct, Inc., as the Borrowers (collectively, the “Company”), amended the Loan and Security Agreement dated September 25, 2009, increasing the borrowing availability to $70.0 million from $50.0 million under the original credit facility. In addition, the Company amended the clause in the agreement which addresses the location of the Company’s inventory which underlies the facility’s borrowing base, to allow a portion of the inventory to be located in a warehouse facility on the west coast of the United States.

ITEM 2.02 Results of Operations and Financial Condition

On April 21, 2010, Vitamin Shoppe, Inc. issued a press release containing its preliminary unaudited financial results for the first fiscal quarter ending March 27, 2010. A copy of the press release is attached as Exhibit 99.2.

ITEM 8.01 Other Events

On April 21, 2010, Vitamin Shoppe, Inc. issued a press release announcing the election of its subsidiary, Vitamin Shoppe Industries, Inc., to redeem on May 21, 2010 (the “Redemption Date”) $25,000,000 of the $100,106,000 of its Second Priority Senior Secured Floating Rate Notes due 2012 (the “Notes”) that remain outstanding. The redemption price for the Notes will be 100% of the principal amount of the redeemed Notes, plus accrued and unpaid interest to the Redemption Date. A copy of the press release is attached to this Form 8-K as Exhibit 99.2, and a copy of the Notice of Redemption is attached to this Form 8-K as Exhibit 99.3.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

10.1	Letter Agreement dated April 20, 2010, Amending the Loan and Security Agreement, dated as of September 25, 2009, by and among Vitamin Shoppe Industries Inc. and VS Direct Inc. as borrowers, Vitamin Shoppe, Inc. as Guarantor, the Lenders and Issuing Bank from time to time party thereto, and JPMorgan Chase Bank, N.A. as Administrative Agent.
99.2	Earning release issued by Vitamin Shoppe, Inc., dated April 21, 2010.
99.3	Notice of Redemption for $25,000,000 of Vitamin Shoppe Industries Inc.’s Second Priority Senior Secured Floating Rate Notes due 2012.

This Form 8-K and the attached Exhibits are furnished to comply with Item 1.01, 2.02, 8.01 and Item 9.01 of Form 8-K. Neither this Form 8-K nor the attached Exhibits are to be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall this Form 8-K nor the attached Exhibits be deemed incorporated by reference in any filing under the Securities Act of 1933 (except as shall be expressly set forth by specific reference in such filing).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Vitamin Shoppe, Inc.

Date: April 21, 2010	By: /s/ Michael G. Archbold
	Name: Michael G. Archbold
	Title: Chief Financial Officer

EX-10.1

Exhibit 10.1

April 20, 2010

Vitamin Shoppe Industries Inc.

2101 91^st Street

North Bergen, NJ 07047

Attention: Vice President of Finance

VS Direct Inc.

2101 91^st Street

North Bergen, NJ 07047

Attention: Vice President of Finance

Vitamin Shoppe, Inc. (f/k/a VS Holdings, Inc.)

2101 91^st Street

North Bergen, NJ 07047

Attention: Vice President of Finance

Re: Loan and Security Agreement dated as of September 25, 2009 (the “Loan Agreement”) executed by Vitamin Shoppe Industries Inc., a New York corporation (“VSI”), VS Direct Inc., a Delaware corporation (“VSD”, together with VSI, the “Borrowers”), Vitamin Shoppe, Inc. (f/k/a VS Holdings, Inc.), a Delaware corporation (the “Guarantor”) and JPMorgan Chase Bank, N.A., a national banking association, in its capacity as agent (in such capacity, the “Agent”) for the Lenders (as defined in the Loan Agreement). Capitalized terms used herein shall have the meaning given to them in the Loan Agreement, unless otherwise defined herein.

