GNC 2011 Annual Report Download - page 166

Table of Contents
On February 7, 2011, we announced that we intend to enter into, subject to market and other conditions, the Refinancing. We currently expect to use the
proceeds from the Refinancing, if consummated, to, among other things, refinance our existing indebtedness, including the term loans held by Ares. We
currently expect to consummate the Refinancing in March 2011; however, there can be no assurance that we will complete the Refinancing either on terms
acceptable to us or at all.
Stockholders Agreement
Upon completion of the Merger, our Parent entered into a stockholders agreement with each of its stockholders at such time, which included certain of
our directors, employees and members of our management and our principal stockholders. Such agreement was amended and restated as of February 12,
2008. Through a voting agreement within the Amended and Restated Stockholders Agreement, each of the Sponsors currently has the right to designate four
members of the Parent Board (or, at the sole option of each, five members of the Parent Board, one of which shall be independent) for so long as they or their
respective affiliates and co-investors each own at least 10% of the outstanding common stock of our Parent. The voting agreement also provides for election
of our Parent's then-current chief executive officer to the Parent Board. Under the terms of the Amended and Restated Stockholders Agreement, certain
significant corporate actions require the approval of a majority of directors on the board of directors, including a majority of the directors designated by Ares
and a majority of the directors designated by OTPP. The Amended and Restated Stockholders Agreement also contains significant transfer restrictions and
certain rights of first offer, tag-along and drag-along rights. In addition, the Amended and Restated Stockholders Agreement contains registration rights that
require our Parent to register Class A common stock held by the stockholders who are parties to the Amended and Restated Stockholders Agreement in the
event our Parent registers for sale, either for its own account or for the account of others, shares of its Class A common stock.
Lease Agreements
At December 31, 2010, General Nutrition Centres Company, a wholly owned subsidiary of the Company, is party to 19 lease agreements, as lessee,
with Cadillac Fairview Corporation, a direct, wholly owned subsidiary of OTPP, as lessor, with respect to properties located in Canada. In December 2010,
Cadillac Fairview Corporation assigned its interest in an additional lease agreement to an unrelated third party in connection with the sale of a shopping center
to which such lease related. For the years ended December 2010, 2009 and 2008, we paid $2.8 million, $2.4 million and $2.5 million, respectively, under the
lease agreements and as of December 31, 2010, the aggregate future minimum lease payments under the lease agreements was $19.3 million. Each lease was
negotiated in the ordinary course of business on an arm's length basis.
Product Purchases
During our 2010 fiscal year, we purchased certain fish oil and probiotics products manufactured by Lifelong Nutrition, Inc. ("Lifelong") for resale under
our proprietary brand name GNC WELLbeING®. Carmen Fortino, who serves as one of our directors, was the Managing Director, a member of the board of
directors and a stockholder of Lifelong's parent company. The aggregate value of the products we purchased from Lifelong was $2.3 million and $3.3 million
for the 2010 and 2009 fiscal years, respectively. Effective December 31, 2010, Lifelong's parent company was sold to a third party and Mr. Fortino resigned
his positions at Lifelong.
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