10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark one)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended	June 30, 2020
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                     to                     .

Commission File Number:  001-35113

 GNC Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware		20-8536244
(State or other jurisdiction of		(I.R.S. Employer
Incorporation or organization)		Identification No.)
300 Sixth Avenue		15222
Pittsburgh,	Pennsylvania	(Zip Code)
(Address of principal executive offices)

Registrant’s telephone number, including area code:  (412) 288-4600

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A common stock, par value $0.001 per share	GNCIQ	*

* On June 30, 2020, the Company’s common stock was suspended from trading on the New York Stock Exchange (the “NYSE”) because of the Debtors’ filing of the Chapter 11 Cases. Effective July 1, 2020, trades in the Company’s common stock began being quoted on the OTC Pink Marketplace under the symbol “GNCIQ.” On July 1, 2020, the NYSE filed a Form 25 to delist the Company’s common stock and to remove it from registration under Section 12(b) of the Exchange Act.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.        ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).        ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☐ Accelerated filer ☒ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.                ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

                    ☐ Yes ☒ No

1

As of August 5, 2020, there were 84,040,526 outstanding shares of Class A common stock, par value $0.001 per share (the “common stock”), of GNC Holdings, Inc.

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TABLE OF CONTENTS

		PAGE
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited Debtor-In-Possession)
	Unaudited Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	1
	Unaudited Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019	3
	Unaudited Consolidated Statements of Comprehensive Income for the three and six months ended June 30, 2020 and 2019	4
	Unaudited Consolidated Statements of Stockholders’ Deficit for the three and six months ended June 30, 2020 and 2019	5
	Unaudited Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	6
	Unaudited Supplemental Cash Flow Information for the six months ended June 30, 2020 and 2019	8
	Condensed Notes to Unaudited Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	43
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	62
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	62
Item 1A.	Risk Factors	64
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	68
Item 3.	Defaults Upon Senior Securities	68
Item 4.	Mine Safety Disclosures	68
Item 5.	Other Information	68
Item 6.	Exhibits	69
Signatures		70

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited Debtor-In-Possession)

GNC HOLDINGS, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)

Consolidated Balance Sheets

(unaudited)

(in thousands)

	June 30, 2020		December 31, 2019
Current assets:
Cash and cash equivalents	$	80,740	$	117,046
Restricted cash (Note 3)	15,688		—
Receivables, net of allowance for credit losses of $32,726 and $22,648, respectively (Note 2)	77,413		101,234
Receivables due from related parties (Note 9)	10,094		8,946
Inventory (Note 5)	275,170		387,655
Prepaid and other current assets	37,183		24,880
Total current assets	496,288		639,761
Long-term assets:
Goodwill (Note 7)	73,552		79,109
Brand name (Note 7)	189,000		300,720
Other intangible assets, net	68,493		71,298
Property, plant and equipment, net (Note 6)	66,597		86,916
Right-of-use assets (Note 6)	248,340		350,579
Equity method investments (Note 9)	42,077		97,930
Investment in GNC Canada (Note 3)	13,570		—
Deferred tax assets (Note 15)	26,542		—
Other long-term assets	18,603		24,274
Total long-term assets	746,774		1,010,826
Total assets	$	1,243,062	$	1,650,587
Current liabilities:
Debtor-in-possession financing (Note 3)	$	305,000	$	—
Accounts payable	6,435		150,742
Accounts payable due to related parties (Note 9)	3,340		11,720
Current portion of long-term debt (Note 8)	—		180,566
Current lease liabilities	—		112,005
Deferred revenue and other current liabilities	40,507		105,792
Total current liabilities	355,282		560,825
Long-term liabilities:
Long-term debt (Note 8)	—		681,999
Deferred income taxes	315		31,586
Lease liabilities	2,018		330,510
Other long-term liabilities	208		41,535
Total long-term liabilities	2,541		1,085,630
Total liabilities not subject to compromise	357,823		1,646,455
Liabilities subject to compromise	1,153,564		—
Total liabilities	1,511,387		1,646,455

1

Contingencies (Note 11)
Mezzanine equity:
Convertible preferred stock (Note 12)	211,395		211,395
Stockholders’ deficit:
Common stock	131		131
Additional paid-in capital	1,013,854		1,012,076
Retained earnings	234,850		518,605
Treasury stock, at cost	(1,725,349)		(1,725,349)
Accumulated other comprehensive loss	(3,206)		(12,726)
Total stockholders’ deficit	(479,720)		(207,263)
Total liabilities, mezzanine equity and stockholders’ deficit	$	1,243,062	$	1,650,587

The accompanying notes are an integral part of the Consolidated Financial Statements.

2

GNC HOLDINGS, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)

Consolidated Statements of Operations

(unaudited)

(in thousands, except per share amounts)

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Revenue (Note 4)	$	343,538	$	533,997	$	816,119	$	1,098,760
Cost of sales, including warehousing, distribution and occupancy	255,305		340,253		591,171		701,925
Gross profit	88,233		193,744		224,948		396,835
Selling, general and administrative	127,115		143,840		271,657		292,143
Long-lived asset impairments and other store closing costs	20,201		—		177,715		—
Loss on net asset exchange for the formation of the joint ventures (Note 9)	—		1,779		1,655		21,293
Other income, net	(565)		(593)		(1,528)		(801)
Operating (loss) income	(58,518)		48,718		(224,551)		84,200
Interest expense, net (Note 8)	22,057		24,964		69,502		57,920
Gain on convertible debt repurchase	—		(3,214)		—		(3,214)
Loss on forward contracts for the issuance of convertible preferred stock	—		—		—		16,787
Reorganization items, net	15,429		—		15,429		—
(Loss) income before income from equity method investments and income taxes	(96,004)		26,968		(309,482)		12,707
Income tax (benefit) expense (Note 15)	(11,386)		13,030		(64,421)		14,986
(Loss) income before income from equity method investments	(84,618)		13,938		(245,061)		(2,279)
Income (loss) from equity method investments (Note 9)	949		2,120		(38,694)		3,075
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
(Loss) earnings per share (Note 13):
Basic	$	(1.06)	$	0.13	$	(3.51)	$	(0.09)
Diluted	$	(1.06)	$	0.11	$	(3.51)	$	(0.09)
Weighted average common shares outstanding (Note 13):
Basic	83,936		83,663		83,916		83,587
Diluted	83,936		140,942		83,916		83,587

 The accompanying notes are an integral part of the Consolidated Financial Statements.

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GNC HOLDINGS, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)

Consolidated Statements of Comprehensive Income (Loss)

(unaudited)

(in thousands)

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Other comprehensive gain (loss):
Net change in interest rate swaps:
Periodic revaluation of interest rate swap, net of tax(1)	—		(2,830)		(3,542)		(4,295)
Reclassification adjustment for interest recognized in Consolidated Statement of Operations, net of tax(2)	—		268		871		504
Net change in unrecognized loss on interest rate swaps, net of tax	—		(2,562)		(2,671)		(3,791)
Deferred loss recognized on interest rate swap, net of $3.4 million tax expense	—		—		7,459		—
Foreign currency translation gain (loss)	251		186		(896)		625
Deconsolidation of GNC Canada - currency translation	5,628		—		5,628		—
Other comprehensive gain (loss)	5,879		(2,376)		9,520		(3,166)
Comprehensive (loss) income	$	(77,790)	$	13,682	$	(274,235)	$	(2,370)

(1)Net of tax benefit of $1.3 million for the three months ended June 30, 2019, and net of tax benefit of $1.6 million and $1.9 million, respectively, for the six months ended June 30, 2020 and 2019.

(2)Net of tax expense of $0.1 million, respectively, for the three months ended June 30, 2019, and net of tax expense of $0.4 million and $0.2 million, respectively, for the six months ended June 30, 2020 and 2019.

The accompanying notes are an integral part of the Consolidated Financial Statements.

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GNC HOLDINGS, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)

Consolidated Statements of Stockholders’ Deficit

(unaudited)

(in thousands)

	Common Stock			Treasury Stock		Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Stockholders’ Deficit
	Class A
	Shares	Dollars
Balance at December 31, 2019	84,564	$	131	$	(1,725,349)	$	1,012,076	$	518,605	$	(12,726)	$	(207,263)
Comprehensive income	—	—		—		—		(200,086)		3,641		(196,445)
Restricted stock awards	68	—		—		—		—		—		—
Minimum tax withholding requirements	(24)	—		—		(54)		—		—		(54)
Stock-based compensation	—	—		—		1,372		—		—		1,372
Balance at March 31, 2020	84,608	131		(1,725,349)		1,013,394		318,519		(9,085)		(402,390)
Comprehensive income	—	—		—		—		(83,669)		5,879		(77,790)
Restricted stock awards	(546)	—		—		—		—		—		—
Minimum tax withholding requirements	(21)	—		—		(10)		—		—		(10)
Stock-based compensation	—	—		—		470		—		—		470
Balance at June 30, 2020	84,041	$	131	$	(1,725,349)	$	1,013,854	$	234,850	$	(3,206)	$	(479,720)
Balance at December 31, 2018	83,886	$	130	$	(1,725,349)	$	1,007,827	$	613,637	$	(10,555)	$	(114,310)
Impact of the adoption of ASC 842	—	—		—		—		(59,936)		—		(59,936)
Comprehensive income	—	—		—		—		(15,262)		(790)		(16,052)
Restricted stock awards	121	—		—		—		—		—		—
Minimum tax withholding requirements	(41)	—		—		(120)		—		—		(120)
Stock-based compensation	—	—		—		1,334		—		—		1,334
Balance at March 31, 2019	83,966	130		(1,725,349)		1,009,041		538,439		(11,345)		(189,084)
Comprehensive income	—	—		—		—		16,058		(2,376)		13,682
Restricted stock awards	628	—		—		—		—		—		—
Minimum tax withholding requirements	(15)	—		—		(108)		—		—		(108)
Stock-based compensation	—	—		—		1,658		—		—		1,658
Balance at June 30, 2019	84,579	$	130	$	(1,725,349)	$	1,010,591	$	554,497	$	(13,721)	$	(173,852)

The accompanying notes are an integral part of the Consolidated Financial Statements.

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GNC HOLDINGS, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)

Consolidated Statements of Cash Flows

(unaudited)

(in thousands)

	Six months ended June 30,
	2020		2019
Cash flows from operating activities:
Net (loss) income	$	(283,755)	$	796
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization expense	14,845		18,704
Non-cash reorganization items, net	13,386		—
Loss (income) from equity method investments	38,694		(3,075)
Amortization of debt costs	21,954		12,364
Stock-based compensation	1,842		2,992
Long-lived asset impairments and other store closing costs	177,715		—
Loss on forward contracts related to the issuance of convertible preferred stock	—		16,787
Loss on net asset exchange for the formation of the joint ventures	1,655		21,293
Gain on convertible notes repurchase	—		(3,214)
Interest expense recognized on interest rate swap	10,810		—
Distribution from equity investments	1,399		—
Deferred income tax benefit	(61,344)		(5,859)
Other	(2,106)		(398)
Changes in assets and liabilities:
Decrease (increase) in receivables	20,559		(4,400)
Decrease (increase) in inventory	88,146		(706)
Decrease (increase) in prepaid and other current assets	(12,841)		874
Increase (decrease) in accounts payable	(51,772)		24,886
Increase (decrease) in deferred revenue and accrued liabilities	53,125		(222)
Decrease in net lease liabilities	(33,998)		(18,556)
Other operating activities	(1,755)		3,057
Net cash (used in) provided by operating activities	(3,441)		65,323

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Cash flows from investing activities:
Capital expenditures	(5,970)		(6,460)
Refranchising proceeds, net of store acquisition costs	408		1,520
Proceeds from net asset exchange	18,211		101,000
Deconsolidation of GNC Canada	(4,293)		—
Capital contribution to the joint ventures	—		(13,079)
Interest rate swap settlement	(8,990)		—
Net cash (used in) provided by investing activities	(634)		82,981
Cash flows from financing activities:
Proceeds from debtor-in-possession financing	30,000		—
Fees associated with the issuance of debtor-in-possession financing	(7,300)		—
Borrowings under revolving credit facility	60,000		22,000
Payments on revolving credit facility	(60,000)		(22,000)
Proceeds from the issuance of convertible preferred stock	—		199,950
Payments on Tranche B-1 Term Loan	—		(147,312)
Payments on Tranche B-2 Term Loan	(37,628)		(123,774)
Payments on convertible notes repurchase	—		(24,708)
Original issuance discount and revolving credit facility fees	—		(10,365)
Fees associated with the issuance of convertible preferred stock	—		(12,814)
Minimum tax withholding requirements	(64)		(228)
Net cash used in financing activities	(14,992)		(119,251)
Effect of exchange rate changes on cash and cash equivalents and restricted cash	(1,551)		(384)
Net (decrease) increase in cash and cash equivalents and restricted cash	(20,618)		28,669
Beginning balance, cash and cash equivalents and restricted cash	117,046		67,224
Ending balance, cash and cash equivalents and restricted cash	$	96,428	$	95,893

The accompanying notes are an integral part of the Consolidated Financial Statements.

7

GNC HOLDINGS, INC. AND SUBSIDIARIES (DEBTOR-IN-POSSESSION)

Supplemental Cash Flow Information

(unaudited)

(in thousands)

	Six months ended June 30,
	2020		2019
Non-cash investing activities (1):
Net assets contributed to the joint ventures (Note 9)	$	—	$	202,487
Net assets removed in deconsolidation of GNC Canada (Note 3)	14,342		—

(1) Capital expenditures included in current liabilities were not material during the six months ended June 30, 2020 and June 30, 2019.

The accompanying notes are an integral part of the Consolidated Financial Statements.

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GNC HOLDINGS, INC. AND SUBSIDIARIES

Condensed Notes to the Unaudited Consolidated Financial Statements

NOTE 1.  NATURE OF BUSINESS

        GNC Holdings, Inc., a Delaware corporation ("GNC," “Holdings,” and collectively with its subsidiaries and, unless the context requires otherwise, its and their respective predecessors, the “Company”), is a global health and wellness brand with a diversified, omni-channel business. The Company's assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink and other general merchandise features innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC.

        The Company's operations consist of three reportable segments, U.S. and Canada, International, and Manufacturing / Wholesale (refer to Note 14. "Segments" for more information). Corporate retail store operations are located in the United States, Canada, Puerto Rico, Ireland and, prior to the joint venture transaction with Harbin Pharmaceutical Group Co., Ltd ("Harbin") in February 2019, China. Franchise locations exist in the United States and approximately 50 other countries. Products can also be purchased through GNC.com, Amazon.com and other marketplaces and select wholesale partners. Additionally, the Company licenses the use of its trademarks and trade names. Prior to the formation of the manufacturing joint venture with International Vitamin Corporation ("IVC") (the "Manufacturing JV") in March 2019, the Company purchased raw materials, manufactured products and sold the finished products through its reportable segments. Following the establishment of the Manufacturing JV, the Company's operations consist of wholesale and retail sales. Refer to Note 9. "Equity Method Investments" for more information on the Company's joint ventures.

Voluntary Filing Under Chapter 11

On June 23, 2020 (the “Petition Date”), the Company and certain of its U.S. subsidiaries (collectively, the “Debtors”) filed a Restructuring Support Agreement (the "RSA") and commenced voluntary Chapter 11 proceedings (the “Chapter 11 Cases”) under Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). See Note 3. "Reorganization and Chapter 11 Proceedings" for listing of our non-Debtor subsidiaries. The Debtors have requested that the Chapter 11 proceedings be jointly administered under the caption In re GNC Holdings, Inc., et al., Case No. 20-11662. Documents and other information related to the Chapter 11 Cases is available online through Prime Clerk, our claims administrator for the Chapter 11 Cases. In addition, the Company’s Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice on June 24, 2020 (the “Canadian Petition Date”). As a result, we deconsolidated General Nutrition Centres Company (“GNC Canada”), our wholly owned subsidiary, subsequent to the Canadian Petition Date. As such, all amounts presented in these Consolidated Financial Statements and notes thereto exclude the operating results and cash flows of GNC Canada subsequent to June 24, 2020 and the assets, liabilities and equity of GNC Canada as of June 30, 2020. Prior period amounts have not been adjusted.

The Consolidated Financial Statements included herein have been prepared in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 852, Reorganizations. See Note 3. "Reorganization and Chapter 11 Proceedings" for further details.

Going Concern

The Company has continued to experience negative same store sales and declining gross profit. The Company has closed underperforming stores under its store optimization strategy and implemented cost reduction measures to help mitigate the effect of these declines and improve its financial position and liquidity. However, our business has been further adversely affected by the outbreak of the coronavirus, or COVID-19. Due to the COVID-19 pandemic, U.S. and Canada company-owned and franchise retail store temporary closures reached approximately 1,400 stores, or 40%, in April 2020 and have steadily re-opened since then. 551 of these stores have been permanently closed with an effective date in June 2020, in connection with the Chapter 11 Cases in which the Bankruptcy Court authorized the Debtors to reject certain unexpired U.S and Canada company-owned and franchise leases as discussed further in Note 3. "Reorganization and Chapter 11 Proceedings." As of June 30, 2020, the Company had over 100, or 4%, of the U.S. and Canada company-owned and franchise retail stores temporarily closed due to the COVID-19 pandemic. There is significant uncertainty relating to the impacts of COVID-19 on the Company’s business going forward due to various global macroeconomic, operational and supply chain risks.

9

Additionally, economic conditions and the risks and uncertainties associated with the Chapter 11 Cases, raise substantial doubt about our ability to continue as a going concern. We currently expect that the Company’s cash flows, cash on hand and financing obtained during the course of bankruptcy should provide sufficient liquidity for the Company during the Chapter 11 Cases. However, the significant risks and uncertainties related to the Company’s liquidity and the Chapter 11 Cases raise substantial doubt about the company’s ability to continue as a going concern within twelve months from the report release date of August 10, 2020.

The accompanying Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") assuming that the Company will continue as a going concern, which contemplates continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is dependent on many factors, including the consummation of the Chapter 11 Cases in a timely manner, the ability to reopen its stores as a result of the potential recovery from COVID-19 and its ability to restructure certain leasing arrangements pursuant to the provisions of the Bankruptcy Code. The Company filed a Plan of Reorganization (the "Plan") on July 15, 2020 with the Bankruptcy Court which supports our going concern assessment. However, the outcome of the Chapter 11 Cases is subject to significant uncertainty and depends upon factors outside of the Company’s control, including actions of the Bankruptcy Court and the Company’s creditors. There can be no assurance that the Company will confirm and consummate the Plan as contemplated by the RSA entered into by the Debtors on June 23, 2020 or complete an alternative plan of reorganization.

Delisting of Common Units from NYSE

On June 30, 2020, the Company’s common stock was suspended from trading on the New York Stock Exchange (the “NYSE”) as a result of the Debtors’ filing of the Chapter 11 Cases. Effective July 1, 2020, trades in the Company’s common stock are quoted on the OTC Pink Marketplace under the symbol “GNCIQ.” On July 1, 2020, the NYSE filed a Form 25 to delist the Company’s common stock and to remove it from registration under Section 12(b) of the Exchange Act.

NOTE 2.  BASIS OF PRESENTATION  

        The accompanying unaudited Consolidated Financial Statements, which have been prepared in accordance with the applicable rules of the SEC, include all adjustments that management considers necessary to fairly state the Company's results of operations, financial position and cash flows. The December 31, 2019 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on March 25, 2020 (the "2019 10-K"). Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2020.

The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business due to various global macroeconomic, operational and supply chain risks as a result of COVID-19. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Furthermore, while operating as debtors-in-possession ("DIP") under Chapter 11, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business and subject to restrictions of the DIP financing and applicable orders of the Bankruptcy Court, for amounts other than those reflected in the accompanying unaudited Consolidated Financial Statements. Any such actions occurring during the Chapter 11 Cases confirmed by the Bankruptcy Court could materially impact the amounts and classifications of assets and liabilities reported in the unaudited Consolidated Financial Statements.

Restricted cash comprises current cash that is restricted as to withdrawal or usage. As of June 30, 2020, the Company had $15.7 million of restricted cash related to funds in escrow from the postpetition DIP financing obtained in the course of bankruptcy.

10

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-used software. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Accordingly, the Company has adopted this ASU in the first quarter of 2020, which did not have a material impact on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which introduces a new model to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company has adopted this ASU in the first quarter of 2020, which did not have a material impact on its Consolidated Financial Statements.

The majority of the Company's domestic store and e-commerce revenues are received as cash at the point of sales. The majority of the Company's franchise and wholesale revenues are billed with varying terms for payment. An allowance for credit losses is established based on the aging of the accounts receivable balances, financial condition of our franchisees and other third-party customers, historical write-off experience and current and future economic and market conditions.

The allowance for credit losses related to accounts receivable, and changes for the three and six months then ended June 30, 2020 are as follows:

(in thousands)	Balance at December 31, 2019		Charged to costs and expenses		Deduction		Balance at March 31, 2020		Charged to costs and expenses		Deduction		Balance at June 30, 2020
Vendor allowance(1)	$	14,033	$	5,439	$	(6,707)	$	12,765	$	2,698	$	—	$	15,463
Trade accounts receivable allowance (2)	8,615		9,224		(3,214)		14,625		3,164		(526)		17,263

(1) Changes to vendor allowance reserves are recorded as cost of sales on the Consolidated Statement of Operations.

(2) Changes to trade accounts receivable allowance are recorded as selling, general and administrative on the Consolidated Statement of Operations.

The Company records credit losses for vendor allowance reserves and trade accounts receivable for balances estimated to be uncollectible considering the aging of receivable balances and financial condition of our vendors and franchisees. Due to the estimated adverse impacts from COVID-19, the Company recognized an $8.7 million allowance for credit losses for its franchisees and other third-party customers and $4.6 million vendor allowance reserves during the first quarter of 2020. Refer to Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

Recently Issued Accounting Pronouncements

        In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, which simplifies accounting for income taxes by eliminating certain exceptions to ASC 740 related to the general approach for intraperiod tax allocation, methodology for calculating income taxes in an interim period and recognition of deferred taxes when there are investment ownership changes. The new guidance also simplifies aspects of accounting for franchise taxes and interim period effects of enacted changes in tax laws or rates. The new guidance provides clarification on accounting for transactions that result in a step-up in the tax basis of goodwill and allocation of consolidated income tax expense to separate financial statements of entities not subject to income tax. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The Company is evaluating the impact this standard will have on its Consolidated Financial Statements and related disclosures.

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NOTE 3. Reorganization and Chapter 11 Proceedings

On the Petition Date, the Chapter 11 Cases were filed. The Debtors filed certain motions and applications intended to limit the disruption of the Chapter 11 Cases on its operations. Since the commencement of the Chapter 11 Cases, the Debtors have continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

Chapter 11 Accounting

The Company has applied ASC 852 in preparing our Consolidated Financial Statements. ASC 852 requires the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the Company's reorganization from the ongoing operations of the business. Accordingly, certain expenses and gains incurred during the Chapter 11 Cases are recorded within Reorganization items, net in the unaudited Consolidated Statements of Operations. In addition, prepetition obligations that are unsecured or undersecured that may be impacted by the Chapter 11 Cases have been classified on the unaudited Consolidated Balance Sheet at June 30, 2020 as liabilities subject to compromise. These liabilities are reported at the amounts the Company currently anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.

Under the Bankruptcy Code, the Debtors may assume, assume and assign or reject executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a prepetition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors of performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach subject, in the case of the rejection of unexpired leases of real property, to certain caps on damages. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtor’s estate for such damages. Generally, the assumption or assumption and assignment of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance thereunder. Accordingly, any description of an executory contract or unexpired lease with the Debtor in this quarterly report, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease with the Debtor is qualified by any overriding rejection rights the Company has under the Bankruptcy Code.

Leases

Due to the adverse impacts of COVID-19, the Company withheld rent and other occupancy payments beginning in April 2020 for certain of its retail locations as management negotiated with landlords for rent concessions. The Company had unpaid rent and other occupancy payments of approximately $47 million as of June 30, 2020. In the event that withholding these rent payments would constitute an event of default per the lease agreement, management intends to negotiate resolution with the landlord. If such negotiations are not successful, the lease liabilities associated with those leases could become immediately due and payable. We also intend to reject certain lease arrangements throughout the Chapter 11 Cases.

On July 20, 2020, the Bankruptcy Court authorized the Debtors to reject certain unexpired U.S and Canada company-owned and franchise leases, 551 of which were rejected with an effective termination date in June 2020. As a result, for each rejected lease, we have extinguished the related right-of-use asset and lease liability, and recorded the expected allowed claim amount in liabilities subject to compromise ("LSTC") as of June 30, 2020, the effects of which were not material.

As of June 30, 2020, the Company identified a trigger event as it relates to the impairment of certain right-of-use assets. See further discussion in Note 6. "Property, Plant and Equipment, Net." For any leases not rejected by the Bankruptcy Court as of August 10, 2020, we have continued to account for these leases under ASC 842, amortizing the right-of-use assets and evaluating for impairment and/or revisions to the assets' useful lives. We anticipate rejecting additional leases in the course of bankruptcy. As of the Petition Date, we have classified all lease liabilities within LSTC.

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Automatic Stay

Subject to certain specific exceptions under the Bankruptcy Code, the Chapter 11 Cases automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities are subject to settlement under the Bankruptcy Code.

Deconsolidation of GNC Canada

GNC Canada filed parallel proceedings in the Canadian Court. Any significant business decision which would impact our Canadian business requires the approval of both the U.S. and Canadian Courts as they have equal and plenary authority. As joint control by the U.S. and Canadian Courts does not constitute continued common control by the parent, the Company has deconsolidated GNC Canada effective as of the Canadian Petition Date consistent with ASC 810, Consolidation. Additionally, as the Company does not have significant influence over GNC Canada while in bankruptcy, GNC will record and account for its investment in GNC Canada using the cost method under ASC 321, Investments - equity securities, as of the date of deconsolidation. The operating results of GNC Canada are reflected in our Consolidated Statements of Operations through the date of deconsolidation.

We recorded a $5.0 million loss within Reorganization items, net related to the deconsolidation of GNC Canada during the three and six months ended June 30, 2020. The loss reflects the re-measurement of our net investment in GNC Canada to its estimated fair value of $13.6 million. Included in the loss was the reclassification of $5.6 million of cumulative foreign currency translation adjustments related to GNC Canada from Accumulated other comprehensive loss.

Subsequent to the deconsolidation, transactions with GNC Canada are no longer eliminated in consolidation and are considered related party transactions. Transactions between GNC and GNC Canada were not material during the 6 days ended June 30, 2020.

Prepetition professional fees

Expenses, gains and losses that are realized or incurred before the Petition Date and in relation to the Chapter 11 Cases are recorded under selling, general and administrative charges on our Consolidated Statements of Operations. Prepetition professional fees related to the Chapter 11 Cases were $34.2 million for the three and six months ended June 30, 2020.

Debtor-In-Possession (“DIP”) Financing

Debtor-in-Possession Credit Agreements

In connection with the Chapter 11 Cases, on June 24, 2020, GNC Corporation and General Nutrition Centers, Inc. (collectively, the “Borrower”) entered into the following DIP financing arrangements (collectively, the "DIP Credit Agreements"):

1. The Borrower entered into a Debtor-in-Possession Term Loan Credit Agreement (the “DIP Term Loan Credit Agreement”), with GLAS Trust Company, LLC, as administrative agent and collateral agent, and the lenders party thereto (collectively, the “TL DIP Lenders”), to obtain a senior secured super-priority DIP term loan (the “DIP Term Loan Facility”), consisting of:

(i) $100 million of new cash (the “New Money DIP”), which term loan shall accumulate interest based on an adjusted LIBOR rate plus an applicable margin of 13.00%, with a 1.00% LIBOR floor, and

(ii) $100 million in aggregate principal of the prepetition Tranche B-2 Term Loans which were converted into a separate tranche of DIP Facility loans (the “Rollup Term Loans”) on July 21, 2020. As of June 30, 2020, the prepetition Tranche B-2 Term Loans were classified in LSTC.

2. The Borrower entered into a Debtor-in-Possession Amended and Restated ABL Credit Agreement (the “DIP FILO Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent,

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and the lenders party thereto (collectively, the “FILO DIP Lenders”), to obtain a senior secured super-priority DIP FILO facility (the “DIP Rollover Facility”). The DIP Rollover Facility consists of the refinancing of all $275 million of the Debtors’ prepetition FILO term loan under its ABL Credit Agreement, dated as of February 28, 2018 (as amended, the “ABL Credit Agreement”). The DIP Rollover Facility is subject to interest based on an adjusted LIBOR rate plus an applicable margin of 9.00%, with a 1.00% LIBOR floor.

DIP Term Loan Facility

Amounts borrowed against the DIP Term Loan Facility as of June 30, 2020 were $30.0 million, of which $15.7 million was held in escrow in accordance with terms of the DIP Term Loan Credit Agreement. The amounts in escrow were recorded as restricted cash within the Consolidated Balance Sheets.

The TL DIP Lenders shall provide an additional $70 million in new money term loans in addition to the $30 million in new money term loans provided pursuant to the Interim DIP Order and $100 million in amounts outstanding pursuant to the Debtors’ prepetition term loan facility would be “rolled-up” into amounts outstanding under the DIP Term Loan Facility, which term loan shall accumulate interest based on an adjusted LIBOR rate plus an applicable margin of 13.00%, with a 1.00% LIBOR floor. The TL DIP Lenders are entitled to receive cash interest payments on the New Money DIP and Rollup Term Loans through the pendency of the Chapter 11 Cases. The associated fees and expenses under the New Money DIP include (i) a 6.00% backstop premium, (ii) a 4.00% upfront fee and (iii) a 3.00% exit fee.

Borrowings under the DIP Term Loan Facility are secured by (i) a super priority lien on the collateral under the existing term loan (the “Term Loan Facility”) under the Amended and Restated Term Loan Agreement, dated as of February 28, 2018 (the "Term Loan Agreement"), as well as the unencumbered collateral of the Debtors, and (ii) a second priority lien on the existing collateral under the existing ABL Facility, junior to the lien in favor of the lenders thereunder. The DIP Term Loan Credit Agreement has various customary covenants, as well as covenants mandating compliance by the Debtors with a 13-week budget, variance testing and reporting requirements, among others.

The scheduled maturity of the DIP Term Loan Facility will be the earlier of six months from June 24, 2020 or the date of consummation of the Plan approved in the RSA, after which consummation (i) the outstanding New Money DIP amounts under the DIP Term Loan Facility would convert into the Exit FLFO Facility (as defined below), and (ii) the Rollup Term Loans would convert into the Exit FLSO Facility (as defined below), in each case upon the consummation of the Plan and the conclusion of the Chapter 11 Cases.

DIP Rollover Facility

The DIP FILO Credit Agreement amends and restates the ABL Credit Agreement and provided Borrower with approximately $30 million of additional liquidity by (i) removing certain cash dominion blockers effective upon Borrower’s paydown of the revolving credit facility under the ABL Credit Agreement (which paydown Borrower completed immediately upon receipt of interim approval of the DIP Facilities from the Bankruptcy Court), (ii) and adding $17.5 million to the borrowing base.

The scheduled maturity of the DIP Rollover Facility will be the earlier of six months from June 24, 2020 or the date of consummation of the Plan approved in the RSA, after which consummation the outstanding amounts under the DIP Rollover Facility would convert into a new FILO exit facility (the “FILO Exit Facility”) to the DIP FILO Credit Agreement upon the consummation of the Plan. The FILO Exit Facility contemplates a four-year maturity with an initial interest rate of LIBOR plus 9.00% with a 1% LIBOR floor, with the ability to step down to LIBOR plus 7.00% with a 1.00% LIBOR floor if certain conditions are satisfied, with mandatory prepayments required in certain circumstances. Other terms are customary and/or consistent with the DIP Rollover Facility or the ABL Credit Agreement.

The DIP Rollover Facility is subject to any additional fees, or to budget reporting covenants beyond those required under the Term Loan DIP Credit Agreement.

DIP Backstop Commitment Letter

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On June 23, 2020, prior to commencement of the Chapter 11 Cases, the Company and certain of its subsidiaries received a DIP Backstop Commitment Letter (the “Commitment Letter”) from the TL DIP Lenders for financing of (i) the New Money DIP and (ii) the Rollup Term Loans.

If the Plan is consummated, the Commitment Letter contemplates that the New Money DIP will convert on a dollar-for-dollar basis into a first-lien-first-out term loan exit facility (the “Exit FLFO Facility”). The Exit FLFO Facility is contemplated to have a 4-year maturity and an interest rate of LIBOR plus an applicable margin of 10.00%, with a 1.00% LIBOR floor, with the borrowings thereunder secured by the same liens as the borrowings under the DIP Term Loan Facility. The Rollup Term Loans, together with an additional $50 million converted from the amounts outstanding under the Term Loan Facility, will convert on a dollar-for-dollar basis into a first-lien-second-out term loan exit facility (the “Exit FLSO Facility”). The Exit FLSO Facility is contemplated to have a 4.25-year term and an interest rate of, at the option of the borrower, LIBOR plus 9.00% cash interest (with a 1.00% LIBOR floor) plus an additional 3.00% interest paid-in-kind or LIBOR plus 11.50% cash interest (with a 1.00% LIBOR floor), with the borrowings thereunder secured by the same liens as the borrowings under the DIP Term Loan Facility, but with second-out payment priority.

Restructuring Support Agreement

On June 23, 2020, the Debtors entered into the RSA with creditors holding, in the aggregate, approximately (a) 92% of the aggregate outstanding principal amount of the Company’s Tranche B-2 Term Loan (the TL DIP Lenders), and (b) 87% of the aggregate outstanding principal amount of the Company’s ABL FILO Term Loan (the FILO DIP Lenders, and collectively with the TL Creditors, the “Consenting Creditors”).

The RSA incorporates the economic terms agreed to by the parties for the Plan. The RSA also contemplates that a significant majority of the Consenting Creditors have agreed that the Company will pursue on a parallel path basis a going concern sale of the business of the Debtors pursuant to Section 363 of the Bankruptcy Code the highest and best sale offer pursuant to this sale process, the “Sale Transaction”). As further discussed in Note 16. "Subsequent Events," on August 7, 2020, the Company reached an agreement for a stalking horse bid with Harbin Pharmaceutical Group Holding Co., Ltd ("Harbin Buyer") ("the Bid") and the Debtors will seek the Bankruptcy Court’s approval of the Bid and any related bid protections. Any such Sale Transaction would be executed through an auction process supervised by the Bankruptcy Court at which higher and better bids may be presented.

The DIP financing will provide the Debtors with at least $130 million in liquidity during the Chapter 11 Cases. If the Plan is consummated in exchange for providing the liquidity offered by the DIP Credit Agreements and in consideration for converting $100 million of prepetition Tranche B-2 Term Loans into the Exit FLSO Facility (as defined and described above), the holders of the prepetition Tranche B-2 Term Loans will also own 100% of the common stock in the reorganized Debtors (the “New Common Shares”), subject to dilution by a management incentive plan providing for 10% of the New Common Shares to be awarded to management and employees as well as a proposed equity distribution to general unsecured creditors. If the Plan is approved and the class of unsecured creditors votes to accept the approved Plan, they will have a choice to receive 3-year warrants for 5% of the pro forma equity of the reorganized Debtors or elect to receive their pro rata share of $250,000 in cash.

Pursuant to the RSA, each of the Debtors and Consenting Creditors has made certain customary commitments to each other. The Debtors have agreed to, among other things, use commercially reasonable efforts to implement the restructuring contemplated by the RSA; implement the Plan in a timely manner if the Sale Transaction is not consummated; respond to diligence and status update requests from certain of the Consenting Creditors’ representatives; and satisfy certain other covenants. The Consenting Creditors have committed to support and vote for the Plan and have agreed to use commercially reasonable efforts to take, or refrain from taking, certain actions in furtherance of such support. Certain of the Consenting Creditors have also agreed to provide debtor-in-possession financing pursuant to the DIP Credit Agreements.

The RSA contains milestones for the progress of the Chapter 11 Cases (the “Milestones”), which include the dates by which the Debtors are required to, among other things, obtain certain orders of the Bankruptcy Court and consummate the Debtors’ emergence from bankruptcy. Among other dates set forth in the RSA, the agreement contemplates that the Bankruptcy Court shall have entered the Interim DIP order no later than three business days after the Petition Date, the Final DIP Order no later than 35 days after the Petition Date and the Disclosure Statement Order no later than 45 days after the Petition Date and that the Company shall have emerged from

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bankruptcy no later than 141 days after the Petition Date, subject in each case to an extension or waiver of such dates by the requisite Consenting Creditors under the terms of the RSA. As of August 10, 2020, GNC has achieved or extended all Milestones required up to the report release date of August 10, 2020.

The transactions contemplated by the RSA are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated.

Plan of Reorganization

On July 15, 2020, the Debtors filed a joint plan of reorganization (the “Plan of Reorganization”) and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court. On August 7, 2020, the Debtors filed an amended Plan of Reorganization. On August 19, 2020, the Bankruptcy Court will hold a hearing to consider approval of the Disclosure Statement.

Reorganization Items, net

The accounting standards require that the Consolidated Financial Statements, for the periods incurred after the Petition Date as a direct result of the Chapter 11 Cases, distinguish transactions and events that are directly associated with the Chapter 11 Cases from the ongoing operations of the business. Accordingly, certain expenses (including professional fees), realized gains and losses, and provisions for losses that are realized or incurred during the Chapter 11 Cases are recorded in reorganization items, net in the Consolidated Statements of Operations. Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Bankruptcy and are consisted of the following for the three and six months ended June 30, 2020:

	Three months ended June 30, 2020		Six months ended June 30, 2020
	(in thousands)
Debtor-in-possession financing costs	$	7,300	$	7,300
Professional fees	2,043		2,043
Prepetition debt issuance costs and debt discount	1,039		1,039
Loss on deconsolidation of GNC Canada	5,047		5,047
Total reorganization items, net	$	15,429	$	15,429

	Six months ended June 30,
	2020		2019
Cash paid during the period for:
Reorganization items, net	$	7,532	$	—

Claims and Claims Resolution Process

To the best of our knowledge, after making reasonable efforts, we have notified all of our known current or potential creditors that the Debtors have filed the Chapter 11 Cases. On July 21, 2020 each of the Debtors filed their respective Schedules of Assets and Liabilities (the “Schedules”) and Statements of Financial Affairs (the “Statements”) (collectively, the “Schedules and Statements”) with the Bankruptcy Court. These documents set forth, among other things, the assets and liabilities of each of the Debtors, the unexpired leases of the Debtors, including executory contracts to which each of the Debtors is a party, are subject to the qualifications and assumptions included therein, and are subject to amendment or modification as our Chapter 11 Cases proceed. The Schedules and Statements may be subject to further amendment or modification after filing.

Pursuant to the Federal Rules of Bankruptcy Procedure, creditors who wish to assert prepetition claims against us and whose claim (i) is not listed in the Schedules and Statements or (ii) is listed in the Schedules and Statements as disputed, contingent, or unliquidated, must file a proof of claim with the Bankruptcy Court prior to the bar date set by the court. The general bar date for creditors to file claims or contest claim amounts is scheduled for August 28, 2020 and the governmental bar date is scheduled for December 21, 2020 (collectively, the "Bar Dates").

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As of August 7, 2020, approximately 763 claims totaling $62.7 million have been filed with the Bankruptcy Court against the Debtors by approximately 633 claimants. We expect additional claims to be filed prior to the Bar Dates. In addition, creditors who have already filed claims may amend or modify their claims in ways we cannot reasonably predict. The amounts of these additional claims and/or amendments or modifications to claims already filed may be material. We anticipate the claims filed against the Debtors in the Chapter 11 Cases will be numerous. We expect the process of resolving claims filed against the Debtors to be complex and lengthy. We plan to investigate and evaluate all filed claims in connection with the Chapter 11 Cases. As part of the process, we will work to resolve differences in amounts scheduled by the Debtors and the amounts claimed by creditors, including through the filing of objections with the Bankruptcy Court where necessary. Accordingly, the ultimate number and amount of claims that will be allowed against the Debtors is not presently known, nor can the ultimate recovery with respect to allowed claims be reasonably estimated.

See Note 12. "Mezzanine Equity," for further details discussing classification of mezzanine equity.

Liabilities Subject to Compromise

The accompanying unaudited Consolidated Balance Sheet as of June 30, 2020 includes amounts classified as liabilities subject to compromise, which represent unsecured or undersecured prepetition liabilities. These amounts include the Company's current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust estimates as necessary. Liabilities subject to compromise consisted of the following:

	June 30, 2020
	(in thousands)
Accounts payable	$	61,128
Accrued interest	3,744
Lease liabilities	329,790
Other liabilities	188,971
Tranche B-2 Term Loan	410,834
Notes	159,097
Total Liabilities subject to compromise	$	1,153,564

The principal balance on the Tranche B-2 Term Loan and Notes of $410.8 million and $159.1 million, respectively, has been reclassified from long-term debt to LSTC as of June 30, 2020. See also Note 8. "Debt / Interest Expense" for further details.

Effective as of the Petition Date, we ceased recording interest expense on outstanding prepetition debt subject to compromise. Contractual interest expense represents amounts due under the contractual terms of outstanding prepetition debt classified as LSTC. For the quarter ended June 30, 2020, contractual interest expense of $0.8 million related to LSTC has not been recorded in the Consolidated Financial Statements.

Accrued interest on the prepetition debt subject to compromise was also reclassified from accrued liabilities to LSTC as of June 30, 2020. We have not made any interest payments on our prepetition debt subject to compromise since the commencement of the Chapter 11 Cases.

Employee Retention Program

On July 20, 2020, the Bankruptcy Court approved the Debtors' Key Employee Retention Program ("KERP"). The KERP is designed to enhance retention of key employees and provides a maximum award pool of approximately $3.1 million.

Debtor Financial Statements

Debtors Condensed Combined Financial Statements

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The Company has seventeen wholly-owned entities that are considered non-debtors (“Non-Debtors”).

•Nutra Insurance Company

•GNC Korea Limited

•GNC Hong Kong Limited

•GNC (Shanghai) Trading Co., Ltd.

•GNC China JV Holdco Limited

•GNC (Shanghai) Food Technology Limited

•GNC South Africa (Pty) Ltd.

•GNC Jersey One Limited

•GNC Jersey Two Unlimited

•THSD Unlimited Company

•GNC Live Well Ireland

•GNC Colombia SAS

•GNC Newco Parent, LLC

•Nutra Manufacturing, LLC

•GNC Supply Purchaser, LLC

•GNC Intermediate IP Holdings, LLC

•GNC Intellectual Property Holdings, LLC

With the exception of cash and cash equivalents, brand name and equity method investments in the amounts of $5.1 million, $24.8 million and $42.1 million, respectively, the balance sheet, results of operations and cash flow activity of the Non-Debtors is not material to the consolidated financial statements of GNC as of and for the period ended June 30, 2020. See Note 9. "Equity Method Investments" for more information on the Company's equity method investments.

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NOTE 4.  REVENUE

        Revenue is recognized when obligations under the terms of a contract with the customer are satisfied. Generally, this occurs with the transfer of control of products or services. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. Applicable sales tax collected concurrent with revenue-producing activities is excluded from revenue.

Due to the deconsolidation of GNC Canada, as further discussed in Note 1. "Nature of Business," all amounts presented in this footnote exclude the operating results of GNC Canada subsequent to June 24, 2020.

U.S. and Canada Revenue

The following is a summary of revenue disaggregated by major source in the U.S. and Canada segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
U.S. company-owned product sales: (1)	(in thousands)
Protein	$	51,509	$	77,160	$	125,317	$	157,345
Performance supplements	42,694		73,083		110,685		147,824
Weight management	16,122		29,607		36,639		60,373
Vitamins	36,866		44,936		85,828		91,944
Herbs / Greens	10,699		15,536		24,504		31,391
Wellness	26,185		46,370		65,267		93,515
Health / Beauty	29,869		46,535		69,354		92,888
Food / Drink	11,370		26,259		30,569		54,483
General merchandise	3,218		5,519		8,089		12,318
Total U.S. company-owned product sales	228,532		365,005		556,252		742,081
Wholesale sales to franchisees	36,444		59,869		87,500		118,126
Royalties and franchise fees	6,907		8,175		14,234		16,647
Sublease income	9,738		10,498		19,980		21,474
Cooperative advertising and other franchise support fees	2,605		4,754		7,013		9,821
Other (2)	15,980		27,759		39,408		57,067
Total U.S. and Canada revenue	$	300,206	$	476,060	$	724,387	$	965,216

(1)Includes e-commerce sales.

(2)Includes revenue primarily related to operations in Canada through deconsolidation date of June 24, 2020, and the loyalty programs, myGNC Rewards and PRO Access.

International Revenues

        The following is a summary of revenue disaggregated by major source in the International reportable segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Wholesale sales to franchisees	$	15,637	$	27,019	$	35,820	$	52,456
Royalties and franchise fees	4,001		6,332		10,509		12,319
Other (1)	9,295		6,097		16,149		15,596
Total International revenue	$	28,933	$	39,448	$	62,478	$	80,371

(1)Includes revenue related to China operations prior to the transfer of the China business to the HK JV and China JV, which was effective February 13, 2019, wholesale sales to the HK JV and China JV, and revenue from company-owned locations in Ireland.

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Manufacturing / Wholesale Revenue

The following is a summary of revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Third-party contract manufacturing(1)	$	—	$	—	$	—	$	15,783
Intersegment sales(1)	—		—		—		35,505
Wholesale partner sales	14,399		18,489		29,254		37,390
Total Manufacturing / Wholesale revenue	$	14,399	$	18,489	$	29,254	$	88,678

(1)As a result of the transfer of the Nutra manufacturing business to the newly formed Manufacturing JV effective March 1, 2019, no third-party contract manufacturing and intersegment sales were recognized thereafter.

Revenue by Geography

        The following is a summary of revenue by geography:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Total revenues by geographic areas(1):	(in thousands)
United States	$	334,411	$	510,762	$	787,284	$	1,048,805
Foreign	9,127		23,235		28,835		49,955
Total revenues	$	343,538	$	533,997	$	816,119	$	1,098,760

(1) Geographic areas are defined based on legal entity jurisdiction.

Balances from Contracts with Customers

        Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. The Company's PRO Access and loyalty program points are recorded within deferred revenue and other current liabilities on the Consolidated Balance Sheets. Deferred franchise and license fees are recorded within deferred revenue and other current liabilities and other long-term liabilities on the Consolidated Balance Sheets.