Ladies and Gentlemen:

For and in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, and in reliance on the representations, warranties covenants and agreements contained in this letter agreement, the Agent, the Lenders party hereto, the Guarantor and the Borrowers hereby agree, effective as of the date hereof, to amend the following:

1. Definition of Eligible Inventory. Clauses (f) and (j) of the definition of “Eligible Inventory” in Section 1.61 of the Loan Agreement are hereby amended and restated to read in full as follows:

“(f) Inventory located (1) at premises other than a premise which is owned or leased by any Borrower or (2) in any third party warehouse or in the possession of a bailee (other than a third Party processor) unless Agent has received a Collateral Access Agreement in respect of such premises on terms and conditions reasonably satisfactory to Agent (Inventory of any Borrower which

is in-transit from any location of Borrower permitted herein to another such location shall be considered Eligible Inventory, provided, that, it otherwise satisfies the criteria for Eligible Inventory set forth herein and is not in-transit more than ten (10) consecutive days; provided, further, that, the aggregate amount of Eligible Inventory consisting of in-transit Inventory shall not exceed the amount equal to ten percent (10%) of the Value of all Inventory of Borrowers at such time);”

“(j) Inventory that is not subject to the first priority, valid and perfected security interest of Agent except in the case of those non-consensual statutory liens described in Section 9.8(c)(i) hereof and landlord, warehousman or similar liens (i) in respect of which Agent has established a Reserve (if and only to the extent establishment of a Reserve is permitted by the terms hereof) or (ii) for which no Reserve is provided by the terms hereof, or (iii) in respect of which premises Agent has received a Collateral Access Agreement pursuant to which the landlord, warehousman or bailee, as applicable, has either waived or subordinated its lien on terms and conditions reasonably satisfactory to Agent;”

2. Definition of Reserves. Clause (iv) of the definition of “Reserves” in Section 1.152 of the Loan Agreement is hereby amended and restated to read in full as follows:

“(iv) any amounts which are past due in respect of rental payments, service charges or other amounts which are past due to (i) lessors of real property other than retail store locations (“Non-Retail Store Locations”) or (ii) consignees, warehousemen or bailees of Inventory or personal property (“Warehouse Locations”), to the extent Inventory or Records are located in or on such property (but not in respect of Non-Retail Store Locations or Warehouse Locations (A) where Agent has received a Collateral Access Agreement executed and delivered by the owner and lessor of such real property that Agent has acknowledged in writing is in form and substance satisfactory to Agent or (B) which do not (1) contain Records relating to Receivables or Inventory or (2) in which either no Inventory or Inventory having a Value of less than $100,000 is located), provided, that, notwithstanding, the foregoing Agent may, at its option, establish Reserves in respect of amounts at any time due or to become due to the owner and operator of such Non-Retail Store Location and Warehouse Location as Agent shall reasonably determine in the event that any of the following shall occurred: (A) an Event of Default shall have occurred and be continuing, (B) any Borrower, Guarantor or Agent shall have received notice of any event of default under (i) the lease with respect to such Non-Retail Store Location or (ii) the bailee or warehouse agreement with respect to such Warehouse Location or (C) any Borrower or

Guarantor has granted to the lessor, consignee, warehousemen or bailee a consensual security interest or lien upon any assets of such Borrower or Guarantor (unless such security interest is waived or subordinated to the security interest of Agent on terms and conditions reasonably satisfactory to Agent),”

3. Definition of Maximum Credit. The definition of “Maximum Credit” in Section 1.123 of the Loan Agreement is hereby amended and restated to read in full as follows:

““Maximum Credit” shall mean the amount of $70,000,000 (subject to adjustment as provided in Section 2.3 and as provided in the definition of Reserves).”

4. Commitment of Chase Lincoln First Commercial Corporation. The reference to the Commitment amount of Chase Lincoln First Commercial Corporation appearing in the Loan Agreement under its signature line is hereby amended by deleting “$50,000,000” and replacing it entirely with “$70,000,000”.

To induce Lenders and the Agent to enter into this letter agreement, the Guarantor and the Borrowers hereby represent and warrant to Lenders and the Agent as follows:

(a) Reaffirm Existing Representations and Warranties. Each representation and warranty of the Guarantor and the Borrowers contained in the Loan Agreement and the other Financing Agreements is true and correct in all material respects on the date hereof, except to the extent any such representation or warranty are expressly stated as of a certain date, in which case such representations and warranties shall have been true and correct in all material respects as of such date.

(b) No Default or Event of Default. No Default or Event of Default has occurred which is continuing on the date hereof.

As a condition precedent to the effectiveness of the amendment to the Loan Agreement contained in this letter agreement, the Guarantor and the Borrowers shall have delivered to the Agent the following:

(a) Resolutions. Resolutions of each of the Borrowers and the Guarantor approving and consenting to this letter agreement, including but not limited to the increase in the Commitment.

(b) Arrangement Fee. A one time arrangement fee of $50,000.00 payable on the date the Borrowers, the Guarantor, the Agent and Lenders execute this letter agreement.

(c) Other Documents. Such other documents, instruments and agreements, as the Agent may reasonably require in connection with this letter agreement and the transactions contemplated hereby.

The amendment contained herein to the definition of “Maximum Credit” increasing the Commitment amount shall be deemed as one of the two permitted requests under Section 2.3(c)

of the Loan Agreement. The Guarantor and the Borrowers hereby agree to pay on demand all reasonable fees and expenses incurred by the Agent (including, without limitation, reasonable fees and expenses of counsel to the Agent) in connection with the preparation, negotiation and execution of this letter agreement and all related documents. This letter agreement may be executed in counterparts, and all parties need not execute the same counterpart; however, no party shall be bound by this letter agreement until a counterpart hereof has been executed by the Guarantor, the Borrowers and Lenders; facsimiles or other electronic transmission (e.g., pdf) shall be effective as originals. THIS LETTER AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE MATTERS SET FORTH HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES. This letter agreement constitutes a “Financing Agreement” under and as defined in Section 1.78 of the Loan Agreement and this letter agreement shall be governed by, and construed in accordance with, the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

If you are in agreement with the foregoing, please execute this letter agreement in the space indicated below and return an executed counterpart of this letter to Vinson & Elkins L.L.P., counsel to the Agent, at 2001 Ross Ave., Suite 3700, Dallas, Texas 75201, attn: Lateefat Adediran. (ph. 214-220-7889, and fax 214-999-7889). This letter agreement will constitute a valid and binding agreement of the Borrowers, the Guarantor, the Lenders and the Agent (on behalf of the Lenders) when counterparts of this letter agreement have been executed and delivered by each Borrower, the Guarantor and the Required Lenders (as defined in the Loan Agreement). It is not necessary that all signatures appear on the same counterpart. Facsimiles are effective as originals.

[Signature Page Follows]

Very truly yours,
JPMORGAN CHASE BANK, N.A., as the Agent
By:	/s/ Kim X. Nguyen
Name:	Kim X. Nguyen
Title:	Vice President
CHASE LINCOLN FIRST COMMERCIAL CORPORATION, as a Lender
By:	/s/ Joseph M. Callahan
Name:	Joseph M. Callahan
Title:	Senior Credit Executive

CHA715/78006 [Signature Page — Amendment Letter to Loan Agreement]

VITAMIN SHOPPE INDUSTRIES INC.
By:	/s/ Richard L. Markee
Name:	Richard L. Markee
Title:	CEO - Chairman
VS DIRECT INC.
By:	/s/ Richard L. Markee
Name:	Richard L. Markee
Title:	CEO - Chairman
VITAMIN SHOPPE, INC.
By:	/s/ Richard L. Markee
Name:	Richard L. Markee
Title:	CEO - Chairman

CHA715/78006 [Signature Page — Amendment Letter to Loan Agreement]

EX-99.2

Exhibit 99.2

Vitamin Shoppe, Inc. Announces Fiscal First Quarter 2010 Results

• Net sales increased 11.0% for the fiscal first quarter of 2010 vs. last year; comparable store sales grew 6.2%

• Income from operations increased 42.3%

• Diluted earnings per share increased to $0.31 per share from $0.12 per share

• Opened 16 stores during the quarter

NORTH BERGEN, N.J. – April 21, 2010 — Vitamin Shoppe, Inc. (NYSE: VSI), a leading specialty retailer and direct marketer of nutritional products, today announced its preliminary results for its fiscal first quarter ended March 27, 2010.