The following table presents changes in the Company’s contract liabilities:

	Six months ended June 30, 2020
	Balance at Beginning of Period		Recognition of revenue included in beginning balance		Contract liability, net of revenue, recognized during the period		Balance at End of Period
	(in thousands)
Deferred franchise and license fees	$	28,293	$	(4,934)	$	2,168	$	25,527
PRO Access and loyalty program points (1)	22,896		(16,909)		12,194		18,181
Gift card liability (1)	3,110		(1,502)		274		1,882

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	Six months ended June 30, 2019
	Balance at Beginning of Period		Recognition of revenue included in beginning balance		Contract liability, net of revenue, recognized during the period		Balance at End of Period
	(in thousands)
Deferred franchise and license fees	$	33,464	$	(5,533)	$	2,247	$	30,178
PRO Access and loyalty program points (1)	24,836		(18,093)		19,207		25,950
Gift card liability (1)	3,416		(1,793)		343		1,966

(1) Net of estimated breakage

As of June 30, 2020, the Company had deferred franchise fees with unsatisfied performance obligations extending throughout 2030 of $25.5 million, of which $5.7 million is expected to be recognized over the next 12 months. The Company has elected to use the practical expedient allowed under the rules of adoption to not disclose the duration of the remaining unsatisfied performance obligations for contracts with an original expected length of one year or less.

NOTE 5.  INVENTORY

        The net realizable value of inventory consisted of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Finished product ready for sale	$	275,170	$	387,655
Inventory	$	275,170	$	387,655

As a result of the COVID-19 pandemic, the Company temporarily closed up to 40% company-owned and franchise stores from March through June 2020, and sales trends have significantly declined beginning in the second half of March 2020. Due to the store closures, decline in sales trends and estimated adverse impacts on the Company's business as a result of COVID-19, the Company recorded $18.2 million inventory obsolescence reserves during the first quarter of 2020, of which $17.8 million was recorded within the U.S. and Canada segment and $0.4 million was recorded within the Manufacturing and Wholesale segment. As a result of filing the Chapter 11 Cases on June 23, 2020, the Company expects vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC and therefore recorded $12.6 million in inventory reserves during the three months ended June 30, 2020 within the U.S and Canada segment. Refer to Note 3. "Reorganization and Chapter 11 Proceedings" for more information on the Chapter 11 Cases.

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NOTE 6.  PROPERTY, PLANT AND EQUIPMENT, NET

The following is a summary of impairment charges and other store closing costs:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Right-of-use asset	$	18,199	$	—	$	39,422	$	—
Property and equipment	2,002		—		13,227		—
Other store closing costs	—		—		7,897		—
Total impairment and other store closing costs	$	20,201	$	—	$	60,546	$	—

As a result of the COVID-19 pandemic, the Company temporarily closed up to 40% of its company-owned and franchise stores from March through June 2020, and sales trends have significantly declined beginning in the second half of March 2020. During the first quarter of 2020, due to the store closures, decline in sales trends and estimated adverse impact from COVID-19, the Company recorded $40.3 million of impairment charges and other store closing costs, of which $21.2 million related to right-of-use asset impairments, $11.2 million related to property and equipment impairment and $7.9 million related to other store closing costs. Refer to Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

In connection with the Chapter 11 Cases, the Company launched liquidation sales in June 2020 in approximately 500 U.S and Canada company-owned stores which are expected to close during the third quarter of 2020. As a result of the liquidation sales and planned store closures, the Company recorded $20.2 million impairment charges, of which $18.2 million related to right-of use asset impairments and $2.0 million related to property and equipment impairment. Refer to Note 3. "Reorganization and Chapter 11 Proceedings" for more information on the Chapter 11 Cases.

The impairment test was performed at the individual store level, as it is the lowest level in which identifiable cash flows are largely independent of other groups of assets and liabilities. If the undiscounted estimated cash flows were less than the carrying value of the asset group, an impairment charge was calculated by subtracting the estimated fair value of the asset group from its carrying value. Fair value for property, plant and equipment was estimated using a discounted cash flow method (income approach) utilizing the undiscounted cash flows computed in the first step of the test. Fair value for right-of-use assets was estimated using a discounted cash flow method (income approach) based on market participant assumptions.

During the first quarter of 2020, the Company sold its owned location in Boston, MA and recorded a $2.1 million pre-tax gain from the sale recognized within other income, net on the Company's Consolidated Statement of Operations.

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NOTE 7.  GOODWILL AND INTANGIBLE ASSETS

Due to the significant decline in the Company's share price in the first quarter of 2020 and estimated adverse impacts from the COVID-19 pandemic, management concluded a triggering event occurred in the first quarter requiring an impairment test of its definite-lived intangible assets, indefinite-lived intangible brand name asset and the goodwill of all reporting units. No impairment was recorded for the Company's definite-lived intangible assets.

Brand Name

In the first quarter of 2020, management performed an impairment test for its brand intangible asset, and concluded that the estimated fair value under the relief from royalty method (income approach) was less than its carrying value, which resulted in an impairment charge of $111.7 million. The brand name impairment test was performed in totality as it represents a single unit of account and $88.6 million of the charge was allocated to the U.S. and Canada and the remaining amount was allocated to the International segment. Key assumptions included in the estimation of the fair value include the following:

•Future cash flow assumptions - Future cash flow assumptions include retail sales from the Company’s corporate retail store operations, GNC.com retail sales, wholesale partner sales, China JV and HK JV retail sales, and domestic and international franchise retail sales. Sales were based on organic growth and were derived from historical experience and assumptions regarding future growth, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business. The Company's analysis incorporated an assumed period of cash flows of 10 years with a terminal value.

•Royalty rate - The royalty rates utilized consider external market evidence and internal financial metrics including a review of available returns after the consideration of property, plant and equipment, working capital and other intangible assets. The royalty rate used to estimate the fair values of the Company's reporting units was within a range of 0% - 3%.

•Discount rate - The discount rate was based on an estimated weighted average cost of capital ("WACC") for each business supported by the GNC brand name. The components of WACC are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. The WACC used to estimate the fair values of the Company's reporting units was within a range of 20% to 22%. Any difference between the WACC among reporting units is primarily due to the precision with which management expects to be able to predict the future cash flows of each reporting unit.

No impairment was recorded during the second quarter of 2020 for brand name.

Goodwill

Management performed an impairment test of the Company's goodwill. The results of the impairment test indicated no impairments for GNC.com, International Franchise and Wholesale reporting units. However, The Health Store reporting unit had a fair value below its carrying value, which resulted in a $5.5 million goodwill impairment charge, which was recorded within the International segment.

The Company estimated the fair values of its reporting units in the first quarter of 2020 using a discounted cash flow method (income approach) weighted 50% and a guideline company method (market approach) weighted 50%. The key assumptions used under the income approach include the following:

•Future cash flow assumptions - The Company's projections for its reporting units were based on organic growth and were derived from historical experience and assumptions regarding future growth and profitability trends, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business. The Company's analysis incorporated an assumed period of cash flows of 10 years with a terminal value.

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•Discount rate - The discount rate was based on an estimated WACC for each reporting unit. The components of WACC are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. The WACC used to estimate the fair values of the Company's reporting units was within a range of 20% to 22%. Any difference between the WACC among reporting units is primarily due to expectation of achieving the future cash flows of each reporting unit.

The guideline company method involves analyzing transaction and financial data of publicly-traded companies to develop multiples, which are adjusted to account for differences in growth prospects and risk profiles of the reporting unit and comparable.

No impairment was recorded during the second quarter of 2020 for goodwill.

Goodwill Roll-Forward

The following table summarizes the Company's goodwill activity by reportable segment:

	U.S. and Canada		International		Manufacturing / Wholesale			Total
	(in thousands)
Goodwill at December 31, 2019
Gross	$	389,895	$	43,330	$	141,299		$	574,524
Accumulated impairments	(380,644)		—		(114,771)			(495,415)
Goodwill	9,251		43,330		26,528			79,109
2020 Activity:
Impairment	—		(5,451)		—			(5,451)
Translation effect of exchange rates	—		(106)		—			(106)
Total 2020 activity	—		(5,557)		—		—	(5,557)
Balance at June 30, 2020
Gross	389,895		43,224		141,299			574,418
Accumulated impairments	(380,644)		(5,451)		(114,771)			(500,866)
Goodwill	$	9,251	$	37,773	$	26,528		$	73,552

Intangible Assets

The following table reflects the gross carrying amount and accumulated amortization for each major definite-lived intangible assets:

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		June 30, 2020						December 31, 2019
	Weighted-Average Life	Cost		Accumulated Amortization/Impairment		Carrying Amount		Cost		Accumulated Amortization/Impairment		Carrying Amount
		(in thousands)
Brand name	Indefinite	$	720,000	$	(531,000)	$	189,000	$	720,000	$	(419,280)	$	300,720
Retail agreements	30.3	31,000		(14,145)		16,855		31,000		(13,619)		17,381
Franchise agreements	25	70,000		(37,217)		32,783		70,000		(35,817)		34,183
Manufacturing agreements	25	40,000		(21,267)		18,733		40,000		(20,467)		19,533
Other intangibles	7	640		(581)		59		639		(529)		110
Franchise rights	3	7,566		(7,503)		63		7,566		(7,475)		91
Total		$	869,206	$	(611,713)	$	257,493	$	869,205	$	(497,187)	$	372,018

NOTE 8.  DEBT / INTEREST EXPENSE

        Debt consisted of the following: 

	June 30, 2020		December 31, 2019
	(in thousands)
DIP Financing:
DIP Financing - New Money DIP	$	30,000	$	—
DIP Financing - DIP FILO	275,000		—
Total DIP Financing	305,000		—
Liabilities subject to compromise:
Tranche B-2 Term Loan	410,834		—
Notes	159,097		—
Total liabilities subject to compromise	569,931		—
Long-term debt, including the current portion:
Tranche B-2 Term Loan (net of $7.0 million discount)	—		441,500
FILO Term Loan (net of $8.2 million discount)	—		266,814
Notes (net of $3.9 million conversion feature and $0.5 million discount)	—		154,675
Debt issuance costs	—		(424)
Total long-term debt, including the current portion	—		862,565
Total debt	$	874,931	$	862,565

DIP Financing

As described further in Note 3. "Reorganization and Chapter 11 Proceedings," in connection with the Chapter 11 Cases, the Company entered into the DIP Credit Agreements on June 24, 2020.

Prepetition Debt

On February 28, 2018, the Company amended and restated its Senior Credit Facility (the "Amendment," and the Senior Credit Facility as so amended, the Term Loan Agreement), which included an extension of the maturity date of the Tranche B-2 Term Loan. In the event that all outstanding amounts under the convertible senior notes exceeding $50.0 million are not repaid, refinanced, converted or effectively discharged prior to May 16, 2020, the Springing Maturity Date, the maturity date of the Tranche B-2 Term Loan became the Springing Maturity Date, subject to certain adjustments. On February 28, 2018, the Company also entered into the ABL Credit Agreement, consisting of:

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•a $275.0 million asset-based Term Loan Facility advanced on a “first-in, last-out” basis (the "FILO Term Loan") with a maturity date of December 2022 (which maturity date will become May 2020, subject to certain adjustments, should the Springing Maturity Date be triggered); and

•a $100.0 million asset-based Revolving Credit Facility (the "Revolving Credit Facility") with a maturity date of August 2022 (which maturity date will become May 2020, subject to certain adjustments, should the Springing Maturity Date be triggered). In connection with the transfer of the Nutra manufacturing and Anderson facility net assets to the Manufacturing JV with IVC, the Revolving Credit Facility commitment was reduced from $100.0 million to $81.0 million effective March 2019. As of March 31, 2020, there were $30.0 million borrowings outstanding on the Revolving Credit Facility. At June 30, 2020, the Company had $19.9 million available under the Revolving Credit Facility, after giving effect to $30.0 million borrowing outstanding, $4.5 million utilized to secure letters of credit and a $26.6 million reduction to borrowing ability as a result of decrease in net collateral.

        The Tranche B-2 Term Loan requires annual aggregate principal payments of at least $43 million and bears interest at a rate of, at the Company's option, LIBOR plus a margin of 8.75% per annum subject to change under certain circumstances (with a minimum and maximum margin of 8.25% and 9.25%, respectively, per annum), or prime plus a margin of 7.75% per annum subject to change under certain circumstances (with a minimum and maximum margin of 7.25% and 8.25%, respectively, per annum). Any mandatory repayments as defined in the credit agreement shall be applied to the remaining annual aggregate principal payments in direct order of maturity. The Company paid $100 million on the Tranche B-2 Term Loan in November 2018 and elected to use the payment to satisfy the scheduled amortization payments on the Term Loan Facility through December 2020. The Term Loan Agreement is secured by a (i) first lien on certain assets of the Company primarily consisting of capital stock issued by General Nutrition Centers, Inc. and its subsidiaries, intellectual property and equipment (“Term Priority Collateral”) and (ii) second lien on certain assets of the Company primarily consisting of inventory and accounts receivable (“ABL Priority Collateral”). The Term Loan Agreement is guaranteed by all material, wholly-owned domestic subsidiaries of the Company (the “U.S. Guarantors”) and by GNC Canada, an unlimited liability company organized under the laws of Nova Scotia (together with the U.S. Guarantors, the “Guarantors”).

        There are no scheduled amortization payments associated with the FILO Term Loan, which bears interest at a rate of, at the Company's option, LIBOR plus a margin of 7.00% per annum subject to decrease under certain circumstances (with a minimum possible interest rate of LIBOR plus a margin of 6.50% per annum) or prime plus a margin of 6.00% per annum subject to decrease under certain circumstances (with a minimum possible interest rate of prime plus a margin of 5.50% per annum). Outstanding borrowings under the Revolving Credit Facility bear interest at a rate of LIBOR plus 1.50% per annum (subject to an increase of 0.25% or 0.50% based on the amount available to be drawn under the Revolving Credit Facility) or prime plus a margin of 0.50% per annum (subject to an increase of 0.25% or 0.50% based on the amount to be drawn under the Revolving Credit Facility). The Company is also required to pay an annual fee to revolving lenders equal to 1.5% per annum (subject to an increase of 0.25% or 0.50% based on the amount available to be drawn under the Revolving Credit Facility) on outstanding letters of credit and an annual commitment fee of 0.375% on the undrawn portion of the Revolving Credit Facility, which is subject to an increase to 0.5% based on the amount available to be drawn under the Revolving Credit Facility. The FILO Term Loan and Revolving Credit Facility are secured by a (i) first lien on ABL Priority Collateral and (ii) second lien on Term Priority Collateral. The FILO Term Loan and Revolving Credit Facility are guaranteed by the Guarantors.

        Under the Company’s Credit Agreements, the Company is required to make certain mandatory prepayments, including a requirement to prepay first the Tranche B-2 Term Loan (until repaid in full) and second the FILO Term Loan (until repaid in full, but only if such prepayment is permitted under the ABL Credit Agreement) in each case annually with amounts based on excess cash flow, as defined in the Company’s Credit Facilities, based on the results of the Company for the prior fiscal year. The payment will be 75% of excess cash flow for each such fiscal year, subject to a reduction to 50% based on the attainment of a certain Consolidated Net First Lien Leverage Ratio, and will be reduced by certain scheduled debt payment amounts. Based on the Company's results for the year ended December 31, 2019, the Company made an excess cash flow payment of $25.9 million in April 2020. The Company made an excess cash flow payment of $9.8 million in April 2019 with respect to the year ending December 31, 2018.

As discussed in Note 3, “Reorganization and Chapter 11 Proceedings,” the Chapter 11 Cases automatically stayed actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to prepetition debt. All of the Debtors’ prepetition debt excluding those amounts converted into DIP financing, are included in liabilities subject to compromise as of June 30, 2020.

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At June 30, 2020, the Company's contractual interest rates under the Tranche B-2 Term Loan, the FILO Term Loan and the Revolving Credit Facility were 10.1%, 8.0% and 4.0%, respectively, which consist of LIBOR plus the applicable margin rate and in the case of Revolving Credit Facility at Prime rate plus the applicable margin rate. At December 31, 2019, the interest rates under the Tranche B-2 Term Loan and the FILO Term Loan were 10.6%, and 8.8%, respectively.

        The Company’s Credit Facilities contain customary covenants, including limitations on the ability of the Borrower to, among other things, incur debt, grant liens on their assets, enter into mergers or liquidations, sell assets, make investments or acquisitions, make optional payments in respect of, or modify, certain other debt instruments, pay dividends or other payments on capital stock, or enter into arrangements that restrict their ability to pay dividends or grant liens. Despite these limitations, the Company has the ability to discharge the liabilities of GNC Holdings, Inc. in the ordinary course of business through a variety of alternatives, including a restricted payment basket, a junior lien debt incurrence basket, and repayment of intercompany debt.

 In addition, the Term Loan Agreement requires compliance, as of the end of each fiscal quarter of the Company, with a maximum Consolidated Net First Lien Leverage Ratio currently set at 4.25 to 1.00. If the Company’s availability under the Revolving Credit Facility is less than the greater of (i) 12.5% of the borrowing base or (ii) $12.5 million, then the ABL Credit Agreement requires compliance as of the end of each fiscal quarter with a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00.

Prior to the issuance of our Form 10-Q for the quarter ended March 31, 2020, we determined that we did not have the ability to pay the accelerated maturity payment due on the Springing Maturity Date and therefore obtained an extension for the accelerated maturity payment to June 30, 2020. On the Petition Date, the filing of the Chapter 11 Cases constituted an event of default that accelerated obligations under the following debt instruments and agreements:

•the Amended and Restated Term Loan Agreement, dated as of February 28, 2018 (as amended), among the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto with respect to approximately $410.8 million of borrowings outstanding, plus accrued and unpaid interest thereon;

•the ABL Credit Agreement, dated as of February 28, 2018 (as amended), among the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto with respect to approximately $335 million of borrowings outstanding, plus accrued and unpaid interest thereon; and

•the indenture, dated August 10, 2015, by and among the Company, as issuer, certain other subsidiaries of the Company, as guarantors, and BNY Mellon Trust Company, N.A., as the trustee with respect to an aggregate principal amount of approximately $157.6 million of 1.5% convertible senior unsecured notes due 2020 (the "Indenture"). 

        As of June 30, 2020, the Company maintains $159.1 million in principal amount of its 1.5% convertible Notes outstanding. The Notes, classified within LSTC at June 30, 2020 and debt at December 31, 2019, consist of the following components:

	June 30, 2020		December 31, 2019
	(in thousands)
Liability component
Principal	$	159,097	$	159,097
Conversion feature	—		(3,898)
Discount related to debt issuance costs	—		(524)
Net carrying amount	$	159,097	$	154,675

Interest Rate Swaps

        On June 13, 2018, the Company entered into two interest rate swaps with notional amounts of $275 million and $225 million to limit the exposure of its variable interest rate debt by effectively converting it to a fixed interest rate. The Company receives payments based on the one-month LIBOR and makes payments based on a fixed rate. The Company receives payments with a floor of 0.00% and 0.75%, respectively, on the $275 million and $225

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million interest rate swaps, which aligns with the related debt instruments. The interest rate swap agreements had an effective date of June 29, 2018. The $225 million interest rate swap expires on February 28, 2021, and the $275 million interest rate swap expires on June 30, 2021. The notional amount of the $225 million interest rate swap has scheduled decreases to $175 million on June 30, 2019, $125 million on June 30, 2020 and $75 million on December 31, 2020. The Company designated these instruments as cash flow hedges deemed effective upon initiation. The interest rate swaps are recognized on the balance sheet at fair value. When the cash flow hedges are deemed effective, changes in fair value are recorded within other comprehensive loss on the Consolidated Balance Sheets and reclassified into the Consolidated Statement of Operations as interest expense in the period in which the underlying transaction affects earnings.

As of March 31, 2020, the Company's expectation was that it could not reduce the outstanding balance on the Notes to below $50 million before the Springing Maturity date, which would result in acceleration of the maturity date of the Tranche B-2 and the FILO Term Loan. As such, the Company deemed the cash flow hedges as ineffective as the forecasted hedging transactions were not expected to occur by the end of the originally specified time period. The Company reclassified a $10.8 million pre-tax loss previously deferred within accumulated other comprehensive loss to interest expense during the three months ended March 31, 2020.

In connection with the closing of the debtor-in-possession financing, the Company agreed to settle and terminate the outstanding swap agreements for $9.8 million on June 29, 2020, of which $9.0 million was classified in the Consolidated Statement of Cash Flows as cash flows from investing activities for the settlement of the liability and $0.8 million classified as cash flows from operating activities for settlement of the interest.

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The fair values of the derivative financial instruments included in the Consolidated Balance Sheets consisted of the following:

	Fair Value at
Balance Sheet Classification	June 30, 2020		December 31, 2019
	(in thousands)
Other current liabilities	$	—	$	5,013
Other long-term liabilities	—		1,927
Total liabilities	$	—	$	6,940

Interest Expense 

        As discussed in Note 3. "Reorganization and Chapter 11 Proceedings," upon the Petition Date, GNC ceased recording interest expense on prepetition debt subject to compromise. For the quarter ended June 30, 2020, contractual interest expense of $0.8 million related to LSTC has not been recorded in the Consolidated Financial Statements. Interest expense consisted of the following:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
DIP Financing	$	58	$	—	$	58	$	—
Tranche B-1 Term Loan coupon	—		—		—		928
Tranche B-2 Term Loan coupon	10,310		12,954		22,649		29,422
FILO Term Loan coupon	6,861		6,826		13,687		13,578
Revolving Credit Facility	534		96		683		219
Amortization of discount and debt issuance costs	3,499		2,522		18,554		8,565
Subtotal	21,262		22,398		55,631		52,712
Notes:
Coupon	551		729		1,147		1,436
Amortization of conversion feature	1,442		1,611		2,984		3,312
Amortization of discount and debt issuance costs	200		242		417		486
Total Notes	2,193		2,582		4,548		5,234
Loss on interest rate swap	(1,356)		—		9,454		—
Other	(42)		(16)		(131)		(26)
Interest expense, net	$	22,057	$	24,964	$	69,502	$	57,920

During the first quarter, the Company accelerated the amortization of original issuance discount and deferred financing fees for the Tranche B-2 Term Loan, FILO Term Loan and the Revolving Credit Facility of $12.4 million to the Springing Maturity Date.

NOTE 9. EQUITY METHOD INVESTMENTS

        The Company's interests in the Manufacturing, HK and China joint ventures, which are Non-Debtors as discussed in Note 3. "Reorganization and Chapter 11 Proceedings," are accounted for as equity method investments due to the Company’s ability to exercise significant influence over management decisions of the joint ventures. Under the equity method, the Company's share of profits and losses from the joint ventures is recorded within income from equity method investments on the Consolidated Statement of Operations. The following table provides a reconciliation of equity method investments on the Company’s Consolidated Balance Sheets:

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	June 30, 2020		December 31, 2019
	(in thousands)
Manufacturing JV	$	56,684	$	75,434
Manufacturing JV capital contribution	10,714		10,714
HK JV and China JV	10,206		10,342
Income from equity method investments	5,567		5,296
Distributions received from equity method investments	(5,254)		(3,856)
Manufacturing JV other-than-temporary impairment	(35,840)		—
Total equity method investments	$	42,077	$	97,930

In February 2019, the Company contributed its China business in exchange for 35% ownership of each of the formed joint ventures with Harbin, the HK JV and China JV. The HK JV includes the operation of the cross-border China e-commerce business, and has an exclusive right to use the Company’s trademarks to manufacture and distribute the Company’s products in China (excluding Hong Kong, Taiwan and Macau) via e-commerce channels. The China JV is a retail-focused joint venture to operate GNC's brick-and-mortar retail business in China and it will have an exclusive right to use the Company's trademarks to manufacture and distribute the Company's products in China (excluding Hong Kong, Taiwan and Macau) via retail stores and pharmacies. The HK JV closed in February 2019 and the Company anticipates completing the formation of a second, retail-focused joint venture located in China (the “China JV”) with Harbin in the second half of 2020, following the satisfaction of certain routine regulatory and legal requirements.

        In March 2019, the Company entered into a strategic joint venture with IVC regarding the Company's manufacturing business. The Manufacturing JV is responsible for the manufacturing of the products previously produced by the Company at the Nutra manufacturing facility. The Company received $99.2 million from IVC and contributed the net assets of the Nutra manufacturing and Anderson facilities in exchange for an initial 43% equity interest in the Manufacturing JV. In addition, the Company made a capital contribution of $10.7 million to the Manufacturing JV to fund its share of short-term working capital needs. Under the terms of the agreement, IVC has the ability to pay an additional $75.0 million over a four year period from the effective date of the transaction as IVC's ownership of the joint venture increases to 100%. The subsequent purchase price for each year is $18.8 million, adjusted up or down based on the Company's future purchases from the Manufacturing JV. The Company received the first subsequent purchase price of $15.6 million during the first quarter of 2020. As a result, the Company's ownership of the Manufacturing JV decreased to 32% in March 2020.

Gain (loss) from the net asset exchange

In connection with the formation of the joint ventures effective in the first quarter of 2019, the Company deconsolidated its China business and its Nutra manufacturing business which resulted in a pre-tax gain of $5.8 million and loss of $27.1 million, respectively, recorded within loss on net asset exchange for the formation of the joint ventures on the Consolidated Statements of Operations. The $5.8 million gain from the Harbin transaction was calculated based on the difference between the fair value of the 35% equity interest in the HK JV and China JV, less the carrying value of the contributed China business, including $2.4 million of cash, and third-party closing fees. The $27.1 million loss from the Manufacturing JV transaction was calculated based on the fair value of the 43% equity interest retained in the Manufacturing JV and the $101 million in cash received, less a $1.8 million working capital purchase price adjustment in the second quarter of 2019, less the carrying value of the contributed Nutra and Anderson facilities and third-party closing fees.

As mentioned above, the Company received $15.6 million from IVC in connection with the subsequent purchase of the ownership of the Manufacturing JV in the first quarter of 2020, which resulted in a pre-tax loss of $3.1 million on net asset exchange calculated based on the difference between the cash receipt and the purchase price of $18.8 million. The loss was recorded in (loss) income from equity method investment within the Consolidated Statement of Operations. Additionally, in the first quarter of 2020, the Company recognized a $1.7 million purchase price adjustment related to the Harbin transaction, which was recorded as a loss on net asset exchange within the Consolidated Statements of Operations during the three months ended March 31, 2020.

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Other-Than-Temporary Impairment

Due to the current and estimated adverse impacts from the COVID-19 pandemic and the Company's store closures, management expects a decrease in future purchases from the Manufacturing JV resulting in a decline in the value of its equity method investment in the Manufacturing JV. The decline in value was determined to be other-than-temporary which required the equity method investment to be written down to its fair value. The Company recognized $35.8 million other-than-temporary impairment related to its equity method investment in the Manufacturing JV, which was recorded within (loss) income from equity method investment on the Consolidated Statement of Operations during the three months ended March 31, 2020. This impairment charge was derived using Level 3 inputs and was primarily driven by the projected future purchase price of the equity interest in the Manufacturing JV from IVC under the terms of the agreement. As a result of the impairment, the carrying amount of the Company's equity method investment in the Manufacturing JV was $35.8 million less than its share of underlying equity in net assets as of June 30, 2020. No impairment triggers were identified as it relates to our equity method investments as of June 30, 2020.

Related Party Transactions

The Company's related party transactions with the Manufacturing, HK and China joint ventures are as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Manufacturing JV finished goods purchases	$	39,783	$	51,632	$	76,220	$	72,392
HK JV revenue, primarily wholesale and royalties	6,537		2,087		10,349		4,274

	June 30, 2020		December 31, 2019
	(in thousands)
Manufacturing JV accounts payable1	$	18,714	$	11,720
HK JV accounts receivable	10,094		8,946

¹ On Petition Date, all prepetition Manufacturing JV accounts payable has been classified in LSTC.

NOTE 10.  FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

        ASC 820, Fair Value Measurements and Disclosures defines fair value as a market-based measurement that should be determined based on the assumptions that marketplace participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1 — observable inputs such as quoted prices in active markets for identical assets and liabilities;

Level 2 — observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other inputs that are observable, or can be corroborated by observable market data; and

Level 3 — unobservable inputs for which there are little or no market data, which require the reporting entity to develop its own assumptions.

        The carrying amounts of cash and cash equivalents, restricted cash, receivables, accounts payable, accrued liabilities and the Revolving Credit Facility approximate their respective fair values. Based on the interest rates currently available and their underlying risk, the carrying value of franchise notes receivable recorded in other long-term assets approximates its fair value.

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        The carrying value and estimated fair value of the Term Loan Facility, net of discount, Notes (net of the equity component classified in stockholders' equity and discount) and the interest rate swaps were as follows:

	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Liabilities not subject to compromise:
Tranche B-2 Term Loan	$	—	$	—	$	441,500	$	414,321
FILO Term Loan	—		—		266,814		265,851
Notes	—		—		154,675		148,488
DIP Financing - New Money DIP	30,000		30,000		—		—
DIP Financing - DIP FILO	275,000		275,000		—		—
Interest rate swaps	—		—		6,940		6,940
Liabilities subject to compromise:
Tranche B-2 Term Loan	$	410,834	$	292,033	$	—	$	—
Notes	159,097		795		—		—

        The fair values of the term loans were determined using the instruments' trading value in markets that are not active, which are considered Level 2 inputs. The fair value of the Notes was determined based on quoted market prices and bond terms and conditions, which are considered Level 2 inputs. The Company's interest rate swaps are carried at fair value, which is based primarily on Level 2 inputs utilizing readily observable market data, such as LIBOR forward rates, for all substantial terms of the interest rate swap contracts and the assessment of nonperformance risk.

As a result of the Debtors filing for relief under Chapter 11 as further discussed in Note 3. "Reorganization and Chapter 11 Proceedings," GNC’s prepetition debt, except for the FILO Term Loan which rolled into the DIP ABL FILO Facility, is classified as liabilities subject to compromise as of June 30, 2020. As of June 30, 2020, the estimated carrying amount and fair value of GNC’s DIP Term Loan is $275.0 million and is classified as Level 2 within the fair value hierarchy. The fair values of debt instruments classified as Level 2 instruments are valued using market prices we obtain from external third parties.

As described in Note 6. "Property, Plant and Equipment, Net," and Note 7. "Goodwill and Intangible Assets, Net," the Company recorded long-lived asset impairments during the six months ended June 30, 2020. This resulted in the following assets being measured at fair value on a non-recurring basis using Level 3 inputs:

•the indefinite-lived brand name intangible asset at June 30, 2020;

•goodwill at June 30, 2020 for the Health Store reporting unit;

•property and equipment and right-of-use assets at certain of the Company's stores at June 30, 2020;

•equity method investment in the Manufacturing JV at June 30, 2020.

NOTE 11.  CONTINGENCIES

On June 23, 2020, the Debtors filed the Chapter 11 Cases seeking relief under the Bankruptcy Code. The commencement of the Chapter 11 Cases automatically stayed all of the proceedings and actions against the Debtors. See Note 3. "Reorganization and Chapter 11 Proceedings" for a description of the Chapter 11 Cases.

        The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including claims related to breach of contracts, product liability matters, intellectual property matters and employment-related matters resulting from the Company's business activities.

        The Company's contingencies are subject to substantial uncertainties, including for each such contingency the following, among other factors: (i) the procedural status of the case; (ii) whether the case has or may be certified as a class action suit; (iii) the outcome of preliminary motions; (iv) the impact of discovery; (v) whether there are significant factual issues to be determined or resolved; (vi) whether the proceedings involve a large number of parties and/or parties and claims in multiple jurisdictions or jurisdictions in which the relevant laws are complex or unclear; (vii) the extent of potential damages, which are often unspecified or indeterminate; and (viii) the status of

32

settlement discussions, if any, and the settlement posture of the parties. Consequently, except as otherwise noted below with regard to a particular matter, the Company cannot predict with any reasonable certainty the timing or outcome of the legal matters described below, and the Company is unable to estimate a possible loss or range of loss for such matters. If the Company ultimately is required to make any payments in connection with an adverse outcome in any of the matters discussed below, it is possible that it could have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

        As a manufacturer, prior to the formation of the Manufacturing JV, and retailer of nutritional supplements and other consumer products that are ingested by consumers or applied to their bodies, the Company has been and is currently subjected to various product liability claims. Although the effects of these claims to date have not been material to the Company, it is possible that current and future product liability claims could have a material adverse effect on its business or financial condition, results of operations or cash flows. The Company currently maintains product liability insurance with a deductible/retention of $4.0 million per claim with an aggregate cap on retained loss of $10.0 million per policy year. GNC was granted an automatic stay order by the Bankruptcy Court continuing the provisions under existing insurance arrangements. The Company typically seeks and has obtained contractual indemnification from most parties that supply raw materials for its products or that manufacture or market products it sells. The Company also typically seeks to be added, and has been added, as an additional insured under most of such parties' insurance policies. However, any such indemnification or insurance is limited by its terms and any such indemnification, as a practical matter, is limited to the creditworthiness of the indemnifying party and its insurer, and the absence of significant defenses by the insurers. Consequently, the Company may incur material product liability claims, which could increase its costs and adversely affect its reputation, revenue and operating income.

Litigation

        DMAA / Aegeline Claims.  Prior to December 2013, the Company sold products manufactured by third parties that contained derivatives from geranium known as 1.3-dimethylpentylamine/ dimethylamylamine/ 13-dimethylamylamine, or "DMAA," which were recalled from the Company's stores in November 2013, and/or Aegeline, a compound extracted from bael trees. As of June 30, 2020, the Company was named in 27 personal injury lawsuits involving products containing DMAA and/or Aegeline. On July 22, 2020, all matters pending in the United States District Court for the District of Hawaii were dismissed.

        The remaining matters are currently stayed pending final resolution.

        The Company is contractually entitled to indemnification by its third-party vendors with regard to these matters, although the Company’s ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of the vendors and/or their insurance coverage and the absence of any significant defenses available to their insurers.

California Wage and Break Claims. On February 29, 2012, former Senior Store Manager, Elizabeth Naranjo, individually and on behalf of all others similarly situated, sued General Nutrition Corporation in the Superior Court of the State of California for the County of Alameda. The complaint contains eight causes of action, alleging, among other matters, meal, rest break and overtime violations for which indeterminate money damages for wages, penalties, interest, and legal fees are sought. In June 2018, the Court granted in part and denied in part the Company's Motion for Decertification. In August 2018, the plaintiff voluntarily dismissed the class action claims alleging overtime violations. In November 2019, GNC filed a renewed Motion for Decertification, which was denied by the Court in January 2020. There is no trial date currently scheduled. As of June 30, 2020, an immaterial liability has been accrued in the accompanying financial statements. The Company intends to vigorously defend against the remaining class action claims asserted in this action.

Pennsylvania Fluctuating Workweek. On September 18, 2013, Tawny Chevalier and Andrew Hiller commenced a class action in the Court of Common Pleas of Allegheny County, Pennsylvania. Plaintiff asserted a claim against the Company for a purported violation of the Pennsylvania Minimum Wage Act ("PMWA"), challenging the Company's utilization of the "fluctuating workweek" method to calculate overtime compensation, on behalf of all employees who worked for the Company in Pennsylvania and who were paid according to the fluctuating workweek method. In October 2014, the Court entered an order holding that the use of the fluctuating workweek method violated the PMWA. In September 2016, the Court entered judgment in favor of Plaintiffs and the class in an immaterial amount, which has been recorded as a charge in the accompanying Consolidated Financial Statements. Plaintiffs subsequently filed a petition for an award of attorney's fees, costs and incentive payment. The court awarded an immaterial amount in legal fees. The Company appealed the adverse judgment and the award of attorney's fees. On December 22, 2017, the Pennsylvania Superior Court held that the Company correctly determined the "regular rate" by dividing weekly compensation by all hours worked (rather than 40), but held that

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the regular rate must be multiplied by 1.5 (rather than 0.5) to determine the amount of overtime owed. Taking accumulated interest into account, the net result of the Superior Court's decision was to reduce the Company's liability by an immaterial amount, which has been reflected in the accompanying Consolidated Financial Statements. The Company filed a petition for appeal to the Pennsylvania Supreme Court on January 22, 2018. The Pennsylvania Supreme Court accepted the Company's petition for appeal and the Company filed its appellant’s brief on August 27, 2018. The Pennsylvania Supreme Court ruled in favor of Plaintiffs. The case has been remanded to the trial court for final resolution.

Oregon Attorney General. On October 22, 2015, the Attorney General for the State of Oregon sued the Company in Multnomah County Circuit Court for alleged violations of Oregon’s Unlawful Trade Practices Act, in connection with its sale in Oregon of certain third-party products. The Company is vigorously defending itself against these allegations. Along with its Amended Answer and Affirmative Defenses, the Company filed a counterclaim for declaratory relief, asking the court to make certain rulings in favor of the Company, and adding USPlabs, LLC and SK Laboratories as counterclaim defendants.  In March 2018, the Oregon Attorney General filed a motion for summary judgment relating to its first claim for relief, which the Company contested.  The Company filed a cross motion for summary judgment on the first claim for relief, which the Oregon Attorney General contested. Following oral argument in August 2018, the Court denied the State’s motion for summary judgment and granted in part and denied in part the Company’s motion for summary judgment. The parties are in the process of exchanging discovery. There is no trial date currently scheduled.

 As any losses that may arise from this matter are not probable or reasonably estimable at this time, no liability has been accrued in the accompanying Consolidated Financial Statements. Moreover, the Company does not anticipate that any such losses are likely to have a material impact on the Company, its business or results of operations. The Company is contractually entitled to indemnification and defense by its third-party vendors. Ultimately, however, the Company's ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of its vendors and/or their insurance coverage and the absence of any significant defenses available to their insurers.

E-Commerce Pricing Matters.  In April 2016, Jenna Kaskorkis, et al. filed a complaint against General Nutrition Centers, Inc. followed by similar cases brought forth by Ashley Gennock in May 2016 and Kenneth Harrison in December 2016.  Plaintiffs allege that the Company's promotional pricing on its website was misleading and did not fairly represent promotions based on average retail prices over a trended period of time being consistent with prices advertised as promotional.  A tentative agreement was reached in the third quarter of 2017 on many of the key terms of a settlement. In December 2019, the Court approved the settlement agreement.

Government Regulation

        In November 2013, the Company received a subpoena from the U.S. Department of Justice ("DOJ") for information related to its investigation of a third party product vendor, USPlabs, LLC. The Company fully cooperated with the investigation of the vendor and the related products, all of which were discontinued in 2013. In December 2016, the Company reached agreement with the DOJ in connection with the Company's cooperation, which agreement acknowledges the Company relied on the representations and written guarantees of USPlabs and the Company's representation that it did not knowingly sell products not in compliance with the Federal Food, Drug and Cosmetic Act (the "FDCA"). Under the agreement, which included an immaterial payment to the federal government, the Company will take a number of actions to broaden industry-wide knowledge of prohibited ingredients and improve compliance by vendors of third party products. These actions are in keeping with the leadership role the Company has taken in setting industry quality and compliance standards, and the Company's commitment over the course of the agreement (60 months) to support a combination of its own and the industry's initiatives. Some of these actions include maintaining and continuously updating a list of restricted ingredients that will be prohibited from inclusion in any products that are sold by the Company.  Vendors selling products to the Company for the sale of such products by the Company will be required to warrant that the products sold do not contain any of these restricted ingredients.  In addition, the Company will develop and maintain a list of ingredients that the Company believes comply with the applicable provisions of the FDCA.       

Environmental Compliance

        As part of soil and groundwater remediation conducted at the Nutra manufacturing facility pursuant to an investigation conducted in partnership with the South Carolina Department of Health and Environmental Control (the "DHEC"), the Company completed additional investigations with the DHEC's approval, including the installation and operation of a pilot vapor extraction system under a portion of the facility in the second half of 2016, which was an immaterial cost to the Company. After an initial monitoring period, in October of 2017 the DHEC approved a work

34

plan for extended monitoring of such system and the contamination into 2021. While the Company contributed the net assets of the Nutra manufacturing and Anderson facilities to the Manufacturing JV in March of 2019 (refer to Note 9. “Equity Method Investments” for additional information), we retained certain liabilities, including historical environmental liabilities, related to the facilities. As such, the Company and the Manufacturing JV will continue to consult with the DHEC on the next steps in the work after their review of the results of the extended monitoring is complete. At this stage of the investigation, however, it is not possible to estimate the timing and extent of any additional remedial action that may be required, the ultimate cost of remediation, or the amount of our potential liability. Therefore, no liability has been recorded in the Company's Consolidated Financial Statements.

        In addition to the foregoing, the Company is subject to numerous federal, state, local and foreign environmental and health and safety laws and regulations governing its operations, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges from its operations into the environment, including discharges to air, surface water and groundwater. Failure to comply with such laws and regulations could result in costs for remedial actions, penalties or the imposition of other liabilities, including certain historic liabilities retained by the Company pursuant to the terms of the Manufacturing JV. New laws, changes in existing laws or the interpretation thereof, or the development of new facts or changes in their processes could also cause the Company to incur additional capital and operating expenditures to maintain compliance with environmental laws and regulations and environmental permits. The Company is also subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment without regard to fault or knowledge about the condition or action causing the liability. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities.

        From time to time, the Company has incurred costs and obligations for correcting environmental and health and safety noncompliance matters and for remediation at or relating to certain of the Company's current or former properties or properties at which the Company's waste has been disposed. However, compliance with the provisions of national, state and local environmental laws and regulations has not had a material effect upon the Company's capital expenditures, earnings, financial position, liquidity or competitive position. The Company believes it has complied with, and is currently complying with, its environmental obligations pursuant to environmental and health and safety laws and regulations and that any liabilities for noncompliance will not have a material adverse effect on its business, financial performance or cash flows. However, it is difficult to predict future liabilities and obligations, which could be material.

NOTE 12. MEZZANINE EQUITY

        Holdings is authorized to issue up to 60.0 million shares of preferred stock, par value $0.001 per share. On February 13, 2018, the Company entered into a Securities Purchase Agreement (as amended from time to time, the “Securities Purchase Agreement”) by and between the Company and Harbin, pursuant to which the Company agreed to issue and sell to Harbin, and Harbin agreed to purchase from the Company, 299,950 shares of a newly created series of convertible preferred stock of the Company, designated the “Series A Convertible Preferred Stock” (the “Convertible Preferred Stock”), for a purchase price of $1,000 per share, or an aggregate of approximately $300 million. The Convertible Preferred Stock is convertible into 56.1 million shares of the Company's Common Stock at an initial conversion price of $5.35 per share, subject to customary anti-dilution adjustments. On November 7, 2018, The Company entered into an Amendment to the Securities Purchase Agreement with Harbin. Pursuant to the terms of the Securities Purchase Agreement, Harbin assigned its interest in the Securities Purchase Agreement to Harbin and funded the $300 million investment in three separate tranches. The shares of Convertible Preferred Stock were issued as follows: (i) 100,000 shares of Convertible Preferred Stock issued on November 8, 2018 for a total purchase price of $100 million (the initial issuance), (ii) 50,000 shares of Convertible Preferred Stock issued on January 2, 2019 for a total purchase price of $50 million (the "Second Issuance") and (iii) 149,950 shares of Convertible Preferred Stock issued on February 13, 2019 for a total purchase price of approximately $150 million (the “Third Issuance”).

        Holders of shares of Convertible Preferred Stock are entitled to receive cumulative preferential dividends, payable quarterly in arrears, at an annual rate of 6.5% of the stated value of $1,000 per share, subject to increase in connection with the payment of dividends in kind. Dividends are payable, at the Company's option, in cash from legally available funds or in kind by issuing additional shares of Convertible Preferred Stock with such stated value

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equal to the amount of payment being made or by increasing the stated value of the outstanding Convertible Preferred Stock by the amount per share of the dividend or in a combination thereof.

        As of June 30, 2020, the Company had issued a total of 299,950 shares of Convertible Preferred Stock. The Convertible Preferred Stock was recorded as Mezzanine Equity, net of issuance cost, on the Consolidated Balance Sheets because the shares are redeemable at the option of the holder if a fundamental change occurs, which includes change in control or delisting, where the common stock ceases to be listed or quoted on a national securities exchange, (a "Fundamental Change"). The guaranteed Second Issuance and Third Issuance were considered forward contracts that represented an obligation to both parties until the shares were issued. The forward contracts were recorded at fair value on the Consolidated Balance Sheets as of December 31, 2018, with any changes in fair value recorded in earnings in the Consolidated Statements of Operations. The Company recorded a $16.8 million loss on forward contracts for the issuance of Convertible Preferred Stock during the first quarter of 2019. Upon issuance of the shares associated with the forward contracts, the carrying value of the forward contracts were recorded to Mezzanine Equity.

        As a result of the delisting of our common stock from the NYSE on June 30, 2020, a Fundamental Change occurred. Subsequent adjustment of the amount presented in temporary equity is unnecessary if it is not probable that the instrument will become redeemable.  With the triggering of the Fundamental Change, under the Convertible Preferred Stock Agreement, the holders could request redemption of their shares at the stated value plus any accumulated and unpaid dividends. However, an automatic stay has been granted to GNC that prohibits among other things, sales or transfers of equity securities. The commencement of the Chapter 11 Cases automatically stayed all of the proceedings and actions against the Debtors and specified that holders of Convertible Preferred Stock are not entitled to dividends during the course of bankruptcy and there is no current option to redeem the shares.

As of June 30, 2020, the Company has not accrued for dividends on the Convertible Preferred Stock; however, the Company has continued the accumulation of dividends through June 30, 2020.

As of June 30, 2020, the stated value of the Convertible Preferred Stock is $300.0 million (299,950 shares at $1,000 per share) and there are accumulated and unpaid dividends on such shares of $30.2 million. As of December 31, 2019, the stated value of the Convertible Preferred Stock was $300.0 million (299,950 shares at $1,000 per share) and there were accumulated and unpaid dividends on such share of $19.8 million.

NOTE 13. EARNINGS PER SHARE

The following table represents the Company's basic and dilutive weighted-average shares:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
	(in thousands)
Basic weighted average shares	83,936	83,663	83,916	83,587
Effect of dilutive Convertible Preferred Stock	—	57,093	—	—
Effect of dilutive stock-based compensation awards	—	186	—	—
Diluted weighted average shares	83,936	140,942	83,916	83,587

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The following awards and convertible stock were excluded from the computation of diluted EPS because the impact was antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
	(in thousands)
Antidilutive:
Stock-based awards	6,018	3,768	6,398	4,292
Convertible Preferred Stock	60,896	—	60,409	49,979
Total excluded from diluted EPS	66,914	3,768	66,807	54,271

The Company applied the if-converted method to calculate dilution on the Notes, which has resulted in all the 2.4 million underlying convertible shares in all periods being anti-dilutive.

        The computations for basic and diluted loss per common share are as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands, except per share data)
(Loss) earnings per common share - Basic
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Cumulative undeclared convertible preferred stock dividend	5,280		4,950		10,475		8,667
Net (loss) income attributable to common shareholders	(88,949)		11,108		(294,230)		(7,871)
Weighted average common shares outstanding - basic	83,936		83,663		83,916		83,587
(Loss) earnings per common share - basic	$	(1.06)	$	0.13	$	(3.51)	$	(0.09)
(Loss) earnings per common share - Diluted
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Cumulative undeclared convertible preferred stock dividends	5,280		—		10,475		8,667
Net (loss) earnings attributable to common shareholders	(88,949)		16,058		(294,230)		(7,871)
Weighted average common shares outstanding - diluted	83,936		140,942		83,916		83,587
(Loss) earnings per common share - diluted	$	(1.06)	$	0.11	$	(3.51)	$	(0.09)

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NOTE 14.  SEGMENTS

The Company aggregates its operating segments into three reportable segments, which include U.S. and Canada (until GNC Canada was deconsolidated on June 24, 2020), International and Manufacturing / Wholesale. Warehousing and distribution costs have been allocated to each reportable segment based on estimated utilization and benefit. The Company's chief operating decision maker (its chief executive officer) evaluates segment operating results based primarily on operating income. Operating income of each reportable segment excludes certain items that are managed at the consolidated level, such as corporate costs. The Manufacturing / Wholesale segment, prior to the formation of the Manufacturing JV, manufactured and sold product to the U.S. and Canada and International segments at cost with a markup, which was eliminated at consolidation.