“We had a very strong first quarter,” said Rick Markee, Chairman and Chief Executive Officer of Vitamin Shoppe, Inc. “Comparable store sales for the first quarter of 2010 increased 6.2%, making this our 18^th consecutive quarter of comparable same-store sales growth. Additionally, the results reflect a solid 7.8% growth in our direct business. Income from operations increased by 42.3% and net income almost doubled.”

Fiscal First Quarter 2010 Results

Net sales increased $19.1 million, or 11.0%, to $191.6 million for the three months ended March 27, 2010, compared with $172.6 million for the three months ended March 28, 2009. The increase was the result of the increase in comparable store sales, a strong performance from new stores and a 7.8% increase in direct sales driven by growth in Vitamin Shoppe’s online business.

The Company operated 453 stores as of March 27, 2010 compared with 418 stores as of March 28, 2009. Overall store sales for the three months ended March 27, 2010 rose due to an increase in non-comparable store sales of $8.1 million and an increase in comparable store sales of $9.3 million, or 6.2%.

Cost of goods sold, which includes product, warehouse, distribution and occupancy costs, increased $11.1 million, or 9.6%, to $126.6 million for the three months ended March 27, 2010 compared with $115.5 million for the three months ended March 28, 2009.

Gross profit increased $8.0 million, or 14.0%, to $65.0 million for the three months ended March 27, 2010, compared with $57.0 million for the three months ended March 28, 2009. Gross profit as a percentage of sales was 33.9% for the quarter ended March 27, 2010, compared with 33.0% for the comparable prior year period. The strong improvement reflects a decrease in the level of promotional activity.

Selling, general and administrative expenses, including operating payroll and related benefits, advertising and promotion expense, depreciation and amortization, and other selling, general and administrative expenses, increased $3.0 million, or 6.8%, to $46.9 million for the three months ended March 27, 2010, compared with $43.9 million for the three months ended March 28, 2009. Selling, general and administrative expenses as a percentage of net sales showed improvement by decreasing to 24.5% for the quarter, compared with 25.5% for the comparable prior year period reflecting the maturation of the store base, leverage on corporate expenses and ongoing attention to financial disciplines.

Income from operations increased $5.4 million, or 42.3%, to $18.1 million for the three months ended March 27, 2010, compared with $12.7 million for the three months ended March 28, 2009. Income from operations as a percentage of net sales increased to 9.4% for the 2010 quarter, compared with 7.4% for the comparable prior year period.

Net income increased to $8.7 million for the three months ended March 27, 2010, compared with $4.6 million for the three months ended March 28, 2009. Diluted earnings per share increased to

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$0.31 for the three months ended March 27, 2010, compared with $0.12 for the three months ended March 28, 2009. Net income for the current quarter includes a pretax loss on extinguishment of debt of $0.6 million (or approximately $.01 per share), related to the previously announced redemption of $20 million of Vitamin Shoppe’s senior notes.

The company also today announced it has expanded its senior credit facility to $70 million (from $50 million) and plans to redeem an additional $25 million of outstanding floating rate notes. This is expected to save in excess of $1 million of interest expense annually.

2010 Outlook

The Company reiterated its outlook for 2010. Vitamin Shoppe expects:

• to spend approximately $22 million in total capital expenditures while opening approximately 42 new stores;

• continued comparable store sales growth in line with industry growth in the mid-single digits;

• an effective tax rate of approximately 40%

• diluted weighted average shares outstanding of 27.8 million

• inventory growth at a rate less than total sales growth

• continued reduction of debt and to fund store growth with excess cash flow

• to improve its operating margin largely reflecting leverage on selling, general and administrative expenses (including corporate and depreciation and amortization expense);

Conference Call

The Company will hold a conference call at 10:00 am Eastern Time today to discuss its fiscal first quarter 2010 results. The call can be accessed live over the phone by dialing 1-888-680-0892, or for international callers, 1-617-213-4858, passcode number 91555200. A replay will be available one hour after the call and can be accessed by dialing 1-888-286-8010 or for international callers, 1-617-801-6888. The passcode for the replay is 52725246. The replay will be available until April 28, 2010.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company’s website at www.vitaminshoppe.com. The on-line replay will be available beginning immediately following the call.

About Vitamin Shoppe, Inc.

Vitamin Shoppe is a leading specialty retailer and direct marketer of nutritional products based in North Bergen, New Jersey. The company sells vitamins, minerals, nutritional supplements, herbs, sports nutrition formulas, homeopathic remedies, green living products, and health and beauty aids to customers located primarily in the United States. The company carries national brand products as well as exclusive products under the Vitamin Shoppe, BodyTech, MD Select, and VS Basics proprietary brands. The Vitamin Shoppe conducts business through more than 450 company-owned retail stores, national mail order catalogs, and websites, www.VitaminShoppe.com and www.EcoShoppe.com and has a social community site at www.VSconnect.com.

Source: Vitamin Shoppe, Inc.

Certain statements herein are “forward-looking statements”. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events and actual results

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of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including the strength of the economy, changes in the overall level of consumer spending, the performance of the Company’s products within the prevailing retail environment, trade restrictions, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 26, 2009 and in all filings with the Securities Exchange Commission made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.

VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended
	March 27, 2010		March 28, 2009
Net sales	$	191,613	$	172,555
Cost of goods sold		126,599		115,543
Gross profit		65,014		57,012
Selling, general and administrative expenses		46,942		43,941
Related party expenses		—		370
Income from operations		18,072		12,701
Loss on extinguishment of debt		552		—
Interest expense, net		2,927		5,007
Income before provision for income taxes		14,593		7,694
Provision for income taxes		5,867		3,132
Net income		8,726		4,562
Preferred stock dividends in arrears		—		2,577
Net income (loss) available to common stockholders	$	8,726	$	1,985
Weighted average shares outstanding
Basic		26,692,983		14,175,906
Diluted		27,708,463		15,969,484
Net income per share
Basic	$	0.33	$	0.14
Diluted	$	0.31	$	0.12

Key Performance Indicators and Statistics (In thousands, except store data):

	Three Months Ended
	March 27, 2010			March 28, 2009
Net sales	$	191,613		$	172,555
Increase in comparable store net sales		6.2	%		5.1	%
Gross profit as a percent of net sales		33.9	%		33.0	%
Income from operations	$	18,072		$	12,701
Depreciation and Amortization		5,414			5,078
Amortization of deferred financing fees		285			292

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	Three Months Ended
	March 27, 2010		March 28, 2009
Store Data:
Stores open at beginning of period	438		401
Stores opened	16		17
Stores closed	(1	)	—
Stores open at end of period	453		418

Results of Operations by Sales Channel:

(In thousands):

	Three Months Ended
	March 27, 2010			March 28, 2009
Sales:
Retail	$	169,063		$	151,642
Direct		22,550			20,913
Net sales		191,613			172,555
Income from operations:
Retail		31,356			24,675
Direct		4,491			4,366
Corporate costs		(17,775	)		(16,340	)
Income from operations	$	18,072		$	12,701

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VITAMIN SHOPPE, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)

	March 27, 2010			December 26, 2009
ASSETS
Current assets:
Cash and cash equivalents	$	12,162		$	8,797
Inventories		112,457			106,091
Prepaid expenses and other current assets		13,446			13,401
Deferred income taxes		3,086			5,145
Total current assets		141,151			133,434
Property and equipment, net		83,455			83,960
Goodwill		177,248			177,248
Other intangibles, net		70,165			70,356
Other assets:
Deferred financing fees, net of accumulated amortization of $2,678 and $2,856 in 2010 and 2009, respectively		1,796			2,384
Other long-term assets		1,872			1,875
Total other assets		3,668			4,259
Total assets	$	475,687		$	469,257
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$			$	20,000
Current portion of capital lease obligation		1,595			1,537
Revolving credit facility		20,000
Accounts payable		28,693			25,075
Deferred sales		5,504			14,386
Accrued salaries and related expenses		4,328			7,551
Other accrued expenses		18,580			14,469
Total current liabilities		78,700			83,018
Long-term debt		100,106			100,106
Capital lease obligation, net of current portion		1,953			2,303
Deferred income taxes		19,057			19,945
Other long-term liabilities		4,987			4,766
Deferred rent		25,648			24,768
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.01 par value; 400,000,000 shares authorized, 26,849,710 shares issued and outstanding at March 27, 2010, and 400,000,000 shares authorized, 26,750,423 shares issued and outstanding at December 26, 2009		268			268
Additional paid-in capital		212,171			210,359
Accumulated other comprehensive loss		(535	)		(882	)
Retained earnings		33,332			24,606
Total stockholders’ equity		245,236			234,351
Total liabilities and stockholders’ equity	$	475,687		$	469,257