In connection with the Chapter 11 Cases, the Company launched liquidation sales in June 2020 in approximately 500 U.S and Canada company-owned stores which are expected to close during the third quarter of 2020. As a result, during the three and six months ended June 30, 2020, GNC recorded $20.2 million impairment charges within U.S. and Canada and recorded $12.6 million inventory reserves within U.S. and Canada as the Company expects vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC. During the six months ended June 30, 2020, due to the estimated adverse impacts from the COVID-19 pandemic, the Company recorded $177.7 million long-lived asset impairments and other store closing costs ($149.1 million within U.S. and Canada; $28.6 million within International), $22.8 million reserves related to inventory obsolescence and vendor allowances ($22.4 million within U.S. and Canada; $0.4 million within Manufacturing / Wholesale), and $8.7 million allowance for doubtful accounts ($7.9 million within U.S. and Canada; $0.8 million within International). Refer to Note 3. "Reorganization and Chapter 11 Proceedings" for more information on the Chapter 11 Cases and Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

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The following table represents key financial information for each of the Company's reportable segments:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Revenue:
U.S. and Canada	$	300,206	$	476,060	$	724,387	$	965,216
International	28,933		39,448		62,478		80,371
Manufacturing / Wholesale:
Intersegment revenues	—		—		—		35,505
Third-party	—		—		—		15,783
Wholesale partner sales	14,399		18,489		29,254		37,390
Subtotal Manufacturing / Wholesale	14,399		18,489		29,254		88,678
Total reportable segment revenues	343,538		533,997		816,119		1,134,265
Elimination of intersegment revenues	—		—		—		(35,505)
Total revenue	$	343,538	$	533,997	$	816,119	$	1,098,760
Operating income:
U.S. and Canada	$	(19,675)	$	49,202	$	(150,875)	$	101,302
International	8,231		14,269		(9,151)		28,319
Manufacturing / Wholesale	6,730		12,118		13,661		27,462
Total reportable segment operating income	(4,714)		75,589		(146,365)		157,083
Corporate costs	(53,804)		(25,079)		(78,638)		(51,340)
Loss on net asset exchange for the formation of the joint ventures	—		(1,779)		(1,655)		(21,293)
Other	—		(13)		2,107		(250)
Unallocated corporate costs, loss on net asset exchange and other	(53,804)		(26,871)		(78,186)		(72,883)
Total operating (loss) income	(58,518)		48,718		(224,551)		84,200
Interest expense, net	22,057		24,964		69,502		57,920
Reorganization items, net	15,429		—		15,429		—
Gain on purchase of convertible debt	—		(3,214)		—		(3,214)
Loss on forward contracts for the issuance of convertible preferred stock	—		—		—		16,787
(Loss) income before income taxes	$	(96,004)	$	26,968	$	(309,482)	$	12,707

        Refer to Note 4. "Revenue" for more information on the Company's reportable segments.

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NOTE 15.  INCOME TAXES

The Coronavirus Aid, Relief, and Economic Security Act ("CARES" Act) signed into law on March 27, 2020 in response to the COVID-19 pandemic, provides additional avenues of financial relief and assistance to individuals and businesses, including tax relief. The CARES Act includes, among other items, provisions relating to payroll tax credits and deferrals, net operating loss carry back periods, alternative minimum tax credits, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also temporarily and retroactively increases the limitation on the deductibility of interest expense under Internal Revenue Code Section 163(j)(1) from 30% to 50% of adjusted taxable income for tax years beginning in 2019 and 2020. The Company is currently evaluating the impact of the provisions of the CARES Act.

The Company recognized $11.4 million of income tax benefit during the three months ended June 30, 2020 compared with $13.0 million of income tax expense in the prior year quarter. The Company's income tax benefit/expense is based on income, statutory tax rates and the available carryback of net operating losses. The Company’s year-to-date tax provision is calculated by applying the most recent annualized effective tax rate to year-to-date pre-tax ordinary income. The Company’s 2020 annual effective tax rate was impacted by a $40.8 million partial valuation allowance for attributes expected to be generated in 2020 that may not be realizable, the other-than-temporary impairment of the Manufacturing JV, and the benefit of the federal tax rate differential related to federal net operating losses generated during the current year that are expected to be carried back to prior years at a 35% rate. The 2019 effective tax rate was significantly impacted by a gain for tax purposes resulting from the transfer of the Nutra manufacturing net assets to the Manufacturing JV and the establishment of a partial valuation allowance for attributes generated in the 2019 year that may not be realizable. The tax impacts of unusual or infrequent items are recorded discretely in the interim period in which they occur.

During the fourth quarter of the year ended December 31, 2019, as further discussed in Note 1. "Nature of Business," management concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern. Management considered this in concluding that certain deferred tax assets were no longer more likely than not realizable. As a result, increases in valuation allowance of $40.8 million and $27.1 million on the Company’s deferred tax assets were recorded as of June 30, 2020 and December 31, 2019, respectively, which related principally to Federal deferred tax assets, state NOL carryforwards, and other state tax attributes. These increases were partially offset by valuation allowance decreases of $4.8 million as of June 30, 2020 and December 31, 2019. The Company’s deferred tax assets of $26.5 million as of June 30, 2020 are considered realizable, as the majority of the deferred tax assets are related to federal net operating losses generated in the current year that are expected to be carried back to prior years at a 35% federal income tax rate based on the new CARES Act legislation.

        At June 30, 2020 and December 31, 2019, the Company had $11.6 million and $10.7 million of unrecognized tax benefits, respectively, excluding interest and penalties, which if recognized, would affect the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company accrued $2.8 million at June 30, 2020 and $2.1 million at December 31, 2019, for potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to the ultimate settlement of uncertain tax positions, amounts previously accrued will be reversed as a reduction to income tax expense.

        Holdings files a consolidated federal tax return and various consolidated and separate tax returns as prescribed by the tax laws of the state, local and international jurisdictions in which it and its subsidiaries operate. The statutes of limitation for the Company’s U.S. federal income tax returns are closed for years through 2013. The Company has various state and local jurisdiction tax years open to examination (the earliest open period is generally 2011).

NOTE 16. SUBSEQUENT EVENTS

COVID-19

The Company is closely monitoring the current and future potential impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact our customers, employees, suppliers, vendors, business partners and distribution channels. The Company incurred significant disruptions during the three and six months ended June 30, 2020 from COVID-19, and the Company's estimates on the future impact that COVID-19 will have on the Company's financial position and operating results is subject to numerous uncertainties.

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These uncertainties include the severity of the virus, the duration of the outbreak, governmental, business or other actions (which could include limitations on our operations), impacts on the Company's supply chain, the effect on customer demand, store closures or changes to our operations. The health of the Company's workforce, and the ability to meet staffing needs in stores, distribution facilities, wholesale operations and other critical functions cannot be predicted and is vital to our operations. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown. As of August 5, 2020, the Company had less than 100, or 3%, of the U.S. and Canada company-owned and franchise retail stores closed due to the COVID-19 pandemic.

In addition, the Company cannot predict with certainty the impact that COVID-19 will have on its customers, vendors, suppliers and other business partners; however, any material effect on these parties could adversely impact the Company. The situation surrounding COVID-19 remains fluid, and the Company is actively managing its response in collaboration with customers, government officials, team members and business partners and assessing potential impacts to its financial position and operating results, as well as adverse developments in the business.

Stalking Horse Agreement

On August 7, 2020, the Debtors entered into a Stalking Horse Agreement (the “Stalking Horse Agreement”) with Harbin Buyer. Pursuant to the terms of the Stalking Horse Agreement, the Debtors have agreed to sell substantially all of their assets (the “Assets,” and such sale, the “Sale”) to Harbin Buyer, and Harbin Buyer has agreed to assume from the Debtors certain specified liabilities as further set forth in the Stalking Horse Agreement (the “Assumed Liabilities”). The Stalking Horse Agreement contemplates that the Company will form (a) a new Delaware limited liability company as a wholly owned subsidiary (“GNC Newco”) and (b) a new Nova Scotia unlimited liability company as a wholly owned subsidiary of GNC Newco (“GNC Canada Newco”). At the closing (the “Closing”) of the transactions contemplated by the Stalking Horse Agreement, (i) the Debtors will transfer all of the Assets and Assumed Liabilities to GNC Newco (other than those Assets and Assumed Liabilities in Canada, which will be transferred to GNC Canada Newco), (ii) GNC Newco will redeem and cancel all of the issued and outstanding equity capital of GNC Newco held by the Company or its affiliates, and (iii) GNC Newco will issue all of the equity capital of GNC Newco to Harbin Buyer or its designated affiliate, such that, following such issuance, Harbin Buyer or its designated affiliate (as applicable) will hold 100% of the issued and outstanding equity capital of GNC Newco.

The purchase price under the Stalking Horse Agreement will comprise (a) indebtedness under the Second Lien Credit Agreement (as defined in the Stalking Horse Agreement) in a principal amount equal to $210.0 million, subject to adjustment as provided therein, (b) the payment of an amount in cash equal to $550.0 million, subject to adjustment as provided therein, (c) the issuance of up to $10.0 million in convertible junior notes to the Debtors’ unsecured creditors, subject to the satisfaction of certain conditions and (d) the assumption of the Assumed Liabilities (together, the “Purchase Price”). In addition, under the Stalking Horse Agreement, Harbin Buyer is obligated to make a $57.0 million good faith deposit (the “Deposit”) to be held in a segregated escrow account, with the Deposit being released to the Company upon the earlier to occur of (i) the Closing, in which case the amount of the Deposit will be credited against the cash portion of the Purchase Price and (ii) a Buyer Default Termination (as defined in the Stalking Horse Agreement). If the Stalking Horse Agreement is terminated other than due to a Buyer Default Termination, the Deposit will be returned to Harbin Buyer.

The Stalking Horse Agreement, which is subject to Court approval, is intended to constitute a “stalking horse bid” for the Assets in accordance with the Debtors’ motion to modify the bidding procedures order (the “Bidding Procedures Order”), which was approved by a final order of the Court on Court on July 22, 2020, to extend the deadline by which the Debtors are authorized to enter into a Stalking Horse Agreement to August 7, 2020 (the “Stalking Horse Extension Motion”). The Stalking Horse Agreement includes certain bid protections for Harbin Buyer payable in accordance with the terms thereof, including a break-up fee equal to $22.8 million and an expense reimbursement of up to $3.0 million of reasonable and documented out of pocket fees (the “Bid Protections”). A hearing to consider the Stalking Horse Extension Motion, and the entry of a final order approving the modified Bidding Procedures Order, is scheduled to be held before the Bankruptcy Court on August 19, 2020 at 1.00 p.m. ET.

The Bidding Procedures Order established certain bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers to purchase all or substantially all of the Assets (any such offer, a “Competing Transaction”). The Bid Protections are payable upon certain termination events set forth in

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the Stalking Horse Agreement, including the consummation of a Competing Transaction (subject to certain exceptions).

The Bidding Procedures Order set the deadline (the “Bid Deadline”) to submit bids for the Debtors’ assets as September 11, 2020. Upon the receipt of at least one qualified offer from other bidders proposing a Competing Transaction by the Bid Deadline, the Debtors will hold an auction with respect to the Assets on or about September 15, 2020.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with Item 1. “Financial Statements” of this Quarterly Report on Form 10-Q. The following information presented for the three and six months ended June 30, 2020 and 2019 was prepared by management, is unaudited, and was derived from our unaudited consolidated financial statements and accompanying notes. In the opinion of management, all adjustments necessary for a fair statement of our financial position and operating results for such periods and as of such dates have been included.

Forward-Looking Statements

        This Quarterly Report on Form 10-Q and any documents incorporated by reference herein or therein includes forward-looking statements within the meaning of federal securities laws. Forward-looking statements include statements that may relate to our plans, objectives, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs and other information that is not historical information. Forward-looking statements can often be identified by the use of terminology such as "subject to," "believe," "anticipate," "plan," "expect," "intend," "estimate," "project," "may," "will," "should," "would," "could," "can," the negatives thereof, variations thereon and similar expressions, or by discussions of strategy.

        All forward-looking statements, including, without limitation, our examination of historical operating trends, are based upon our current expectations and include various assumptions. We believe there is a reasonable basis for our expectations and beliefs, but they are inherently uncertain and subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. A detailed discussion of risk and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in the section titled “Risk Factors” in our 2019 Annual Report on Form 10-K, as filed with the Securities and Exchange Commission (the "SEC") on March 25, 2020 (the "2019 10-K") and as set forth in Part II, Item 1A. "Risk Factors" included herein.

        In addition, we operate in a highly competitive and rapidly changing environment; therefore, new risk factors can arise, and it is not possible for management to predict all such risk factors, nor to assess the impact of all such risk factors on our business or the extent to which any individual risk factor, or combination of risk factors, may cause results to differ materially from those contained in any forward-looking statement. Consequently, forward-looking statements should be regarded solely as our current plans, estimates and beliefs. You should not place undue reliance on forward-looking statements as a prediction of actual results. We cannot guarantee future results, events, levels of activity, performance or achievements. The forward-looking statements included in this Quarterly Report on Form 10-Q are made as of the date of this filing. We do not undertake and specifically decline any obligation to update, republish or revise forward-looking statements to reflect future events or circumstances or to reflect the occurrences of unanticipated events.

Business Overview

        GNC is a global health and wellness brand with a diversified, omni-channel business. Our assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink and other general merchandise features innovative private-label products as well as nationally recognized third-party brands, some of which are exclusive to GNC.  We derive our revenues principally from: product sales through our company-owned stores; online sales primarily through our website, GNC.com, as well as third-party websites; domestic and international franchise activities, and select wholesale partnerships. We sell products through a worldwide network of approximately 6,700 locations operating under the GNC brand name.

        We believe the competitive strengths that position us as a leader in the specialty nutritional supplement space include our: well-recognized brand; stable base of long-term customers; geographically diverse store base; proprietary product and innovation capabilities; and differentiated service model designed to enhance the customer experience.

Voluntary Reorganization under Chapter 11

On June 23, 2020 (the "Petition Date"), we and certain of our U.S. subsidiaries (collectively, the "Debtors") filed a prearranged plan of reorganization (the “Plan”) under Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Debtors’ voluntary Chapter 11 proceedings (the "Chapter 11 Cases") are being jointly administered for procedural purposes under the caption In re GNC Holdings, Inc., Inc., et al., Case No. 20-11662. In addition, our Canadian subsidiary

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("GNC Canada") voluntarily commenced parallel proceedings under the CCAA in Canada in the Ontario Superior Court of Justice, Case No. CV-20-00642970-00CL.

We are currently operating our business as debtors-in-possession in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. After we filed our Chapter 11 petitions, the Bankruptcy Court granted certain relief requested by the Debtors enabling us to conduct our business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing us to pay employee wages and benefits, to pay taxes and certain governmental fees and charges, to continue to operate our cash management system in the ordinary course, and to pay the prepetition claims of certain of our vendors. For goods and services provided following the Petition Date, we intend to pay vendors in full under normal terms.

Subject to certain exceptions, under the Bankruptcy Code, the filing of the Chapter 11 Cases automatically enjoined, or stayed, the continuation of most judicial or administrative proceedings or filing of other actions against the Debtors or their property to recover, collect or secure a claim arising prior to the Petition Date. Accordingly, although the filing of the Chapter 11 Cases triggered defaults under the Debtors’ funded debt obligations, creditors are stayed from taking any actions against the Debtors as a result of such defaults, subject to certain limited exceptions permitted by the Bankruptcy Code. Absent an order of the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities are subject to settlement under the Bankruptcy Code.

For the duration of the Chapter 11 Cases, our operations and ability to develop and execute our business plan are subject to the risks and uncertainties associated with the Chapter 11 process as described in Item 1A. “Risk Factors.” As a result of these risks and uncertainties, the amount and composition of our assets, liabilities, officers and/or directors could be significantly different following the outcome of the Chapter 11 Cases, and the description of our operations, properties and liquidity and capital resources included in this quarterly report may not accurately reflect its operations, properties and liquidity and capital resources following the Chapter 11 Cases.

In particular, subject to certain exceptions, under the Bankruptcy Code, the Debtors may assume, assume and assign or reject executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a pre-petition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors of performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach subject, in the case of the rejection of unexpired leases of real property, to certain caps on damages. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtor’s estate for such damages. Generally, the assumption or assumption and assignment of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance thereunder. Accordingly, any description of an executory contract or unexpired lease with the Debtor in this quarterly report, including where applicable a quantification of our obligations under any such executory contract or unexpired lease with the Debtor is qualified by any overriding rejection rights we have under the Bankruptcy Code. Further, nothing herein is or shall be deemed an admission with respect to any claim amounts or calculations arising from the rejection of any executory contract or unexpired lease and the Debtors expressly preserve all of their rights with respect thereto.

Deconsolidation of GNC Canada

As noted above, GNC Canada filed parallel proceedings in the Canadian Court. Any significant business decision which would impact our Canadian business requires the approval of both the U.S. and Canadian Courts as they have equal and plenary authority. As joint control by the U.S. and Canadian Courts does not constitute continued common control by the parent, we have deconsolidated GNC Canada effective as of June 24, 2020. The operating results of GNC Canada are reflected in our Consolidated Statements of Operations through the date of deconsolidation.

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Uncertainty Relating to COVID-19

Our business has been materially and adversely affected by the outbreak of the novel coronavirus known as COVID-19. During March 2020, many state governments ordered all but certain essential businesses closed and imposed significant limitations on the circulation of the populace due to the COVID-19 pandemic. U.S. and Canada company-owned and franchise retail stores closures reached approximately 1,400 stores, or 40%, in April 2020 and have steadily re-opened since then. Some of these stores have been permanently closed effective in June in connection with the Chapter 11 Cases and the rejection of certain unexpired U.S and Canada company-owned and franchise leases. As of August 5, 2020, we had less than 100, or 3%, of the U.S. and Canada company-owned and franchise retail stores closed due to the COVID-19 pandemic. In response, we have significantly reduced inventory purchases and capital expenditures, as well as taken actioned measures to decrease costs by nearly $40 million in 2020 consisting of employee furloughs, marketing reductions, store hours reductions and deferral of non-essential spend.

Due to the expected impact of COVID-19, including uncertainties on the severity of the virus, the duration of the outbreak, governmental, business or other actions (which could include limitations on our operations), impacts on our supply chain, the effect on customer demand, temporary and permanent store closures or changes to our operations, we have recorded charges to carrying amount of inventory, accounts receivable, goodwill, indefinite-lived intangibles, our equity method investment and other long-lived assets during the six months June 30, 2020.

Refer to Item 1. "Financial Statements," Note 16. "Subsequent Events" for additional information on the uncertainty relating to COVID-19.

Our Current Strategy

        Key elements of our business strategy and areas of internal focus for us are as follows:

•Leading brand of nutritional supplements. GNC has been in business for more than 80 years and we are built on a core foundation as a brand builder of high-quality nutritional supplements. Based on our worldwide network of approximately 6,700 locations and our online channels, we are a leading global brand of health, wellness and performance products.

Our objective is to offer a broad and deep mix of products for consumers interested in living well, whether they are looking to help with a health-related issue, maintain their overall wellness, or improve their performance. Our premium, value-added offerings include both proprietary GNC-branded products and other nationally recognized third-party brands.

We believe our depth of brands, exclusive products and range of merchandise, combined with the customer support and service we offer, differentiate us and allow us to effectively compete against food, drug and mass channel players, specialty stores, independent vitamin, supplement and natural food shops and online retailers.

•Product development and innovation. We develop high-quality, innovative nutritional supplement products that can be purchased only through our store locations, GNC.com, our Amazon.com storefront and other marketplaces or through our select wholesale partners. Our high quality ingredients are rigorously tested before going into GNC products, undergoing multiple quality checks so that they meet our high standards for identity, strength, purity, composition and limits in contaminants.

We believe our sector-leading innovation capability is a significant competitive advantage. Our strategic partnership with International Vitamin Corporation ("IVC") allows us to continue to focus on further innovation while IVC drives increased efficiencies in manufacturing. Refer to Note 9. "Equity Method Investments" for more information. GNC has demonstrated strength in developing unique, branded, and scientifically verified products and has a long history of delivering new ingredients and reformulations. We directly employ scientists, nutritionists, formulators and quality control experts and have access to a wide range of world-class research facilities and consultants.

•A differentiated retail customer experience. Our retail strategy is to deliver a compelling experience at every customer touch point. We operate in a highly personalized, aspirational sector and believe that the

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nutritional supplement consumer often desires and seeks out product expertise and knowledgeable customer service.

We further differentiate ourselves from competitors through development of our well-trained in-store associates as "coaches" with regular training that focuses on solution-based selling, and through in-store technology that allows associates to view customers’ purchase history and preferences in real time via tablets. With that knowledge, and help from sales tools built into the tablet platform, our in-store associates can engage customers in conversation, share product information and testimonials before and after pictures, recommend solutions and help customers add complementary products and build wellness regimens.

Our loyalty programs allow us to develop and maintain a large and loyal customer base, provide targeted offers and information, and connect with our customers on a regular basis. We harness data generated by these programs to better understand customers’ buying behaviors and needs, so we can deliver a stronger experience, bring like-minded consumers into the channel and make well-informed decisions about the business.

•Omni-channel development. We believe our diversified, omni-channel model, which includes company-owned stores, domestic and international franchise locations, wholesale locations and e-commerce channels, differentiates us from online-only and other competitors. Our strategy is to give consumers a seamless, integrated experience across digital, mobile and store channels and in every interaction they have with GNC.

Through GNC.com, our Amazon.com storefront and other marketplaces, customers can research and purchase our products online. We believe our store base is a competitive advantage with respect to our online presence and platform, allowing customers to experience our products and get expert advice from our in-store associates "coaches" as desired.

Our omni-channel model can enhance the customer experience and increase the lifetime value of a GNC customer, and we plan to continue to implement strategies over the next 12-18 months to blend our digital , online and in-store platforms to provide a seamless omni-channel shopping experience. These initiatives include increased cross-channel marketing, online and in-store subscription services, giving customers the option of picking up online purchases in GNC stores, shipping products purchased via e-commerce directly from stores, and providing additional educational content, information and advice on GNC.com.

•International growth. We see opportunity to expand internationally within the large global supplement market, which is expected to continue to grow. In particular, our partnership with Harbin allows us to further expand our business in China. Harbin’s expertise in distribution and regulation is the ideal match for our highly valued brand and assortment of products in the China market. Refer to Item 1. "Financial Statements," Note 9. "Equity Method Investments" for more information.

Key Performance Indicators

The primary key performance indicator that senior management focuses on is operating income for each segment, which is discussed in detail within the section titled "Results of Operations," as well as revenue and same store sales growth.

The table below presents the key components of U.S Company-owned same store sales for the periods indicated:

U.S. Company-Owned Same Store Sales, including GNC.com	Q1	Q2	YTD
2020 total same store sales	(10.1)%	(32.4)%	(20.9)%
2019 total same store sales	(1.6)%	(4.6)%	(3.1)%

        Same store sales include point-of-sale retail sales from all our company-owned domestic stores that have been operating for twelve full months following the opening day and retail sales from GNC.com. We are an omni-channel retailer with capabilities that allow a customer to use more than one channel when making a purchase, including in-store and e-commerce channels. Our e-commerce channels include our wholly-owned website GNC.com and third-party websites, including Amazon (the sales from which are included in the GNC.com business unit), where product assortment and price are controlled by us and purchases are fulfilled by direct shipment to the

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customer from one of our distribution facilities or from third-party e-commerce vendors. In-store sales are reduced by sales originally consummated online or through mobile devices and subsequently returned in-store. Sales of membership programs, including the PRO Access loyalty program and the net change in the deferred points liability associated with the myGNC Rewards program, are excluded from same store sales.

        Same store sales are calculated on a daily basis for each store and exclude the net sales of a store for any period if the store was not open during the same period of the prior year. When a store’s square footage has been changed as a result of reconfiguration or relocation in the same mall or shopping center, the store continues to be treated as a same store. If, during the period presented, a store was permanently closed, relocated to a different mall or shopping center, or converted to a franchise store or a company-owned store, sales from that store up to and including the closing day or the day immediately preceding the relocation or conversion are included as same store sales as long as the store was open during the same period of the prior year. Corporate stores are included in same store sales after the thirteenth month following a relocation or conversion to a company-owned store.

        We also provide retail comparable same stores sales of our franchisees as well as our Canada business if meaningful to current results. While retail sales of franchisees are not included in the Consolidated Financial Statements, the metric serves as a key performance indicator of our franchisees, which ultimately impacts wholesale sales and royalties and fees received from franchisees. We compute same store sales for our franchisees and Canada business consistent with the description of corporate same store sales above. Same store sales for international franchisees and Canada exclude the impact of foreign exchange rate changes relative to the U.S. dollar.

Beginning in March 2020 many state governments ordered all but certain essential businesses closed and imposed significant limitations on the circulation of the populace due to the COVID-19 pandemic. As a result of the COVID-19 pandemic, we temporarily closed up to 40% company-owned and franchise stores from March through June 2020, and sales trends have significantly declined beginning in the second half of March 2020. COVID-19 related temporary closures are also included in the calculation of same store sales. The impact from the COVID-19 temporary closures on U.S. Company-owned same store sales was estimated by excluding the net sales of a store from the calculation of same store sales if the store was temporarily closed at the end of each month as a result of the COVID-19 pandemic.

Non-GAAP Measures

        We have included certain non-GAAP financial measures below, which have been adjusted to exclude the impact of certain transactions occurring during the periods presented, because we believe such measures represent an effective supplemental means by which to measure our operating performance. We believe that (i) net (loss) income, (ii) diluted earnings per share ("EPS"), (iii) EBITDA, each on an as adjusted basis to exclude certain items, and (iv) free cash flow are useful metrics to investors and enable management and our investors to evaluate and compare our results from operations in a more meaningful and consistent manner by excluding specific items that are not reflective of ongoing operating results. However, these metrics are not a measurement of our operating performance under GAAP and should not be considered as an alternative to net (loss) income, EPS, or any other performance measures derived in accordance with GAAP, or as an alternative to GAAP cash flow from operating activities, or as a measure of our profitability or liquidity.

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Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS

(in thousands, except per share data)

	Three months ended June 30,
	2020				2019
	Net Loss		Diluted EPS (1)		Net Income		Diluted EPS (1)
	(unaudited)
Reported	$	(83,669)	$	(1.06)	$	16,058	$	0.11
Vendor allowance reserves (2)	12,597		0.15		—		—
Long-lived asset impairment	20,201		0.24		—		—
Restructuring expense (3)	34,177		0.41		—		—
Reorganization items, net (4)	15,429		0.18		—		—
Interest expense recognized on interest rate swap	(1,356)		(0.02)		—		—
Loss on net asset exchange for the formation of the joint ventures	—		—		1,779		0.01
Gain on convertible notes repurchase	—		—		(3,214)		(0.02)
Other (5)	1,513		0.02		464		—
Tax effect (6)	(25,111)		(0.30)		3,219		0.02
Adjusted	$	(26,219)	$	(0.38)	$	18,306	$	0.13
Weighted average diluted common shares outstanding	83,936				140,942

(1) The Company applies the if-converted method to calculate dilution impact of the convertible senior notes and the convertible preferred stock. For reported and adjusted diluted EPS for the three months ended June 30, 2020, the underlying shares of the convertible preferred stock and the convertible senior notes are anti-dilutive. Therefore, the diluted EPS included a reduction to net (loss) income for the cumulative undeclared dividends of $5.3 million for the second quarter of 2020. For reported and adjusted EPS for the three months ended June 30, 2019, the underlying shares of the convertible preferred stock is dilutive.

(2) As a result of filing the Chapter 11 Cases on June 23, 2020, the Company expects vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC, and therefore GNC recorded $12.6 million in inventory reserves during the three months ended June 30, 2020. Refer to Item 1. "Financial Statements," Note 3. "Reorganization and Chapter 11 Proceedings " and Note 5. "Inventory" for additional information.

(3) Includes expenses realized or incurred before the Petition Date and in relation to the Chapter 11 Cases recorded under selling, general and administrative charges on our Consolidated Statements of Operations as well as previously capitalized debt refinancing fees were written off in the second quarter of 2020 in connection with the filing of the Chapter 11 Cases.

(4) The Company has applied ASC 852 in preparing its Consolidated Financial Statements. ASC 852 requires the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the Company's reorganization from the ongoing operations of the business. Accordingly, certain expenses and gains incurred during the Chapter 11 Cases are recorded within Reorganization items, net in the unaudited Consolidated Statements of Operations.

(5) The three months ended June 30, 2020 included $1.2 million severance expense and $0.3 million executive incentive. The three months ended June 30, 2019 included retention of $0.8 million and immaterial refranchising gains.

(6) For the three months ended June 30, 2020 and 2019, the Company utilized a blended federal rate plus a net state rate that excluded the impact of certain state NOL's, state credits and valuation allowance.

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	Six months ended June 30,
	2020				2019
	Net Loss		Diluted EPS (1)		Net Income		Diluted EPS (1)
	(unaudited)
Reported	$	(283,755)	$	(3.51)	$	796	$	(0.09)
Loss on net asset exchange for the formation of the joint ventures	1,655		0.02		21,293		0.16
Loss from equity method investment	3,125		0.04		—		—
Restructuring expense (2)	34,177		0.41				—
Reorganization items, net (3)	15,429		0.18		—		—
Amortization of discount and deferred financing fees in connection with the accelerated debt maturity date (4)	12,390		0.15				—
Long-lived asset impairments and other store closing costs	177,715		2.12		—		—
Manufacturing JV other-than-temporary impairment	35,840		0.43		—		—
Inventory and vendor allowance reserves (5)	35,396		0.42		—		—
Allowance for credit losses (6)	8,703		0.10		—		—
Interest expense recognized on interest rate swap (7)	9,454		0.11		—		—
Amortization of discount in connection with early debt payment	156		—		3,119		0.02
Loss on forward contracts related to the issuance of convertible preferred stock	—		—		16,787		0.13
Gain on convertible notes repurchase	—		—		(3,214)		(0.02)
Other (8)	692		0.01		1,177		0.01
Tax effect (9)	(88,154)		(1.05)		(2,617)		(0.02)
Adjusted	$	(37,177)	$	(0.57)	$	37,341	$	0.28
Weighted average diluted common shares outstanding	83,916				133,787

(1) The Company applies the if-converted method to calculate dilution impact of the convertible senior notes and the convertible preferred stock. For reported and adjusted diluted EPS for the six months ended June 30, 2020, the underlying shares of the convertible preferred stock and the convertible senior notes are anti-dilutive. Therefore, the diluted EPS included a reduction to net (loss) income for the cumulative undeclared dividends of $10.5 million for the six months ended June 30, 2020. For reported and adjusted EPS for the six months ended June 30, 2019, the underlying shares of the convertible preferred stock are dilutive.

(2) Previously capitalized debt refinancing fees were written off in the second quarter of 2020 in connection with the filing of the Chapter 11 Cases and expenses realized or incurred before the Petition Date and in relation to the Chapter 11 Cases are recorded under selling, general and administrative charges on our Consolidated Statements of Operations.

(3) The Company has applied ASC 852 in preparing its Consolidated Financial Statements. ASC 852 requires the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the Company's reorganization from the ongoing operations of the business. Accordingly, certain expenses and gains incurred during the Chapter 11 Cases are recorded within Reorganization items, net in the unaudited Consolidated Statements of Operations.

(4) The Company accelerated the amortization of discount and deferred financing fees related to the Tranche B-2 Term Loan, FILO Term Loan and the Revolving Credit Facility as a result of the expected acceleration of the debt maturity date to the Springing Maturity Date.

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(5) Included $22.8 million inventory obsolescence and vendor allowance reserves due to the current and estimated adverse impacts from the COVID-19 pandemic, and $12.6 million in inventory reserves as a result of filing the Chapter 11 Cases on June 23, 2020 in which the Company expects vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC. Refer to Item 1. "Financial Statements," Note 3. "Reorganization and Chapter 11 Proceedings " and Note 5. "Inventory" for additional information.

(6) Represents credit losses for its franchisees and other third-party customers during the three months ended March 31, 2020 based on the current and estimated adverse impacts from the COVID-19.

(7) During the first quarter of 2020, the Company deemed the cash flow hedges as ineffective as the forecasted hedging transactions were not expected to occur by the end of the originally specified time period. The Company reclassified a $10.8 million pre-tax loss previously deferred within accumulated other comprehensive loss to interest expense and subsequent changes in fair value within interest expense in the current period.

(8) The six months ended June 30, 2020 included $2.0 million severance, $0.5 million executive incentive, and $0.3 million loss from the cancellation of the annual franchise conference as a result of COVID-19, partially offset by a $2.1 million gain from the sale of the Company owned location in Boston, MA. The six months ended June 30, 2019 included retention of $1.6 million and immaterial refranchising gains.

(9) For the three months ended June 30, 2020 and 2019, the Company utilized a blended federal rate plus a net state rate that excluded the impact of certain state NOL's, state credits and valuation allowance.

Reconciliation of Net Loss to Adjusted EBITDA

(in thousands)

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(unaudited)
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Income tax expense	(11,386)		13,030		(64,421)		14,986
Interest expense, net	22,057		24,964		69,501		57,920
Depreciation and amortization	6,987		8,514		14,845		18,704
Restructuring expense	34,177		—		34,177		—
Reorganization items, net	15,429		—		15,429		—
Loss on net asset exchange for the formation of the joint ventures	—		1,779		1,655		21,293
Loss from equity method investment	—		—		3,125		—
Loss on forward contracts related to the issuance of convertible preferred stock	—		—		—		16,787
Gain on convertible notes repurchase	—		(3,214)		—		(3,214)
Long-lived asset impairments and other store closing costs	20,201		—		177,715		—
Manufacturing JV other-than-temporary impairment	—		—		35,840		—
Obsolete inventory reserves and vendor allowance	12,597		—		35,396		—
Allowance for doubtful accounts	—		—		8,703		—
Other	1,513		464		692		1,177
Adjusted EBITDA	$	17,906	$	61,595	$	48,902	$	128,449

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Reconciliation of Net Cash (Used in) Provided by Operating Activities to Free Cash Flow

(in thousands)

	Six months ended June 30,
	2020		2019
Net cash (used in) provided by operating activities	$	(3,441)	$	65,323
Capital expenditures	(5,970)		(6,460)
Free cash flow	$	(9,411)	$	58,863

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Results of Operations

(Calculated as a percentage of consolidated revenue unless indicated otherwise)

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Revenues:
U.S. and Canada	87.4	%	89.1	%	88.7	%	87.8	%
International	8.4	%	7.4	%	7.7	%	7.3	%
Manufacturing / Wholesale:
Intersegment revenues	—	%	—	%	—	%	3.2	%
Third-party contract manufacturing	—	%	—	%	—	%	1.4	%
Wholesale partner sales	4.2	%	3.5	%	3.6	%	3.5	%
Subtotal Manufacturing / Wholesale	4.2	%	3.5	%	3.6	%	8.1	%
Elimination of intersegment revenue	—	%	—	%	—	%	(3.2)	%
Total net revenues	100.0	%	100.0	%	100.0	%	100.0	%
Operating expenses:
Cost of sales, including warehousing, distribution and occupancy	74.3	%	63.7	%	72.4	%	63.9	%
Gross profit	25.7	%	36.3	%	27.6	%	36.1	%
Selling, general and administrative	37.0	%	26.9	%	33.3	%	26.6	%
Long-lived asset impairments	5.9	%	—	%	21.8	%	—	%
Loss on net asset exchange for the formation of the joint ventures	—	%	(0.2)	%	(0.2)	%	(1.9)	%
Other income, net	(0.2)	%	(0.1)	%	(0.2)	%	(0.1)	%
Total operating expenses	117.0	%	90.2	%	127.1	%	88.5	%
Operating income:
U.S. and Canada (*)	(6.6)	%	10.3	%	(20.8)	%	10.5	%
International (*)	28.4	%	36.5	%	(14.6)	%	35.2	%
Manufacturing / Wholesale (*)	46.7	%	65.5	%	46.7	%	31.0	%
Unallocated corporate costs and other
Corporate costs	(15.7)	%	(4.7)	%	(9.6)	%	(4.7)	%
Loss on net asset exchange for the formation of the joint ventures	—	%	(0.3)	%	(0.2)	%	(1.9)	%
Other	—	%	—	%	0.3	%	—	%
Subtotal unallocated corporate, loss on net asset exchange and other costs	(15.7)	%	(5.0)	%	(9.5)	%	(6.6)	%
Total operating (loss) income	(17.0)	%	9.1	%	(27.5)	%	7.7	%
Interest expense, net	6.4	%	4.7	%	8.5	%	5.3	%
Reorganization items	4.5	%	—	%	1.9	%	—	%
Gain on purchase of convertible debt	—	%	(0.6)	%	—	%	(0.3)	%
Loss on forward contracts for the issuance of convertible preferred stock	—	%	—	%	—	%	1.5	%
Loss before income from equity method investments and income taxes	(27.9)	%	5.0	%	(37.9)	%	1.2	%
Income tax (benefit) expense	(3.3)	%	2.4	%	(7.9)	%	1.4	%
Net loss before income from equity method investments	(24.6)	%	2.6	%	(30.0)	%	(0.2)	%
(Loss) income from equity method investments	0.3	%	0.4	%	(4.7)	%	0.3	%
Net (loss) income	(24.3)	%	3.0	%	(34.7)	%	0.1	%

(*) Calculated as a percentage of segment revenue.

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The following table summarizes the number of our locations for the periods indicated:

	Six months ended June 30,
	2020	2019
U.S. & Canada
Company-owned(a):
Beginning of period balance	2,902	3,206
Openings	4	13
Acquired franchise locations(b)	5	14
Franchise conversions(c)	—	(4)
Closings (d)	(556)	(159)
End of period balance	2,355	3,070
Domestic Franchise:
Beginning of period balance	956	1,037
Openings	7	3
Acquired franchise locations(b)	(5)	(11)
Franchise conversions(c)	—	4
Closings (d)	(95)	(33)
End of period balance	863	1,000
International(e):
Beginning of period balance	1,915	1,957
Openings	22	50
Closings	(45)	(53)
China locations contributed to the China joint venture	—	(5)
End of period balance	1,892	1,949
Store-within-a-store (Rite Aid):
Beginning of period balance	1,759	2,183
Openings	32	19
Closings(f)	(165)	(201)
End of period balance	1,626	2,001
Total Locations	6,736	8,020

_______________________________________________________________________________

(a) Includes Canada.

(b) Stores that were acquired from franchisees and subsequently converted into company-owned store locations.

(c) Company-owned store locations sold to franchisees.

(d) Excludes approximately 100 of the U.S. and Canada company-owned and franchise retail temporary closed stores due to COVID-19 as of June 30, 2020.

(e) Includes franchise locations in approximately 50 countries (including distribution centers where sales are made and store-within-a-store locations) and company-owned locations in Ireland.

(f) Rite Aid store-within-a-store closings were primarily a result of the Walgreens acquisition of certain Rite Aid locations.

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Comparison of the Three Months Ended June 30, 2020 (current quarter) and 2019 (prior year quarter)

Revenues 

        Our consolidated net revenues decreased $190.5 million, or 35.7%, to $343.5 million for the three months ended June 30, 2020 compared with $534.0 million for the same period in 2019. The decrease in revenue was largely due to U.S. company-owned negative same store sales of 32.4% due to the COVID-19 pandemic, retail store closures associated with the store optimization program and lower Domestic and International franchise revenue.

        U.S. and Canada.  Revenues in our U.S. and Canada segment decreased $175.9 million, or 36.9%, to $300.2 million for the three months ended June 30, 2020 compared with $476.1 million in the prior year quarter. The $175.9 million decrease was primarily due to the following:

•A decrease in U.S. company-owned same store sales of 32.4%, which includes GNC.com sales, resulted in a $109.1 million decrease to revenue, of which approximately $74 million was attributable to the impact of COVID-19 temporary store closures. U.S. and Canada company-owned and franchise retail stores closures reached approximately 1,400 stores, or 40%, in April 2020 and have steadily re-opened since then. Some of these stores have been permanently closed effective in June in connection with the Chapter 11 Cases and the rejection of certain unexpired U.S and Canada company-owned and franchise leases as discussed further in Item 1. "Financial Statements," Note 3. "Reorganization and Chapter 11 Proceedings." As of June 30, we had over 100, or 4%, of the U.S. and Canada company-owned and franchise retail stores were closed due to the COVID-19 pandemic. E-commerce sales comprised 17.6% of U.S. and Canada revenue in the current quarter compared with 8.1% in the prior year quarter attributable to the impact of COVID-19 decreasing in-store purchases and driving sales online;

•The decrease in the number of corporate stores from 3,070 at June 30, 2019 to 2,355 at June 30, 2020 as a result of our store portfolio optimization strategy contributed a $3 million decrease to revenue;

•A decrease in domestic franchise revenue of $25.2 million due to a decrease in same store sales of 17.6% due to COVID-19 and decrease in number of franchise stores from 1,000 at June 30, 2019 to 863 at June 30, 2020; and

•A decrease in Canada same stores sales of 57.4% resulted in a $10.8 million decrease to revenue primarily due to COVID-19.

        International. Revenues in our International segment decreased $10.5 million, or 26.7%, to $28.9 million in the current quarter compared with $39.4 million in the prior year quarter primarily due to the outbreak of COVID-19 which caused business disruption in the International segment. Revenue from our international franchisees decreased by $14.0 million in the current quarter compared with the prior year quarter primarily due to lower sales in Hong Kong, Mexico, South Korea, UAE and Singapore as a result of the COVID-19 pandemic. Revenue from sales to the HK joint venture, primarily from wholesale sales, increased $4.5 million in the current quarter compared with the prior year quarter.

        Manufacturing / Wholesale. Revenues in our Manufacturing / Wholesale segment decreased $4.1 million, or 22.1%, to $14.4 million for the three months ended June 30, 2020 compared with $18.5 million in the prior year quarter due to decreases in wholesale partner sales. Sales to our wholesale partners decreased largely due to the expiration of the PetSmart sales agreement in the fourth quarter of 2019.

Cost of Sales and Gross Profit

        Cost of sales, which includes product costs, warehousing, distribution and occupancy costs, decreased $85.0 million to $255.3 million for the three months ended June 30, 2020 compared with $340.3 million in the prior year quarter. Gross profit decreased $105.5 million from $193.7 million in the prior year quarter to $88.2 million in the current quarter. In connection with the Chapter 11 Cases, we recorded $12.6 million in inventory reserves in which we expect vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC. Excluding these reserves in the current quarter, gross profit as a percentage of revenue was 29.4% for the three months ended June 30, 2020 compared with 36.3% in the prior year quarter. The decrease in gross profit rate was primarily due to deleverage in occupancy expense associated with lower sales.

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Selling, General and Administrative (“SG&A”) Expense

        SG&A expense, including compensation and related benefits, advertising and other expenses, decreased $16.7 million, or 11.6%, from $143.8 million in the prior year quarter to $127.1 million in the current quarter. SG&A expense, as a percentage of revenue, was 37.0% and 26.9% for the three months ended June 30, 2020 and 2019, respectively.

        During the three months ended June 30, 2020, we recorded $34.2 million for restructuring costs in connection with the filing of the Chapter 11 Cases ($28.0 million of restructuring professional fees, and $6.2 million write-off of debt refinancing fees) and $1.5 million in certain other expenses as detained within the table "Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS" above. During the three months ended June 30, 2019, we recognized $0.8 million related to a retention program adopted in the first quarter of 2018 to retain senior executives and certain other key personnel who are critical to the execution and success of our strategy which vested in four installments of 25% each over two years through February 2020.

        Excluding the impact of these items, SG&A expense decreased $51.5 million in the current quarter compared with the prior year quarter, and, as a percentage of revenue, was 26.6% and 26.8% for the three months ended June 30, 2020 and 2019, respectively. The decrease in SG&A expense was primarily due to lower salaries and benefits associated with the store portfolio optimization, corporate incentive and cost saving initiatives.

Long-lived Asset Impairments and Other Store Closing Costs

We recorded $20.2 million of long-lived asset impairments as a result of the liquidation sales and planned store closures during the Chapter 11 Cases, of which $18.2 million related to right-of use asset impairments and $2.0 million related to property and equipment impairment.

Refer to Item 1. "Financial Statements," Note 6. "Property, Plant and Equipment, Net" for more information.

Other Income, net

        Other income, net, of $0.6 million in the current quarter was primarily related to was a result of foreign currency gains. Other income, net, of $0.6 million in the prior year quarter included foreign currency gains and refranchising gains.

Operating Income

        As a result of the foregoing, consolidated operating loss was $58.5 million for the three months ended June 30, 2020 compared with operating income of $48.7 million in the prior year quarter. Operating loss in the current quarter was significantly impacted by restructuring fees of $34.2 million and inventory reserves of $12.6 million.

        U.S. and Canada. Operating loss was $19.7 million for the three months ended June 30, 2020 compared with operating income of $49.2 million for the same period in 2019. Operating loss in the current quarter included $20.2 million of long-lived asset impairments, $12.6 million for inventory reserves and $1.2 million in severance expense. Excluding these items and immaterial gains on refranchising in the prior year quarter, operating income was $14.1 million, or 4.7% of segment revenue, in the current quarter compared with $48.8 million, or 10.3% of segment revenue, in the prior year quarter. The decrease in operating income percentage in the current quarter compared to the prior year quarter was primarily due to occupancy, salaries and benefits and other SG&A deleverage in connection with the decrease in sales.

        International. Operating income was $8.2 million for the three months ended June 30, 2020. Operating income was 28.4% of segment revenue, compared with $14.1 million, or 36.2% of segment revenue, for the same period in 2019. The decrease in operating income percentage was primarily due to a lower margin rate as a result of a change in revenue mix within the segment driven by lower international franchise wholesale sales and higher wholesale sales to the HK JV.

        Manufacturing / Wholesale. Operating income decreased $5.4 million, or 44.5%, to $6.7 million for the three months ended June 30, 2020 compared with $12.1 million in the prior year quarter.  Operating income as a percentage of segment revenue decreased from 65.5% in the prior year quarter to 46.7% in the current quarter. Prior year operating income margins were positively impacted as the Manufacturing / Wholesale segment recognized profit margin that resulted from maintaining consistent pricing to what was charged to our other

55

operating segments prior to the inception of the Manufacturing JV. A decrease in revenue for our other operating segments in the current quarter has resulted in a decrease in the profit margin recognized compared to the prior year quarter.

        Corporate Costs. Corporate costs increased $28.7 million to $53.8 million for the three months ended June 30, 2020 compared with $25.1 million in the prior year quarter attributed primarily to restructuring fees of $34.2 million, and certain other expenses of $1.5 million as explained above. Additionally, the prior year quarter included retention expense $0.8 million. Excluding these expenses, corporate costs decreased $1.5 million in the current quarter compared with the prior year quarter.

Interest Expense, net

        Interest expense was $22.1 million for the three months ended June 30, 2020 compared with $25.0 million for the three months ended June 30, 2019 primarily due to the reduction in long-term debt. Refer to Item 1. "Financial Statements," Note 8. "Debt / Interest Expense" for more information.

Gain on Convertible Debt Repurchase

In the second quarter of 2019, we repurchased $29.5 million in aggregate principal amount of the Notes for $24.7 million in cash. The convertible debt repurchase resulted in a gain of $3.2 million, which included the unamortized conversion feature of $1.3 million and unamortized discount of $0.2 million in the second quarter of 2019. Refer to Item 1. "Financial Statements," Note 8. "Debt / Interest Expense" for more information.

Income Tax (Benefit) Expense

        We recognized $11.4 million of income tax benefit during the three months ended June 30, 2020 compared with $13.0 million of income tax expense for the same period in 2019. Our 2020 annual effective tax rate was impacted by a partial valuation allowance for attributes expected to be generated in 2020 that may not be realizable, the other-than-temporary impairment of the Manufacturing JV, and the benefit of the federal tax rate differential related to federal net operating losses generated during the current year that are expected to be carried back to prior years at a 35% rate. The 2019 effective tax rate was significantly impacted by a gain for tax purposes resulting from the transfer of the Nutra manufacturing net assets to the Manufacturing JV and the establishment of a partial valuation allowance for attributes generated in the 2019 year that may not be realizable.

Income from Equity Method Investments

        We recognized earnings of $0.9 million from equity method investments during the three months ended June 30, 2020 compared with income from equity method investments of $2.1 million in the prior year quarter. Refer to Item 1. "Financial Statements," Note 9. "Equity Method Investments" for more information.

Net Loss

        As a result of the foregoing, consolidated net loss was $83.7 million for the three months ended June 30, 2020 compared with net income of $16.1 million for the same period in 2019. Excluding certain expenses as reconciled in the table above, under the caption "Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS," adjusted net loss was $26.2 million for the current quarter compared with adjusted net income of $18.3 million for the same period in 2019.

Diluted Loss Per Share

        Diluted loss per share was $1.06 for the three months ended June 30, 2020 compared with diluted earnings per share of $0.11 for the same period in 2019. Excluding certain expenses as reconciled in the table above, under the caption "Reconciliation of Net Income and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS," adjusted diluted loss per share was $0.38 for the current quarter compared with diluted earnings per share of $0.13 for the same period in 2019.

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Comparison of the Six Months Ended June 30, 2020 (current year period) and 2019 (prior year period)

Revenues 

        Our consolidated net revenues decreased $282.7 million, or 25.7%, to $816.1 million for the six months ended June 30, 2020 compared with $1,098.8 million for the same period in 2019. The decrease in revenue was largely due to U.S. company-owned negative same store sales of 20.9% due to the COVID-19 pandemic, the closure of company-owned stores under our ongoing store portfolio optimization strategy, lower Domestic franchise revenue, the transfer of the Nutra manufacturing to the Manufacturing JV in the first quarter of 2019 and lower International franchise revenue.

        U.S. and Canada.  Revenues in our U.S. and Canada segment decreased $240.8 million, or 25.0%, to $724.4 million for the six months ended June 30, 2020 compared with $965.2 million in the prior year period. The $240.8 million decrease was primarily due to the following:

•A decrease in U.S. company-owned same store sales of 20.9%, which includes GNC.com sales, resulted in a $145.0 million decrease to revenue, of which approximately $98.9 million was attributable to the impact of COVID-19 temporary store closures. U.S. and Canada company-owned and franchise retail stores closures reached approximately 1,400 stores, or 40%, in April 2020 and have steadily re-opened since then. Some of these stores have been permanently closed effective in June in connection with the Chapter 11 Cases and the rejection of certain unexpired U.S and Canada company-owned and franchise leases as discussed further in Item 1. "Financial Statements," Note 3. "Reorganization and Chapter 11 Proceedings." As of June 30, we had over 100, or 4%, of the U.S. and Canada company-owned and franchise retail stores were closed due to the COVID-19 pandemic. E-commerce sales comprised 13.5% of U.S. and Canada revenue in the current quarter compared with 7.7% in the prior year quarter attributable to the impact of COVID-19 decreasing in-store purchases and driving sales online;

•The decrease in the number of corporate stores from 3,070 at June 30, 2019 to 2,355 at June 30, 2020 as a result of our store portfolio optimization strategy contributed a $48.8 million decrease to revenue;

•A decrease in domestic franchise revenue of $33.5 million due to a decrease in same store sales of 13.8% and decrease in number of franchise stores from 1,000 at June 30, 2019 to 863 at June 30, 2020; and

•A decrease in Canada same stores sales of 32.9% resulted in a $13.3 million decrease to revenue.

        International. Revenues in our International segment decreased $17.9 million, or 22.3%, to $62.5 million in the six months ended June 30, 2020 compared with $80.4 million in the prior year period primarily due to the outbreak of COVID-19 which caused business disruption in the International segment beginning in January 2020. Revenue from our international franchisees decreased by $20.5 million in the current year period compared with the prior year period primarily due to lower sales in the Hong Kong, South Korea, Mexico, Singapore, UAE and Philippines as a result of the COVID-19 pandemic. Revenue from sales to the HK joint venture, primarily from wholesale sales, increased $6.1 million in the current quarter compared with the prior year quarter.

        Manufacturing / Wholesale. Revenues in our Manufacturing / Wholesale segment, excluding intersegment sales, decreased $23.9 million, or 45.0%, to $29.3 million for the six months ended June 30, 2020 compared with $53.2 million in the prior year period primarily due to the transfer of the Nutra manufacturing business to the Manufacturing JV. Sales to our wholesale partners decreased $8.1 million, or 21.8%, from $37.4 million in the prior year period to $29.3 million in the current year period largely due to expiration of the PetSmart agreement in the fourth quarter of 2019 and closures of our Rite Aid store-within-a-store as a result of Walgreens' acquisition of certain Rite Aid locations. There were no intersegment sales in the current year period due to the transfer of the Nutra manufacturing business to the Manufacturing JV in March 2019, compared to $35.5 million in the prior year period.

Cost of Sales and Gross Profit

        Cost of sales, which includes product costs, warehousing, distribution and occupancy costs, decreased $110.7 million to $591.2 million for the six months ended June 30, 2020 compared with $701.9 million in the prior year period. Gross profit decreased $171.9 million from $396.8 million in the prior year period to $224.9 million in the current year period. Based on the estimated adverse impact from the COVID-19 pandemic and Chapter 11 Cases in which we expect vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC, we recorded $35.4 million in reserves related to

57

inventory obsolescence and vendor allowances in the current year period. Excluding these expenses in the current quarter, gross profit as a percentage of revenue was 31.9% for the six months ended June 30, 2020 compared with 36.1% in the prior year quarter. The decrease in gross profit rate was primarily due to deleverage in occupancy expense associated with lower sales.

Selling, General and Administrative Expense

        SG&A expense, including compensation and related benefits, advertising and other expenses, decreased $20.4 million, or 7.0%, from $292.1 million in the prior year period to $271.7 million in the current year period. SG&A expense, as a percentage of revenue, was 33.3% and 26.6% for the six months ended June 30, 2020 and 2019, respectively.

During the six months ended June 30, 2020, we recognized $34.2 million for restructuring costs in connection with the filing of the Chapter 11 Cases ($28.0 million of restructuring professional fees, and $6.2 million write-off of debt refinancing fees), $8.7 million allowance for credit losses for certain vendors and franchisees in connection with the adverse impact from COVID-19, $2.5 million in certain other expenses as detained within the table "Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS" above. During the six months ended June 30, 2019, we recognized $1.6 million related to a retention program adopted in the first quarter of 2018 to retain senior executives and certain other key personnel who are critical to the execution and success of our strategy which vested in four installments of 25% each over two years through February 2020.

        Excluding the impact of these items, SG&A expense decreased $64.6 million in the current quarter compared with the prior year quarter, and, as a percentage of revenue, was 27.7% and 26.4% for the six months ended June 30, 2020 and 2019, respectively. The decrease in SG&A expense was primarily due to lower salaries and benefits associated with the store portfolio optimization, corporate incentive and cost saving initiatives.

Long-lived Asset Impairments and Other Store Closing Costs

We recorded $177.7 million long-lived asset impairments and other store closing costs, consisting of $111.7 million related to brand name (of which $88.6 million was allocated to the U.S. and Canada segment and the remaining was allocated to the International segment), $60.5 million related to long-lived assets and other store closing costs, and $5.5 million related to goodwill impairment for The Health Store reporting unit within the International segment.

Refer to Item 1. "Financial Statements," Note 6. "Property, Plant and Equipment, Net" and Note 7. "Goodwill and Intangible Assets" for more information.

Other Income, net

        Other income, net, of $1.5 million in the current year period included a $2.1 million gain from the sale of our owned location in Boston, MA, offset by a $0.6 million foreign currency loss. Other income, net, of $0.8 million in the prior year period included foreign currency gains and refranchising gains.

Operating Income

        As a result of the foregoing, consolidated operating loss was $224.6 million for the six months ended June 30, 2020 compared with operating income of $84.2 million in the prior year period. Operating loss in the current year period was significantly impacted $177.7 million long-lived asset impairment and other store closing charges, $35.4 million reserves related to inventory obsolescence and vendor allowance, $34.2 million in prepetition restructuring fees and $8.7 million allowance for credit losses in connection with the current and estimated adverse impacts from the COVID-19 pandemic and certain other expenses as detailed within the table "Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS" above.

        U.S. and Canada. Operating loss was $150.9 million for the six months ended June 30, 2020 compared with operating income of $101.3 million for the same period in 2019. Operating loss in the current year period included $88.6 million non-cash brand impairment and $60.5 million of long-lived asset store impairment charges and other store closing costs. In addition, as mentioned above, in connection with adverse impacts from the COVID-19 pandemic and Chapter 11 Cases, we recorded $35.4 million inventory and vendor reserves, $8.7 million allowances for credit losses, and $0.7 million in certain other expenses detailed within table "Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS" above. Excluding these items and immaterial gains on refranchising in the prior year period, operating income was $43.2 million, or 6.0% of segment revenue, in the current year period compared with $100.9 million, or 10.5% of segment revenue, in the prior year period. The decrease in operating income percentage in the current period compared to the prior year period was

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primarily due to occupancy, salaries and benefits and other SG&A deleverage in connection with the decrease in sales.

        International. Operating loss was $9.2 million for the six months ended June 30, 2020. Excluding non-cash brand impairment of $23.1 million and goodwill impairment of $5.5 million in the current year period, operating income was $19.4 million, or 31.1% of segment revenue, compared with $28.3 million, or 35.2% of segment revenue, for the same period in 2019. The decrease in operating income percentage was primarily due to a lower margin rate driven by a change in revenue mix within the segment as a result of the transfer of the China business to the joint ventures effective February 13, 2019.

        Manufacturing / Wholesale. Operating income decreased $13.8 million, or 50.3%, to $13.7 million for the six months ended June 30, 2020 compared with $27.5 million in the prior year period.  Operating income as a percentage of segment revenue increased from 31.0% in the prior year period to 46.7% in the current year period. Revenue decreased as a result of the transfer of the Nutra manufacturing business to the Manufacturing JV as described above. However, operating income margins were positively impacted as the Manufacturing / Wholesale segment recognized profit margin that resulted from maintaining consistent pricing to what was charged to our other operating segments prior to the inception of the Manufacturing JV.

        Corporate Costs. Corporate costs increased $27.3 million to $78.6 million for the six months ended June 30, 2020 compared with $51.3 million in the prior year period attributable primarily to restructuring fees of $34.2 million, and $1.7 million in certain other expenses as discussed above. Additionally, as explained above, the prior year period included retention expense $1.6 million. Excluding these expenses, corporate costs decreased $5.4 million in the current year period compared with the prior year period.

Loss on Net Asset Exchange for the Formation of the Joint Ventures. During the first six months of 2020, we recognized a $1.7 million purchase price adjustment related to the Harbin transaction. During the first six months of 2019, we recognized a pre-tax loss of $21.3 million related to the contribution of our China business to the HK JV and China JV and the contribution of our Nutra manufacturing and Anderson facility net assets to the Manufacturing JV. Refer to Item 1. "Financial Statements," Note 9. "Equity Method Investment" for more information.

Interest Expense, net

        Interest expense was $69.5 million for the six months ended June 30, 2020 compared with $57.9 million for the six months ended June 30, 2019. The increase was primarily due to $12.4 million accelerated amortization of the discounts and deferred financing fees in connection with the accelerated maturity date for the Tranche B-2, FILO Term Loan and the Revolving Credit Facility and $10.8 million expense recognized for the amount previously deferred within accumulated other comprehensive loss related to the interest rate swap cash flow hedges being deemed ineffective as of June 30, 2020, partially offset by lower interest expense as a result of the reduction in long-term debt. Refer to Note 8. "Debt / Interest Expense" for more information.

Gains on Convertible Debt Repurchase

In the second quarter of 2019, we repurchased $29.5 million in aggregate principal amount of the Notes for $24.7 million in cash. The convertible debt repurchase resulted in a gain of $3.2 million in the six months ended June 30, 2019, which included the unamortized conversion feature of $1.3 million and unamortized discount of $0.2 million. Refer to Item 1. "Financial Statements," Note 8. "Debt / Interest Expense" for more information.

Loss on Forward Contracts for the Issuance of Convertible Preferred Stock

A loss of $16.8 million was recorded in the six months ended June 30, 2019 for the change in fair value of the forward contracts related to the issuance of convertible preferred stock. There was no such loss incurred in the current period. Refer to Item 1. "Financial Statements," Note 12. "Mezzanine Equity" for more information.

Income Tax (Benefit) Expense

        We recognized $64.4 million of income tax benefit during the six months ended June 30, 2020 compared with $15.0 million of income tax expense for the same period in 2019. Our 2020 annual effective tax rate was impacted by a partial valuation allowance for attributes expected to be generated in 2020 that may not be realizable, the other-than-temporary impairment of the Manufacturing JV, and the benefit of the federal tax rate differential related to federal net operating losses generated during the current year that are expected to be carried back to prior years at a 35% rate. The 2019 effective tax rate was significantly impacted by a gain for tax purposes resulting from the transfer of the Nutra manufacturing net assets to the Manufacturing JV and the establishment of a partial valuation allowance for attributes generated in the 2019 year that may not be realizable.

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(Loss) Income from Equity Method Investments

        We recognized a loss of $38.7 million from equity method investments during the six months ended June 30, 2020 compared with income from equity method investments of $3.1 million in the prior year period. During the first six months of 2020, the loss from equity method investments included a $35.8 million other-than-temporary impairment for the Manufacturing JV as the estimated fair value of the equity method investment in the Manufacturing JV was less than its carrying value, a $3.1 million loss in connection with IVC's first subsequent purchase of the Manufacturing JV. Refer to Item 1. "Financial Statements," Note 9. "Equity Method Investments" for more information.

Net Loss

        As a result of the foregoing, consolidated net loss was $283.8 million for the six months ended June 30, 2020 compared with net income of $0.8 million for the same period in 2019. Excluding certain expenses as reconciled in the table above, under the caption "Reconciliation of Net Loss and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS," adjusted net loss was $37.2 million for the current year period compared with adjusted net income of $37.3 million for the same period in 2019.

Diluted Loss Per Share

        Diluted loss per share was $3.51 for the six months ended June 30, 2020 compared with diluted loss per share of $0.09 for the same period in 2019. The diluted loss per share included cumulative undeclared dividends of $10.5 million and $8.7 million, respectively, for the current and prior year quarters. Excluding certain expenses as reconciled in the table above, under the caption "Reconciliation of Net Income and Diluted EPS to Adjusted Net (Loss) Income and Adjusted Diluted EPS," adjusted diluted loss per share was $0.57 for the current year period compared with diluted earnings per share of $0.28 for the same period in 2019.

Liquidity and Capital Resources

Our commencement of the Chapter 11 Cases constituted a default under certain of its debt instruments that accelerated our obligations under the Amended and Restated Term Loan Agreement, ABL Credit Agreement and the Indenture. Under the Bankruptcy Code, holders of the Tranche B-2 Term Notes and FILO Term Loan are stayed from taking any action against us as a result of this event of default.

On June 24, 2020 we entered into senior secured super-priority debtor-in-possession ("DIP") financing consisting of $100 million of new cash (the "New Money DIP") and $100 million of principal rolled up from the Tranche B-2 Term Loans (the "Rollup Term Loans"). Of the New Money DIP, we borrowed $30 million, of which $15.7 million was deposited in escrow as restricted cash. We also entered into senior secured super-priority DIP financing consisting of a refinancing of $275 million of FILO Term Loans converted into DIP financing (the "DIP ABL FILO Facility"). No amounts were outstanding on the DIP ABL FILO Facility as of June 30, 2020.

The Chapter 11 Cases and adverse impacts from COVID-19 have deteriorated our operational results and cash flows and may continue to do so in the future. We have continued to experience negative same store sales and declining gross profit. We have closed underperforming stores under its store optimization strategy and implemented cost reduction measures to help mitigate the effect of these declines and improve its financial position and liquidity. These factors raise substantial doubt about our ability to continue as a going concern. The accompanying Consolidated Financial Statements have been prepared in conformity with accounting principles accepted in the United States of America which contemplate the our continuation as a going concern.

In order to decrease our level of indebtedness and maintain our liquidity at levels sufficient to meet its commitments, we have undertaken a number of actions, including closing stores and further reducing its recurring operating expenses. We believe that even after taking these actions, it did not have sufficient liquidity to satisfy its debt service obligations, meet other financial obligations, comply with its debt covenants, and execute its business plan. As a result, the Debtors filed petitions for reorganization under Chapter 11 of the Bankruptcy Code.

Cash (Used in) Provided by Operating Activities

        Cash used in operating activities was $3.4 million for the six months ended June 30, 2020 compared with cash provided by operating activities of $65.3 million for the six months ended June 30, 2019. The decrease in cash from operating activities was driven by a decrease in operating income, as discussed above, and unfavorable working capital changes.

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Cash Provided by Investing Activities

        Cash used in investing activities was $0.6 million for the six months ended June 30, 2020 compared with cash provided by $83.0 million for the same period in 2019.

During the six months ended June 30, 2020, we received $15.6 million from IVC in connection with the subsequent purchase of the ownership of the Manufacturing JV in the first quarter of 2020, which resulted in a pre-tax loss of $3.1 million on net asset exchange calculated based on the difference between the cash receipt and the purchase price of $18.8 million. In connection with the closing of the debtor-in-possession financing, we agreed to settle and terminate the outstanding swap agreements on June 29, 2020 for $9.8 million, of which $9.0 million was classified as an investing activity. Additionally, we deconsolidated GNC Canada effective as of the Canadian Petition Date including cash of $4.3 million.

In the prior year, we received $101.0 million cash proceeds from IVC in exchange for IVC's 57% of ownership of the Manufacturing JV. In addition, in 2019 we made a capital contribution of $10.7 million to the Manufacturing JV for our share of short-term working capital needs and contributed cash of $2.4 million from our China business to the HK JV and China JV. Capital expenditures for the six months ended June 30, 2020 were $6.0 million compared with $6.5 million for the same period in 2019.

Cash Used in Financing Activities

        For the six months ended June 30, 2020, cash used in financing activities was $15.0 million, primarily consisting of $37.6 million in payments on the Tranche B-2 Term Loan utilizing proceeds from IVC's purchase of equity interest in the Manufacturing JV during the first quarter of 2020, partially offset by $22.7 million ($30.0 million net of $7.3 million in fees) provided by the debtor-in-possession financing.

        For the six months ended June 30, 2019, cash used in financing activities was $119.3 million, primarily consisting of $147.3 million in payments on the Tranche B-1 Term Loan, $114.0 million in payments on the Tranche B-2 Term Loan, $12.8 million fees associated with the issuance of Convertible Preferred Stock and a $10.4 million original issuance discount ("OID") paid to the Tranche B-2 Term Loan lender at 2% of the outstanding balance, partially offset by approximately $200 million of proceeds from the issuance of the Convertible Preferred Stock.

Contractual Obligations

Our contractual obligations consist mainly of payments related to Long-term debt and related interest, operating leases related to real estate used in the operation of our business and product purchase commitments. Due to the uncertain of timing of the Chapter 11 Cases, we cannot reasonably estimate the maturities of our prepetition and post-petition debt and interest or our obligations under lease agreements.

Critical Accounting Estimates

        There have been no material changes to the application of critical accounting policies and significant judgments and estimates as disclosed in our 2019 10-K. As described in Item 1. "Financial Statements," Note 6. "Property, Plant and Equipment, Net," Note 7. "Goodwill and Other Long-lived Assets," and Note 9. "Equity Method Investment," we recorded $177.7 million in long-lived asset impairment and other store closing costs and $35.8 million other-than-temporary impairment for the Manufacturing JV. The calculation of these charges required the use of judgment and estimates that involve inherent uncertainties.

Recent Accounting Pronouncements

        Refer to Note 2. "Basis of Presentation," which is incorporated herein by reference.

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

        The following changes have occurred with respect to our exposure to market risk since December 31, 2019:

Interest Rate Exposure

The Term Loan Facility and the asset-based Revolving Credit Facility are subject to changing interest rates. Effective as of the Petition Date, we ceased recording interest expense on outstanding prepetition debt subject to compromise, which reduced our interest rate exposure.

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On June 13, 2018, we entered into two interest rate swaps in an effort to manage interest rate exposure. As of March 31, 2020, our expectation was that it could not reduce the outstanding balance on the Notes to below $50 million before the Springing Maturity date, which would result in acceleration of the maturity date of the Tranche B-2 and the FILO Term Loan. As such, we deemed the cash flow hedges as ineffective as the forecasted hedging transactions were not expected to occur by the end of the originally specified time period. In connection with the Chapter 11 Cases, we entered into debtor-in-possession financing and agreed to settle and terminate the outstanding swap agreements on June 29, 2020.

For discussion of our exposure to market risk, refer to Part II, Item 7A "Quantitative and Qualitative Disclosures About Market Risk" of our 2019 Form 10-K.

Item 4.  Controls and Procedures 

Evaluation of Disclosure Controls and Procedures

        Our management, with the participation of our Chief Executive Officer (“CEO”) and our Chief Financial Officer ("CFO"), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed in the reports that we file or submit under the Exchange Act has been appropriately recorded, processed, summarized and reported on a timely basis and are effective in ensuring that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Based on such evaluation, our CEO and CFO have concluded that, as of June 30, 2020, our disclosure controls and procedures are effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

        There are no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ending June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  

PART II - OTHER INFORMATION 

Item 1.   Legal Proceedings 

On June 23, 2020, the Debtors filed the Chapter 11 Cases seeking relief under the Bankruptcy Code. The commencement of the Chapter 11 Cases automatically stayed all of the proceedings and actions against the Debtors. See Note 3. "Reorganization and Chapter 11 Proceedings" for a description of the Chapter 11 Cases.

        We are engaged in various legal actions, claims and proceedings arising in the normal course of business, some of which are covered by insurance for which we have rights of indemnification. These actions, claims and proceedings are of the sort that are commonly encountered in the nutritional supplement retail industry, including claims related to breach of contracts, products liabilities, intellectual property matters and employment-related matters resulting from our business activities. Although the impact of the final resolution of these matters on the Company's financial condition, results of operations or cash flows is not known, management does not believe that the resolution of these lawsuits will have a material adverse effect on the financial condition, results of operations or liquidity of the Company.

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        DMAA/Aegeline Claims.   As disclosed in prior Annual Reports on Form 10-K and Quarterly Reports on Forms 10-Q, prior to December 2013, we sold products manufactured by third parties that contained derivatives from geranium known as 1.3-dimethylpentylamine/ dimethylamylamine/ 13-dimethylamylamine, or "DMAA," which were recalled from our stores in November 2013, and/or Aegeline, a compound extracted from bael trees. As of June 30, 2020, individuals (on their own behalf or on behalf of minors or estates) have filed 27 personal injury lawsuits involving products containing DMAA and/or Aegeline, where we (or one of our wholly-owned subsidiaries) along with the third-party vendor, have been named as parties:

•Case No. 140502403, filed May 20, 2014 in Common Pleas Court of Philadelphia County, Pennsylvania

•Case No. 15-1-0847-05, filed May 1, 2015, in the first Circuit Court, State of Hawaii

•Cases filed in the District Court for the District of Hawaii as follows:

- Case No. 3-00639 DMK, filed November 21, 2013

- Case No. CV 14-00030, filed January 23, 2013

- Case No. CV 14-00032, filed January 23, 2014

- Case No. 14-cv-00364 filed October 24, 2014

- Case No. CV14-00366 filed August 15, 2014

- Case No. CV-15-00228, filed June 17, 2016

- Case No. CV14-00363, filed August 15, 2014

- Case No. CV 14-00031, filed January 23, 2014

- Case No. CV14-00029, filed January 23, 2014

- Case No. CV14-00365 filed October 24, 2014

- Case No. 14-cv-00367 filed October 24, 2014

•Cases filed in the Superior Court of California as follows:

◦Orange County:

- Case No. 2014-00740258 filed August 18, 2014

- Case No. 30-2015-00783256-CU-PL-CXC, filed April 16, 2015

- Case No. 30-2015-00776749, filed March 12, 2015

◦San Diego County:

- Case No. 37-2015-00008404, filed March 13, 2015

- Case No. 37-2013-00074052-CU-PL-CTL, filed November 1, 2013

- Case No. 37-2014-110924, filed September 8, 2014

Los Angeles County:

◦Los Angeles County:

- Case No. BC559542, filed October 6, 2014

- Case No. BC575262, filed March 13, 2015

- Case No. BC575264, filed March 13, 2015

- Case No. BC534065, filed January 23, 2014

◦Monterey County:

- Case No. M131321, filed March 13, 2015

- Case No. M131322, filed March 13, 2015

◦Santa Clara County:

- Case No. 115CV78045, filed March 13, 2015

- Case No. CV-14-0037, filed January 24, 2014

        On July 22, 2020, all matters pending in the United States District Court for the District of Hawaii were dismissed. The remaining matters are currently stayed pending final resolution.

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        We are contractually entitled to indemnification by our third-party vendor with regard to these matters, although our ability to obtain full recovery in respect of any such claims against us is dependent upon the creditworthiness of our vendor and/or its insurance coverage and the absence of any significant defenses available to its insurer.

        Other Legal Proceedings.    For additional information regarding certain legal proceedings to which we are a party, see Item 1. "Financial Statements" Note 11. "Contingencies."

Item 1A.   Risk Factors

        Other than as set forth below, there have been no material changes to the disclosures relating to this item from those set forth under Part I, Item 1A “Risk Factors” in the 2019 10-K:

We are subject to risks and uncertainties associated with our Chapter 11 Cases.

As previously reported on June 23, 2020, the Debtors filed voluntary petitions commencing the Chapter 11 Cases under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Debtors continue to operate their business as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

Pursuant to the Restructuring Support Agreement (substantially in the form attached as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on June 24, 2020, the “RSA”), the Debtors are pursuing on a parallel path basis (1) a standalone plan of reorganization (the “Plan”) and (2) a sale of the business of the Debtors pursuant to Section 363 of the Bankruptcy Code and based on a potential stalking horse bid from Harbin Buyer and/or other co-investors and/or their respective designees on terms and in accordance with documentation acceptable to the Consenting Creditors (as defined in the RSA) (the highest and best sale offer pursuant to this sale process, the “Sale”). A summary of certain material terms in the RSA was disclosed in the Company’s Current Report on Form 8-K filed on June 24, 2020, which description is incorporated by referenced herein.

In 2019, we engaged financial and legal advisors to assist us in, among other things, analyzing various strategic alternatives to address our liquidity and capital structure, including strategic and refinancing alternatives to restructure our indebtedness in private transactions. These restructuring efforts led to the execution of the RSA and commencement of the Chapter 11 Cases in the Bankruptcy Court on June 23, 2020.

The Chapter 11 Cases could have a material adverse effect on our business, financial condition, results of operations and liquidity. So long as the Chapter 11 Cases continue, our senior management may be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing on our business operations. Bankruptcy Court protection also may make it more difficult to retain management and the key personnel necessary to the success and growth of our business. In addition, during the period of time we are involved in the Chapter 11 Cases, our customers and suppliers may lose confidence in our ability to reorganize our business successfully and may seek to establish alternative commercial relationships.

Other significant risks include or relate to the following:

•our ability to obtain the Bankruptcy Court’s approval with respect to motions or other requests made to the Bankruptcy Court in the Chapter 11 Cases, including maintaining strategic control as debtors-in-possession;

•our ability to consummate either the Plan or the Sale;

•the effects of the filing of the Chapter 11 Cases on our business and the interest of various constituents, including our stockholders;

•the high costs of Chapter 11 Cases and related fees;

•our ability to maintain relationships with suppliers, customers, employees and other third parties as a result of the Chapter 11 Cases;

•Bankruptcy Court rulings in the Chapter 11 Cases as well as the outcome of all other pending litigation and the outcome of the Chapter 11 Cases in general;

•the length of time that we will operate with Chapter 11 protection and the continued availability of operating capital during the pendency of the proceedings;

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•third-party motions in the Chapter 11 Cases, which may interfere with our ability to consummate either the Plan or the Sale;

•the potential adverse effects of the Chapter 11 Cases on our liquidity and results of operations; and

•our ability to continue as a going concern.

Because of the risks and uncertainties associated with the Chapter 11 Cases, we may not be able to accurately predict or quantify the ultimate impact the Chapter 11 Cases may have on our business, cash flows, liquidity, financial condition and results of operations, nor can we accurately predict the ultimate impact the Chapter 11 Cases may have on our corporate or capital structure.

Delays in the Chapter 11 Cases may increase the risks of our being unable to consummate either the Plan or the Sale and increase our costs associated with the Chapter 11 Cases.

The RSA contemplates the consummation of the Plan (or the Sale, if it can be consummated on terms and in accordance with documentation acceptable to the Consenting Creditors (as defined in the RSA)), but there can be no assurance that we will be able to consummate either the Plan or the Sale. A prolonged Chapter 11 proceeding could adversely affect our relationships with customers, suppliers and employees, among other parties, which in turn could adversely affect our business, competitive position, financial condition, liquidity and results of operations and our ability to continue as a going concern. A weakening of our financial condition, liquidity and results of operations could adversely affect our ability to implement either the Plan or the Sale (or any other plan of reorganization). If we are unable to consummate either the Plan or the Sale, we may be forced to liquidate our assets.

The RSA is subject to significant conditions and milestones that may be difficult for us to satisfy.

There are certain material conditions we must satisfy under the RSA, including the timely satisfaction of milestones in the Chapter 11 Cases, which include the consummation of either the Plan or the Sale. Our ability to timely complete such milestones is subject to risks and uncertainties, many of which are beyond our control.

If the RSA is terminated, our ability to confirm and consummate either the Plan or the Sale could be materially and adversely affected.

The RSA contains a number of termination events, upon the occurrence of which certain parties to the RSA may terminate the agreement. If the RSA is terminated as to all parties thereto, each of the parties thereto will be released from its obligations in accordance with the terms of the RSA. Such termination may result in the loss of support for the Plan and/or the Sale by the parties to the RSA, which could adversely affect our ability to confirm and consummate the Plan or the Sale. If neither the Plan nor the Sale is consummated, there can be no assurance that the Chapter 11 Cases would not be converted to Chapter 7 liquidation cases or that any new plan would be as favorable to holders of claims against the Debtors as contemplated by the RSA.

Even if the Plan or the Sale is consummated, we may not be able to achieve our stated goals and there is substantial doubt regarding our ability to continue as a going concern.

Even if the Plan or Sale or any other Chapter 11 plan of reorganization is consummated, we may continue to face a number of risks, such as changes in economic conditions, changes in our industry, changes in demand for our services and increasing expenses. Some of these risks become more acute when a case under the Bankruptcy Code continues for a protracted period without indication of how or when the case may be completed. As a result of these risks and others, we cannot guarantee that the Plan or the Sale will achieve our stated goals.

Furthermore, even if our debts are reduced or discharged through the Plan or Sale, we may need to raise additional funds through public or private debt or equity financing or other various means to fund our business after the completion of the Chapter 11 Cases. Our access to additional financing may be limited, if it is available at all. Therefore, adequate funds may not be available when needed or may not be available on favorable terms, or at all.

In certain instances, a Chapter 11 case may be converted to a case under Chapter 7 of the Bankruptcy Code.

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Upon a showing of cause, the Bankruptcy Court may convert our Chapter 11 Cases to a case under Chapter 7 of the Bankruptcy Code. In such event, a Chapter 7 trustee would be appointed or elected to liquidate our assets for distribution in accordance with the priorities established by the Bankruptcy Code. We believe that liquidation under Chapter 7 would result in significantly smaller distributions being made to our creditors than those provided for in either the Plan or the Sale because of (i) the likelihood that the assets would have to be sold or otherwise disposed of in a distressed fashion over a short period of time rather than in a controlled manner and as a going concern, (ii) additional administrative expenses involved in the appointment of a Chapter 7 trustee, and (iii) additional expenses and claims, some of which would be entitled to priority, that would be generated during the liquidation and from the rejection of leases and other executory contracts in connection with a cessation of operations.

As a result of the Chapter 11 Cases, our historical financial information may not be indicative of our future performance, which may be volatile.

During the Chapter 11 Cases, we expect our financial results to continue to be volatile as restructuring activities and expenses, contract terminations and rejections, and claims assessments significantly impact our Consolidated Financial Statements. As a result, our historical financial performance is likely not indicative of our financial performance after the date of the filing of the Chapter 11 Cases. In addition, if we emerge from Chapter 11, the amounts reported in subsequent consolidated financial statements may materially change relative to our historical consolidated financial statements, including as a result of revisions to our operating plans pursuant to the Plan or the Sale (as applicable). We also may be required to adopt fresh start accounting, in which case our assets and liabilities will be recorded at fair value as of the fresh start reporting date, which may differ materially from the recorded values of assets and liabilities on our consolidated balance sheets. Our financial results after the application of fresh start accounting may be different from historical trends.

We may be subject to claims that will not be discharged in the Chapter 11 Cases, which could have a material adverse effect on our financial condition and results of operations.

The Bankruptcy Code provides that the confirmation of a plan of reorganization discharges a debtor from substantially all debts arising prior to consummation of a plan of reorganization. With few exceptions, all claims that arose prior to June 23, 2020 or before consummation of a plan of reorganization (i) would be subject to compromise and/or treatment under the plan of reorganization and/or (ii) would be discharged in accordance with the Bankruptcy Code and the terms of the plan of reorganization. Any claims not ultimately discharged pursuant to the plan of reorganization could be asserted against the reorganized entities and may have an adverse effect on our financial condition and results of operations on a post-reorganization basis.

The pursuit of the Chapter 11 Cases has consumed, and will continue to consume, a substantial portion of the time and attention of our management, which may have an adverse effect on our business and results of operations, and we may experience increased levels of employee attrition.

While the Chapter 11 Cases continue, our management will be required to spend a significant amount of time and effort focusing on the Chapter 11 Cases instead of focusing exclusively on our business operations. This diversion of attention may materially adversely affect the conduct of our business, and, as a result, our financial condition and results of operations, particularly if the Chapter 11 Cases are protracted.

Furthermore, during the pendency of the Chapter 11 Cases, we may experience increased levels of employee attrition, and our employees may face considerable distraction and uncertainty. A loss of key personnel or material erosion of employee morale could adversely affect our business and results of operations. Our ability to engage, motivate and retain key employees or take other measures intended to motivate and incentivize key employees to remain with us through the pendency of the Chapter 11 Cases is limited by restrictions on implementation of incentive programs under the Bankruptcy Code. The loss of services of members of our senior management team could impair our ability to execute our strategy and implement operational initiatives, which would be likely to have a material adverse effect on our financial condition, liquidity and results of operations. In addition, the longer the Chapter 11 Cases continue, the more likely it is that vendors and employees will lose confidence in our ability to reorganize our business successfully.

Our current operations and future growth may require significant additional capital, and the amount and terms of our indebtedness could impair our ability to fund our capital requirements. Financings under the Credit Agreements may be insufficient to fund our cash requirements through emergence from bankruptcy.

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Our business requires substantial capital. We may require additional capital in the event of growth opportunities, unanticipated maintenance requirements, or significant departures from our current business plan. Additional financing may not be available on a timely basis or on terms acceptable to us and within the limitations contained in the debtor-in-possession (“DIP”) credit agreements entered into in connection with the Chapter 11 Cases (the “DIP Credit Agreements”). The terms of the DIP Credit Agreements were previously disclosed in the Company’s Current Report on Form 8-K filed on June 24, 2020, which description is incorporated herein by reference.

Failure to obtain additional financing, should the need for it develop, could impair our ability to fund capital expenditure requirements and meet debt service requirements and could have an adverse effect on our business. Further, for the duration of the Chapter 11 Cases, we will be subject to various risks, including but not limited to (i) the inability to maintain or obtain sufficient financing sources for operations or to fund the Chapter 11 Cases and meet future obligations, and (ii) increased legal and other professional costs associated with the Chapter 11 Cases and our reorganization.

If the transactions contemplated by the RSA are not completed and the effective date of the Plan or the Sale does not occur prior to the maturity of the indebtedness under the DIP Credit Agreements, we may need to refinance such indebtedness. We may not be able to obtain some or all of any such financing on acceptable terms or at all.

We may be unable to comply with restrictions imposed by the DIP Credit Agreements.

The DIP Credit Agreements impose a number of restrictions on us. For example, the DIP Credit Agreements require us to maintain minimum levels of liquidity and various financial ratios and comply with various other financial covenants. Specifically, the terms of the DIP Credit Agreements require us to comply with covenants that are customary for DIP facilities of a similar type, including, but not limited to specified restrictions on indebtedness, liens, guarantee obligations, mergers, acquisitions, consolidations, liquidations and dissolutions, sales of assets, leases, payment of dividends and other restricted payments, voluntary payments of other indebtedness, investments, loans and advances, transactions with affiliates, sale and leaseback transactions and compliance with RSA milestones. The DIP Credit Agreements also require compliance with a variance covenant that compares actual operating disbursements and receipts and capital expenditures to the budgeted amounts set forth in the DIP budgets delivered to the agent and lenders thereunder from time to time pursuant to the terms of the DIP Credit Agreements. Our ability to comply with these provisions may be affected by events beyond our control and our failure to comply could result in an event of default under the DIP Credit Agreements.

Our common stock is quoted on the OTC Pink, and thus may have a limited market and lack of liquidity.

The recent delisting of our common stock on the NYSE, as well as NYSE’s filing of Form 25-NSE with respect to our common stock on July 1, 2020 could result in significantly lower trading volumes and reduced liquidity for investors seeking to buy or sell shares of our common stock. Our common stock is currently quoted on the OTC Pink, which may have an unfavorable impact on our stock price and liquidity. The OTC Pink Marketplace is a significantly more limited market than the NYSE or The Nasdaq Stock Market. The quotation of our shares on such marketplace may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock, could further depress the trading price of our common stock, and could have a long-term adverse impact on our ability to raise capital in the future. There can be no assurance that there will be an active market for our shares of common stock, either now or in the future, or that stockholders will be able to liquidate their investment or liquidate it at a price that reflects the value of the business. Accordingly, we urge extreme caution with respect to existing and future investments in our equity and other securities.

We believe it is likely that our common stock will substantially decrease in value as a result of the Chapter 11 Cases.

We have a significant amount of indebtedness that is senior to our current common stock in our capital structure. Our existing common stock has substantially decreased in value leading up to and during the Chapter 11 Cases. We do not foresee a market for our existing common stock after emergence from the Chapter 11 Cases. Accordingly, any trading in our common stock during the pendency of our Chapter 11 Cases is highly speculative and poses substantial risks to purchasers of our common stock.

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Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

We made no purchases of shares of Class A common stock for the quarter ended June 30, 2020.

In August 2015, the Board approved a $500.0 million multi-year repurchase program in addition to the $500.0 million multi-year program approved in August 2014, bringing the aggregate share repurchase program authorization to $1.0 billion of the Company’s common stock. As of June 30, 2020, the Company has utilized $802.2 million of the current repurchase program and has $197.8 million remains available for purchase under the program.

Item 3.   Defaults Upon Senior Securities

        The information set forth in Note 3 of the Notes to the Unaudited Condensed Consolidated Financial Statements included under Part 1. "Item 1. Financial Statements" of this quarterly report is incorporated into this item by reference.

Item 4.   Mine Safety Disclosures

        Not applicable. 

Item 5.  Other Information

        None.

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Item 6.   Exhibits

Exhibit
No.	Description
10.1	First Amendment to the Term Loan Agreement, dated as of May 15, 2020 (Incorporated by reference to Exhibit 10.1 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed May 15, 2020.)
10.2	Second Amendment to the ABL Credit Agreement, dated as of May 15, 2020 (Incorporated by reference to Exhibit 10.2 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed May 15, 2020.)
10.3	Second Amendment to the Term Loan Agreement, dated as of June 12, 2020 (Incorporated by reference to Exhibit 10.1 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 15, 2020.)
10.4	Third Amendment to the ABL Credit Agreement, dated as of June 12, 2020 (Incorporated by reference to Exhibit 10.2 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 15, 2020.)
10.5 **	Restructuring Support Agreement, dated June 23, 2020 (Incorporated by reference to Exhibit 10.1 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 24, 2020.)
10.6	Harbin Term Sheet (Incorporated by reference to Exhibit 10.2 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 24, 2020.)
10.7	DIP Backstop Commitment Letter, dated June 23, 2020 (Incorporated by reference to Exhibit 10.3 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 24, 2020.)
10.8	Form of Letter Agreement (Incorporated by reference to Exhibit 10.4 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 24, 2020.)
10.9	Amendment to Employment Agreement of Kenneth A. Martindale, dated June 18, 2020 (Incorporated by reference to Exhibit 10.5 to Holdings' Current Report on Form 8-K (File No.: 001-35113), filed June 24, 2020.)
10.10 *†	Employment Agreement by and among General Nutrition Centers, Inc., a Delaware corporation that is an indirect wholly owned subsidiary of GNC Holdings, Inc., and Carl Seletz, dated January 14, 2013.
10.11*	Stalking Horse Agreement, by and among GNC Holdings, Inc. and certain of its subsidiaries listed on Schedule I thereto and Harbin, dated August 7, 2020.
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted , as Adopted Certification of Chief Executive Officer and Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document - The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
*	Filed herewith.
**	In accordance with Item 601(a)(5) of Regulation S-K, certain schedules or similar attachments to the exhibit have been omitted from this filing.
†	Management contract or compensatory plan or arrangement of the Company required to be filed as an exhibit.

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SIGNATURES

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 persons undersigned thereunto duly authorized.

	GNC HOLDINGS, INC.
	(Registrant)
	/s/ Tricia K. Tolivar
Date: August 10, 2020	Tricia K. Tolivar
	Chief Financial Officer
	(Principal Financial Officer)

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EX-10.10

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of January 14, 2013 (the “Effective Date”), by and between General Nutrition Centers, Inc., a Delaware corporation (the “Company”) that is an indirect wholly owned subsidiary of GNC Holdings, Inc., a Delaware corporation (“GNC”), and Carl Seletz (the “Executive”).

WHEREAS, the Company desires to employ the Executive on the terms and subject to the conditions set forth herein and the Executive has agreed to be so employed.

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1.Employment of Executive; Duties.

1.1Title.During the Employment Period (as defined in Section 2), the Executive shall serve as Senior Vice President, International of the Company and of GNC. The Executive shall report to the President of the Company.

1.2Duties.During the Employment Period, the Executive shall have the normal duties, responsibilities and authority commensurate with the position of Senior Vice President, International, and such other powers and duties as may be assigned to the Executive from time to time. The Executive shall devote substantially all the Executive's working time, attention, knowledge and skills faithfully, and to the best of the Executive's ability, to the Executive's duties and responsibilities under this Agreement and, except where the Company provides its written consent otherwise, shall relocate the Executive's principal residence within 75 miles of the principal office of the Company by December 31, 2016. Until Executive relocates within 75 miles of the principal office of the Company, reasonable expenses incurred by Executive to maintain an office at the Company's principal office will be considered a normal business expense, reimbursable to Executive or paid directly by the Company, as appropriate. The Executive shall at all times be subject to, comply with, observe and carry out the Company's rules, regulations, policies and codes of ethics and/or conduct applicable to its employees and senior executive officers as in effect from time to time.

2.Term of Employment.

The employment of the Executive under this Agreement shall commence on the Effective Date and shall continue until the first anniversary of the Effective Date (the “Initial Employment Period”), and shall automatically continue after the end of the Initial Employment Period for additional, consecutive one-year periods (each an “Extension Period” and, together with the Initial Employment Period, the “Employment Period”), unless (a) the Company or the Executive notifies the other in writing not less than 30 days prior to the end of the Initial Employment Period, or the end of the applicable Extension Period, of its or the Executive's election, in its or the Executive's sole discretion, not to extend the Employment Period, or (b) terminated earlier in accordance with Section 4.

3.Compensation and General Benefits.

3.1Base Salary.

(a)During the Employment Period, the Company shall pay to the Executive an annual base salary at least equal to $350,000 (such base salary, as may be adjusted from time to time pursuant to Section 3.1(b), is referred to herein as the “Base Salary”). The Executive's Base Salary, less amounts required to be withheld under applicable law, shall be payable in equal installments in accordance with the Company's normal payroll practices and procedures in effect from time to time.

(b)The Board of Directors of GNC (the “Board”) or the Compensation Committee established by the Board (the “Compensation Committee”) shall review the Executive's performance on an annual basis and, based on such review, may change the Base Salary, as it, acting in its sole discretion, shall determine to be reasonable and appropriate.

3.2Bonus.With respect to the 2013 calendar year and with respect to each calendar year that commences during the Employment Period, the Executive shall be eligible to earn an annual incentive bonus (the “Annual Bonus”) based on the achievement of performance objectives established by the Board or the Compensation Committee for the applicable year. For 2013, the Executive's target Annual Bonus shall be forty percent (40%) of the Base Salary and the Executive's maximum Annual Bonus shall be eighty percent (80%) of the Base Salary, with the actual amount earned determined by the actual level of achievement of the relevant performance objectives (in each case, prorated consistent with the Executive's first day of employment). The Annual Bonus shall not be earned until the date that it is paid, and the Executive must be an employee in good standing on such date in order to receive any Annual Bonus, except as otherwise provided in Section 4.2 or Section 4.3. Any Annual Bonus earned shall be payable in full no later than March 15 of the year following the year such bonus is earned. Notwithstanding anything herein to the contrary, the Executive agrees that the Annual Bonus and any other incentive compensation payable to the Executive under this Agreement or otherwise shall be subject to any clawback policy adopted or implemented by the Company or GNC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or otherwise, from time to time.