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Investor Contacts:

Investor Contact:

Michael Archbold

Chief Financial Officer

201-624–3611

ir@vitaminshoppe.com

Or:

Ian Lee

Solebury Communications Group

203-428-3215

ilee@soleburycomm.com

Media Contacts:

Susan McLaughlin

Director Corporate Communications

201-624-3134

smclaughlin@vitaminshoppe.com

Or:

Allison & Partners

Jill Yaffe, 646-428-0602

vitaminshoppe@allisonpr.com

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EX-99.3

Exhibit 99.3

VITAMIN SHOPPE INDUSTRIES INC.

2101 91st Street

North Bergen, New Jersey 07047

NOTICE OF REDEMPTION

April 21, 2010

Vitamin Shoppe Industries Inc.’s Second Priority Senior Secured Floating Rate Notes due 2012

NOTICE IS HEREBY given by Vitamin Shoppe Industries Inc., a New York corporation (the “Company”), the issuer of certain Second Priority Senior Secured Floating Rate Notes due 2015, CUSIP number 92849A AC 3 (the “Notes”), issued pursuant to the Indenture (the “Indenture”), dated as of November 15, 2005 among the Company, each of the Guarantors party thereto, and Wilmington Trust Company, as trustee (the “Trustee”), that, pursuant to Section 3.07 of the Indenture, the Company has elected to redeem Notes on May 21, 2010 (the “Redemption Date”), in the aggregate totaling $25,000,000 (the “Redeemed Notes”), plus accrued and unpaid interest to the Redemption Date. The current principal amount of the Notes outstanding is $100,106,000. Unless the Company defaults in making such redemption payment, interest on the Redeemed Notes ceases to accrue on and after the Redemption Date. For all purposes of the Indenture, the Redeemed Notes will be deemed to be no longer outstanding from and after the Redemption Date, and all rights with respect thereto, except as stated herein, will cease as of the close of business on that same date.

The redemption price for the Redeemed Notes will be 100% of the principal amount of the Redeemed Notes, plus accrued and unpaid interest to the Redemption Date (the “Redemption Price”). The amount of accrued and unpaid interest on the Redeemed Notes at the Redemption Date will be the amount calculated by (i) multiplying the “Applicable Eurodollar Rate,” which is 750 basis points over the rate determined by the Company equal to the applicable British Bankers’ Association LIBOR rate for deposits in U.S. dollars for a period of three months as reported by any generally recognized financial information service as of 11:00 a.m. (London time) two business days prior to May 15, 2010, by the current principal amount of the Redeemed Notes outstanding and then (ii) multiplying by the quotient resulting from dividing six by 360.

There are no Liquidated Damages, as defined in the Indenture, payable on the Redeemed Notes. The Trustee will send the total Redemption Price to the sole Holder, the Depositary Trust Company (“DTC”), and DTC will distribute the funds in accordance with its applicable procedures. DTC and the Trustee will make such appropriate notations on their respective records to reflect the decrease in Notes outstanding as a result of the consummation of the redemption.

Notes called for redemption must be surrendered (or transferred by book-entry transfer) to the Paying Agent, as defined in the Indenture, to collect the Redemption Price. The address of the Paying Agent follows:

Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890

Attention: Corporate Trust Administration

Delivery of Notes to an address other than as set forth above, or transmission of instructions other

than as set forth above, will not constitute a valid delivery.

This Notice of Redemption constitutes the notice required by Section 3.03 of the Indenture. No representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in this Notice of Redemption or printed on the Notes. They are included solely for the convenience of the Holders.