3.3Expenses.The Executive shall be entitled to receive reimbursement from the Company for all reasonable and necessary expenses incurred by the Executive in performing the Executive's duties hereunder on behalf of the Company, subject to, and consistent with, the Company's policies for expense payment and reimbursement, in effect from time to time.

3.4Benefits.The Executive shall be entitled to participate in any benefit plans, arrangements or policies made available by the Company to its executive officers generally, subject to and on a basis consistent with the terms, conditions and overall administration of each such plan, arrangement or policy.

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3.5Equity Awards.

(a)The Company shall recommend to the Compensation Committee that the Executive be granted non-qualified options (the “Options”) under the GNC Holdings, Inc. 2011 Stock and Incentive Plan (the “Plan”)to purchase five thousand five hundred sixty five (5,565) shares of Class A Common Stock, par value $0.001 per share, of GNC (the “Common Stock”), with a per share exercise price equal to the Fair Market Value (as defined under the Plan) of the Common Stock. The Options shall have a term of seven years from the date of grant. The options shall become vested and exercisable in equal installments of 25% on each of the first four anniversaries of the date of grant, subject to the Executive's continuous employment with the Company through and including each applicable vesting date. Except as otherwise provided herein, the Options shall be subject to the terms and conditions of the Plan and the form of option agreement applicable for senior executives of the Company approved by the Compensation Committee under the Plan.

(b)The Company shall recommend to the Compensation Committee that the Executive be granted three thousand four hundred fifty seven (3,457) shares of Common Stock under the Plan that are unvested on the date of grant and subject to a risk of forfeiture. The restricted stock shall become vested in equal installments of 33% on each of the first three anniversaries of the date of grant, subject to Executive's continuous employment with the Company through and including each applicable vesting date. Except as otherwise provided herein, the restricted stock shall be subject to the terms and conditions of the Plan and the form of restricted stock agreement applicable for senior executives of the Company approved by the Compensation Committee under the Plan.

(c)The Company shall recommend to the Compensation Committee that the Executive be granted one thousand seven hundred twenty eight (1,728) shares of Performance Share Units under the Plan. The Performance Share Units will cliff vest, contingent upon the Company reaching certain performance goals established in January 2013.

(d)Subject to the approval of the Compensation Committee, or other committee under the Plan, the Executive shall be eligible to participate in and be granted awards under the Plan.

4.Termination.

4.1General.The employment of the Executive under this Agreement (and the Employment Period) may be terminated in accordance with the provisions of this Section 4.

4.2Death or Disability of the Executive.

(a)The employment of the Executive hereunder (and the Employment Period) shall terminate upon (i) the death of the Executive or (ii) at the option of the Company, upon not less than 15 days' prior written notice to the Executive or the Executive's personal representative or guardian, if the Executive suffers a "Total Disability" (as defined in Section 4.2(c)). Upon termination for death or Total Disability, subject to reduction by any

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benefits paid or payable to the Executive, or the Executive's beneficiaries or estate under any Company-sponsored disability benefit plan program or policy for the period following such date of termination, (A) the Company shall pay to the Executive, or the Executive's guardian, personal representative or estate, as applicable, a lump sum equal to the Executive's Base Salary for the remainder of the Employment Period in effect immediately prior to the date of termination and, (B) subject further to the sole discretion of the Board or the Compensation Committee, the Company may also pay to the Executive, or the Executive's guardian, personal representative or estate, as applicable, a prorated share of the Annual Bonus pursuant to Section 3.2 (based on the period of actual employment) that the Executive would have been entitled to receive had the Executive worked through the date of payment of such Annual Bonus based on the actual level of achievement of the performance objectives, for the year of such termination, and payable at the time and in the manner annual bonuses are paid to employees, generally.

(b)All payments under Section 4.2(a) shall be paid on the first regular payroll date following the 60^th day after the Executive's date of termination, provided that on or before such date Executive (or the Executive's guardian, personal representative or estate, as applicable) executes a Release (as defined in Section 4.3(d) and any period in which such Release may be revoked has expired without revocation.

(c)Subject to the last sentence of this Section 4.2(c), for purposes of this Agreement, “Total Disability” shall mean (i) if the Executive is subject to a legal decree of incompetency (the date of such decree being deemed the date on which such disability occurred), (ii) the written determination by a physician selected by the Company that, because of a medically determinable disease, injury or other physical or mental disability, the Executive is unable substantially to perform, with or without reasonable accommodation, the material duties of the Executive required hereby, and that such disability has lasted for 90 consecutive days or any 120 days during the immediately 12-month period or is, as of the date of determination, reasonably expected to last six months or longer after the date of determination, in each case based upon medically available reliable information, or (iii) the Executive qualifies for benefits under the Company's long-term disability coverage, if any. In conjunction with determining mental and/or physical disability for purposes of this Agreement, the Executive hereby consents to (A) any examinations that the Board or the Compensation Committee determines are relevant to a determination of whether the Executive is mentally and/or physically disabled or are required by the Company physician, (B) furnish such medical information as may be reasonably requested and (C) waive any applicable physician patient privilege that may arise because of such examination. Notwithstanding anything to the contrary in this Section 4.2(c), Total Disability shall have the definition of "Disabled" contained in Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") and the regulations and guidance promulgated thereunder (collectively "Code Section 409A"), in any instance in which amounts are paid under this Agreement as a result of Executive's Total Disability and such amounts are treated as deferred compensation under Code Section 409A.

(d)The treatment of all outstanding stock options and other equity-based awards held by the Executive as of the date of termination pursuant to this Section

4.2shall be governed by the terms of the Plan and the individual grant agreements applicable to the Executive.

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4.3Termination by the Company Without Cause or Resignation by the Executive For Good Reason.

(a)The Company may terminate the Executive's employment without "Cause" (as defined in Section 4.3(g)), and thereby terminate the Executive's employment (and the Employment Period) under this Agreement at any time with no requirement for notice to the Executive.

(b)The Executive may resign, and thereby terminate the Executive's employment (and the Employment Period), at any time for "Good Reason" (as defined in Section 4.3(f)), upon not less than 60 days' prior written notice to the Company specifying in reasonable detail the reason therefor; provided, however, that the Company shall have an opportunity to substantially cure any such Good Reason within 60 days after the Company's receipt of such notice; and providedfurther that, if the Company is not seeking to cure, the Company shall not be obligated to allow the Executive to continue working during such period and may, in its sole discretion, accelerate such termination of employment (and the Employment Period) to any date during such period.

(i)Executive may not terminate employment under this Agreement for Good Reason on account of any act or omission by the Company, the first occurrence of which the Executive had actual notice for 60 days or more prior to giving notice of termination for Good Reason.

(ii)A determination of whether the Executive has Good Reason, and of whether the Company has substantially cured and thus eliminated the grounds for such Good Reason, shall be made only by the Chief Executive Officer of GNC (the "Chief Executive Officer"), within the Chief Executive Officer's sole judgment and discretion, acting in good faith after having met with the Company's director of Human Resources.

(iii)A resignation by the Executive for Good Reason requires the Executive to actually resign his employment within 30 days after the Company's cure period has expired if the Company has failed to substantially cure the event constituting Good Reason.

(c)In the event the Executive's employment is terminated pursuant to this Section 4.3, then, subject to Section 4.3(d), the following provisions shall apply:

(i)The Company shall pay the Executive, as severance, an amount equal to one year of the Base Salary to be paid in accordance with the Company's normal payroll practices and procedures.

(ii)If such termination occurs upon or within six months following a Change in Control (as defined in Exhibit A), the Company shall pay the Executive, as severance, an amount equal to two years of the Base Salary, such amount to be paid in accordance with the Company's normal payroll practices and procedures.

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(iii)If the Executive's employment is terminated pursuant to this Section 4.3 without Cause, and if the Company has previously effected reductions in the Executive's Base Salary and the base salary of all executives at the same level as the Executive, which reductions were substantially similar, then the Base Salary rate for purposes of Section 4.3(c)(i) or (ii) shall be the Base Salary rate in effect immediately prior to such reductions. If the Executive resigns pursuant to this Section 4.3 for Good Reason, then any reduction in the Executive's Base Salary that triggered Good Reason shall be disregarded for purposes of Section 4.3(c)(i) or (ii).

(iv)Subject to the sole discretion of the Board or the Compensation Committee, the Company may pay to the Executive a prorated share of the Annual Bonus pursuant to Section 3.2 (based on the period of actual employment) that the Executive would have been entitled to receive had the Executive worked through the date of payment of such Annual Bonus based on the actual level of achievement of the performance objectives, for the year of such termination, and payable at the time and in the manner annual bonuses are paid to employees, generally.

(v)If the Executive elects continuation coverage (with respect to the Executive's coverage and/or any eligible dependent coverage) under the Consolidated Omnibus Budget Reconciliation Act of 1986 ("COBRA Continuation Coverage") with respect to the Company's group health insurance plan, the Executive shall be responsible for payment of the monthly cost of COBRA Continuation Coverage. Unless prohibited by law, the Company shall reimburse the Executive for any portion of the monthly cost of COBRA Continuation Coverage that exceeds the amount of the monthly health insurance premium (with respect to the Executive's coverage and/or any eligible dependent coverage) payable by the Executive immediately prior to the date of Executive's termination, such reimbursements to continue (A) through the expiration of the Employment Period in effect immediately prior to the date of termination or (B) in the event that Executive's Base Salary is being paid pursuant to Section 4.3(c)(ii), for the period set forth therein. The Company shall pay the reimbursements on a monthly basis in accordance with the Company's normal payroll practices and procedures. No "gross-up" for taxes on the reimbursements under this Section 4.3(c)(v) shall be provided to the Executive.

(vi)The treatment of all outstanding stock options and other equity-based awards held by the Executive as of the date of termination pursuant to this Section 4.3 shall be governed by the terms of the Plan and the individual grant agreements applicable to the Executive.

(vii)Payments and reimbursements made to the Executive under this Section 4.3(c) shall be made or commence on the first regular payroll date following the 60^th day after the date of termination, provided that on or before such date the Release (as defined in Section 4.3(d)) has been

6

executed and any period in which the Executive may revoke such Release has expired, without such Release having been revoked, and provided further that the payment of all such payments and reimbursements shall be contingent on the Executive's continued compliance with all post-termination restrictive covenants applicable to the Executive, including but not limited to those contained in Section 5.

(d)As a condition precedent to the Executive's right to receive the benefits set forth in Section 4.3(c). the Executive agrees to execute a release of the Company and its respective Affiliates, officers, directors, stockholders, employees, agents, insurers, representatives and successors from and against any and all claims that the Executive may have against any such Person (as defined in Section 5.4(f)) relating to the Executive's employment by the Company and the termination thereof, such release to be in form and substance reasonably satisfactory to the Company (the "Release").

(e)Anything in this Agreement to the contrary notwithstanding, if it shall be determined that any payment, vesting, distribution or transfer by the Company or any successor, or any Affiliate of the foregoing or by any other Person or that any other event occurring with respect to the Executive and the Company for the Executive's benefit, whether paid or payable or distributed or distributable under the terms of this Agreement or otherwise (including under any employee benefit plan) (a "Payment") would be subject to or result in the imposition of the excise tax imposed by Section 4999 of the Code (and any regulations or guidance promulgated or issued thereunder, any successor provision, and any similar provision of state or local income tax law) (collectively, the "Excise Tax"), then the amount of the Payment shall be reduced to the highest amount that may be paid by the Company or other entity without subjecting any such Payment to the Excise Tax (the "Payment Reduction"). To the extent necessary to effect the Payment Reduction, the Company shall reduce or eliminate the Payments by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the initial determination, subject to the confirmation of the Accounting Firm (as defined herein) with respect to the intended effect of such Payment Reduction.

(i)Subject to the provisions of Section 4.3(e)(ii), all determinations required to be made under this Section 4.3(e), including whether and when a Payment is subject to Section 4999 and the assumptions to be utilized in arriving at such determination and in determining an appropriate Payment Reduction, shall be made by PricewaterhouseCoopers LLP, or any other nationally recognized accounting firm that shall be the Company's outside auditors at the time of such determination (the "Accounting Firm"), which Accounting Firm shall provide detailed supporting calculations to the Executive and the Company within 15 business days of the receipt of notice from the Company or the Executive that there will be a Payment that the Person giving notice believes may be subject to the Excise Tax. All fees and expenses of the Accounting Firm shall be borne by the Company. Any determination by the Accounting Firm shall be binding upon the Company and the Executive in

7

determining whether a Payment Reduction is required and the amount thereof (subject to Sections 4.3(e)(ii) and (iii)), in the absence of material mathematical or legal error.

(ii)As a result of uncertainty in the application of Section 4999 that may exist at the time of the initial determination by the Accounting Firm, it may be possible that in making the calculations required to be made hereunder, the Accounting Firm shall determine that a Payment Reduction was not made that should be made (an "Overpayment") or that a Payment Reduction was made that need not be made (an "Underpayment"). If, within 75 days after the Accounting Firm's initial determination under Section 4.3(e)(i), the Accounting Firm shall determine that an Overpayment was made, any such Overpayment shall be treated for all purposes, to the extent practicable and subject to applicable law, as a loan to the Executive with interest at the applicable Federal rate provided for in Section 1274(d) of the Code and shall be repaid by the Executive to the Company within 35 days after the Executive receives notice of the Accounting Firm's determination; provided, however, that the amount to be repaid by the Executive to the Company either as a loan or otherwise as a lump sum payment (where a loan is not practicable or permitted by law) shall be reduced to the extent that any portion of the Overpayment to be repaid shall not be offset by a corresponding reduction in tax by reason of such repayment of the Overpayment. If the Accounting Firm shall determine that an Underpayment was made, any such Underpayment shall be due and payable by the Company to the Executive within 35 days after the Company receives notice of the Accounting Firm's determination.

(iii)The Executive shall give written notice to the Company of any claim by the Internal Revenue Service that, if successful, would require the payment by the Executive of an Excise Tax, such notice to be provided within 15 days after the Executive shall have received written notice of such claim. The Executive shall cooperate with the Company in determining whether to contest or pay such claim and shall not pay such claim without the written consent of the Company, which shall not be unreasonably withheld, conditioned or delayed.

(iv)This Section 4.3(e)shall remain in full force and effect following the termination of the Executive's employment for any reason until the expiration of the statute of limitations on the assessment of taxes applicable to the Executive for all periods in which the Executive may incur a liability for taxes (including Excise Taxes), interest or penalties arising out of the operation of this Agreement.

(f)For purposes of this Agreement, the Executive is entitled to terminate the Executive's employment for "Good Reason" if without the Executive's prior written consent:

8

(i)the Company fails to comply with any material obligation imposed by this Agreement; or

(ii)the Company effects a material reduction in the Executive's Base Salary, unless all executives at the same level as the Executive receive a substantially similar reduction in base salary (in which case any such material reduction shall not be considered to be a failure by the Company to comply with a material alteration imposed by this Agreement).

(g)For purposes of this Agreement, "Cause" means the occurrence of any one or more of the following events, and the Company shall have the sole discretion to determine the existence of Cause:

(i)a failure by the Executive to comply with any material obligation under this Agreement;

(ii)the Executive's being indicted for or charged with

(A) any felony or (B) any misdemeanor that causes or is likely to cause harm or embarrassment to the Company or any of its Affiliates, in the reasonable judgment of the Board;

(iii)theft, embezzlement or fraud by the Executive in connection with the performance of the Executive's duties hereunder;

(iv)the Executive's engaging in any activity that gives rise to a material conflict with the Company or any of its Affiliates;

(v)the misappropriation by the Executive of any material business opportunity of the Company or any of its Affiliates;

(vi)any material failure to comply with, observe or carry out the Company's rules, regulations, policies and codes of ethics and/or conduct applicable to its employees and senior executive officers in effect from time to time, including (without limitation) those regarding conflicts, potential conflicts of interest or the appearance of a conflict of interest;

(vii)substance abuse or use of illegal drugs that, in the reasonable judgment of the Board, (A) impairs the Executive's performance of the Executive's duties hereunder or (B) causes or is likely to cause harm or embarrassment to the Company or any of its Affiliates; and

(viii)engagement in conduct that Executive knows or should know is injurious to the Company or any of its Affiliates.

(h)For the avoidance of doubt, the election by either the Company or the Executive not to extend or further extend the Employment Period pursuant to

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Section 2.2 shall not be a termination without Cause or a resignation for Good Reason under Section 4.3.

4.4Termination For Cause, Voluntary Resignation Other Than For Good Reason or Election Not to Extend the Employment Period.

(a)(i) The Company may, upon action of the Board, terminate the employment of the Executive (and the Employment Period) at any time for "Cause," (ii) the Executive may voluntarily resign other than for Good Reason and thereby terminate the Executive's employment (and the Employment Period) under this Agreement at any time upon not less than 30-days' prior written notice or (iii) either the Company or the Executive may elect not to extend or further extend the Employment Period pursuant to Section 2.2,provided that the Executive continues to provide services hereunder through the end of the Employment Period.

(b)The following provisions shall apply upon termination by the Company for Cause, by the Executive as the result of resignation for other than for Good Reason, or by the Company or the Executive at the end of the Employment Period as the result of an election not to extend or further extend the Employment Period:

(i)The Executive shall be entitled to receive all amounts of earned but unpaid Base Salary and benefits accrued and vested through the date of such termination. Except as provided below, all other rights of the Executive (and all obligations of the Company) hereunder shall terminate as of the date of such termination. The Base Salary and benefits accrued through the end of termination shall be paid in accordance with the Company's general payroll practices and procedures and the terms and conditions of any applicable plan.

(ii)The treatment of all outstanding stock options and other equity-based awards held by the Executive as of the date of termination pursuant to this Section 4.4 shall be governed by the terms of the Plan and the individual grant agreements applicable to the Executive.

4.5Resignation from Officer Positions.Upon the termination of the Executive's employment for any reason (unless otherwise agreed in writing by the Company and the Executive), the Executive shall be deemed to have resigned, without any further action by the Executive, from any and all officer and/or director positions that the Executive, immediately prior to such termination, (a) held with the Company or any of its Affiliates and (b) held with any other entities at the direction of, or as a result of the Executive's affiliation with, the Company or any of its Affiliates. If for any reason this Section 4.5 is deemed to be insufficient to effectuate such resignations, then Executive shall, upon the Company's request, execute any documents or instruments that the Company may deem necessary or desirable to effectuate such resignations. In addition, the Executive hereby designates the Secretary or any Assistant Secretary of the Company and of any Affiliate to execute any such documents or instruments as the Executive's attorney-in-fact to effectuate such resignations if execution by the Secretary or any Assistant Secretary of the Company or Affiliate is deemed by the Company or the Affiliate to be a more expedient means to effectuate such resignation or resignations.

Solicitation.

5. 
Confidentiality, Work Product and Non-Competition and Non-

5.1Confidentiality.

(a)In connection with the Executive's employment with the Company, the Company promises to provide the Executive with access to "Confidential Information" (as defined in Section 5.4(d)) in support of the Executive's employment duties. The Executive recognizes that the Company's business interests require a confidential relationship between the Company and the Executive and the fullest practical protection and confidential treatment of all Confidential Information. At all times, both during and after the Employment Period, the Executive shall not directly or indirectly: (i) appropriate, download, print, copy, remove, use, disclose, divulge, communicate or otherwise "Misappropriate" (as defined in Section 5.4(e)) any Confidential Information, including, without limitation, originals or copies of any Confidential Information, in any media or format, except for the Company's benefit within the course and scope of the Executive's employment or with the prior written consent of the Chief Executive Officer; or (ii) take or encourage any action that would circumvent, interfere with or otherwise diminish the value or benefit of the Confidential Information to any of the Company Parties (as defined in Section 5.4(b)).

(b)All Confidential Information, and all other information and property affecting or relating to the business of the Company Parties within the Executive's possession, custody or control, regardless of form or format, shall remain, at all times, the property of the respective Company Parties, the appropriation, use and/or disclosure of which is governed and restricted by this Agreement.

(c)The Executive acknowledges and agrees that:

(i)the Executive occupies a unique position within the Company, and the Executive is and shall be intimately involved in the development and/or implementation of Confidential Information;

(ii)in the event the Executive breaches this Section 5.1 with respect to any Confidential Information, such breach shall be deemed to be a Misappropriation of such Confidential Information; and

(iii)any Misappropriation of Confidential Information shall result in immediate and irreparable harm to the Company.

(d)Upon receipt of any formal or informal request, by legal process or otherwise, seeking the Executive's direct or indirect disclosure or production of any Confidential Information to any Person, the Executive shall promptly and timely notify the Company and provide a description and, if applicable, hand deliver a copy of such request to the Company. The Executive irrevocably nominates and appoints the Company as the Executive's true and lawful attorney-in-fact to act in the Executive's name, place and stead to perform any act that the Executive might perform to defend and protect against any disclosure of Confidential Information.

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(e)At any time the Company may request, during or after the Employment Period, the Executive shall deliver to the Company all originals and copies of Confidential Information and all other information and property affecting or relating to the business of the Company Parties within the Executive's possession, custody or control, regardless of form or format, including, without limitation any Confidential Information produced by the Executive. Both during and after the Employment Period, the Company shall have the right of reasonable access to review, inspect, copy and/or confiscate any Confidential Information within the Executive's possession, custody or control.

(f)Upon termination or expiration of this Agreement, the Executive shall immediately return to the Company all Confidential Information, and all other information and property affecting or relating to the business of the Company Parties, within the Executive's possession, custody or control, regardless of form or format, without the necessity of a prior Company request.

(g)During the Employment Period and thereafter, the Executive represents and agrees that the Executive shall not use or disclose any confidential or proprietary information or trade secrets of others, including but not limited to former employers, and that the Executive shall not bring onto the premises of the Company or access such confidential or proprietary information or trade secrets of such others, unless consented to in writing by said others, and then only with the prior written authorization of the Company.

5.2Work Product/Intellectual Property.

(a)The Executive hereby assigns to the Company all right, title and interest to all "Work Product" (as defined in Section 5.4(h)) that (i) relates to any of the Company Parties' actual or anticipated business, research and development or existing or future products or services, or (ii) is conceived, reduced to practice, developed or made using any equipment, supplies, facilities, assets, information or resources of any of the Company Parties (including, without limitation, any intellectual property rights).

(b)The Executive shall promptly disclose Work Product to the Chief Executive Officer and perform all actions reasonably requested by the Company (whether during or after the Employment Period) to establish and confirm the ownership and proprietary interest of any of the Company Parties in any Work Product (including, without limitation, the execution of assignments, consents, powers of attorney, applications and other instruments). The Executive shall not file any patent or copyright applications related to any Work Product except with the written consent of the Chief Executive Officer.

5.3Non-Competition and Non-Solicitation.

(a)In consideration of the Confidential Information being provided to the Executive as stated in Section 5.1, and other good and valuable new consideration as stated in this Agreement, including, without limitation, the opportunity to earn an Annual Bonus, the opportunity to be awarded equity awards pursuant to Section 3.5, employment and/or continued employment with the Company, and the business relationships, Company goodwill, work experience, client, customer and/or vendor relationships and other

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fruits of employment that the Executive shall have the opportunity to obtain, use and develop under this Agreement, the Executive agrees to the restrictive covenants stated in this Section 5.3. The rights and obligations of the parties under this Section 5.3 shall be binding upon and inure to the benefit of the parties hereto and their heirs, personal representatives, successors and permitted assigns.

(b)During the Employment Period and until the end of the Restricted Period (as defined in Section 5.4(g)), the Executive agrees that the Executive shall not, directly or indirectly, on the Executive's own behalf or on the behalf of any other Person, within the United States of America or in any other country or territory in which the businesses of the Company are conducted or from which the Executive could participate in a business that competes with the business of the Company:

(i)engage in a Competing Business (as defined in Section 5.4(c)) including, without limitation, by owning, managing, operating, controlling, being employed by, providing services as a consultant or independent contractor to or participating in the ownership, management, operation or control of any Competing Business;

(ii)induce or attempt to induce any customer, vendor, supplier, licensor or other Person in a business relationship with any Company Party, for or with which the Executive or employees working under the Executive's supervision had any direct or indirect responsibility or contact at any time during the two most recent years of Executive's employment with the Company, (A) to do business with a Competing Business or (B) to cease, restrict, terminate or otherwise reduce business with the Company for the benefit of a Competing Business, regardless of whether the Executive initiates contact; or

(iii)(A) solicit, recruit, persuade, influence or induce, or attempt to solicit, recruit, persuade, influence or induce anyone employed or otherwise retained by any of the Company Parties (including any independent contractor or consultant) at any time during the two most recent years of Executive's employment with the Company, to cease or leave their employment or contractual or consulting relationship with any Company Party, regardless of whether the Executive initiates contact for such purposes or (B) hire, employ or otherwise attempt to establish, for any Person, any employment, agency, consulting, independent contractor or other business relationship with any Person who is or was employed or otherwise retained by any of the Company Parties (including any independent contractor or consultant) at any time during the two most recent years of Executive's employment with the Company, regardless of whether the Executive initiates contact for such purposes.

(c)The parties hereto acknowledge and agree that, notwithstanding anything in Section 5.3(b)(i), (i) the Executive may own or hold, solely as passive investments, securities of Persons engaged in any business that would otherwise be included in Section 5.3(b)(i). as long as with respect to each such investment the securities held by the Executive do not exceed two percent (2%) of the outstanding securities of such Person

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and such securities are publicly traded and registered under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and (ii) the Executive may serve on the board of directors (or other comparable position) or as an officer of any entity at the request of the Board; provided, however, that in the case of investments otherwise permitted under clause (i) above, the Executive shall not be permitted to, directly or indirectly, participate in, or attempt to influence, the management, direction or policies of (other than through the exercise of any voting rights held by the Executive in connection with such securities), or lend the Executive's name to, any such Person.

(d)The Executive acknowledges and agrees that, for purposes of this Section 5.3, indirect acts by the Executive shall include, without limitation, an act by the Executive's spouse, ancestor, lineal descendant, lineal descendant's spouse, sibling or other member of the Executive's immediate family.

(e)The Executive acknowledges that (i) the restrictive covenants contained in this Section 5.3 are ancillary to and part of an otherwise enforceable agreement, such being the agreements concerning Confidential Information and other consideration as stated in this Agreement, (ii) at the time that these restrictive covenants are made, the limitations as to time, geographic scope and activity to be restrained, as described herein, are reasonable and do not impose a greater restraint than necessary to protect the goodwill and other legitimate business interests of the Company, including without limitation, Confidential Information (including trade secrets), client, customer and/or vendor relationships, client and/or customer goodwill and business productivity, (iii) in the event of termination of the Executive's employment, the Executive's experiences and capabilities are such that the Executive can obtain gainful employment without violating this Agreement and without the Executive incurring undue hardship, (iv) based on the relevant benefits and other new consideration provided for in this Agreement, including, without limitation, the disclosure and use of Confidential Information, the restrictive covenants of this Section 5.3, as applicable according to their terms, shall remain in full force and effect even in the event of the Executive's involuntary termination from employment, with or without Cause and (v) the Executive has carefully read this Agreement and has given careful consideration to the restraints imposed upon the Executive by this Agreement and consents to the terms of the restrictive covenants in this Section 5.3, with the knowledge that this Agreement may be terminated at any time in accordance with the provisions hereof.

5.4Definitions.For purposes of this Agreement, the following terms shall have the following meanings:

(a)An "Affiliate" of any specified Person means any other Person, whether now or hereafter existing, directly or indirectly controlling or controlled by, or under direct or indirect common control with, such specified Person. For purposes hereof, "control" or any other form thereof, when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" shall have meanings correlative to the foregoing.

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(b)"Company Parties" means the Company, and its direct and indirect parents, subsidiaries and Affiliates, and their successors in interest. Notwithstanding the foregoing, "Company Parties" shall not include Ares Corporate Opportunities Fund II, L.P. or Ontario Teachers' Pension Plan Board or any other sponsor or their respective Affiliates other than the Company and GNC.

(c)"Competing Business" means any business that competes with any of the Company Parties, including, without limitation, any enterprise that engages in, owns or operates businesses that market, sell, distribute, manufacture or otherwise are involved in the nutritional supplements industry at the time of termination of the Executive's employment.

(d)Confidential Information.

(i)Definition. "Confidential Information" means any and all material, information, ideas, inventions, formulae, patterns, compilations, programs, devices, methods, techniques, processes, know how, plans (marketing, business, ·strategic, technical or otherwise), arrangements, pricing and other data of or relating to any of the Company Parties (as well as their customers and/or vendors) that is confidential, proprietary or trade secret (A) by its nature, (B) based on how it is treated or designated by a Company Party, (C) because the disclosure of which would have a material adverse effect on the business or planned business of any of the Company Parties and/or (D) as a matter of law.

(ii)Exclusions. Confidential Information does not include material, data, and/or information (A) that any Company Party has voluntarily placed in the public domain, (B) that has been lawfully and independently developed and publicly disclosed by third parties, (C) that constitutes the general non-specialized knowledge and skills gained by the Executive during the Employment Period or (D) that otherwise enters the public domain through lawful means; provided, however, that the unauthorized appropriation, use or disclosure of Confidential Information by the Executive, directly or indirectly, shall not affect the protection and relief afforded by this Agreement regarding such information.

(iii)Inclusions. Confidential Information includes, without limitation, the following information (including without limitation, compilations or collections of information) relating or belonging to any Company Party (as well as its clients, customers and/or vendors) and created, prepared, accessed, used or reviewed by the Executive during or after the Employment Period: (1) product and manufacturing information, such as ingredients, combinations of ingredients and manufacturing processes; (2) scientific and technical information, such as research and development, tests and test results, formulae and formulations, studies and analysis; (3) financial and cost information, such as operating and production costs, costs of goods sold, costs of supplies and manufacturing materials, non-public financial statements and reports, profit and loss information, margin information and financial performance information; (4) customer related information, such as customer related

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contracts, engagement and scope of work letters, proposals and presentations, customer- related contacts, lists, identities and prospects, practices, plans, histories, requirements and needs, price information and formulae and information concerning client or customer products, services, businesses or equipment specifications; (5) vendor and supplier related information, such as the identities, practices, history or services of any vendors or suppliers and vendor or supplier contacts; (6) sales, marketing and price information, such as marketing and sales programs and related data, sales and marketing strategies and plans, sales and marketing procedures and processes, pricing methods, practices and techniques and pricing schedules and lists; (7) database, software and other computer related information, such as computer programs, data, compilations of information and records, software and computer files, presentation software and computer-stored or backed-up information including, but not limited to, e­ mails, databases, word processed documents, spreadsheets, notes, schedules, task lists, images and video; (8) employee-related information, such as lists or directories identifying employees, representatives and contractors, and information regarding the competencies (knowledge, skill, experience), compensation and needs of employees, representatives and contractors and training methods; and (9) business- and operation-related information, such as operating methods, procedures, techniques, practices and processes, information about acquisitions, corporate or business opportunities, information about partners and potential investors, strategies, projections and related documents, contracts and licenses and business records, files, equipment, notebooks, documents, memoranda, reports, notes, sample books, correspondence, lists and other written and graphic business records.

(e)"Misappropriate", or any form thereof, means:

(i)the acquisition of any Confidential Information by a Person who knows or has reason to know that the Confidential Information was acquired by theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy or espionage through electronic or other means (each, an "Improper Means"); or

(ii)the disclosure or use of any Confidential Information without the express consent of the Company by a Person who (A) used Improper Means to acquire knowledge of the Confidential Information, (B) at the time of disclosure or use, knew or had reason to know that his or her knowledge of the Confidential Information was (x) derived from or through a Person who had utilized Improper Means to acquire it, (y) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use or (z) derived from or through a Person who owed a duty to the Company to maintain its secrecy or limit its use or (C) before a material change of his or her position, knew or had reason to know that it was Confidential Information and that knowledge of it had been acquired by accident or mistake.

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(f)"Person" means any individual, corporation, partnership, limited liability company, joint venture, association, business trust, joint-stock company, estate, trust, unincorporated organization, government or other agency or political subdivision thereof or any other legal or commercial entity.

(g)"Restricted Period" means the longer of (i) 12 months after the date of termination of employment (the Executive's last day of work for the Company) or (ii) the period during which the Executive is receiving payments from the Company pursuant to Section 4.3.

(h)"Work Product" means all patents and patent applications, all inventions, innovations, improvements, developments, methods, designs, analyses, drawings, reports, creative works, discoveries, software, computer programs, modifications, enhancements, know-how, formulations, concepts and ideas, and all similar or related information (in each case whether or not patentable), all copyrights and copyrightable works, all trade secrets, confidential information, and all other intellectual property and intellectual property rights that are conceived, reduced to practice, developed or made by the Executive either alone or with others in the course of employment with the Company (including employment prior to the date of this Agreement).

5.5Remedies.

(a)Because the Executive's services are unique and because the Executive has access to Confidential Information, the Executive acknowledges and agrees that if the Executive breaches any of the provisions of this Section 5, the Company may suffer immediate and irreparable harm for which monetary damages alone will not be a sufficient remedy and the Company may seek injunctive relief. The restrictive covenants stated in this Section 5 are without prejudice to the Company's rights and causes of action at law.

(b)In addition to the remedies provided in subsection (a), if the Executive violates any provision of this Section 5, the Company may, upon giving written notice to Executive, immediately cease all payments and benefits that it may be providing to the Executive pursuant to Section 4.3(c), and Executive shall be required to reimburse the Company for any payments received from, and the cash value of any benefits provided by, the Company between the first day of the violation and the date such notice is given; provided, however, that the foregoing shall be in addition to such other remedies as may be available to the Company and shall not be deemed to permit the Executive to forego or waive such payments in order to avoid his or her obligations under this Section 5; provided, further, that any Release previously executed by the Executive shall continue in effect.

(a) (c) The existence of any claim or cause of action by the Executive against the Company, whether predicated upon this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the restrictive covenants set forth in this Section 5 but shall be claimed and litigated separately.

5.6Interpretation; Severability.

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(a)The Executive has carefully considered the possible effects on the Executive of the covenants not to compete, the confidentiality provisions and the other obligations contained in this Agreement, and the Executive recognizes that the Company has made every effort to limit the restrictions placed upon the Executive to those that are reasonable and necessary to protect the Company's legitimate business interests.

(b)The Executive acknowledges and agrees that the restrictive covenants set forth in this Agreement are reasonable and necessary in order to protect the Company's valid business interests. It is the intention of the parties hereto that the covenants, provisions and agreements contained herein shall be enforceable to the fullest extent allowed by law. If any covenant, provision or agreement contained herein is found by a court having jurisdiction to be unreasonable in duration, scope or character of restrictions, or otherwise to be unenforceable, such covenant, provision or agreement shall not be rendered unenforceable thereby, but rather the duration, scope or character of restrictions of such covenant, provision or agreement shall be deemed reduced or modified with retroactive effect to render such covenant, provision or agreement reasonable or otherwise enforceable (as the case may be), and such covenant, provision or agreement shall be enforced as modified. If the court having jurisdiction shall not review the covenant, provision or agreement, the parties hereto shall mutually agree to a revision having an effect as close as permitted by applicable law to the provision declared unenforceable. The parties hereto agree that if a court having jurisdiction determines, despite the express intent of the parties hereto, that any portion of the covenants, provisions or agreements contained herein are not enforceable, the remaining covenants, provisions and agreements herein shall be valid and enforceable. Moreover, to the extent that any provision is declared unenforceable, the Company shall have any and all rights under applicable statutes or common law to enforce its rights with respect to any and all Confidential Information or unfair competition by the Executive.

5.7Non-Waiver.The failure or delay of the Company at any time to require performance by the Executive of any provision of this Section 5 or to seek redress against the Executive or any other employee for any specific breach or threatened breach of this Section 5, even if known, shall not operate or be construed as a waiver by the Company of its rights to require performance of that provision or to exercise any right, power or remedy hereunder, and any waiver by the Company of any breach of any provision of this Section 5 shall not be construed as a waiver of the provision itself, or a waiver of any right, power or remedy under this Agreement. No notice to or demand on the Executive in any case shall, of itself, entitle the Executive to any other or further notice or demand in similar or other circumstances.

6.Insurance and Indemnification.

6.1Insurance.GNC shall use commercially reasonable efforts to obtain and maintain a policy or policies of directors' and officers' liability insurance customary for similarly situated companies in an amount not less than that maintained by similarly situated companies, with reputable insurance companies providing the Executive with coverage for losses and other potential liabilities. In all policies of director and officer liability insurance, the Executive shall be named as an insured in such a manner as to provide the Executive

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substantially the same rights and benefits as are accorded to GNC's directors and executive officers.

6.2Indemnification.To the extent not covered by insurance, GNC shall provide indemnification and advancement of reasonable legal expenses to the Executive on terms and conditions and with rights and benefits substantially the same as is provided from time to time by GNC to its directors and executive officers.

7.Miscellaneous.

7.1Public Statements.

(a)Media Nondisclosure. The Executive agrees that during the Employment Period or at any time thereafter, except as may be authorized in writing by the Company, the Executive shall not directly or indirectly disclose or release to the Media any information concerning or relating to any aspect of the Executive's employment or termination from employment with the Company and/or any aspect of any dispute that is the subject of this Agreement. For the purposes of this Agreement, the term "Media" includes, without limitation, any news organization, station, publication, show, website, web log (blog), bulletin board, chat room and/or program (past, present and/or future), whether published through the means of print, radio, television and/or the Internet or otherwise, and any member, representative, agent and/or employee of the same.

(b)Non-Disparagement. The Executive agrees that during the Employment Period or at any time thereafter, the Executive shall not make any statements, comments or communications in any form, oral, written or electronic to any Media or any customer, client or supplier of the Company or any of its Affiliates, which would constitute libel, slander or disparagement of the Company or any of its Affiliates, including, without limitation, any such statements, comments or communications that criticize, ridicule or are derogatory to the Company or any of its Affiliates; provided, however that the terms of this Section 7.1(b) shall not apply to communications between the Executive and, as applicable, the Executive's attorneys or other persons with whom communications would be subject to a claim of privilege existing under common law, statute or rule of procedure. The Executive further agrees that the Executive shall not in any way solicit any such statements, comments or communications from others.

7.2ARBITRATION. SUBJECT TO THE RIGHTS UNDER SECTION 7.3 TO SEEK INJUNCTIVE OR OTHER EQUITABLE RELIEF, AND SUBJECT FURTHER TO THE RIGHT OF THE COMPANY TO OPT OUT OF ARBITRATION AS STATED IN SECTION 7.2(b), BINDING ARBITRATION SHALL BE THE EXCLUSIVE REMEDY FOR ANY AND ALL DISPUTES, CLAIMS OR CONTROVERSIES, WHETHER STATUTORY, CONTRACTUAL OR OTHERWISE, BETWEEN THE PARTIES HERETO ARISING UNDER OR RELATING TO THIS AGREEMENT OR THE EXECUTIVE'S EMPLOYMENT BY OR TERMINATION FROM THE COMPANY (INCLUDING, BUT NOT LIMITED TO, THE AMOUNT OF DAMAGES, OR THE CALCULATION OF ANY BONUS OR OTHER AMOUNT OR BENEFIT DUE) (COLLECTIVELY, "DISPUTES"). THE PARTIES EACH WAIVE THE RIGHT TO A JURY TRIAL AND WAIVE THE RIGHT TO ADJUDICATE THEIR

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DISPUTES UNDER THIS AGREEMENT OUTSIDE THE ARBITRATION FORUM PROVIDED FOR IN THIS AGREEMENT, EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT.

(a)Mediation First. In the event either party provides a notice of arbitration of any Dispute to the other party, the parties shall promptly proceed to make a good-faith effort to settle the Dispute by agreement, in a full-day, non-binding mediation with a mediator selected from a panel of mediators of JAMS. The mediation will be governed by JAMS mediation procedures in effect at the time of the mediation. The Company shall bear the costs for mediation, including the mediator's fees; provided, however, that the parties shall each bear their own individual costs and attorneys' fees. If for any reason JAMS cannot serve as the mediation administrator, the Company may select an alternative mediation administrator, such as the American Arbitration Association ("AAA"), to serve under the terms of this Agreement. The Executive may, but is not required to, be represented by counsel in mediation. Any mediators proposed for the panel provided for in this Section 7.2(a) must be available to serve in the Agreed Venue.

(b)Company Opt-Out.

(i)In the event that the parties fail to settle the Dispute at the mediation required by Section 7.2(a) of this Agreement, the Company shall have thirty (30) days after the conclusion of the full-day mediation to opt out of arbitration. The Company may do so only by written notice provided to the Executive and JAMS. Providing such notice within the time requirements of this Agreement will render Section 7.2 of this Agreement and its subparts (the"Arbitration Provision") otherwise inapplicable and of no effect as to all parties to this Agreement, but only with regard to the Dispute raised in the notice of arbitration sent pursuant to Section 7.2(a) above.

(ii)It is the intention of the parties hereto that the terms of the Arbitration Provision shall be enforceable to the fullest extent allowed by law. However, if any terms of the Arbitration Provision (including, without limitation, the terms of the Section 7.2(b)(i) Company Opt-Out) are adjudicated to be invalid, illegal or unenforceable, then the parties hereby stipulate and agree that (A) the adjudicating authority may and hereby is requested to modify the effect and/or interpret such terms so that they become valid, legal and enforceable and are as like the original terms as possible; (B) such terms will not affect any other terms of the Arbitration Provision or this Agreement; (C) if for any reason the terms in question cannot be modified or interpreted in accordance with this subsection, then the Arbitration Provision will be reformed, construed and enforced as if such terms never had been contained herein and/or have been severed herefrom; (D) such invalidity, illegality or unenforceability will not take effect in any other jurisdiction absent a separate adjudication to that effect; and (E) the remainder of this Agreement shall continue in full force and effect.

(c)Procedure Generally. In the event that the parties fail to settle at the mediation required by this Agreement, and the Company does not exercise its right

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to opt out of arbitration as provided in Section 7.2(b) above, the parties agree to submit the Dispute to a single arbitrator selected from a panel of JAMS arbitrators. The arbitration will be governed by the JAMS Comprehensive Arbitration Rules and Procedures in effect at the time the arbitration is commenced, subject to the terms and modifications of this Agreement. If for any reason JAMS cannot serve as the arbitration administrator or cannot fulfill the panel requirements of the Arbitration Provision, the Company may select an alternative arbitration administrator, such as AAA, to serve under the terms of this Agreement.

(d)Arbitrator Selection. To select the arbitrator, the parties shall make their respective strikes from a panel of former federal court judges and magistrates, to the extent available from JAMS (the "First Panel"). If the parties cannot agree upon an arbitrator from the First Panel or if such a panel is not available from JAMS, then the parties will next make their respective strikes from a panel of former Pennsylvania state court trial and appellate judges, to the extent available from JAMS (the "Second Panel"). Any arbitrators proposed for the First and Second Panels provided for in this Section 7.2(d) must be available to serve in the Agreed Venue. If the parties cannot agree upon an arbitrator from the Second Panel or if such a panel is not available from JAMS, then the parties will next make their respective strikes from the panel of all other JAMS arbitrators available to serve in the Agreed Venue.

(e)VENUE. THE PARTIES STIPULATE AND AGREE THAT THE EXCLUSIVE VENUE OF ANY SUCH ARBITRATION PROCEEDING (AND OF ANY OTHER PROCEEDING, INCLUDING ANY COURT PROCEEDING, UNDER THIS AGREEMENT) SHALL BE ALLEGHENY COUNTY, PENNSYLVANIA (THE "AGREED VENUE").

(f)Authorityand Decision. The arbitrator shall have the authority to award the same damages and other relief that a court could award. The arbitrator shall issue a reasoned award explaining the decision and any damages awarded. The arbitrator's decision will be final and binding upon the parties and enforceable by a court of competent jurisdiction. The parties will abide by and perform any award rendered by the arbitrator. In rendering the award, the arbitrator shall state the reasons therefor, including (without limitation) any computations of actual damages or offsets, if applicable.

(g)Fees and Costs. In the event of arbitration under the terms of this Agreement, the fees charged by JAMS or other arbitration administrator and the arbitrator shall be borne by the Company, subject to subsequent reallocation in the determination of the arbitrator and to the extent permitted by law. Otherwise, the parties shall each bear their own costs, expenses and attorneys' fees incurred in arbitration; provided, however, that the prevailing party shall be entitled to recover and have awarded its attorneys' fees, court costs, arbitration expenses, and its portion of the fees and costs charged by JAMS or other arbitration administrator, regardless of which party initiated the proceedings, in addition to any other relief to which it may be entitled. The Executive may, but is not required to, be represented by counsel in arbitration.

(h)Limited Scope. The following are excluded from binding arbitration under this Agreement: claims for workers' compensation benefits or unemployment

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benefits; replevin; and claims for which a binding arbitration agreement is invalid as a matter of law.

7.3Injunctive Relief.The parties hereto may seek injunctive relief in arbitration; provided, however, that as an exception to the arbitration agreement set forth in Section 7.2, the parties, in addition to all other available remedies, shall each have the right to initiate an action in any court of competent jurisdiction in order to request injunctive or other equitable relief regarding the terms of Section 5 or 7.2. The exclusive venue of any such proceeding shall be in the Agreed Venue. The parties agree (a) to submit to the jurisdiction of any competent court in the Agreed Venue, (b) to waive any and all defenses the Executive may have on the grounds of lack of jurisdiction of such court and (c) that neither party shall be required to post any bond, undertaking or other financial deposit or guarantee in seeking or obtaining such equitable relief. Evidence adduced in any such proceeding for an injunction may be used in arbitration as well. The existence of this right shall not preclude or otherwise limit the applicability or exercise of any other rights and remedies that a party hereto may have at law or in equity.

7.4Settlement of Existing Rights.In exchange for the other terms of this Agreement, the Executive acknowledges and agrees that: (a) the Executive's entry into this Agreement is a condition of employment and/or continued employment with the Company, as applicable; (b) except as otherwise provided herein, this Agreement will replace any existing employment agreement between the parties and thereby act as a novation, if applicable; (c) the Executive is being provided with access to Confidential Information, including, without limitation, proprietary trade secrets of one or more Company Parties, to which the Executive has not previously had access; (d) all Company inventions and intellectual property developed by the Executive during any past employment with the Company and all goodwill developed with the Company's clients, customers and other business contacts by the Executive during any past employment with Company, as applicable, is the exclusive property of the Company; and (e) all Confidential Information and/or specialized training accessed, created, received or utilized by the Executive during any past employment with Company, as applicable, will be subject to the restrictions on Confidential Information described in this Agreement, whether previously so agreed or not.

7.5Entire Agreement; Waiver.This Agreement contains the entire agreement between the Executive and the Company with respect to the subject matter hereof, and supersedes any and all prior understandings or agreements, whether written or oral. No modification or addition hereto or waiver or cancellation of any provision hereof shall be valid except by a writing signed by the party to be charged therewith. No delay on the part of any party to this Agreement in exercising any right or privilege provided hereunder or by law shall impair, prejudice or constitute a waiver of such right or privilege.

7.6Governing Law.This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without regard to principles of conflict of laws.

7.7Successors and Assigns; Binding Agreement.The rights and obligations of the parties under this Agreement shall be binding upon and inure to the benefit of

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the parties hereto and their heirs, personal representatives, successors and permitted assigns. This Agreement is a personal contract, and, except as specifically set forth herein, the rights and interests of the Executive herein may not be sold, transferred, assigned, pledged or hypothecated by any party without the prior written consent of the others. As used herein, the term "successor" as it relates to the Company, shall include, but not be limited to, any successor by way of merger, consolidation or sale of all or substantially all of such Person's assets or equity interests.

7.8Representation by Counsel; Independent Judgment.Each of the parties hereto acknowledges that (a) it or the Executive has read this Agreement in its entirety and understands all of its terms and conditions, (b) it or the Executive has had the opportunity to consult with any individuals of its or the Executive's choice regarding its or the Executive's agreement to the provisions contained herein, including legal counsel of its or the Executive's choice, and any decision not to was the Executive's or its alone and (c) it or the Executive is entering into this Agreement of its or the Executive's own free will, without coercion from any source, based upon its or the Executive's own independent judgment.

7.9Interpretation.The parties and their respective legal counsel actively participated in the negotiation and drafting of this Agreement, and in the event of any ambiguity or mistake herein, or any dispute among the parties with respect to the provisions hereto, no provision of this Agreement shall be construed unfavorably against any of the parties on the ground that the Executive, it, or the Executive's or its counsel was the drafter thereof.

7.10Survival.The provisions of Sections 4.3(c), 4.3(e), and 7shall survive the termination of this Agreement.

7.11Notices.All notices and communications hereunder shall be in writing and shall be deemed properly given and effective when received, if sent by facsimile or telecopy, or by postage prepaid by registered or certified mail, return receipt requested, or by other delivery service which provides evidence of delivery, as follows:

If to the Company, to:

General Nutrition Centers, Inc. 300 Sixth Avenue

Pittsburgh, PA 15222 Attention: Chief Legal Officer

If to the Executive, to:

Carl Seletz

at the most recent address of the Executive on file with the Company

or to such other address as one party may provide in writing to the other party from time to time.

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7.12Counterparts.This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile or electronic transmission of any signed original document or retransmission of any signed facsimile or electronic transmission will be deemed the same as delivery of an original. At the request of any party, the parties will confirm facsimile or electronic transmission by signing a duplicate original document.

7.13Captions.Paragraph headings are for convenience only and shall not be considered a part of this Agreement.

7.14No ThirdParty Beneficiary Rights.Except as otherwise provided in this Agreement, no entity other than GNC shall have any right to enforce any provision of this Agreement, even if indirectly benefited by it.

7.15Withholding.Any payments provided for hereunder shall be paid net of any applicable withholding required under Federal, state or local law and any additional withholding to which Executive has agreed.

7.16Section 409A of the Code.

(a)Although the Company does not guarantee to the Executive any particular tax treatment relating to the payments and benefits under this Agreement, it is intended that such payments and benefits be exempt from, or comply with, Code Section 409A, and all provisions of this Agreement shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A. The parties mutually desire to avoid adverse tax consequences associated with the application of Code Section 409A to this Agreement and agree to cooperate fully and take appropriate reasonable actions to avoid any such consequences under Code Section 409A, including delaying payments and reforming the form of the Agreement (maintaining, to the maximum extent reasonably possible, the original intent and economic benefit to Executive and the Company of the applicable provisions) if such action would reduce or eliminate taxes and/or interest payable as a result of Code Section 409A. In addition, Sections 7.l 6(b) through 7.16(d) shall take precedence over any contrary terms in this Agreement.

(b)A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following such termination of employment that are considered "nonqualified deferred compensation" under Code Section 409A unless such termination is also a "separation from service" within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a "termination," "termination of employment" or like terms shall mean "separation from service." If the Executive is deemed on the date of termination to be a "specified employee" within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment that is considered "nonqualified deferred compensation" under Code Section 409A payable on account of a "separation from service," such payment or benefit shall be made or provided at the date which is the earlier of (1) the expiration of the six-month period measured from the date of such "separation from service" of the Executive, and (2) the date of the Executive's death (the "Delay Period"). Upon the

24

expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 7.16(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Executive in a lump sum with interest at the prime rate as published in The Wall Street Journal on the first business day following the end of the Delay Period, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided, that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period the arrangement is in effect; and (iii) such payments shall be made on or before the last day of the Executive's taxable year following the taxable year in which the expense was incurred.

(d)If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of any payment to be made under this Agreement that is considered nonqualified deferred compensation.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF the parties have duly executed this Agreement, intending it as a document under seal to be effective for all purposes as of the Effective Date.

WITNESS/ATTEST:	GENERAL NUTRITION CENTERS, INC.
By: /s/ Jamie L. Garbowsky	By: /s/ Gerald J. Stubenhofer
Name: Jamie L. Garbowsky	Title: SVP, Chief Legal Officer and Secretary
WITNESS/ATTEST:	EXECUTIVE
By: /s/ Jamie L. Garbowsky	By: /s/ Carl Seletz
Name: Jamie L. Garbowsky	Title: SVP, International

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EXHIBIT A

Definition of Change in Control

For purposes of this Agreement, a "Change in Control" means, and shall be deemed to have occurred upon the occurrence of, any one of the following events:

1.the acquisition (including any acquisition through purchase, reorganization, merger, consolidation or similar transaction) in one or more transactions by any one individual, entity (including any employee benefit plan or any trust for an employee benefit plan) or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (for purposes of this definition only, a "Person"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of shares or other securities (as defined in Section 3(a)(l 0) of the Exchange Act) representing 50% or more of either (1) the Common Stock or (2) the combined voting power of the securities of GNC entitled to vote generally in the election of directors of the Board (the "GNC Voting Securities"), in each case calculated on a fully diluted basis after giving effect to such acquisition; provided, however, that none of the following acquisitions shall constitute a Change in Control as defined in this clause (i): (A) any acquisition by any one Person or group of Persons consisting solely of stockholders of GNC on March 31, 2011, and (B) any acquisition so long as such acquisition does not result in any Person (other than any stockholder or stockholders of GNC on March 31, 2011), beneficially owning shares or securities representing 50% or more of either the Common Stock or GNC Voting Securities; or

2.approval by the stockholders of GNC of (A) a complete liquidation or dissolution of GNC or the Company or (B) the sale or other disposition (other than a merger or consolidation) of all or substantially all of the assets of GNC and its subsidiaries, taken as a whole, to any Person.

Notwithstanding anything to the contrary in this Exhibit A, in any instance in which amounts are to be paid under this Agreement as a result of a Change in Control, and such amounts are treated as deferred compensation under Section 409A of the Code, then, such amounts only shall be paid if the Change in Control constitutes a "change in ownership or effective control" of the Company as defined under Code Section 409A and regulations and guidance issued by the Internal Revenue Service thereunder.

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EX-10.11

EXECUTION VERSION

STALKING HORSE AGREEMENT

BY AND AMONG

GNC HOLDINGS, INC.,

EACH OF THE SUBSIDIARIES OF GNC HOLDINGS, INC.

LISTED ON SCHEDULE I

AND

HARBIN PHARMACEUTICAL GROUP HOLDING CO., LTD.

DATED AS OF AUGUST 7, 2020

THIS STALKING HORSE AGREEMENT IS SUBJECT TO REVISION BY THE SELLER AT ANY TIME AND MUST BE KEPT CONFIDENTIAL IN ACCORDANCE WITH THE TERMS OF THE CONFIDENTIALITY AGREEMENT ENTERED INTO BETWEEN THE RECIPIENT OF THIS AGREEMENT AND THE SELLER.

TABLE OF CONTENTS

		Page
Article I DEFINITIONS		6
Section 1.1	Definitions	6
Section 1.2	Construction	26
Article II PURCHASE AND SALE		26
Section 2.1	Purchase and Sale of Assets	26
Section 2.2	Excluded Assets	29
Section 2.3	Assumed Liabilities	30
Section 2.4	Excluded Liabilities	31
Section 2.5	Assumption and Assignment of Certain Contracts	32
Section 2.6	Consents to Certain Assignments	34
Section 2.7	Designation of Assets and Liabilities	35
Section 2.8	Wrong Pocket	36
Section 2.9	Acquisition of Acquired GNC Equity Interests	36
Article III PURCHASE PRICE; Deposit		37
Section 3.1	Purchase Price	37
Section 3.2	Deposit Escrow	37
Section 3.3	Allocation	39
Section 3.4	Purchase Price Adjustment	39
Article IV the Closing		41
Section 4.1	Time and Place of the Closing	41
Section 4.2	Deliveries by the Seller	41
Section 4.3	Deliveries by the Buyer	42
Article V REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES		42
Section 5.1	Organization, Standing and Corporate Power	42
Section 5.2	Subsidiaries	43
Section 5.3	Authority; Execution and Delivery; Enforceability	43
Section 5.4	No Conflicts	43
Section 5.5	Legal Proceedings and Orders	44
Section 5.6	Permits	45
Section 5.7	Compliance with Law	45
Section 5.8	Absence of Certain Developments	46
Section 5.9	Seller SEC Documents; Financial Statements	46
Section 5.10	Employee Benefit Plans	47
Section 5.11	Employee and Labor Matters	49
Section 5.12	Contracts	50
Section 5.13	Intellectual Property; Information Technology; Privacy	51
Section 5.14	Taxes	54
Section 5.15	Insurance	55

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Section 5.16	Title to Assets; Real Property	55
Section 5.17	Environmental Matters	56
Section 5.18	Brokers	56
Section 5.19	Investment Company Act	57
Section 5.20	Foreign Corrupt Practices Act	57
Section 5.21	OFAC; Anticorruption Laws	57
Section 5.22	Material Customers and Material Suppliers	57
Section 5.23	Affiliate Transactions	58
Section 5.24	GNC Newco Activities	58
Section 5.25	Canadian Competition Act	59
Section 5.26	Canadian Cultural Business	59
Article VI REPRESENTATIONS AND WARRANTIES OF BUYER		59
Section 6.1	Organization and Good Standing	59
Section 6.2	Authority Relative to this Agreement	59
Section 6.3	No Violation; Consents	60
Section 6.4	Legal Proceedings and Orders	61
Section 6.5	Brokers	61
Section 6.6	Buyer Financing	61
Section 6.7	Anti-Money Laundering, Anti-Terrorism and Similar Laws	62
Section 6.8	Investment Canada Act and Canadian Competition Act	63
Section 6.9	Related Party	63
Section 6.10	Reliance by Buyer	63
Article VII COVENANTS OF THE PARTIES		63
Section 7.1	Conduct of Business of Selling Entities	63
Section 7.2	Conduct of Business of Buyer	67
Section 7.3	Access to and Delivery of Information; Maintenance of Records	67
Section 7.4	Expenses	69
Section 7.5	Further Assurances	69
Section 7.6	Public Statements	69
Section 7.7	Governmental Authority Approvals and Cooperation	70
Section 7.8	Financing	72
Section 7.9	Debt Financing Cooperation	73
Section 7.10	Employee Matters	74
Section 7.11	Tax Matters	77
Section 7.12	Submission for Bankruptcy Court Approval and Canadian Court Recognition	79
Section 7.13	Overbid Procedures; Adequate Assurance	81
Section 7.14	Termination Fee	82
Section 7.15	Transfer of Purchased Assets; Substitution of Letters of Credit; Payments Received	83
Section 7.16	Post-Closing Operation of the Seller; Name Changes	84
Section 7.17	Purchased Assets “AS IS;” Certain Acknowledgements	85
Section 7.18	Formation of Newcos; Canadian Stores	86
Section 7.19	Release	86
Section 7.20	Withholding	87

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Article VIII CONDITIONS TO CLOSING		87
Section 8.1	Conditions to Each Party’s Obligations to Effect the Closing	87
Section 8.2	Conditions to Obligations of the Buyer	88
Section 8.3	Conditions to Obligations of the Selling Entities	89
Section 8.4	Frustration of Closing Conditions	90
Article IX TERMINATION; WAIVER		90
Section 9.1	Termination	90
Section 9.2	Procedure and Effect of Termination	93
Section 9.3	Extension; Waiver	93
Article X MISCELLANEOUS PROVISIONS		94
Section 10.1	Amendment and Modification	94
Section 10.2	Survival	94
Section 10.3	Notices	94
Section 10.4	Assignment	96
Section 10.5	Severability	96
Section 10.6	Governing Law	96
Section 10.7	Acknowledgement and Release	96
Section 10.8	Financing Source Matters	97
Section 10.9	Submission to Jurisdiction; WAIVER OF JURY TRIAL	97
Section 10.10	Counterparts	98
Section 10.11	Incorporation of Schedules and Exhibits	98
Section 10.12	Entire Agreement	98
Section 10.13	Remedies	98
Section 10.14	Bulk Sales or Transfer Laws	99
Section 10.15	Seller Disclosure Schedule	99
Section 10.16	Mutual Drafting; Headings; Information Made Available	99
Section 10.17	Approval of the Bankruptcy Court and the Canadian Court	99
Section 10.18	Non-Recourse	99
Section 10.19	Actions of Seller	100
SCHEDULES
Schedule I	Other Selling Entities
Schedule II	Exit Costs
Schedule III	Operating Liabilities
Seller Disclosure Schedule
Section 1.1(a)	Acquired Subsidiaries
Section 1.1(b)	Permitted Encumbrances
Section 1.1(c)	Real Property Leases
Section 2.1(e)	Assumed Agreements
Section 2.1(f)	Assumed Real Property Leases

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Section 2.1(k)	Owned Real Property
Section 2.1(l)	Equity Interests
Section 2.2	Other Excluded Assets
Section 2.5(a)	Cure Payments
Section 5.2	Subsidiaries
Section 5.4(a)	Required Consents and Approvals
Section 5.5	Proceedings and Orders
Section 5.6	Permits
Section 5.7	Compliance with Laws
Section 5.8	Absence of Certain Developments
Section 5.9(e)	Liabilities
Section 5.10(a)	Employee Benefit Plans
Section 5.12	Material Contracts
Section 5.13(a)	Intellectual Property
Section 5.16(a)	Title to Assets
Section 5.18	Brokers
Section 7.1	Exceptions to Conduct of the Business Covenant
Section 7.10(a)	Specified Employees
Section 7.10(f)	Assumed Compensation and Benefit Programs
EXHIBITS
Exhibit A	Form of Assignment and Assumption Agreement
Exhibit B	Form of Bill of Sale
Exhibit C	Form of Intellectual Property Assignment Agreements
Exhibit D	Form of Second Lien Credit Agreement
Exhibit E	Form of Escrow Agreement
Exhibit F	Form of Intercreditor and Subordination Agreement




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STALKING HORSE AGREEMENT

This Stalking Horse Agreement (as amended, modified or supplemented from time to time, this “Agreement”) is made and entered into as of August 7, 2020 by and among GNC Holdings, Inc., a Delaware corporation (the “Seller”), and each of the subsidiaries of the Seller listed on Schedule I (together with the Seller, the “Selling Entities”), and Harbin Pharmaceutical Group Holding Co., Ltd., a corporation incorporated in the People’s Republic of China (the “Buyer”). Each of the Selling Entities and the Buyer are referred to herein as a “Party” and collectively as the “Parties.” Capitalized terms used but not otherwise defined herein have the meanings set forth in Article I.

RECITALS

WHEREAS, the Selling Entities commenced voluntary cases under the Bankruptcy Code in the Bankruptcy Court on June 23, 2020 (the “Petition Date”), and subsequently commenced the CCAA Proceedings before the Canadian Court on June 24, 2020;

WHEREAS, each Selling Entity continues in possession of its assets and is authorized under the Bankruptcy Code to continue the operation of its businesses as a debtor-in-possession;

WHEREAS, the Buyer desires to purchase from the Selling Entities, directly and/or, in the Buyer’s sole discretion, through one or more Buyer Designees, including ZT Biopharmaceutical LLC (an indirect wholly owned subsidiary of Buyer), and the Selling Entities desire to sell to the Buyer and/or such Buyer Designees, substantially all of the Selling Entities’ assets, and the Buyer desires to assume from the Selling Entities, directly and/or, in the Buyer’s sole discretion, through one or more Buyer Designees, certain specified liabilities, in each case pursuant to the terms and subject to the conditions set forth herein;

WHEREAS, the Buyer and the Seller have agreed that the purchase price will be comprised of (a) indebtedness under the Second Lien Credit Agreement (the “Second Lien Loans”) in a principal amount equal to the Second Lien Loans Amount (as defined below), subject to adjustment as provided herein, (b) the payment of an amount in cash equal to the Cash Purchase Price (as defined below), subject to adjustment as provided herein and (c) the assumption of certain liabilities as more fully set forth herein;

WHEREAS, the Selling Entities and the Buyer have agreed that the sale, transfer and assignment of the Purchased Assets and the Assumed Liabilities from the Selling Entities to GNC Newco (as defined below) shall be effected pursuant to sections 105, 363 and 365 of chapter 11 of title 11 of the Bankruptcy Code, and shall be recognized pursuant to the CCAA; and

WHEREAS, in connection with the Bankruptcy Case and the CCAA Proceedings and subject to the terms and conditions contained herein, following entry of the Sale Order finding the Buyer as the prevailing bidder at the Auction, (i) the Selling Entities shall sell and transfer to GNC Newco, and GNC Newco shall purchase and acquire from the Selling Entities, pursuant to sections 105, 363 and 365 of the Bankruptcy Code, the Purchased Assets, and GNC Newco shall

5

assume from the Selling Entities the Assumed Liabilities, (ii) all of the equity interests in GNC Newco beneficially owned by Seller will be redeemed by GNC Newco for no consideration and (iii) concurrently with such redemption, GNC Newco will issue new equity interests to Buyer or a Buyer Designee such that Buyer or such Buyer Designee becomes the owner of all outstanding equity interests in GNC Newco, all as more specifically provided herein and in the Sale Order, and as the same shall be recognized pursuant to the CCAA and as shall be provided for in the Canadian Sale Approval and Vesting Order;

WHEREAS, the Buyer has leveraged its relationships and goodwill and has utilized, and will continue to utilize, its experience and expertise to provide financing arrangement and other services (collectively, the “Buyer Financing Services”) to GNC Newco to facilitate and arrange the financing contemplated by the facilities agreement to be entered into with Bank of China Limited, Macau Branch (the “BoC Financing”);

WHEREAS, the BoC Financing and the lenders’ participation therein would not be possible without the Buyer’s provision of the Buyer Financing Services;

WHEREAS, pursuant to the terms and subject to the conditions set forth herein, the Acquired GNC Equity Interests shall be issued to ZT Biopharmaceutical LLC in consideration for the Buyer Financing Services; and

WHEREAS, pursuant to a guarantee agreement to be executed prior to the Closing, the Buyer shall guarantee the obligations of GNC Newco under the facilities agreement to be entered into with Bank of China Limited, Macau Branch (the “Buyer Guarantee”) and, in consideration for the Buyer Guarantee, GNC Newco shall pay the Buyer a guarantee fee in an amount equal to $20,000 or such other amount to be mutually agreed between GNC Newco and the Buyer (the “Guarantee Fee”).

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

Article IDEFINITIONS

Section 1.1Definitions. A defined term has its defined meaning throughout this Agreement and in each Exhibit and Schedule to this Agreement, regardless of whether it appears before or after the place where it is defined. As used in this Agreement, the following terms have the meanings specified below:

“Accounts Receivable” means any and all (i) accounts receivable, notes receivable, trade receivables and other amounts receivable owed to the Selling Entities (whether current or non-current), together with all security or collateral therefor and any interest or unpaid financing charges accrued thereon, including all causes of action pertaining to the collection of amounts payable, or that may become payable, to the Selling Entities with respect to products sold or services performed on or prior to the Closing Date, (ii) license and royalty receivables and

6

(iii) other amounts due to the Selling Entities which the Selling Entities have historically classified as accounts receivable in the consolidated balance sheet of the Seller.

2“Acquired GNC Equity Interests” has the meaning given to such term in Section 2.9.

3“Acquired Subsidiaries” means the Subsidiaries of each of the Selling Entities (excluding any Selling Entity) listed on Section 1.1(a) of the Seller Disclosure Schedule.

4“Acquired Subsidiary IP” means all Intellectual Property and Intellectual Property Rights (including the goodwill of the Acquired Subsidiaries) owned by any of the Acquired Subsidiaries.

5“Action” means any action, complaint, petition, suit, arbitration, hearing, claim, mediation, audit, inquiry, investigation or other proceeding, whether civil or criminal, at law or in equity, before or by any Governmental Authority.

6“Actual TLB Distribution Amount” has the meaning given to such term in Section 3.4(d).

7“Adjusted TLB Distribution Amount” has the meaning given to such term in Section 3.4(d).

8“Ad Hoc Group Crossover Lenders” means the holders of the Tranche B-2 Term Loan (as defined in the Plan) and ABL FILO Term Loan (as defined in the Plan) that are part of the ad hoc group of lenders represented by Milbank LLP.

9“Ad Hoc Group FILO Lenders” means the holders of FILO Term Loans that are part of the ad hoc group of lenders represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP.

10“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person. For purposes of this definition, “control” (and any similar term) means the power of one or more Persons to direct, or cause the direction of, the management or affairs of another Person by reason of ownership of voting stock, as trustee or executor, as general partner or managing member or by Contract or otherwise; provided, that in no event shall Buyer or any Buyer Designee (i) be considered an “Affiliate” of any portfolio company of any investment fund advised by affiliates of CITIC Capital Holdings Limited (or such investment fund itself), except for purposes of Section 3.2(b) and Section 10.18, (ii) be considered an “Affiliate” of any Selling Entity or (iii) be considered an “Affiliate” of GNC Newco prior to the Closing.

11“Agreement” has the meaning given to such term in the Preamble hereto.

12“Aland Debt Commitment Letter” means the debt commitment letter from Aland (HK) Nutrition Holding Limited, dated as of or prior to the date hereof, as amended,

7

supplemented or replaced in accordance with this Agreement, pursuant to which the Financing Sources party thereto have agreed to provide or cause to be provided the debt financing set forth therein for the purposes of providing funding towards the Cash Purchase Price.

13“Allocation” has the meaning given to such term in Section 3.3.

14“Alternative Financing” has the meaning given to such term in Section 7.8.

15“Anticorruption Laws” means all Laws of any jurisdiction applicable to the Seller or any of its Subsidiaries from time to time concerning or relating to bribery or corruption.

16“Antitrust Laws” has the meaning given to such term in Section 7.7(c).

17“Asset and Liability Dropdown” has the meaning given to such term in Section 2.9.

18“Assignment and Assumption Agreement” means one or more Assignment and Assumption Agreements to be executed and delivered by GNC Newco, GNC Canada Newco and the Selling Entities at the Closing, substantially in the form of Exhibit A.

19“Assumed Agreements” has the meaning given to such term in Section 2.1(e).

20“Assumed Compensation and Benefit Programs” means each of the Seller Compensation and Benefit Programs assumed by Buyer set forth on Section 7.10(f) of the Seller Disclosure Schedule.

“Assumed Liabilities” has the meaning given to such term in Section 2.3.

21“Assumed Real Property Leases” has the meaning given to such term in Section 2.1(f).

22“Assumption Approval” has the meaning given to such term in Section 2.5(g).

23“Auction” has the meaning given to such term in Section 7.13(a).

24“Audited Financial Statements” means the consolidated financial statements of the Seller contained in the Annual Report on Form 10-K for the fiscal year ended December 31, 2019, filed by Seller with the SEC.

25“Back-up Bidder” has the meaning given to such term in Section 7.13(c).

26“Balance Sheet Date” has the meaning given to such term in Section 5.9(e).

27“Bankruptcy Case” means the Selling Entities’ cases commenced under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.

28“Bankruptcy Code” means Title 11 of the United States Code, 11 U.S.C. §§ 101, et seq, as amended.

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29“Bankruptcy Court” means the United States Bankruptcy Court for the District of Delaware or such other court having competent jurisdiction over the Bankruptcy Case.

30“Bidding Procedures Order” means the Bankruptcy Court’s Order Approving (I) the Bidding Procedures in Connection With the Sale of All, Substantially All of the Debtors' Assets, (II) the Procedures for the Assumption and Assignment of Executory Contracts and Unexpired Leases, (III) the Form and Manner of Notice of the Sale Hearing, Assumption Procedures, and Auction Results, (IV) Dates for an Auction and Sale Hearing and (V) Granting Related Relief, [Docket No. 559], entered on July 22, 2020.

31“Bill of Sale” means one or more Bills of Sale to be executed and delivered by the Selling Entities, GNC Newco and GNC Canada Newco at the Closing, substantially in the form of Exhibit B.

32“BoC Debt Commitment Letter” means the debt commitment letter supplement from the Bank of China Limited, Macau Branch, an executed copy of which was delivered to the Seller on or prior to the date hereof, together with any related fee letter, engagement letter or other agreement, in each case, as amended, supplemented or replaced in accordance with this Agreement, pursuant to which the Financing Sources party thereto shall agree to provide or cause to be provided the debt financing set forth therein for the purposes of providing $400 million in funding towards the Cash Purchase Price, the terms of which will permit the issuance of the Second Lien Loans in accordance with the Second Lien Documents.

33“BoC Financing” has the meaning given to such term in the Recitals.

34“Business” means the business conducted by the Seller, the other Selling Entities and the Acquired Subsidiaries as described in the Seller SEC Documents.

35“Business Day” means any day that is not a Saturday, Sunday or other day on which banks are required or authorized by Law to be closed in either New York, New York or Toronto, Ontario, Canada.

36“Business IP” means, collectively, all Seller IP and all Acquired Subsidiary IP.

37“Buyer” has the meaning given to such term in the Preamble hereto.

38“Buyer Default Termination” has the meaning given to such term in Section 3.2.

39“Buyer Designee” means ZT Biopharmaceutical LLC and any other Affiliates of the Buyer designated by the Buyer in writing to the Seller no later than three (3) Business Days prior to the Closing.

40“Buyer Financing Services” has the meaning given to such term in the Recitals.

41“Buyer Guarantee” has the meaning given to such term in the Recitals.

“Buyer Releasing Party” has the meaning given to such term in Section 7.19(a).

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42“Canadian Bidding Procedures Order” means the order of the Canadian Court in the CCAA Proceedings recognizing and implementing the Bidding Procedures Order in Canada, entered by the Canadian Court on July 27, 2020.

43“Canadian Court” means the Ontario Superior Court of Justice (Commercial List).

44“Canadian Purchased Assets” means all Purchased Assets owned or acquired by the Canadian Selling Entities.

45“Canadian Sale Approval and Vesting Order” has the meaning given to such term in Section 7.12(b).

46“Canadian Seller” means General Nutrition Centres Company.

47"CARES Act" means the Coronavirus Aid, Relief, and Economic Security Act (including any changes in state or local law that are analogous to provisions of the CARES Act or adopted to conform to the CARES Act).

48“Cash” means cash (including petty cash and checks) and cash equivalents (including checking account balances, marketable securities, short-term instruments, certificates of deposits, time deposits, bankers’ acceptances, commercial paper, security entitlements, securities accounts, commodity Contracts, commodity accounts, government securities and any other cash equivalents, whether on hand, in store registers, in transit, in banks or other financial institutions, or otherwise held) and restricted cash of the Seller and its Subsidiaries, in each case calculated in accordance with the accounting principles used to prepare the Audited Financial Statements.

49“Cash Purchase Price” means an amount equal to (a) $550,000,000 minus (b) the Deposit plus (c) the Cash Increase Amount (if any), as reduced pursuant to the proviso to the definition of “Purchased Cash.”

50“Cash Increase Amount” has the meaning given to such term in Section 9.1(k).

51“Cash Reduction Amount” means (a) if the Cash Shortfall is less than $5,000,000, $0, (b) if the Cash Shortfall is equal to or greater than $5,000,000 and less than $10,000,000, an amount equal to the Cash Shortfall minus $5,000,000, and (c) if the Cash Shortfall is equal to or greater than $10,000,000, $5,000,000.

52“Cash Shortfall” means the amount, if any, by which (a) the Target Cash Amount exceeds (b) the Company Cash Pre-Adjustment.

53“CCAA” means the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended.

54“CCAA Proceedings” means the recognition proceedings in respect of the Selling Entities pursuant to Part IV of the CCAA before the Canadian Court.

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55“Claim” has the meaning given to such term in Section 101(5) of the Bankruptcy Code.

56“Closing” has the meaning given to such term in Section 4.1.

57“Closing Cure Payment Amount” means an amount sufficient to satisfy all Cure Payments outstanding as of the Closing, as estimated pursuant to Section 3.4.

58“Closing Date” has the meaning given to such term in Section 4.1.

59“Closing Payroll Period” has the meaning given to such term in Section 7.10(c).

60“COBRA” has the meaning given to such term in Section 7.10(d).

61“Code” means the Internal Revenue Code of 1986, as amended.

62“Company Cash” means all Cash of the Seller and its Subsidiaries, including any Cash in the DIP Funding Account, in each case, as of the Closing.

63“Company Cash Pre-Adjustment” means, without duplication, an aggregate amount equal to (a) Company Cash plus (b) $550,000,000 minus (c) the amount of DIP Obligations minus (d) $100,000,000 minus (e) the amount of Exit Costs as of the Closing minus (f) an amount equal to 50% of Transfer Taxes minus (g) $7,500,000 minus (h) the aggregate amount as of the Closing of Administrative Claims, Priority Tax Claims and Other Priority Claims (each, as defined in the Plan) that are not Assumed Liabilities.

64“Confidentiality Agreement” means the Confidentiality Agreement by and between the Seller and Harbin Pharmaceutical Group Holding Co., Ltd, dated November 8, 2018.

65“Consent” means any approval, consent, ratification, designation, permission, clearance, waiver or other authorization.

66“Consumer Liabilities” means all Liabilities of the Selling Entities with respect to returns of goods or merchandise, store or customer credits, gift cards and certificates, customer prepayments and overpayments, customer loyalty obligations or programs, customer refunds, warranty obligations with respect to goods or merchandise, returns of goods sold by licensees and other similar Liabilities to customers or potential customers of the Selling Entities or licensees of the Selling Entities.

67“Contract” means, with respect to any Person, any lease, sublease, contract, deed, bond, indenture, guarantee, franchise, understanding, arrangement, commitment, letter of intent, mortgage, license, sublicense or other legally enforceable agreement, instrument or obligation, whether written or oral, to which such Person is a party or by which such Person is bound.

68“Contract Notice Period” has the meaning given to such term in Section 2.5(d).

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69“Convertible Notes Issuance” means the issuance by ZT Biopharmaceutical LLC of up to $10 million in subordinated PIK convertible notes, which terms may consist of an 8 year term with a mandatory redemption feature and which shall be in form and substance acceptable to the Buyer, that shall be available for distribution to the unsecured creditors under a plan of reorganization.

70“Cure Payments” has the meaning given to such term in Section 2.5(f).

71“Debt Commitment Letters” means (i) the BoC Debt Commitment Letter and (ii) the Aland Debt Commitment Letter.

72“Debt Financing” means the debt financing incurred or intended to be incurred pursuant to the Debt Commitment Letters.

73“Debt Financing Documents” means the agreements, documents and certificates contemplated by or delivered in connection with the Debt Financing or reasonably requested by the Buyer or its Financing Sources, including without limitation: (a) all credit agreements, facilities agreement, loan documents, security trust agreements, purchase agreements, underwriting agreements, indentures, debentures, notes, intercreditor agreements, guarantee agreements, security documents and fee letters (as customarily redacted) pursuant to which the Debt Financing will be governed; (b) officer, secretary, solvency and perfection certificates, legal opinions, corporate organizational documents, good standing certificates, lien searches, and resolutions contemplated by the Debt Commitment Letters or the Second Lien Documents or reasonably requested by the Buyer or its Financing Sources; (c) all documentation and other information as may be required by bank regulatory authorities under (i) applicable “know-your-customer” and anti-money laundering rules and regulations (including PATRIOT Act) and (ii) OFAC, FCPA and the Investment Company Act; (d) agreements, documents or certificates that facilitate the creation, perfection or enforcement of liens securing the Debt Financing (including original copies of all certificated securities (with transfer powers executed in blank), control agreements, surveys, title insurance, landlord consent and access letters) as are reasonably requested by the Buyer or its Financing Sources; and (e) such other information or documentation reasonably requested in connection with the Debt Financing.

74“Deed” means a special warranty deed, registrable transfer or local equivalent, in a form reasonably satisfactory to the Buyer and the Seller.

75“Deposit” has the meaning given to such term in Section 3.2.

76“DIP Funding Account” has the meaning given to such term in that certain Debtor-in-Possession Term Loan Credit Agreement, dated as of June 26, 2020, among GNC Corporation, General Nutrition Centers, Inc., GLAS Trust Company, LLC, as administrative agent and collateral agent, and the lenders party thereto from time to time.

77“DIP Obligations” has the meaning given to such term in the Final Order of the Bankruptcy Court (I) Authorizing the Debtors to Obtain Postpetition Financing, (II) Authorizing the Debtors to Use Cash Collateral, (III) Granting Liens and Providing Superpriority

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Administrative Expense Claims, (IV) Granting Adequate Protection to Prepetition Secured Lenders, (V) Modifying Automatic Stay, and (VI) Granting Related Relief, [Docket No. 502], filed on July 21, 2020.

78“D&O Claims” has the meaning given to such term in Section 2.1(z).

79“Documentary Materials” has the meaning given to such term in Section 2.1(j).

80“DOJ” has the meaning given to such term in Section 7.7(b).

81“DOL” has the meaning given to such term in Section 5.10(b).

82“Effective Date” means the Effective Date as defined in the Plan.

83“Effective Date True-Up Amount” means, as of the Effective Date, the amount of Cash available to the Seller and the Selling Entities after payment of all exit costs, and other distributions, expenses and other amounts required to be paid by the Seller and its Subsidiaries in accordance with the Plan.

84“Employees” means all employees of the Selling Entities, including those on disability or a leave of absence, whether paid or unpaid.

85“Encumbrances” means any charge, lien (statutory or otherwise), mortgage, lease, hypothecation, encumbrance, pledge, security interest, option, right of use, first offer or first refusal, easement, servitude, restrictive covenant or condition, encroachment or similar restriction or instruments charging, or creating a security interest in the Purchased Assets or any part thereof or interest therein, and any agreements, occupancy agreements, rights of way, restrictions, executions or other encumbrances (including notices or other registrations in respect of any of the foregoing) affecting any right or title to the Purchased Assets or any part thereof or interest therein, in each case of any type, nature or kind whatsoever (whether known or unknown, secured or unsecured or in the nature of setoff or recoupment, choate or inchoate, filed or unfiled, scheduled or unscheduled, noticed or unnoticed, recorded or unrecorded, perfected or unperfected, allowed or disallowed, contingent or non-contingent, liquidated or unliquidated, matured or unmatured, material or nonmaterial, disputed or undisputed, whether arising prior to or subsequent to the commencement of the Bankruptcy Case, and whether imposed by agreement, understanding, applicable Law, equity, or otherwise, including claims otherwise arising under doctrines of successor liability).

86“Environmental Claims” means any Proceeding, claim, investigation, order, demand, allegation, accusation or notice (written or oral) by any Person or entity alleging actual or potential liability or violation arising out of or relating to any Environmental Laws, Environmental Permits or the Release of or exposure to Hazardous Materials.

87“Environmental Laws” has the meaning given to such term in Section 5.17.

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88“Environmental Permits” means any permit, certificate, consent, registration, notice, approval, identification number, license or other authorization required under any applicable Environmental Law.

89“Equity Interests” has the meaning given to such term in Section 2.1(l).

90“ERISA” has the meaning given to such term in Section 5.10(a).

91“ERISA Affiliate” has the meaning given to such term in Section 5.10(e).

92“Escrow Agent” has the meaning given to such term in Section 3.2.

93“Escrow Agreement” has the meaning given to such term in Section 3.2.

94“Estimated Closing Statement” has the meaning given to such term in Section 3.4(a).

95“Estimated TLB Cash Distribution Amount” means the estimated cash distribution to be made under the Plan by the Selling Entities to the holders of Allowed Tranche B-2 Term Loan Secured Claims (as defined in the Plan) and the holders of TLB Allowed DIP Term Roll-Up Loan Claims (as defined in the Plan), in each case in respect of such Allowed Tranche B-2 Term Loan Claims and TLB Allowed DIP Term Roll-Up Loan Claims, as determined in good faith by the Selling Entities; provided, however, that for purposes of determining the Estimated TLB Cash Distribution Amount, the cash amount to be distributed or paid in settlement to the holders of General Unsecured Claims, Convertible Unsecured Notes Claims, or Tranche B-2 Term Loan Deficiency Claims (each, as defined in the Plan) (whether determined or estimated) in excess of $5,000,000 shall not be included or considered for purposes of determining the Estimated TLB Cash Distribution Amount under any circumstances.

96“Exchange Act” has the meaning given to such term in Section 5.9(a).

97“Excluded Assets” has the meaning given to such term in Section 2.2.

98“Excluded Cash” means all Company Cash other than Purchased Cash.

99“Excluded Liabilities” has the meaning given to such term in Section 2.4.

100“Exit Costs” means each fee, cost or other expense identified on Schedule II hereto.

101“Expense Reimbursement” has the meaning given to such term in Section 7.14(a).

102“FCPA” has the meaning given to such term in Section 5.20.

103“FILO Term Loans” means the FILO Term Loans under the Credit Agreement, dated as of February 28, 2018 (as amended by that certain First Amendment, dated as of March 20, 2018, and that certain Second Amendment, dated as of May 15, 2020, and as may be further

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amended, amended and restated, supplemented or otherwise modified from time to time), among GNC Corporation, General Nutrition Centers, Inc., as administrative borrower, certain of their respective subsidiaries, as subsidiary borrowers, the lenders and agents parties thereto, and JPMorgan Chase Bank, N.A., as administrative agent, as such FILO Term Loans are rolled-up under the DIP ABL FILO Credit Agreement (as defined in the Plan).

104“Final Allocation” has the meaning given to such term in Section 3.3.

105“Final Closing Statement” has the meaning given to such term in Section 3.4(b).

106“Final Order” means an Order of the Bankruptcy Court, which is in full force and effect, which has not been modified, amended, reversed, vacated or stayed and as to which the time to file an appeal, a motion for rehearing or reconsideration or a petition for writ of certiorari has expired and no such appeal, motion or petition is pending.

107“Financing Deliverables” means the following documents required to be delivered in connection with the Debt Financing: (a) the Debt Financing Documents and any other officer’s certificate, consents, resolutions and a solvency certificate (including a solvency certificate in the form attached to the Debt Commitment Letters) and customary perfection certificates required in connection with the Debt Financing, and organizational documents and good standing certificates required by the Debt Commitment Letters; (b) documentation and other information reasonably requested by the Financing Sources under applicable “know-your-customer” and anti-money laundering rules and regulations; (c) agreements, documents, notices or certificates that facilitate the creation, perfection or enforcement, in each case as of the Closing, of liens securing the Debt Financing (including original copies of all certificated securities (with transfer powers executed in blank), control agreements, surveys and title insurance) as expressly required by the Debt Commitment Letters; and (d) such other information or documentation reasonably requested in connection with the Debt Financing.

108“Financing Failure Event” means any of the following: (a) the commitments with respect to all or any portion of the Debt Financing (or Alternative Financing) expiring or being validly terminated by any lender party to a Debt Commitment Letter (or, in the case of an Alternative financing, the applicable commitment letter(s)), (b) for any reason, all or any portion of the Debt Financing (or Alternative Financing) becoming unavailable on substantially the terms and conditions contemplated in the Debt Commitment Letters (or, in the case of an Alternative financing, the applicable commitment letter(s)), or (c) a material uncured breach or repudiation by any lender party to a Debt Commitment Letter (or, in the case of an Alternative financing, the applicable commitment letter(s)).

109“Financing Information” means the information with respect to the business, operations and financial condition of the Seller and its Subsidiaries that is expressly required to be provided by the Debt Commitment Letters (including (i) the financial statements as of June 30, 2020 of the Seller and (ii) such information that is required to prepare pro forma consolidated financial statements (including a balance sheet, profit and loss account and cash flow statement) for GNC Newco as of June 30, 2020 (and any subsequent date falling at 3 month intervals

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thereafter until the Closing Date shall have occurred) assuming the Closing Date had occurred on the date falling 12 months prior to the date of such pro forma financial statements.

110“Financing Sources” means the Bank of China Limited, Macau Branch, Aland (HK) Nutrition Holding Limited and any other entities that have committed to provide or arrange or otherwise entered into agreements in connection with all or any part of the Debt Financing in connection with the Transactions, including the parties to any joinder agreements, indentures or credit agreements entered into pursuant thereto or relating thereto, including the agents, underwriters and arrangers of, or in connection with, the Debt Financing, and in each case of the foregoing, each of their respective Affiliates, their and their respective Affiliates’ officers, directors, employees, agents, members, shareholders, controlling persons, and other Representatives and their respective successors and assigns.

111“Fraud” means, with respect to any Party, an actual and intentional fraud in the making of any representation or warranty expressly set forth in Article V or Article VI (as the case may be); provided, that such actual and intentional fraud shall only be deemed to exist if one or more of the individuals listed in the definition of “Knowledge” or their direct reports had actual knowledge as of the date hereof of the underlying breach of any such representation or warranty and the intention that a Party would rely on such representation or warranty to its detriment at the time such representation or warranty was made.

112“FTC” has the meaning given to such term in Section 7.7(b).

113“GAAP” means generally accepted accounting principles in the United States.

114“GNC Names and Marks” means, collectively, “GNC,” “GENERAL NUTRITION CENTER”, “GENERAL NUTRITION CENTERS”, and any other Marks included in the Business IP, in each case, whether used either alone or in combination with other words, graphics, or designs, as well as any abbreviation, variation, derivative, translation, or transliteration thereof or any confusingly similar Mark thereto.

115“GNC Canada Newco” has the meaning given to such term in Section 7.18(a).

116“GNC Newco” has the meaning given to such term in Section 7.18(a).

117“GNC Successor Newco” has the meaning given to such term in Section 7.18(b).

118“Government List” means any list maintained by any agency or department of any Governmental Authority in the United States of Persons, organizations or entities subject to international trade, export, import or transactions restrictions, controls or prohibitions, including (i) the Denied Persons List and Entities List maintained by the U.S. Department of Commerce, (ii) the List of Specially Designated Nationals and Blocked Persons and the List of Sectoral Sanctions Identification maintained by the U.S. Department of Treasury, (iii) the Foreign Terrorist Organizations List and the Debarred Parties List maintained by the U.S. Department of State and (iv) those Persons, organizations and entities listed in the Annex to, or are otherwise

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subject to the provisions of, Executive Order No. 13224 on Terrorist Financing (effective September 21, 2004).

119“Governmental Authority” means any federal, municipal, state, provincial, local or foreign governmental, quasi-governmental, administrative or regulatory authority, department, agency, board, bureau, commission or body (including any court, arbitral body or similar tribunal), including the Bankruptcy Court and the Canadian Court.

120“Governmental Authorization” means any Permit or Consent issued, granted, given or otherwise made available by or under the authority of any Governmental Authority or pursuant to any Law.

121“Guarantee Fee” has the meaning given to such term in the Recitals.

122“Handling” means the access, acquisition, compilation, use, storage, processing, transmission, safeguarding, disposal, destruction, disclosure or exploitation of data.

123“Hazardous Materials” means any pollutants, chemicals, contaminants or any other toxic, infectious, carcinogenic, reactive, radioactive, corrosive, ignitable, flammable or otherwise hazardous substance or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws, including any quantity of asbestos in any form, urea formaldehyde, PCBs, radon gas, mold, crude oil or any fraction thereof, all forms of natural gas, petroleum products, petroleum breakdown products, petroleum by-products or petroleum derivatives.

124“HSR Act” has the meaning given to such term in Section 7.7(b).

125“Intellectual Property” means any and all algorithms, Application Programming Interfaces (APIs), apparatus, designs, net lists, databases, data collections, diagrams, inventions (whether or not patentable), know-how, logos, Marks (including any goodwill associated therewith or symbolized thereby), internet domain names, IP addresses, circuit designed assemblies, semiconductor devices, net lists, IP cores, photo masks, test vectors, methods, network configurations and architectures, libraries, subroutines, processes, proprietary information, confidential information, trade secrets, financial data, technical data, customer lists, supplier lists, business plans, formulae, techniques, protocols, schematics, specifications, software, software code (in any form, including source code and executable or object code), subroutines, techniques, user interfaces, URLs, web sites, works of authorship, and other forms of technology, intellectual property, or industrial property (whether or not embodied in any tangible form and including all tangible embodiments of the foregoing, including invention disclosures, instruction manuals, laboratory notebooks, prototypes, samples, studies and summaries).

126“Intellectual Property Rights” means any and all right, title, and interest in and to Intellectual Property, including any and all intellectual or proprietary rights therein or arising therefrom, including all of the following, which may exist or be created under the Laws of any jurisdiction in the world: (a) rights associated with works of authorship, including exclusive

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exploitation rights, mask work rights, copyrights, and moral and similar attribution rights, (b) Marks; (c) proprietary rights in internet domain names and IP addresses, (d) trade secret rights, (e) patents, industrial design and other industrial property rights, (f) rights of publicity and privacy and in social media usernames, accounts, identifiers, and handles, (g) other proprietary rights in Intellectual Property, including foreign equivalent or counterpart rights and forms of protection analogous in nature or having similar effect under the Laws of any jurisdiction in the world, (h) rights in or relating to any and all registrations, issuances, provisionals, reissuances, continuations, continuations‑in‑part, revisions, substitutions, reexaminations, renewals, extensions, combinations, divisions, and reissues of, and applications for, any of the foregoing rights, and (i) rights to prosecute, sue, enforce, or recover or retain damages, costs, or attorneys’ fees with respect to the past, present and future infringement, misappropriation, dilution, unauthorized use or disclosure, or other violation of any of the foregoing.

127“Inventory” means all inventory (including raw materials, products in-process, finished products, goods in transit, supplies, packaging materials and other inventories) owned by any of the Selling Entities, wherever located and whether in the Selling Entities’ warehouses, distribution facilities or otherwise.

128“IP Assignment Agreements” means the Intellectual Property Assignment Agreements to be executed and delivered by the Selling Entities, GNC Newco and GNC Canada Newco, substantially in the forms attached hereto as Exhibit C.

129“IRS” means the U.S. Internal Revenue Service.

130“IT Systems” means any and all information, payment and communications technologies owned, leased, licensed, used, or held for use by the Selling Entities or the Acquired Subsidiaries, including all computers, hardware, software (whether in object or source code form), databases, servers, workstations, routers, hubs, switches, data communication lines, networks and all other information technology systems, equipment and assets, including any of the foregoing that are used (or held for use) pursuant to outsourced or cloud computing arrangements.

131“Knowledge” means, as to a particular matter, the actual knowledge of (a) with respect to the Buyer, its chief executive officer or its chief financial officer and (b) with respect to any Selling Entity, its chief executive officer or chief financial officer.

132“Law” means any transnational, federal, state, provincial, territorial, local, municipal, foreign or other law, statute, legislation, constitution, principle of common law, resolution, ordinance, code, edict, decree, proclamation, treaty, convention, rule, regulation, ruling, directive, pronouncement, requirement, determination, decision, order, interpretation, opinion or other similar requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by any Governmental Authority.

133“Liability” means any indebtedness, obligation, lien, loss, damage, claim, fine, penalty, judgment, duty, responsibility, expense (including reasonable attorneys’ fees and reasonable costs of investigation and defense) or liability of any nature, whether known or

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unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or unliquidated, direct or indirect, fixed, absolute or contingent, matured or unmatured, ascertained or ascertainable, disputed or undisputed, secured or unsecured, joint or several, vested or unvested, due or to become due, executory, determined or determinable, whether in contract, tort, strict liability, or otherwise.

134“Marks” means any and all trademarks, service marks, trade names, brand names, product names, logos, trade names, trade styles, trade dress, corporate names, slogans, and other indicia of source or origin, including any goodwill associated therewith or symbolized thereby.

135“Material Adverse Effect” means any event, change, condition, circumstance, development, occurrence or effect that has had, or would reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Business, including the Acquired Subsidiaries, the Purchased Assets, the Assumed Liabilities and the Liabilities of the Acquired Subsidiaries, taken as a whole; provided, however, that none of the following events, changes, conditions, circumstances, developments, occurrences or effects shall be taken into account in determining whether a “Material Adverse Effect” has occurred: (a) the announcement of the signing of this Agreement or the filing of the Petitions or the CCAA Proceedings (including any action or inaction by the customers, suppliers, landlords, employees or consultants of the Selling Entities and their respective Affiliates as a result thereof) or compliance with any obligation (including any obligation to not take action) expressly required by this Agreement (provided, however, that the foregoing exception shall not apply to the qualification of the Selling Entities’ representations and warranties in Section 5.4 or, to the extent related thereto, Section 8.2(b)), (b)  the filing of the Petitions or the CCAA Proceedings, (c) actions or omissions taken or not taken by or on behalf of the Selling Entities or any of their Affiliates at the express written request of the Buyer, (d)  actions not taken by or on behalf of the Selling Entities or any of their Affiliates which (i) require the approval of the Buyer, and (ii) with respect to which the Selling Entities have requested the approval of the Buyer and such approval was not timely provided, (e) actions taken by the Buyer or its Affiliates, other than as contemplated by this Agreement, (f)  failure of any Selling Entity or any Acquired Subsidiary to meet any internal or published projections, forecasts, estimates or predictions (it being understood that the foregoing shall not preclude any assertion that the facts or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of Material Adverse Effect should be deemed to constitute, or be taken into account in determining whether there has been, or would reasonably be expected to be, a Material Adverse Effect), (g) changes in applicable Law or GAAP, or in the interpretation or enforcement of any of the foregoing, or any changes in general legal, regulatory or political conditions, in each case occurring after the date hereof; (h) volcanoes, tsunamis, pandemics, earthquakes, floods, storms, hurricanes, tornadoes or other natural disasters, (i) changes in general economic conditions, currency exchange rates or United States or international debt or equity markets, (j) events or conditions generally affecting the industry or markets in which the Selling Entities and Acquired Subsidiaries operate, (k) national or international political or social conditions or any national or international hostilities, acts of terror or acts of war (whether or not declared), or any escalation or worsening of any such conditions, hostilities, acts of terror or acts of war (whether or not declared), (l) any pandemic or epidemic, including outbreaks or additional waves of outbreaks and any escalation or worsening

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thereof, of any contagious diseases (other than COVID-19 or any variation thereof) and any direct or indirect consequence thereof, and (m) any pandemic or epidemic, including outbreaks or additional waves of outbreaks and any escalation or worsening thereof, of COVID-19 or any variation thereof and any direct or indirect consequence thereof; provided, however, that, in the case of clauses (g), (h), (i), (j), (k) and (l), such events, changes, conditions, circumstances, developments, occurrences or effects shall be taken into effect in determining whether a Material Adverse Effect has occurred to the extent that any such events, changes, conditions, circumstances, developments, occurrences or effects has a disproportionate effect on the Business, including the Acquired Subsidiaries, the Purchased Assets, the Assumed Liabilities and the Liabilities of the Acquired Subsidiaries, taken as a whole, relative to similar assets and Liabilities of other Persons operating in the industry or markets in which the Business operates.

136“Material Assets” has the meaning given to such term in Section 7.1(a).

“Material Contract” has the meaning given to such term in Section 5.12(a).

137“Material Customers” has the meaning given to such term in Section 5.22(a).

138“Material Suppliers” has the meaning given to such term in Section 5.22(b).

139“MOFCOM” means the Ministry of Commerce of the PRC or its competent local counterparts.

140“NDRC” means the National Development and Reform Commission of the PRC or its competent local counterparts.

141“Non-Real Property Contracts” means the Contracts to which any Selling Entity is a party other than the Real Property Leases.

142“NQDPs” has the meaning given to such term in Section 7.10(f).

143“OFAC” has the meaning given to such term in Section 5.21.

144“Offered Employee” has the meaning given to such term in Section 7.10(a).

145“Operating Liabilities” means the Liabilities set forth on Schedule III hereto.

146“Order” means any order, writ, judgment, injunction, decree, rule, ruling, directive, determination or award made, issued, entered or rendered by or with any Governmental Authority, whether preliminary, interlocutory or final, including any Order entered by the Bankruptcy Court in the Bankruptcy Case (including the Sale Order) or in the Canadian Court in the CCAA Proceedings (including the Canadian Sale Approval and VestingOrder).

147“Outside Back-up Date” has the meaning given to such term in Section 7.13(c).

148“Outside Date” has the meaning given to such term in Section 9.1(j).

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149“Owned Real Property” has the meaning given to such term in Section 2.1(k).

150“Party” or “Parties” has the meaning given to such term in the Preamble hereto.

151“Permits” has the meaning given to such term in Section 5.6.

152“Permitted Encumbrances” means: (a) statutory liens for Taxes not yet due and payable or that are being contested in good faith and with respect to which adequate reserves have been established in accordance with GAAP, (b) rights of set-off of landlords, banks, carriers, warehousemen, mechanics, repairmen, workmen, customs brokers or agencies, suppliers and materialmen, and other Encumbrances imposed by Law, in each case, incurred in the ordinary course of business and for amounts not yet due and payable or that are being contested in good faith and for which adequate reserves have been made in accordance with GAAP, (c) non-exclusive licenses of Intellectual Property or Intellectual Property Rights, granted in the ordinary course of business consistent with past practice, (d) Laws now or hereafter in effect relating to real property, easements and similar Encumbrances which do not have a Material Adverse Effect on the current use by the Selling Entities of the real property subject thereto, (e) all matters that would be disclosed on an accurate current survey or title report of the Owned Real Property or property subject to Real Property Leases that do not materially interfere with the current use by the Selling Entities of the Owned Real Property or the property subject to Real Property Leases, (f) Encumbrances arising from applicable Laws of general application which do not interfere with the current operation of the Business in any material respect, (g) Encumbrances which do not materially and adversely interfere with the current use of the property subject to Real Property Leases by the Selling Entities or the Acquired Subsidiaries in any material respect, (h) Encumbrances contained in the Assumed Agreements or the Assumed Real Property Leases, (i) subdivision, site plan control, development, reciprocal, servicing, facility, facility cost sharing or similar agreements currently existing or entered into, which do not materially interfere with the current use by the Selling Entities of the Owned Real Property, (j) any subsisting reservations, limitations, provisions and conditions contained in any original grants from the Crown of any land or interest therein, and reservations of undersurface rights to mines and minerals of any kind, and (k) the Encumbrances disclosed on Section 1.1(b) of the Seller Disclosure Schedule.

153“Person” means any individual, corporation, partnership, limited partnership, limited liability company, syndicate, group, trust, association or other organization or entity or Governmental Authority. References to any Person include such Person’s successors and permitted assigns.

154“Personal Information” means any information relating to an identified or identifiable natural person. An identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person.

155“Petition” means the voluntary petition under Chapter 11 of the Bankruptcy Code filed by the Selling Entities with the Bankruptcy Court.

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156“Petition Date” has the meaning given to such term in the Recitals hereto.

157“Plan” means the Joint Chapter 11 Plan of Reorganization of GNC Holdings, Inc. and its affiliated debtors under Chapter 11 of Title 11 of the United States Code, as filed with the United States Bankruptcy Court for the District of Delaware, Chapter 11 Case No. 20-11662 (KBO), including all exhibits, schedules, supplements, and ancillary documents, and as may be amended from time to time.

158“Post-Closing Tax Period” means any taxable period beginning after the Closing Date and the portion of a Straddle Period (or portion thereof) beginning after the Closing Date.

159“PRC” means the People’s Republic of China, excluding for purposes of this Agreement only, Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

160“PRC Approvals” means, any filings with, decisions by and approvals from PRC Governmental Authorities required by applicable Law to (a) execute, deliver and perform each Transaction Document and (b) consummate the Transactions (including the Debt Financing), including, to the extent required by applicable Law, (i) the approval from SASAC, (ii) the filing with and/or confirmation from NDRC with respect to the consummation of the transactions contemplated hereby, (iii) the filing with and/or the issuance of the certificate of outbound investment by enterprises by MOFCOM with respect to the consummation of the Transactions contemplated hereby, (iv) the foreign exchange registration conducted by authorized banks under SAFE’s supervision in connection with the transactions contemplated hereby and (v) any registration with SAFE.

161“Pre-Closing Income Taxes” shall mean any payments for income Taxes made by the Selling Entities during the Pre-Closing Tax Period.

162“Pre-Closing Refunds” has the meaning given to such term in Section 7.11(d).

163“Pre-Closing Tax Period” means any taxable period ending on or prior to the Closing Date and the portion of a Straddle Period ending on the Closing Date.

164“Proceeding” has the meaning given to such term in Section 5.5.

165“Professional Services” has the meaning given to such term in Section 2.4(b).

166“Purchase Price” has the meaning given to such term in Section 3.1(a)(iii).

167“Purchased Assets” has the meaning given to such term in Section 2.1.

168“Purchased Cash” means Company Cash in an amount equal to (a) the Target Cash Amount minus (b) Cash Reduction Amount; provided, however, that if (x) Company Cash is less than (y) the Target Cash Amount minus Cash Reduction Amount, then the Cash Purchased Price shall be reduced by the amount of such shortfall.

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169“Real Property Leases” means all leases, subleases and other occupancy Contracts with respect to real property to which any Selling Entity is a party listed or described on Section 1.1(c) of the Seller Disclosure Schedule.

170“Refund Return” has the meaning given to such term in Section 7.11(d).

171“Refund Tax Matter” has the meaning given to such term in Section 7.11(d).

172“Registered IP” means all Seller IP or Acquired Subsidiary IP that is registered, filed or issued under the authority of, with or by any Governmental Authority, including all patents, registered industrial designs, registered copyrights, registered mask works, and registered Marks and all applications for any of the foregoing.

173“Release” means disposing, discharging, injecting, spilling, leaking, pumping, pouring, leaching, dumping, emitting, escaping or emptying into or upon the indoor or outdoor environment, including any soil, sediment, subsurface strata, surface water, drinking water, ground water, ambient air, the atmosphere or any other media.

174“Representatives” means, with respect to a particular Person, any director, officer, employee or other authorized representative of such Person or its Subsidiaries, including such Person’s attorneys, accountants, financial advisors and restructuring advisors.

175“Required Ad Hoc Group Crossover Lenders” means the Ad Hoc Group Crossover Lenders holding a majority in principal amount of the Tranche B-2 Term Loan (as defined in the Plan) held by all Ad Hoc Group Crossover Lenders.

176“Required FILO Ad Hoc Group Members” means the Ad Hoc Group FILO Lenders holding a majority in principal amount of the FILO Term Loans held by all Ad Hoc Group FILO Lenders.

177“Restructuring” has the meaning given to such term in the Restructuring Support Agreement, dated as of June 23, 2020, by and among the Selling Entities the other signatories thereto.

178“Restructuring Transaction” has the meaning given to such term in Section 7.14(a).

179“Retained Employee” has the meaning given to such term in Section 7.10(b).

180“SAFE” means the State Administration of Foreign Exchange of the PRC or its competent local counterparts.

181“Sale Hearing” means the hearing at which the Bankruptcy Court considers approval of the Sale Order.

182“Sale Motion” means one or more motions and notices filed by the Selling Entities and served on creditors and parties in interest, in accordance with the Bidding

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Procedures Order, other orders of the Bankruptcy Court, the Federal Rules of Bankruptcy Procedures and Local Rules, which motion(s) seeks authority from the Bankruptcy Court for the Selling Entities to enter into this Agreement and consummate the transactions contemplated by this Agreement.

183“Sale Order” means an Order of the Bankruptcy Court, which Order shall be in form and substance reasonably acceptable to the Buyer and the Seller and shall, among other things, (a) approve, pursuant to Sections 105, 363 and 365 of the Bankruptcy Code, (i) the execution, delivery and performance by the Selling Entities of this Agreement, (ii) the sale of the Purchased Assets to GNC Newco and the issuance of the Acquired GNC Equity Interests to the Buyer or one or more Buyer Designees, in each case on the terms set forth herein and free and clear of all Encumbrances (other than Permitted Encumbrances) and (iii) the performance by the Selling Entities of their respective obligations under this Agreement, (b) authorize each of the Selling Entities and the Buyer to execute and file termination statements, instruments of satisfaction, releases and similar documents with respect to all Encumbrances that any Person has with respect to the Purchased Assets, and (c) order that GNC Newco is receiving good and marketable title to all of the Purchased Assets free and clear of all Encumbrances (other than Permitted Encumbrances).

184“SASAC” means the State-owned Assets Supervision and Administration Commission of the State Council of the PRC or its competent local counterparts.

185“SEC” means the U.S. Securities and Exchange Commission.

186“Second Lien Credit Agreement” means that certain Second Lien Credit Agreement to be entered into by GNC Newco, as borrower, the several lenders from time to time party thereto, GLAS Trust Company LLC, as collateral agent and GLAS Trust Company LLC, as administrative agent on the Closing Date, substantially in the form attached as Exhibit D hereto.

187“Second Lien Documents” means (a) the Second Lien Credit Agreement, (b) the Intercreditor and Subordination Agreement substantially in the form attached as Exhibit F hereto, and (c) the other Loan Documents (as defined in the Second Lien Credit Agreement).

188“Second Lien Loans” has the meaning given to such term in the Recitals hereto.

189“Second Lien Loans Adjustment Amount” means (a) $410,000,000 minus (b) (i) $210,000,000 plus (ii) the Shortfall Adjustment Amount minus (c) the Estimated TLB Cash Distribution Amount.

190“Second Lien Loans Amount” means (a) $210,000,000 plus (b) the Shortfall Adjustment Amount (if any) plus (c) the Second Lien Loans Adjustment Amount (if any).

191“Securities Act” has the meaning given to such term in Section 5.9(a).

192“Seller” has the meaning given to such term in the Preamble hereto.

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193“Seller Compensation and Benefit Program” has the meaning given to such term in Section 5.10(a).

194“Seller Disclosure Schedule” has the meaning given to such term in the Preamble to Article V.

195“Seller Financial Statements” has the meaning given to such term in Section 5.9(c).

196“Seller IP” means all Intellectual Property and Intellectual Property Rights (including the goodwill of the Selling Entities) owned by the Selling Entities, including the GNC Names and Marks.

197“Seller Properties” has the meaning given to such term in Section 5.16(b).

198“Seller Released Party” has the meaning given to such term in Section 7.19(a).

199“Seller SEC Documents” has the meaning given to such term in Section 5.9(a).

200“Selling Entities” has the meaning given to such term in the Preamble hereto.

201“Service Provider” has the meaning given to such term in Section 5.10(a).

202“Shortfall Adjustment Amount” means an amount equal to (a) the Cash Shortfall minus (b) the Cash Reduction Amount.

203“Specified Employees” has the meaning given to such term in Section 7.10(a).

204“Specified Stores” has the meaning given to such term in Section 7.1(b)(ii).

205“Straddle Period” means any Tax period that includes, but does not end on, the Closing Date.

206“Subsidiary” means, with respect to any Person, (a) any corporation or similar entity of which at least 50% of the securities or interests having, by their terms, ordinary voting power to elect members of the board of directors, or other persons performing similar functions with respect to such corporation or similar entity, is held, directly or indirectly by such Person and (b) any partnership, limited liability company or similar entity of which (i) such Person is a general partner or managing member or has the power to direct the policies, management or affairs or (ii) such Person possesses a 50% or greater interest in the total capitalization or total income of such partnership, limited liability company or similar entity.

“Successful Bidder” has the meaning given to such term by the Bidding Procedures Order.

207“Target Cash Amount” means an amount equal to (a) $61,145,000 plus (b) the Closing Cure Payment Amount, minus (c) the pro rata portion of all prepaid rent under the

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Assumed Real Property Leases paid by the Selling Entities or their Subsidiaries on or prior to the Closing for any period occurring from and after the Closing.

208“Tax” means all U.S. federal, state, local, non-U.S. or other taxes, assessments, charges, fees, levies or other governmental charges, including all income, gross receipts, capital gains, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, ad valorem, value added, inventory, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, alternative or add-on minimum, or estimated tax imposed by any Governmental Authority (to the extent the foregoing are taxes, similar to taxes or in the nature of a tax), and including any interest, penalty, or addition thereto; and shall include any liability for such amounts as a result of (i) being a transferee or successor or member of a combined, consolidated, unitary or affiliated group, or (ii) a contractual obligation to indemnify any person or other entity except for any agreement, arrangement or obligation entered into in the ordinary course of business and not primarily related to Taxes.

209“Tax Return” means any return, claim for refund, declaration, report, statement, information return or other similar document (including any related or supporting information, amendments, schedule or supplements of any of the foregoing) filed or required to be filed with any Governmental Authority with respect to Taxes.

210“Terminated Employees” has the meaning given to such term in Section 7.10(b).

“Termination Fee” has the meaning given to such term in Section 7.14(a).

211“Termination Payment” has the meaning given to such term in Section 7.14(a).

212“Third-Party” has the meaning given to such term in Section 7.14(a).

213“Third-Party Sale” has the meaning given to such term in Section 7.14(a).

214“Transaction Documents” means this Agreement, the Assignment and Assumption Agreement, the Bill of Sale, the IP Assignment Agreement, the Deeds, the Escrow Agreement, the Second Lien Documents, and any other Contract to be entered into by the Parties and/or one or more Buyer Designees, as applicable, in connection with the Transactions.

215“Transactions” means the transactions contemplated by this Agreement and the other Transaction Documents, including the Asset and Liability Dropdown and the purchase and sale of the Acquired GNC Equity Interests in exchange for the Purchase Price and the assumption of the Assumed Liabilities.

216“Transfer Taxes” has the meaning given to such term in Section 7.11.

217“Transferred Employees” has the meaning given to such term in Section 7.10(a).

218“Union” means a labor union, trade union, works council or any other employee representative body.

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219“Unsecured Creditor Consideration Trigger Event” shall have occurred if both of the following shall have occurred at such time: (a) neither the official committee of unsecured creditors nor the ad hoc group of convertible noteholders shall have objected to the transactions contemplated by this Agreement at any time on or prior to the Closing and (b) the Buyer shall have received, prior to the Closing, written agreements that are binding on, and enforceable by the Seller and Ad Hoc Group Crossover Lenders against, both (i) the official committee of unsecured creditors and (ii) the ad hoc group of convertible noteholders, in each case, providing that they and their members shall not object to or oppose this Agreement, any of the transactions contemplated hereby or the Plan.

220“Vendor Agreement” means that certain agreement entered into by ZT Biopharmaceutical LLC and the counterparty thereto, a copy of which agreement has been delivered to Seller on the date hereof.

221“WARN Act” means the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq. (1988) and any similar Laws, including Laws of any country, state or other locality that is applicable to a termination of employees.

222“WTO Investor” has the meaning given to such term in Section 6.8.

Section 1.2Construction. The terms “hereby,” “hereto,” “hereunder” and any similar terms as used in this Agreement refer to this Agreement in its entirety and not only to the particular portion of this Agreement where the term is used. The terms “including,” “includes” or similar terms when used herein shall mean “including, without limitation”, and will not be construed to limit any general statement that it follows to the specific or similar items or matters immediately following it. The word “or” when used in this Agreement is not meant to be exclusive unless expressly indicated otherwise. The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, if applicable, and such phrase does not mean simply “if”. The word “will” shall be construed to have the same meaning as the word “shall”. Any reference to “days” means calendar days unless Business Days are expressly specified. The meaning of defined terms shall be equally applicable to the singular and plural forms of the defined terms, and the masculine gender shall include the feminine and neuter genders, and vice versa, as the context shall require. Any reference to any federal, state, provincial, local or foreign statute or Law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Unless otherwise indicated, references to (a) Articles, Sections, Schedules and Exhibits refer to Articles, Sections, Schedules and Exhibits of and to this Agreement, (b) references to $ (dollars) are to United States Dollars and (c) a Contract means such Contract as amended from time to time. All accounting terms used in this Agreement and not otherwise defined herein have the meanings assigned to them under GAAP. When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period will be excluded. If the last day of such period is a day other than a Business Day, the period in question will end on the next succeeding Business Day. All references to dates and times herein, except as otherwise specifically noted, shall refer to New York City time.

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ARTICLE II

PURCHASE AND SALE

Section 2.1Purchase and Sale of Assets. Pursuant to sections 105, 363 and 365 of the Bankruptcy Code, Part IV of the CCAA and on the terms and subject to the satisfaction of the conditions contained in this Agreement, at the Closing, the Selling Entities (other than the Canadian Seller) shall sell, assign, convey, transfer and deliver to GNC Newco, and GNC Newco shall purchase and acquire from the Selling Entities (other than the Canadian Seller), all of the Seller’s and its Subsidiaries’ right, title and interest, free and clear of all Encumbrances (other than Permitted Encumbrances), in and to all of the properties, rights, interests and other tangible and intangible assets of the Seller and its Subsidiaries (other than the Canadian Seller) of every nature (wherever located, whether real, personal or mixed, whether or not required to be reflected on a balance sheet prepared in accordance with GAAP), including any assets acquired by the Seller or any of its Subsidiaries (other than the Canadian Seller) after the date hereof but prior to the Closing (collectively, the “Purchased Assets”); provided, however, that the Purchased Assets shall not include any Excluded Assets. At the Closing, the Purchased Assets of the Canadian Seller shall be transferred to GNC Canada Newco (as defined herein) as part of the Asset and Liability Dropdown (as herein defined) in consideration for the assumption by GNC Canada Newco of the Assumed Liabilities in respect of the Canadian Seller and one non-voting preferred share of GNC Canada Newco with a redemption amount equal to the fair market value of the Purchased Assets transferred by the Canadian Seller to GNC Canada Newco (determined in accordance with the allocation of the Purchase Price in Section 3.3 hereof, and as adjusted in accordance with Section 3.4 hereof) less the Assumed Liabilities in respect of the Canadian Seller that are assumed by GNC Canada Newco and the non-voting preferred share of GNC Canada Newco issued to the Canadian Seller shall subsequently be transferred to Seller and contributed by Seller to GNC Newco for shares of GNC Newco prior to the transactions described in Section 2.9 such that GNC Newco and Buyer are the sole owners of the issued and outstanding interests in GNC Canada Newco at the time of the transactions in Section 2.9. Without limiting the generality of the foregoing, the Purchased Assets shall include all right, title and interest in and to the following (except to the extent listed or otherwise included as an Excluded Asset):

(a)all Purchased Cash as of the Closing;

(b)all Accounts Receivable of the Selling Entities as of the Closing, except as set forth in Section 2.2(g);

(c)all Inventory and materials of the Selling Entities as of the Closing;

(d)all royalties, advances, prepaid assets, security and other deposits, prepayments and other current assets relating to the Business, the Assumed Agreements and the Assumed Real Property Leases, in each case of the Selling Entities as of the Closing;

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(e)all Non-Real Property Contracts listed on Section 2.1(e) of the Seller Disclosure Schedule (as amended from time to time in accordance with Section 2.5 hereof, the“Assumed Agreements”) assumed and assigned to GNC Newco pursuant to Section 2.5;

(f)all Real Property Leases listed on Section 2.1(f) of the Seller Disclosure Schedule (as amended from time to time in accordance with Section 2.5 hereof, the “Assumed Real Property Leases”) assumed and assigned to GNC Newco pursuant to Section 2.5;

(g)all GNC Names and Marks and all other Seller IP;

(h)all open purchase orders with customers and suppliers;

(i)all items of machinery, equipment, supplies, furniture, fixtures, leasehold improvements (to the extent of the Selling Entities’ rights to any leasehold improvements under Assumed Real Property Leases) and other tangible personal property and fixed assets owned by the Selling Entities as of the Closing;

(j)all books, records, information, files, data and plans (whether written, electronic or in any other medium), advertising and promotional materials and similar items of the Selling Entities as of the Closing (except as otherwise described in Section 2.2), including customer and supplier lists and mailing lists (collectively, the “Documentary Materials”);

(k)all real property legally and/or beneficially owned by the Selling Entities as of the Closing (collectively, the “Owned Real Property”) listed on Section 2.1(k) of the Seller Disclosure Schedule;

(l)all of the stock or other equity interests owned by the Selling Entities in the Persons listed on Section 2.1(l) of the Seller Disclosure Schedule (the “Equity Interests”) or securities convertible into or exchangeable or exercisable for the stock or other equity interests of any such Persons;

(m)all goodwill and other intangible assets associated with, or relating to, the Business or the Purchased Assets;

(n)subject to section 363(b)(1)(A) of the Bankruptcy Code, all rights to the websites, domain names, telephone and facsimile numbers and e-mail addresses used by each Selling Entity, as well as rights to receive mail and other communications addressed to such Selling Entity (including mail and communications from customers, vendors, suppliers, distributors and agents);

(o)all rights of the Selling Entities under non-disclosure or confidentiality, invention assignment, work made for hire, non-compete, or non-solicitation agreements with current Employees, former Employees or current or former directors, consultants, independent contractors and agents of any of the Selling Entities;

(p)all of the rights and benefits accruing under all Permits, all deposits and prepaid expenses (excluding prepaid income Taxes) held by third parties and/or, to the extent

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transferable, any Governmental Authority and, to the extent transferable, all bank and deposit accounts;

(q)any rights, demands, claims, credits, allowances, rebates (including any vendor or supplier rebates), or rights of setoff (other than against the Selling Entities) arising out of or relating to any of the Purchased Assets as of the Closing;

(r)all prepaid and deferred items (excluding prepaid income Taxes and including prepaid real property Taxes to the extent such prepaid Taxes exceed the amount of the real property Taxes apportioned to a Pre-Closing Tax Period) that relate to the Business or the Purchased Assets as of the Closing, including all prepaid rentals and unbilled charges, fees and deposits;

(s)any rights, claims or causes of action as of the Closing of any Selling Entity relating to or arising against suppliers, vendors, merchants, manufacturers, counterparties to leases, counterparties to licenses, and counterparties to any Assumed Agreement or Assumed Real Property Lease in respect of the assets, properties, conduct of business or operations of such Selling Entity arising out of events occurring on or prior to the Closing Date, excluding any rights, claims or causes of action under chapter 5 of the Bankruptcy Code and any rights, claims or causes of action that exclusively relate to any Excluded Assets or Excluded Liabilities;

(t)all other assets that are related to or used in connection with the Business and that are owned by any Selling Entity as of the Closing;

(u)all rights to the Assumed Compensation and Benefit Programs and all trusts, insurance contracts, administrative service agreements, and investment management agreements that are used to fund or administer the Assumed Compensation and Benefit Programs, including but not limited to the rabbi trusts and the assets of the rabbi trusts used to fund the NQDPs (as defined in Section 7.10(f));

(v)(A) any Tax receivable, Tax refund or other Tax asset with respect to any Pre-Closing Tax Period, and (B) to the extent not included in (A), any Pre-Closing Refund;

(w)all claims (including claims for past, present and future infringement or misappropriation or other violation of Seller IP) and causes of action (other than, in each case, to the extent related to Excluded Assets or Excluded Liabilities) of the Selling Entities as of the Closing against Persons other than the Selling Entities (regardless of whether or not such claims and causes of action have been asserted by the Selling Entities) and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery, including rights to insurance proceeds, possessed by the Selling Entities as of the Closing (regardless of whether such rights are currently exercisable) to the extent related to the Purchased Assets;

(x)all Environmental Permits needed for operations at the Owned Real Property and sites subject to Assumed Real Property Leases, to the extent such Environmental Permits are transferable; and

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(y)all preference or avoidance claims and actions of the Selling Entities (including, without limitation, any such claims and actions arising under Sections 544, 547, 548, 549, and 550 of the Bankruptcy Code), except as set forth in Section 2.2(i); and

(z)all rights, claims and causes of action against any director, officer, equityholder or Transferred Employee of any Selling Entity and all rights, claims and causes of action under director and officer, fiduciary, employment practices and similar insurance policies maintained by any Selling Entity (the “D&O Claims”).

Section 2.2Excluded Assets. Notwithstanding any provision herein to the contrary, the Purchased Assets shall not include the following (collectively, the “Excluded Assets”):

(a)any records, documents or other information exclusively relating to current or former Employees that are not Transferred Employees, and any materials to the extent containing information about any Employee, disclosure of which would violate applicable Law or such Employee’s reasonable expectation of privacy;

(b)the Selling Entities’ (i) minute books and other corporate books and records relating to their organization and existence and the Selling Entities’ books and records relating to Taxes of the Selling Entities, including Tax Returns filed by or with respect to the Selling Entities, and (ii) books, records, information, files, data and plans (whether written, electronic or in any other medium), advertising and promotional materials and similar items exclusively relating to any Excluded Assets or Excluded Liabilities;

(c)the Selling Entities’ rights under this Agreement and the other Transaction Documents, and all cash and non-cash consideration payable or deliverable to the Selling Entities pursuant to the terms and provisions hereof;

(d)any Contracts other than the Assumed Agreements and the Assumed Real Property Leases, together with all prepaid assets relating to any Contract other than the Assumed Agreements and the Assumed Real Property Leases;

(e)all claims and causes of action of the Selling Entities against Persons other than the Acquired Subsidiaries and all rights of indemnity, warranty rights, rights of contribution, rights to refunds, rights of reimbursement and other rights of recovery, including rights to insurance proceeds, of the Selling Entities (regardless of whether such rights are currently exercisable), in each case to the extent exclusively related to any Excluded Assets or Excluded Liabilities;

(f)any shares of capital stock or other equity interests of any of the Selling Entities, or any securities convertible into, exchangeable or exercisable for shares of capital stock or other equity interests of any of the Selling Entities;

(g)Accounts Receivable, intercompany obligations and other amounts receivable of any Selling Entity owned to it by any other Selling Entity;

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(h)any Seller Compensation and Benefit Program or stock option, restricted stock or other equity-based benefit plan of the Selling Entities, and the Selling Entities’ right, title and interest in any assets of or relating thereto, that is not an Assumed Compensation and Benefit Program;

(i)all preference or avoidance claims and actions of the Selling Entities (including, without limitation, any such claims and actions arising under Sections 544, 547, 548, 549, and 550 of the Bankruptcy Code) solely to the extent exclusively related to the Excluded Assets;

(j)Excluded Cash; and

(k)the Selling Entities’ right, title and interest to the other assets, if any, set forth in Section 2.2 of the Seller Disclosure Schedule.

Section 2.3Assumed Liabilities Subject to the terms and conditions of this Agreement, effective as of the Closing, GNC Newco shall assume and agree to pay, perform and discharge when due in accordance with their respective terms the Assumed Liabilities. For purposes of this Agreement, “Assumed Liabilities” means, without duplication, only the following Liabilities (to the extent not paid prior to the Closing):

(a)all Liabilities relating to the Purchased Assets that are properly characterized as current liabilities of the Selling Entities as of the Closing calculated in accordance with GAAP, but excluding any indebtedness for borrowed money;

(b)all Consumer Liabilities;

(c)the Liabilities of the Selling Entities arising under the Assumed Agreements and the Assumed Real Property Leases and under open purchase orders with customers and suppliers that constitute Purchased Assets;

(d)the accounts payable (or other amounts payable) and other intercompany obligations of the Selling Entities owed to the Acquired Subsidiaries;

(e)the Liabilities assumed by the Buyer pursuant to Section 7.10;

(f)any liability for Taxes with respect to the Purchased Assets for any Post-Closing Tax Period (as determined in Section 7.11(b));

(g)the Cure Payments (as defined below);

(h)all other Operating Liabilities, but excluding any portion of such outstanding Operating Liabilities that Seller or its Subsidiaries, as applicable, failed to pay as and when due in the ordinary course of business consistent with past practice prior to the Closing; and

(i)all fees payable in connection with the BoC Debt Commitment Letter and any facilities or other credit agreement entered into in connection therewith, including the Guarantee Fee and any related Taxes.

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Section 2.4Excluded Liabilities. Notwithstanding anything to the contrary herein, GNC Newco shall not assume or be obligated to pay, perform or otherwise discharge or in any other manner be liable or responsible for any Liabilities of, or Action against, the Selling Entities or relating to the Purchased Assets, of any kind or nature whatsoever, whether absolute, accrued, contingent or otherwise, liquidated or unliquidated, due or to become due, known or unknown, currently existing or hereafter arising, matured or unmatured, direct or indirect, and however arising, other than the Assumed Liabilities (all such Liabilities that GNC Newco is not assuming being referred to collectively as the “Excluded Liabilities”). The Excluded Liabilities include the following, whether incurred or accrued before, on or after the Petition Date or the Closing:

(a)all Taxes of the Selling Entities for any Pre-Closing Tax Period (as determined in Section 7.11(b));

(b)all Liabilities of the Selling Entities relating to legal services, accounting services, financial advisory services, investment banking services or any other professional services (“Professional Services”) performed in connection with this Agreement and any of the transactions contemplated hereby, and any pre-Petition or post-Petition Claims for such Professional Services;

(c)all Liabilities of the Selling Entities with respect to current and former Employees and Service Providers (including Liabilities under or relating to any Seller Compensation and Benefit Program and any workers compensation related Liabilities), other than Liabilities under the Assumed Compensation and Benefit Programs and Liabilities otherwise specifically assumed by GNC Newco pursuant to Sections 7.10;

(d)all Liabilities relating to Excluded Assets;

(e)all Liabilities of any Selling Entity in respect of indebtedness, whether or not relating to the Business;

(f)all Liabilities of any Selling Entity to any current, former or prospective shareholder or other holder of equity securities or equity-linked securities of such Selling Entity, including all Liabilities of such Selling Entity related to the right to or issuance of any capital stock or other equity securities or the payment of any dividend or other distribution on or in respect of any capital stock or other equity securities;

(g)all accounts payable (or other amounts payable) or other intercompany obligations of any Selling Entity owed by it to any other Selling Entity;

(h)all fines, penalties or other Liabilities assessed by a Governmental Authority as a result of any noncompliance with applicable Law, including with respect to filings with the SEC;

(i)all costs and expenses incurred or to be incurred by Sellers in connection with this Agreement and the consummation of the transactions by this Agreement;

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(j)any other Liability of the Selling Entities that arises prior to the Closing and is not expressly included among the Assumed Liabilities; and

(k)the Exit Costs.

Section 2.5Assumption and Assignment of Certain Contracts. The Sale Order shall provide for the assumption by the Selling Entities, and the Sale Order shall, to the extent permitted by Law, provide for the assignment by the Selling Entities to GNC Newco, effective upon the Closing, of the Assumed Agreements and the Assumed Real Property Leases on the terms and conditions set forth in the remainder of this Section 2.5.

(a)The Seller shall use commercially reasonable efforts to provide timely and proper written notice of the motion seeking entry of the Sale Order to all parties to any executory Contracts or unexpired leases to which any Selling Entity is a party that are Assumed Agreements or Assumed Real Property Leases and take all other actions reasonably necessary to cause such Contracts to be assumed by the Selling Entities and assigned to GNC Newco pursuant to Section 365 of the Bankruptcy Code. At the Closing, the Selling Entities shall assume and assign to GNC Newco the Assumed Agreements and the Assumed Real Property Leases that may be assigned by any such Selling Entity to GNC Newco pursuant to Sections 363 and 365 of the Bankruptcy Code. Section 2.5(a) of the Seller Disclosure Schedule sets forth the Seller’s good faith estimate (on a vendor by vendor basis) as of the date of this Agreement of the amounts necessary to cure defaults, if any, with respect to each counterparty to any of the Assumed Agreements set forth on Section 2.1(e) of the Seller Disclosure Schedule and the Assumed Real Property Leases set forth on Section 2.1(f) of the Seller Disclosure Schedule, in each case as determined by the Seller based on the Seller’s books and records and reasonable good faith judgment. The Seller shall provide an update of such good faith estimate not less than ten (10) Business Days prior to the Closing Date (other than an estimate in respect of any Contract designated as an Assumed Agreement or Assumed Real Property Lease after such date, in which case the Seller shall provide its good faith estimate as promptly as reasonably practicable prior to the Closing Date).

(b)From and after the date of this Agreement until three (3) Business Days prior to the Bid Deadline (as defined in the Bidding Procedures Order), the Buyer may, in its sole discretion, designate any Contract of any Selling Entity as an Assumed Agreement or Assumed Real Property Lease, as applicable, or remove any such Contract from Section 2.1(e) or Section 2.1(f) of the Seller Disclosure Schedule, respectively, such that it is not an Assumed Agreement or Assumed Real Property Lease, in each case by providing written notice of such designation or removal to the Seller, in which case Section 2.1(e) or Section 2.1(f) of the Seller Disclosure Schedule, as applicable, shall automatically be deemed to be amended to include or remove, as applicable, such Contract as an Assumed Agreement or an Assumed Real Property Lease, in each case, without any adjustment to the Purchase Price.

(c)In the case of any amendment by the Buyer of Section 2.1(e) or Section 2.1(f) of the Seller Disclosure Schedule pursuant to Section 2.5(b), the Seller shall give notice to the other parties to any Contract to which such amendment relates of the removal or addition of such Contract from Section 2.1(e) or Section 2.1(f) of the Seller Disclosure Schedule as applicable,

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within three (3) Business Days of the Buyer notifying the Seller of such amendment or such lesser time as is approved by the Bankruptcy Court.

(d)From and after the date of this Agreement until the Closing, subject to providing the Buyer with not less than five (5) Business Days prior written notice (“Contract Notice Period”), the Seller may move to reject any Contract which is not an Assumed Agreement or an Assumed Real Property Lease; provided, however, that the Buyer may, at any time during the Contract Notice Period, designate such Contract as an Assumed Agreement or an Assumed Real Property Lease in accordance with Section 2.5(b) and Seller shall not thereafter reject or seek to reject such Contract.

(e)As part of the Sale Motion (or, as necessary in one or more separate motions), the Selling Entities shall request that by virtue of a Selling Entity providing twenty-one (21) days’ notice of its intent to assume and assign any Contract, the Bankruptcy Court deem any non-debtor party to such Contract that does not file an objection with the Bankruptcy Court during such notice period to have given any required Consent to the assumption of the Contract by the Selling Entity and assignment to GNC Newco if, and to the extent that, pursuant to the Sale Order or other order of the Bankruptcy Court, the applicable Selling Entity is authorized to assume and assign the Contract to GNC Newco and GNC Newco is authorized to accept such Assumed Agreement or Assumed Real Property Lease pursuant to Section 365 of the Bankruptcy Code.

(f)In connection with the assumption and assignment to GNC Newco of any Assumed Agreement or Assumed Real Property Lease pursuant to this Section 2.5, the Buyer shall pay all of the cure amounts, as determined by the Bankruptcy Court, if any, necessary to cure all defaults, if any, and to pay all actual or pecuniary losses that have resulted from such defaults under the Assumed Agreements and the Assumed Real Property Leases, including any amounts payable to any landlord under any Assumed Real Property Lease that relates to the period prior to the Assumption Approval and any amounts required to satisfy state Tax claims related to the transfer of any Real Property Lease or Owned Real Property (such amounts, collectively, the “Cure Payments”); provided, that to the extent such Cure Payments are not made prior to Closing, all Liabilities related to such Cure Payments shall be assumed by GNC Newco at the Closing as Assumed Liabilities. No Selling Entity shall have any liability for such Cure Payments.

(g)The Seller shall use its commercially reasonable efforts to obtain an order of the Bankruptcy Court to assign the Assumed Agreements and the Assumed Real Property Leases to GNC Newco designated by the Seller (the “Assumption Approval”) on the terms set forth in this Section 2.5. In the event the Selling Entities are unable to assign any such Assumed Agreement or Assumed Real Property Lease to GNC Newco pursuant to an order of the Bankruptcy Court, then the Parties shall use commercially reasonable efforts prior to the Closing and for six (6) months following the Closing (or the remaining term of any such Assumed Agreement or Assumed Real Property Lease or the closing of the Bankruptcy Case, if shorter) to obtain, and to cooperate in obtaining, all Consents and Governmental Authorizations from Governmental Authorities and third parties necessary to assume and assign such Assumed

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Agreement or Assumed Real Property Lease to GNC Newco; provided, however, that such commercially reasonable efforts shall not require Seller to pay any amount or incur any financial obligation to any Person unless the Buyer funds such amount.

(h)Notwithstanding the foregoing and without limited the Selling Entities’ obligations under Section 7.1, a Contract shall not be an Assumed Agreement or Assumed Real Property Lease hereunder and shall not be assigned to or assumed by GNC Newco to the extent that such Contract (i) is rejected by a Selling Entity or terminated by a Selling Entity or the other party thereto, or terminates or expires by its terms, prior to the Closing and is not continued or otherwise extended upon assumption or (ii) requires a Consent or Governmental Authorization (other than, and in addition to, that of the Bankruptcy Court) in order to permit the sale or transfer to GNC Newco of the Selling Entities’ rights under such Contract, if such Consent or Governmental Authorization has not been obtained prior to the Closing.

(i)From and after the date on which the Buyer is identified as the Successful Bidder until the Closing, the Selling Entities shall, and shall cause the Acquired Subsidiaries to, use commercially reasonable efforts to promptly terminate any Contract to which an Acquired Subsidiary is party at the written request of the Buyer.

Section 2.6Consents to Certain Assignments.

(a)If (i) notwithstanding the applicable provisions of Sections 363 and 365 of the Bankruptcy Code and the Sale Order and the commercially reasonable efforts of the Selling Entities and Buyer pursuant to Section 2.5(g), any Consent or Governmental Authorization is not obtained prior to Closing and as a result thereof GNC Newco shall be prevented by a third party from receiving the rights and benefits with respect to a Purchased Asset intended to be transferred hereunder, or (ii) any Purchased Asset is not otherwise capable of sale and/or assignment (after giving effect to the Sale Order and the Bankruptcy Code), then, in any such case, the Seller shall, prior to the closing of the Bankruptcy Case and subject to any approval of the Bankruptcy Court that may be required and at the request of the Buyer, cooperate with Buyer in any lawful and commercially reasonable arrangement under which GNC Newco would, to the extent practicable, obtain (for no additional cost or consideration) the economic claims, rights and benefits under such asset and assume the economic burdens and obligations with respect thereto in accordance with this Agreement, including by subcontracting, sublicensing or subleasing to the Buyer or any Buyer Designee, including GNC Newco; provided, that Seller’s cooperation obligations contemplated by this Section 2.6 shall not include any obligation by any Selling Entity or any of their respective Affiliates to pay money (advance or otherwise) to any third party or to incur out-of-pocket expenses unless Buyer funds such amounts. Buyer shall cooperate with the Selling Entities in order to enable the Selling Entities to provide to GNC Newco the benefits contemplated by this Section 2.6. The Selling Entities shall as promptly as practicable pay to the Buyer when received all monies received by the Selling Entities attributable to such Purchased Asset from and after the Closing Date and the Buyer shall promptly pay the Selling Entities for all reasonable and documented out-of-pocket costs incurred by the applicable Selling Entities associated with, arising or resulting from such arrangement.

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(b)To the extent that GNC Newco has not obtained all of the Permits included in the Purchased Assets that are necessary for GNC Newco to take title to all of the Purchased Assets at the Closing and to operate all aspects of the Business as of immediately following the Closing in a substantially similar manner in all material respects as it was operated by the Selling Entities immediately prior to the Closing, the Selling Entities shall, to the extent permitted by applicable Laws, use commercially reasonable efforts to maintain after the Closing such Permits that the Buyer reasonably requests, at the Buyer’s sole expense, until the earlier of the time GNC Newco has obtained such Permits and six (6) months following the Closing (or the remaining term of any such Permit or the closing of the Bankruptcy Case, if shorter).

Section 2.7Designation of Assets and Liabilities. At any time on or prior to the third (3^rd) Business Day prior to the Bid Deadline (as defined in the Bidding Procedures Order), the Buyer may, in its sole discretion by written notice to the Seller, (a) designate any of the Purchased Assets as additional Excluded Assets, (b) designate any of the Excluded Assets as additional Purchased Assets, (c) designate any of the Operating Liabilities, Consumer Liabilities or Liabilities described in Section 2.3(e) (other than the NQDPs (subject to Section 7.10(f)) and The Key Employee Retention Plan approved pursuant to the Bankruptcy Court’s Order, dated July 20, 2020 [D.I. 470]) as additional Excluded Liabilities and (d) designate any of the Excluded Liabilities as additional Assumed Liabilities, which notice shall set forth in reasonable detail the assets or Liabilities so designated; provided, that (i) there shall be no increase or reduction in the Purchase Price in connection with any such designation by the Buyer, (ii) the assignment or transfer of such asset or liability shall have been effected pursuant to Section 2.5 and Section 2.6 hereof, as applicable, including, without limitation with any necessary prior Consent and (iii) the Buyer shall not be permitted to take any of the actions described in the foregoing clause (c) to the extent such action would result in any new or incremental Administrative Claim, Priority Tax Claim or Other Priority Claim (each, as defined in the Plan). Notwithstanding any other provision hereof, the Liabilities of the Selling Entities under or related to any Purchased Asset excluded under this paragraph shall constitute Excluded Liabilities.

Section 2.8Wrong Pocket.

(a)During the six (6) month period following the Closing, if either Buyer or any Selling Entity becomes aware that any right, property or asset forming part of the Purchased Assets has not been transferred to GNC Newco or that any right, property or asset forming part of the Excluded Assets has been transferred to GNC Newco, such Party shall promptly notify the other Party and the Parties shall, as soon as reasonably practicable thereafter, use commercially reasonable efforts to cause such right, property or asset (and any related Liability) to be transferred at the expense of the Party that is seeking the assets to be transferred to it and with any necessary prior Consent, to (i) GNC Newco, in the case of any right, property or asset forming part of the Purchased Assets which was not transferred to GNC Newco at or in connection with the Closing, or (ii) the applicable Selling Entity, in the case of any right, property or asset not forming part of the Excluded Assets which was transferred to GNC Newco at the Closing.

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(b)From and after the Closing, ifeither Buyer or any Selling Entity or any of their respective Affiliates receives any (i) funds or property that is, in the reasonable determination of the receiving Party, intended for or otherwise the property ofthe other Party pursuant to the terms of this Agreement or any other Transaction Document, the receiving Party shall promptly use commercially reasonable efforts to (A) notify and (B) forward such funds or property to, the other Party (and, for the avoidance of doubt, the Parties acknowledge and agree that there is no right of offset with respect to such funds or property, whether in connection with a dispute under this Agreement or any other Transaction Document or otherwise) or (ii) mail, courier package, facsimile transmission, purchase order, invoice, service request or other document that is, in the reasonable determination of the receiving Party, intended for or otherwise the property ofthe other Party pursuant to the terms of this Agreement or any other Transaction Document, the receiving Party shall promptly use commercially reasonable efforts to (A) notify and (B) forward such document or property to,the other Party.

(c)From and after the Closing, ifeither Buyer or any Selling Entity or any of their respective Affiliates pays any amount to any third party in satisfaction of any Liability of the other Party pursuant to the terms of this Agreement or any other Transaction Document, (i) the paying Party shall promptly notify the other Party of such payment and (ii) to the extent the paying Party is not obligated to make such payment pursuant to the terms of this Agreement or any other Transaction Document, the other Party shall promptly reimburse the paying Party for the amount so paid by the paying Party to such third party (and, for the avoidance of doubt, the Parties acknowledge and agree that there is no right of offset with respect to such amount, whether in connection with a dispute under this Agreement or any other Transaction Document or otherwise).

Section 2.9Acquisition of Acquired GNC Equity Interests. At the Closing, immediately following the consummation of the transactions set forth in Section 2.1 and Section 2.3 (collectively, the “Asset and Liability Dropdown”), (i) all of the issued and outstanding equity interests of GNC Newco held by the Seller or its Affiliates shall be redeemed and canceled by GNC Newco for no consideration and (ii) concurrently with such redemption and cancellation, GNC Newco shall issue to ZT Biopharmaceutical LLC all of the equity interests in GNC Newco (such interests, the “Acquired GNC Equity Interests”) such that all outstanding equity interests of GNC Newco are owned by ZT Biopharmaceutical LLC, free and clear of all Encumbrances (other than Permitted Encumbrances) and together with all accrued rights and benefits attached thereto.

ARTICLE III  
PURCHASE PRICE; DEPOSIT

Section 3.1Purchase Price.

(a)The consideration for the Asset and Liability Dropdown shall be as follows:

(i)the issuance of an aggregate principal amount of Second Lien Loans pursuant to the Second Lien Documents equal to the Second Lien Loans Amount;

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(ii)a cash amount equal to the Cash Purchase Price;

(iii)only if the Unsecured Creditor Consideration Trigger Event occurs, the Convertible Notes Issuance; and

(iv)the assumption of the Assumed Liabilities by execution of the Assignment and Assumption Agreement (such amounts in clauses (i), (ii) and (iii) collectively, the “Purchase Price”).

(b)The Buyer Financing Services shall be the consideration for the issuance of the Acquired GNC Equity Interests to ZT Biopharmaceutical LLC.

(c)On the Closing Date, the Buyer shall (i) pay or cause to be paid to GNC Corporation, a Selling Entity and designee of the Seller hereunder (“GNC Corporation”), by wire transfer of immediately available funds to an account or series of accounts designated by the Seller at least three (3) Business Days prior to the Closing, an amount or amounts in cash equal, in the aggregate, to the Cash Purchase Price and (ii) following the consummation of the transactions contemplated by Section 2.9, cause GNC Newco to issue to GNC Corporation the Second Lien Loans in accordance with Section 3.1(a)(i). Immediately following the receipt of the Cash Purchase Price, GNC Corporation hereby agrees to repay in full in cash on the Closing Date all DIP Obligations unless prohibited by the Bankruptcy Court.

(d)Promptly following the Closing, GNC Newco shall pay to the Buyer the Guarantee Fee in consideration for the Buyer Guarantee.

Section 3.2Deposit Escrow.

(a)Concurrently with the execution of this Agreement, the Seller and the Buyer have entered into an escrow agreement substantially in the form of Exhibit E (the “Escrow Agreement”) with Prime Clerk LLC (the “Escrow Agent”). On or prior to August 11, 2020 the Buyer shall deposit into escrow with the Escrow Agent an amount equal to fifty-seven million dollars ($57,000,000) (such amount, together with any interest accrued thereon prior to the Closing Date, the “Deposit”) by wire transfer of immediately available funds pursuant to the terms of this Agreement and the Escrow Agreement. The Deposit shall not be subject to any lien, attachment, trustee process or any other judicial process of any creditor of any of the Parties. The Deposit shall become payable to the Seller upon the earlier of (i) the Closing, (ii) the termination of this Agreement by (x) the Seller pursuant to Section 9.1(f) (other than in the circumstances described in clause (iii) of this Section 3.2(a)) or Section 9.1(i) or (y) the Seller pursuant to Section 9.1(b), Section 9.1(c) or Section 9.1(d) or the Buyer pursuant to Section 9.1(b), Section 9.1(c), Section 9.1(e) or Section 9.1(j), in each case under this clause (y) at a time when the Seller could have terminated this Agreement pursuant to Section 9.1(f) (other than in the circumstances described in clause (iii) of this Section 3.2(a)) or Section 9.1(i) or (iii) the termination of this Agreement by the Seller pursuant to Section 9.1(f) at a time when all of the conditions to the Closing set forth in Article VIII have been satisfied or, to the extent permitted by applicable Law, waived by the applicable Party in writing (other than those conditions that by their nature cannot be satisfied until the Closing) and Buyer breaches its

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obligation to effect the Closing pursuant to Article IV and satisfy its obligation to make the payments pursuant to Section 3.1(c) because of a Financing Failure Event or the failure to have received the proceeds of any Alternative Financing as contemplated by Section 7.8 (any such termination described in the foregoing clauses (ii)(x), (ii)(y) or (iii), a “Buyer Default Termination”); provided, that if (I) this Agreement is terminated pursuant to Section 9.1(i)(iv), (II) such termination resulted from a termination of the Vendor Agreement in accordance with its terms and (III) the primary cause of such termination of the Vendor Agreement is an uncured breach of the confidentiality provisions contained in the Vendor Agreement as a result of any action taken by the Selling Entities or any of their respective Subsidiaries, Affiliates, Representatives or creditors, then such termination shall not be a Buyer Default Termination for any purpose hereunder. If the Closing occurs, the Deposit shall be delivered to an account designated by the Seller by wire transfer of immediately available funds as payment of a portion of the Cash Purchase Price. If the Deposit becomes payable to the Seller by reason of a Buyer Default Termination, then either (A) the Seller and the Buyer shall jointly instruct the Escrow Agent to disburse the Deposit to the Seller or (B) the Seller or the Buyer shall deliver to the Escrow Agent a final and non-appealable written Order from a court of competent jurisdiction directing the Escrow Agent to disburse the Deposit to the Seller, in each case in accordance with the Escrow Agreement, and the Escrow Agent shall, within two (2) Business Days after receiving such joint written instruction or Order, as the case may be, disburse the Deposit to an account designated by the Seller by wire transfer of immediately available funds to the account designated in writing by the Seller to be retained by the Seller for its own account. If this Agreement or the transactions contemplated herein are terminated other than for a termination which constitutes a Buyer Default Termination, the Seller and the Buyer shall jointly instruct the Escrow Agent to, and the Escrow Agent shall, within two (2) Business Days after such instruction, return to the Buyer the Deposit by wire transfer of immediately available funds to the account designated in writing. The Escrow Agent’s escrow fees and charges shall be paid by the Buyer.

(b)The Parties acknowledge and agree that the Seller’s entitlement to the Deposit under Section 3.2(a) will constitute liquidated damages (and not a penalty) and, if the Seller retains such amount, then notwithstanding anything to the contrary contained herein, such Deposit shall be the sole and exclusive remedy available to the Selling Entities and any other Person against the Buyer, its Subsidiaries and Affiliates and/or the Financing Sources in connection with this Agreement, the other Transaction Documents, the Debt Financing Documents and the transactions contemplated hereby or thereby (including as a result of the failure to consummate the Closing or for a breach or failure to perform hereunder or otherwise) and none of the Buyer, its Subsidiaries and Affiliates and/or the Financing Sources shall have any further Liability relating to or arising out of this Agreement, the other Transaction Documents, the Debt Financing Documents or the transactions contemplated hereby or thereby. For the avoidance of doubt, (i) under no circumstances shall the Seller or any of its Affiliates be entitled to monetary damages other than retention of the Deposit and (ii) while the Seller may pursue both a grant of specific performance in accordance with Section 10.13 and retaining the Deposit pursuant to this Section 3.2, under no circumstances shall Seller or any of its Affiliates be permitted or entitled to receive both a grant of specific performance and any money damages, including retention of all or any portion of the Deposit.

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Section 3.3Allocation. The Buyer shall, not later than forty-five (45) days after the Closing Date, prepare and deliver to the Seller an allocation of the Purchase Price (and the Assumed Liabilities and other relevant items, to the extent properly taken into account under the Code) among the Purchased Assets (the “Allocation”) in accordance with Section 1060 of the Code and the Treasury Regulations for Seller’s review and approval (such approval not to be unreasonably withheld, conditioned or delayed). Any reasonable comments provided by the Seller to the Buyer under this Section 3.3 shall be considered by the Buyer in good faith. The Allocation shall be conclusive and binding on the Parties unless the Seller notifies Buyer in writing that the Seller objects to one or more items reflected in the Allocation, and specify the reasonable basis for such objection, within fifteen (15) days after delivery to the Seller of the Allocation. In the case of such an objection, the Seller and the Buyer shall negotiate in good faith to resolve any disputed items. Any resolution by the Seller and the Buyer shall be conclusive and binding on the parties once set forth in writing (any such conclusive and binding Allocation, the “Final Allocation”). If the Seller and the Buyer are unable to resolve all disputed items within fifteen (15) days after the delivery of the Seller’s written objection to the Buyer, each of the Buyer and the Seller may separately determine the allocation of the Purchase Price (and the Assumed Liabilities and other relevant items, to the extent properly taken into account under the Code) among the Purchased Assets, and there shall be no Final Allocation. The Parties agree to file all Tax Returns (including the filing of IRS Form 8594 with their U.S. federal income Tax Return for the taxable year that includes the date of the Closing) consistent with the Final Allocation unless otherwise required by applicable Law and shall act, in all respects pertaining to Tax matters and for all Tax purposes, consistent with the Final Allocation. None of the Parties or their respective Affiliates shall take any position in connection with Tax matters which is inconsistent with the Final Allocation. In the event that a Governmental Authority disputes the Final Allocation, the Party receiving notice of such dispute shall promptly notify the other Party hereto, and Seller and Buyer shall, and shall cause their Affiliates to, use their reasonable best efforts to defend such Final Allocation in any applicable proceeding. In administering the Bankruptcy Case, the Bankruptcy Court shall not be required to apply the Final Allocation in determining the manner in which the Purchase Price should be allocated as between the Selling Entities and their respective estates for non-tax purposes.

Section 3.4Purchase Price Adjustment.

(a)At least three (3) Business Days prior to the Closing Date, the Seller shall prepare, or cause to be prepared, and deliver to the Buyer a statement (the “Estimated Closing Statement”) setting forth in reasonable detail the Seller’s good faith estimate of (i) the Target Cash Amount, including the Closing Cure Payment Amount, (ii) the Company Cash, (iii) the Cash Reduction Amount, (iv) the Cash Purchase Price, (v) the Second Lien Loans Amount, (vi) the Excluded Cash and (vii) the Estimated TLB Cash Distribution Amount. During the period following the delivery of the Estimated Closing Statement and prior to the Closing Date, the Buyer shall have an opportunity to review the Estimated Closing Statement and provide comments to the Seller, and the Seller shall reasonably and in good faith consider the Buyer’s reasonable comments with respect thereto.

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(b)On the Closing Date, immediately prior to the Closing, the Seller shall prepare, or cause to be prepared, and deliver a statement, as reviewed and confirmed by a third-party approved by the Buyer (which, for the avoidance of doubt, may be Seller’s chief financial officer or other Seller employee designated by Buyer), to the Buyer (the “Final Closing Statement”) setting forth in reasonable detail the Seller’s updated good faith estimate of (i) the Target Cash Amount, including the Closing Cure Payment Amount, (ii) the Company Cash, (iii) the Cash Reduction Amount, (iv) the Cash Purchase Price, (v) the Second Lien Loans Amount, (vi) the Excluded Cash and (vii) the Estimated TLB Cash Distribution Amount, which amounts shall be final for all purposes of this Agreement absent manifest error.

(c)Concurrently with final distributions under the Plan, the Buyer hereby directs the Seller to pay, and the Seller shall, on behalf of Buyer, pay or cause to be paid, to GLAS Trust Company LLC, as administrative agent under the Second Lien Credit Agreement (or any successor administrative agent), an aggregate amount in cash equal to the Effective Date True-Up Amount as a prepayment of the amount of outstanding Second Lien Loans in accordance with the Second Lien Documents.

(d)Not less than three (3) Business Days prior to the Effective Date, the Seller shall deliver to the Buyer a written notice of (i) the actual cash distributions made and to be made by the Selling Entities to the holders of Allowed Tranche B-2 Term Loan Claims and the holders of TLB Allowed DIP Term Roll-Up Loan Claims (each as defined in the Plan) in respect of such Allowed Tranche B-2 Term Loan Claims and the holders of TLB Allowed DIP Term Roll-Up Loan Claims (the “Actual TLB Distribution Amount”), (ii) the aggregate amount of interest paid or accrued from the Closing Date through the Effective Date pursuant to the Debtor-in-Possession Term Loan Credit Agreement, dated as of June 26, 2020, among GNC Corporation, General Nutrition Centers, Inc., GLAS Trust Company, LLC, as administrative agent and collateral agent, and the lenders party thereto from time to time (the “DIP Term Loan Interest Amount”) and the cash amount to be distributed or paid in settlement to the holders of General Unsecured Claims, Convertible Unsecured Notes Claims, or Tranche B-2 Term Loan Deficiency Claims (each, as defined in the Plan) in excess of $5,000,000 (such amount in excess of $5,000,000 and the DIP Term Loan Interest Amount, taken together with the Actual TLB Distribution Amount, the “Adjusted TLB Distribution Amount”). Concurrently with the final distributions under the Plan, the Buyer shall cause GNC Newco to issue to the Seller or, at the Seller’s written direction, to the holders of Allowed Tranche B-2 Term Loan Claims, new Second Lien Loans in an aggregate principal amount equal to the lesser of (i) $12,000,000 and (ii) (x) $410 million minus (y) the aggregate principal amount of Second Lien Loans issued pursuant to Section 3.1(c)(ii)minus (z) the Adjusted TLB Distribution Amount. If the resulting amount in the immediately preceding clause (ii) is a negative number, then concurrently with and as part of the final distribution under the Plan, Seller shall cause Second Lien Loans in the aggregate principal amount equal to the absolute amount of such negative number to be distributed to GNC Newco and not the holders of Allowed Tranche B-2 Term Loan Claims and GNC Newco agrees to cancel such Second Lien Loans upon receipt thereof.

ARTICLE IV 
THE CLOSING

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Section 4.1Time and Place of the Closing. Upon the terms and subject to the satisfaction or, to the extent permitted by applicable Law, waiver of the conditions contained in Article VIII of this Agreement, the closing of the Asset and Liability Dropdown and the issuance of the Acquired GNC Equity Interests contemplated by this Agreement (the “Closing”) shall take place at the offices of Latham & Watkins LLP, 330 N. Wabash Avenue, Suite 2800, Chicago, Illinois 60611, at 8:00 a.m. (central time) no later than the third (3rd) Business Day following the date on which the conditions set forth in Article VIII have been satisfied or, to the extent permitted by applicable Law, waived by the applicable Party in writing (other than conditions which by their nature are to be satisfied at the Closing, but subject to the satisfaction or, to the extent permitted, waiver of such conditions at or prior to the Closing), or at such other place and time as the Buyer and the Seller may mutually agree; provided, that the Closing shall not take place on a Monday. The date on which the Closing actually occurs is herein referred to as the “Closing Date.”

Section 4.2Deliveries by the Seller. At the Closing, the Seller shall deliver or cause to be delivered the following to the Buyer:

(a)the Bill of Sale, duly executed by the Selling Entities, GNC Newco and GNC Canada Newco;

(b)the Assignment and Assumption Agreement, duly executed by the Selling Entities, GNC Newco and GNC Canada Newco;

(c)the IP Assignment Agreement, duly executed by the applicable Selling Entities, GNC Newco and GNC Canada Newco;

(d)Deeds with respect to all Owned Real Property, duly executed by the applicable Selling Entities;

(e)a copy of the Sale Order as entered by the Bankruptcy Court;

(f)a copy of the Canadian Sale Approval and Vesting Order as granted by the Canadian Court;

(g)the certificate contemplated by Section 8.2(c);

(h)a properly executed certificate of non-foreign status prepared in accordance with Treasury Regulations Section 1.1445-2(b) from each Selling Entity (other than the Canadian Seller); and

(i)certificates representing all of the Equity Interests, duly endorsed (or accompanied by duly executed stock or similar powers) by the Selling Entity owning such Equity Interests in blank or for transfer to GNC Newco, if such Equity Interests are certificated, or other appropriate instruments necessary to transfer such Equity Interests to GNC Newco; and

(j)all instruments necessary to issue the Acquired GNC Equity Interests to Buyer or the applicable Buyer Designee.

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Section 4.3Deliveries by the Buyer. At the Closing, the Buyer shall deliver or cause to be delivered the following to the Seller:

(a)the Cash Purchase Price, payable in accordance with Section 3.1(c);

(b)the Second Lien Loans in an aggregate principal amount equal to the Second Lien Loans Amount pursuant to the Second Lien Documents, in each case duly executed by all parties thereto other than the Seller; and

(c)the certificate contemplated by Section 8.3(c).

ARTICLE V  
REPRESENTATIONS AND WARRANTIES OF THE SELLING ENTITIES

Except (a) as set forth in the disclosure schedule delivered by Seller to Buyer (the “Seller Disclosure Schedule”) prior to the execution of this Agreement (with specific reference to the representations and warranties in this Article V to which the information in such schedule relates; provided, however, that, disclosure in the Seller Disclosure Schedule as to a specific representation or warranty shall qualify any other sections of this Article V to the extent (notwithstanding the absence of a specific cross reference) it is reasonably apparent from the face of such disclosure that such disclosure relates to such other sections), (b) as otherwise set forth in the Seller SEC Documents filed and publicly available at least two (2) Business Days prior to the date hereof (other than any forward-looking disclosures contained in the “Forward Looking Statements” and “Risk Factors” sections of the Seller SEC Documents and any other disclosures included therein to the extent they are predictive or forward-looking in nature), and (c) such exceptions that result from the filing and commencement of the Bankruptcy Case and the CCAA Proceedings, each Selling Entity hereby represents and warrants to Buyer as follows:

Section 5.1Organization, Standing and Corporate Power. Each Selling Entity and each Acquired Subsidiary is a corporation or other entity duly organized, validly existing and, to the extent applicable, in good standing (or its equivalent) under the laws of the jurisdiction of its incorporation or organization and has the requisite corporate or other entity power and authority to own or lease all of its properties and assets and to carry on its business as it is now being conducted. Each Selling Entity is duly licensed or qualified to do business as currently conducted in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except where the failure to be so licensed or qualified, has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. No Acquired Subsidiary is in violation of any of the provisions of its organizational or governing documents, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

Section 5.2Subsidiaries. Section 5.2 of the Seller Disclosure Schedule identifies (i) each Acquired Subsidiary, its jurisdiction of formation, and all owners of equity interests of each such Subsidiary and the number or percentage of equity interests owned by each such owner and (ii) all equity interests that are owned directly or indirectly by Seller of Persons who

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are not direct or indirect Subsidiaries of the Seller. All of the equity interests set forth on Section 5.2 of the Seller Disclosure Schedule are owned directly or indirectly by Seller or a Selling Entity that is wholly owned by Seller. Neither the Seller nor any of its Subsidiaries owns, directly or indirectly, any capital stock or other equity, ownership, proprietary or voting interest in any Person other than the other Selling Entities or the Acquired Subsidiaries set forth in Section 5.2 of the Seller Disclosure Schedule.

Section 5.3Authority; Execution and Delivery; Enforceability. Subject to the applicable provisions of the Bankruptcy Code and, in the case of the Canadian Seller, to the applicable provisions of the CCAA and the issuance of the Canadian Bidding Procedures Order, each of the Selling Entities has all necessary power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is a party, to perform and comply with each of its obligations hereunder and thereunder and, upon entry and effectiveness of the Sale Order and, in the case of the Canadian Seller, the Canadian Sale Approval and Vesting Order, in accordance with the terms hereof, will have all necessary corporate or similar authority to consummate the transactions contemplated hereby and thereby. The execution and delivery by the Selling Entities of this Agreement and the other Transaction Documents to which any Selling Entity is a party, the performance and compliance by the Selling Entities with each of their obligations herein and therein, and the consummation by it of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate or other action on the part of the Selling Entities, and no other corporate or other Proceedings on the part of the Selling Entities and no other stockholder votes are necessary to authorize the execution of this Agreement or the other Transaction Documents, or the performance or consummation by the Selling Entities of the transactions contemplated hereby or thereby. Each Selling Entity has duly and validly executed and delivered this Agreement and will (as of the Closing) duly and validly execute and deliver the other Transaction Documents to which it is a party and, assuming the due authorization, execution and delivery by the Buyer and each applicable Buyer Designee of this Agreement and the other Transaction Documents to which it is party, and by the other parties to the Transaction Documents, this Agreement constitutes and the other Transaction Documents will constitute (as of the Closing) legal, valid and binding obligations of each Selling Entity, enforceable against such Selling Entity in accordance with its terms, subject in all cases to (a) the entry and effectiveness of the Sale Order and, in the case of the Canadian Seller, the Canadian Sale Approval and Vesting Order and (b) limitations imposed by Laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

Section 5.4No Conflicts.

(a)The authorization, execution and delivery of this Agreement and the other Transaction Documents does not and will not, and the performance by the Selling Entities of this Agreement and the other Transaction Documents will not, except to the extent excused by or unenforceable as a result of the filing of the Bankruptcy Case or the CCAA Proceedings and except for the entry and effectiveness of the Sale Order, the Canadian Bidding Procedures Order or the Canadian Sale Approval and Vesting Order, with or without notice, lapse of time or both, (i) conflict with, result in breach or violation of, constitute a default under, or contravene, any

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provision of any Selling Entity’s organizational or governing documents, (ii) assuming that all consents, approvals, authorizations and permits described in Section 5.4(b) have been obtained and all filings and notifications described in Section 5.4(b) have been made and any waiting periods thereunder have terminated or expired, conflict with, result in breach or violation of, constitute a default under, or contravene, any Law, Permit or Order applicable to any Selling Entity or by which any property or asset of any Selling Entity is bound or affected or (iii) except as set forth in Section 5.4(a) of the Seller Disclosure Schedule, require any consent or approval under, result in any breach of or any loss of any benefit under, constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or constitute, give rise to or result in the creation of a Encumbrance on any Purchased Assets pursuant to, any Contract or Permit to which any Selling Entity is party, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)Assuming the accuracy of the representations and warranties of Buyer and/or the applicable Buyer Designees in Section 6.3(a), the execution, delivery and performance by the Selling Entities of this Agreement and the other Transaction Documents does not and will not, and the consummation by the Selling Entities of the transactions contemplated hereby and thereby and compliance by the Selling Entities with any of the terms or provisions hereof will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) under the Exchange Act and the rules and regulations of the NYSE, (ii) compliance with any applicable requirements under the under the HSR Act and of laws analogous to the HSR Act existing in foreign jurisdictions, (iii) the entry of the Sale Order by the Bankruptcy Court and, in the case of the Canadian Seller, the entry of the Canadian Sale Approval and Vesting Order and (iv) such other Consents and filings where the failure to obtain such Consents or make such filings would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect.

Section 5.5Legal Proceedings and Orders. Except as would not reasonably be expected to have a Material Adverse Effect or as described in Section 5.5 of the Seller Disclosure Schedule, (i) other than in connection with the Bankruptcy Case or the CCAA Proceedings, there is no pending or, to the Knowledge of Seller, threatened action, suit, arbitration, proceeding (including any civil, criminal, administrative, investigative or appellate proceeding or any informal proceeding) or investigation pending or being heard by or before, or otherwise involving, any Governmental Authority, arbitrator, arbitration panel or any other Person (each a “Proceeding”) against or affecting the Seller or any of its Subsidiaries, or any of their respective properties, assets or rights, and (ii) no Person has commenced or threatened in writing to commence any Proceeding (a) that relates to and would reasonably be expected to materially and adversely affect any of the Purchased Assets, (b) against or involving any of the Acquired Subsidiaries, or (c) that would reasonably be expected to have the effect of preventing, materially delaying, making illegal or otherwise materially interfering with any of the transactions contemplated by this Agreement. To the Knowledge of Seller, except as described in Section 5.5

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of the Seller Disclosure Schedule, there is no material Order to which any of the Selling Entities, any of the Purchased Assets or any of the Acquired Subsidiaries is subject.

Section 5.6Permits.

(a)Except as set forth in Section 5.6 of the Seller Disclosure Schedule, each of the Selling Entities and each Acquired Subsidiary, has all material federal, state, provincial, local and foreign governmental licenses, franchises, permits, certificates, registrations, consents, certificates, rights, agreements, approvals, orders, exemptions, billing, qualifications and authorizations (“Permits”) necessary for the conduct of their business and the lawful ownership and use of their properties and assets, as presently conducted and used, and each of the Permits (i) was, to the Knowledge of Seller, duly granted by the appropriate granting authority, (ii) is fully and unconditionally vested in the applicable Selling Entity or Acquired Subsidiary, (iii) is legal, valid, subsisting and in full force and effect in accordance with its terms and (iv) has not been sold, transferred, alienated, leased or encumbered, and no other Person has the right to use such Permit or enjoy ownership or possession of such Permit, and no such right to use, enjoy ownership or possession of such Permit has been restricted, transferred or surrendered since the initial award thereof, except, in each case, as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b)Except as set forth in Section 5.6 of the Seller Disclosure Schedule, other than in connection with or as a result of the Bankruptcy Case or the CCAA Proceedings, (i) the operation of the Selling Entities and each Acquired Subsidiary as currently conducted is not, and has not been since January 1, 2018, in violation of, nor is any Selling Entity or any Acquired Subsidiary in default or violation under, any Permit (except for such past violation or default as has been remedied and imposes no continuing current or future obligations or costs on the Selling Entities or any Acquired Subsidiary), except for such default or violation or violation that, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, (ii) to the Knowledge of Seller, no event has occurred which, with notice or the lapse of time or both, would constitute a default or violation of any term, condition or provision of any Permit, except where such default or violation of such Permit, individually or in the aggregate, has not had and would not reasonably be expected to have, a Material Adverse Effect and (iii) there are no actions pending or, to the Knowledge of Seller, threatened, that seek the revocation, cancellation or modification of any Permit, except where such revocation, cancellation or modification, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect.

Section 5.7Compliance with Law. Each of the Selling Entities and the Acquired Subsidiaries is in compliance and since January 1, 2018 has been in compliance with all Laws and Orders relating to the Purchased Assets (including the use thereof) and the conduct of the Business, except (a) for such past noncompliance as has been remedied and imposes no continuing current or future obligations or costs on such Selling Entity or such Acquired Subsidiary (as applicable), (b) as would not reasonably be expected to result in a Material Adverse Effect or (c) except as set forth in Section 5.7 of the Seller Disclosure Schedule. To the Knowledge of Seller and except as would not reasonably be expected to be material to the

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Selling Entities and the Acquired Subsidiaries, taken as a whole, no investigation related to any of the Selling Entities or Acquired Subsidiaries that is being conducted by any Governmental Authority. None of the Selling Entities nor any Acquired Subsidiary has received any written citation, complaint, Order, or other communication since January 1, 2018 from a Governmental Authority that alleges that such Selling Entity or such Acquired Subsidiary is not in compliance with any Law or Order, except where any non-compliance, individually or in the aggregate, has not had and would not reasonably be expected to have, a Material Adverse Effect.

Section 5.8Absence of Certain Developments. Since the Balance Sheet Date (a) there has not occurred a Material Adverse Effect and (b) except as set forth in Section 5.8 of the Seller Disclosure Schedule and other than in connection with the Bankruptcy Case or the CCAA Proceedings, the Business been conducted in all material respects in the ordinary course.

Section 5.9Seller SEC Documents; Financial Statements.

(a)Seller has timely filed or furnished all reports, schedules, forms, statements, registration statements, prospectuses and other documents required to be filed or furnished by Seller with the SEC under the United States Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”), or the United States Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”) since January 1, 2018 (collectively, the “Seller SEC Documents”).

(b)As of its respective filing date, and, if amended, as of the date of the last amendment prior to the date of this Agreement, each Seller SEC Document complied in all material respects with the requirements of the Exchange Act or the Securities Act, as the case may be, and the rules and regulations of the SEC promulgated thereunder applicable to such Seller SEC Document and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As of the date hereof, there are no material outstanding or unresolved comments in comment letters received from the SEC with respect to any of the Seller SEC Documents.

(c)The consolidated financial statements of the Seller included in the Seller SEC Documents (including, in each case, any notes or schedules thereto) (the “Seller Financial Statements”) fairly present, in all material respects, the consolidated financial condition and the consolidated results of operations, cash flows and changes in stockholders’ equity of the Seller and its Subsidiaries (on a consolidated basis) as of the respective dates of and for the periods referred to in the Seller Financial Statements, and were prepared in accordance with GAAP applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto), subject, in the case of any interim unaudited Seller Financial Statements, to normal year-end adjustments, which adjustments are not material individually or in the aggregate, and the absence of notes and other presentation items.

(d)Seller has established and maintains disclosure controls and procedures and internal control over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 and paragraph (e) of Rule 15d-15 under the Exchange Act) as

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required by Rules 13a-15 and 15d-15 under the Exchange Act. Seller’s disclosure controls and procedures are designed to ensure that all information (both financial and non-financial) required to be disclosed by Seller in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such information is accumulated and communicated to Seller’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. Seller’s management has completed an assessment of the effectiveness of Seller’s disclosure controls and procedures and, to the extent required by applicable Law, presented in any applicable Seller SEC Document that is a report on Form 10-K or Form 10-Q, or any amendment thereto, its conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by such report or amendment based on such evaluation. Based on Seller’s management’s most recently completed evaluation of Seller’s internal control over financial reporting, (i) Seller had no significant deficiencies or material weaknesses in the design or operation of its internal control over financial reporting that would reasonably be expected to adversely affect Seller’s ability to record, process, summarize and report financial information and (ii) to the Knowledge of Seller, there have been no instances of any fraud, whether or not material, that involves management or other employees who have a significant role in Seller’s internal control over financial reporting. As of the date of this Agreement, to the Knowledge of Seller, there is no reason that its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when next due.

(e)Seller and its Subsidiaries do not have any Liabilities required by GAAP to be reflected or reserved on a consolidated balance sheet of Seller (or the notes thereto) except (i) as disclosed, reflected or reserved against in the most recent balance sheet included in the Seller Financial Statements or the notes thereto, (ii) for liabilities and obligations incurred in the ordinary course of business since the date of the most recent balance sheet included in the Seller Financial Statements (the “Balance Sheet Date”), (iii) for liabilities and obligations arising out of or in connection with this Agreement or the other Transaction Documents, the transactions contemplated hereby or thereby or disclosed in Section 5.9(e) of the Seller Disclosure Schedule, (iv) for liabilities and obligations that, individually or in the aggregate, have not had, and would not reasonably be expected to have, a Material Adverse Effect, or (v) Liabilities that will be or are Liabilities of the Selling Entities as debtors in the Bankruptcy Case or, in the case of the Canadian Seller, the CCAA Proceedings, and that will not result in any Encumbrance (other than a Permitted Encumbrance) on the Purchased Assets following the entry of the Sale Order or the Canadian Sale Approval and Vesting Order.

(f)To the Knowledge of Seller, there are no SEC investigations or other governmental investigations pending or threatened regarding any accounting practices of the Seller or its Subsidiaries.

Section 5.10Employee Benefit Plans.

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(a)Section 5.10(a) of the Seller Disclosure Schedule sets forth a true and complete list of each material (i) “employee benefit plan” as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), whether or not subject to ERISA, (ii) end of service or severance, termination protection, retirement, pension, profit sharing, deferred compensation, phantom, equity or equity-based, health or welfare, employment, independent contractor, vacation, change in control, transaction, retention, bonus or other incentive, fringe benefit, paid time off or similar plan, agreement, arrangement, program or policy, or (iii) other plan, Contract, policy or arrangement providing compensation or benefits, in each case whether or not written, in the case of clauses (i)-(iii), that is sponsored, maintained, administered, contributed to or entered into by any Selling Entity or any Acquired Subsidiary, for the benefit of any of its current or former directors, officers, employees or individual independent contractors (each, a “Service Provider”), or for which any Acquired Subsidiary has any direct or indirect liability (the “Seller Compensation and Benefit Programs”). No Seller Compensation and Benefit Program that is subject to Laws of any jurisdiction other than the United States is a defined benefit pension plan.

(b)With respect to each Assumed Compensation and Benefit Program, Seller has made available to Buyer, as of the date hereof, or as reasonably practicable thereafter but in any event no later than thirty (30) days following the date hereof, to the extent applicable, true, correct and complete copies of (1) the Assumed Compensation and Benefit Program document, including any amendments thereto, and all related trust documents, insurance contracts or other funding vehicles, (2) a written description of such Assumed Compensation and Benefit Program if such plan is not set forth in a written document, (3) the most recent summary plan description together with the summary or summaries of all material modifications thereto, (4) the most recent IRS determination or opinion letter, (5) the two most recent annual reports (Form 5500 or 990 series and all schedules and financial statements attached thereto), and (6) all material correspondence to or from the IRS, the United States Department of Labor (“DOL”), the Pension Benefit Guaranty Corporation or any other Governmental Authority received in the last two (2) years with respect to such Assumed Compensation and Benefit Program.

(c)Each Assumed Compensation and Benefit Program has been administered in accordance with its terms and all applicable Laws in all material respects, including ERISA and the Code. No material Proceeding has been brought, or to the Knowledge of Seller is threatened, against or with respect to any Assumed Compensation and Benefit Program, including any audit or inquiry by any Governmental Authority, including the IRS or United States Department of Labor (other than routine claims for benefits) . With respect to Assumed Compensation and Benefit Programs, no event has occurred and, to the Knowledge of Seller, there exists no condition or set of circumstances which could subject any Selling Entity or any Acquired Subsidiaries to any material Tax, lien, fine or penalty under ERISA, the Code or other applicable Laws.

(d)Each Assumed Compensation and Benefit Program that is intended to be qualified under Section 401(a) of the Code has received or is the subject of a favorable determination, opinion or advisory letter from the IRS regarding its tax-qualified status, and to the Knowledge of Seller, no fact or event has occurred since the date of such letter or letters from

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the IRS that could reasonably be expected to adversely affect the qualified status of any such Assumed Compensation and Benefit Program or the exempt status of any such trust.

(e)Neither the Selling Entities or the Acquired Subsidiaries nor any trade or business that, together with any Selling Entity or Acquired Subsidiary, would be deemed a single employer within the meaning of Section 4001 of ERISA (an “ERISA Affiliate”) or other applicable Laws maintains, contributes to, or sponsors (or has in the past six years maintained, contributed to or sponsored), or otherwise has any liability in respect of, a multiemployer plan as defined in Section 3(37) of ERISA or plan subject to Title IV or Section 302 of ERISA or Section 412 of the Code or other applicable Laws and no condition exists that presents a risk to Seller or any ERISA Affiliate of incurring any liability in respect of any such plan. No Seller Compensation and Benefit Program provides post-employment health or welfare benefits for any current or former director, officer, employee or individual independent contractor of any Selling Entity or any Acquired Subsidiary (or their dependents), in any jurisdiction, other than as required under Section 4980B of the Code and at the participant’s sole expense.

(f)No amount that could be received (whether in cash or property or the vesting of property), as a result of the consummation of the transactions contemplated by this Agreement (alone or in conjunction with any other event, including any termination of employment), by any employee, officer, director or other Person with respect to any Selling Entity or any Acquired Subsidiary who is a “disqualified individual” (as such term is defined in proposed Treasury Regulation Section 1.280G-1) under any Seller Compensation and Benefit Program would reasonably be expected to be characterized as an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code). No Seller Compensation and Benefit Program provides for the gross-up or reimbursement of Taxes under Section 4999 or Section 409A of the Code or otherwise.

(g)Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby (alone or in conjunction with any other event, including any termination of employment) will (i) entitle any current or former Service Provider to any additional material compensation or benefit (including any bonus, retention or severance pay), (ii) accelerate the time of payment or vesting or result in any material increase, payment or funding of compensation or benefits under any of the Seller Compensation and Benefit Programs, (iii) directly or indirectly cause the transfer or the set aside of any assets to fund any benefits under any Assumed Compensation and Benefit Program, (iv) otherwise give rise to any material liability under any Assumed Compensation and Benefit Program, or (iv) result in any forgiveness of indebtedness, trigger any funding obligations under any Assumed Compensation and Benefit Program or limit or restrict the right of any Selling Entity or any Acquired Subsidiary to merge, materially amend, terminate or transfer the assets of any Assumed Compensation and Benefit Program.

(h)Each Assumed Compensation and Benefit Program is maintained outside the jurisdiction of the United States complies in all material respects with applicable local Law, and all such plans that are intended to be funded and/or book-reserved are funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions.

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Section 5.11Employee and Labor Matters.

(a)None of the Selling Entities or any Acquired Subsidiary is a party to, or otherwise bound by, any collective bargaining agreement or other Contract with a Union. No Employee is represented by a Union. To the Knowledge of Seller, there are no Union organizing activities or demands of any Union for recognition or certification pending or threatened against any Selling Entity or any of the Acquired Subsidiaries, and there have been no such activities or demands for the past three (3) years. No petition has been filed or proceedings instituted by an Employee or group of Employees with any labor relations board seeking recognition of a bargaining representative. There is not presently, and for the past three (3) years there has not been, any collective labor strike, dispute, lockout, slowdown or stoppage pending or, to the Knowledge of Seller, threatened against or affecting any Selling Entity or any of the Acquired Subsidiaries. There is no unfair labor practice charge or complaint against any Selling Entity or Acquired Subsidiary pending or threatened before the National Labor Relations Board or any other labor relations tribunal or Governmental Authority.

(b)The Selling Entities and the Acquired Subsidiaries are and have been in compliance in all material respects with all applicable Laws respecting employment and employment practices including, without limitation, all Laws respecting terms and conditions of employment, health and safety, wage payment, wages and hours, classification of employees and independent contractors, child labor, immigration and work authorizations, employment discrimination, harassment and retaliation, disability rights or benefits, equal employment opportunity, plant closures and layoffs, affirmative action, workers’ compensation, labor relations, social welfare obligations and unemployment insurance.

Section 5.12Contracts.

(a)Except as set forth in Section 5.12(a) of the Seller Disclosure Schedule or in the Seller SEC Documents, no Selling Entity nor any of the Acquired Subsidiaries is a party to any of the following Contracts (each, a “Material Contract”):

(i)any Contract for the employment of any officer, individual employee or other person on a full-time or consulting basis providing for base compensation in excess of $250,000 per annum that is not terminable by such Selling Entity or Acquired Subsidiary upon notice of sixty (60) days or less for a cost of $250,000 or less;

(ii)any material license of any material Intellectual Property that involves payments (by or to any Selling Entity or Acquired Subsidiary) in excess of $200,000 per annum and is not terminable by such Selling Entity or Acquired Subsidiary upon notice of sixty (60) days or less for a cost of $200,000 or less (other than licenses of commercially available, off-the-shelf software and other than licenses entered into in the ordinary course of business);

(iii)any Contract or group of related Contracts with the same party for the purchase of products or services, in either case, under which the aggregate undelivered

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balance of such products and services has a selling price in excess of $1,000,000 and which is not terminable by such Selling Entity or Acquired Subsidiary upon notice of sixty (60) days or less for a cost of $1,000,000 or less (other than purchase orders entered into in the ordinary course of business);

(iv)any Contract that materially prohibits any Selling Entity or Acquired Subsidiary from freely engaging in business anywhere in the world;

(v)any Contract relating to any acquisition or disposition by such Selling Entity or Acquired Subsidiary of any business (whether by asset or stock purchase or otherwise) or any merger, consolidation or similar business combination transaction, in each case, pursuant to which such Selling Entity or Acquired Subsidiary has an outstanding obligation to pay purchase price in excess of $1,000,000;

(vi)any material joint venture or partnership Contract;

(vii)any Real Property Lease;

(viii)any Contract (other than a Seller Compensation and Benefit Program) under which the Acquired Subsidiaries or any Selling Entity is expected to receive or pay in excess of $500,000 in the twelve (12) month period ending December 31, 2019; or

(ix)any Contract to enter into any of the foregoing.

(b)Each Material Contract is a valid and binding obligation of each Selling Entity or Acquired Subsidiary party thereto, as applicable, and, to the Knowledge of Seller, the other parties thereto, enforceable against each of them in accordance with its terms, except, in each case, (i) as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or other similar Laws affecting or relating to enforcement of creditors’ rights generally or general principles of equity, (ii) as set forth in Section 5.12(b) of the Seller Disclosure Schedule, or (iii) as would not reasonably be expected to result in a Material Adverse Effect.

(c)To the Knowledge of Seller, no event has occurred, is pending or threatened which, after the giving of notice, lapse of time or otherwise, would constitute a material breach, violation or default by any Selling Entity or Acquired Subsidiary or, to the Knowledge of Seller, any other Person, or would permit acceleration, termination or material modification, and none of the Selling Entities and Acquired Subsidiaries has waived any material rights under any Material Contracts, except, in each case, (i) as a result of the Bankruptcy Case or the CCAA Proceedings, (ii) as would not reasonably be expected to have a Material Adverse Effect, (iii) as set forth in Section 5.12(c) of the Seller Disclosure Schedule, (iv) as may be cured upon entry of the Sale Order and/or the Canadian Approval and Vesting Order and payment of the Cure Payments, or (v) for Contracts that will be rejected in the Bankruptcy Case.

Section 5.13Intellectual Property; Information Technology; Privacy.

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(a)Section 5.13(a) of the Seller Disclosure Schedule sets forth a complete and accurate list of all (i) Registered IP and (ii) domain names included in the Business IP, in each case, listing for each entry (as applicable), the legal and beneficial owner(s) or registrant(s), applicable title or mark, applicable jurisdiction(s), and registration and application number(s) and date(s). Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, the Selling Entities and the Acquired Subsidiaries own or possess rights to use all Intellectual Property, Intellectual Property Rights and IT Systems used in or necessary for the conduct of their respective businesses as currently conducted, free and clear of all Encumbrances (other than Permitted Encumbrances). Except as, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, (i) the Business IP constitutes all Intellectual Property and Intellectual Property Rights owned by Seller or any of its Subsidiaries, and (ii) subject to Section 2.6, the Business IP together with all Intellectual Property, Intellectual Property Rights, and IT Systems licensed or made available to the Selling Entities pursuant to the Assumed Agreements include all of the Intellectual Property, Intellectual Property Rights, and IT Systems necessary and sufficient to enable Buyer and the Buyer Designees to conduct the Business from and after Closing in substantially the same manner and to substantially the same extent currently conducted by the Seller and its Subsidiaries.

(b)Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, neither the execution and delivery of this Agreement or the other Transaction Documents, nor the performance of this Agreement or any other Transaction Document, nor the consummation of the Transactions, will result in (i) the loss, forfeiture, termination, or impairment of, or give rise to a right of any Person to limit, terminate, or consent to the continued use of, any rights of any Selling Entity or Acquired Subsidiary in any Intellectual Property or Intellectual Property Rights or (ii) the grant, assignment or transfer to any other Person of any license, immunity, covenant not to assert or compete, or other right, title, or interest in, to or under any Business IP.

(c)Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all Registered IP (including applications therefor) is subsisting, unexpired, and to the Knowledge of Seller, valid and enforceable. All actions required to keep such rights pending or in effect, including payment of filing, examination, annuity and maintenance fees and filing for renewals, statements of use and other similar actions, have been taken in a timely manner (taking into account any applicable grade periods) and except as disclosed in Section 5.13(c) of the Seller Disclosure Schedule, no such filings, payments, or other actions must be made, paid, or taken within ninety (90) days following the Closing Date. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, none of the Registered IP is involved in any opposition, cancellation, nullity, reissue, reexamination or other proceeding or action challenging the validity, enforceability or ownership of such Registered IP. Seller and the Acquired Subsidiaries possess and exclusively own (and immediately after Closing, Buyer or a Buyer Designee will possess and exclusively own) all right, title, and interest in and to all GNC Names and Marks and all other Business IP free and clear of all Encumbrances (other than Permitted Encumbrances) or

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Orders restricting the use thereof, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(d)Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, neither of the Selling Entities nor any of the Acquired Subsidiaries is infringing, misappropriating, diluting, or otherwise violating the Intellectual Property Rights of any Person, nor have any of the Selling Entities nor any of the Acquired Subsidiaries entered into any agreement that impairs or restricts the use of any Business IP. Except as would not reasonably be expected to have a Material Adverse Effect, there is no Proceeding pending (or to the Knowledge of Seller, threatened) and neither Seller nor any of its Subsidiaries has received any charge, complaint, claim, demand, or notice since January 1, 2018 (or earlier, if presently not fully resolved) alleging: either (i) any such infringement, misappropriation, dilution, or violation (including any claim that any Selling Entity or Acquired Subsidiary must license or refrain from using any Intellectual Property Rights of any Person) or (ii) challenging the use, validity, ownership, or enforceability of any Business IP. To the Knowledge of Seller, except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, no Person is infringing, misappropriating, diluting or otherwise violating any Business IP. Neither any Selling Entity nor any Acquired Subsidiary has made or asserted any charge, complaint, claim, demand or notice since January 1, 2018 (or earlier, if presently not fully resolved) alleging any such infringement, misappropriation, dilution, or violation.

(e)Except as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, all Business IP that derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use has been maintained in confidence in accordance with protection procedures that are adequate for protection, and in accordance with procedures customarily used in the industry to protect rights of like importance and all use or disclosure of any such Business IP by or to any Person has been pursuant to the terms of non-disclosure or confidentiality agreements between such Person and Seller or one of its Subsidiaries and to the Knowledge of Seller, there has been no unauthorized use or disclosure of any Business IP. Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, all former and current officers, directors, employees, personnel, consultants, advisors, agents, and independent contractors of Seller and its Subsidiaries, and each of their predecessors, who have contributed to or participated in the conception and development of Intellectual Property or Intellectual Property Rights for such entities have entered into valid and binding proprietary rights agreements with Seller or one of its Subsidiaries or predecessors, vesting ownership of such Intellectual Property or Intellectual Property Rights in Seller or one of its Subsidiaries.

(f)Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, the IT Systems operate and perform as required for the conduct of the Business and in accordance with their documentation and functional specifications and otherwise as required by the Selling Entities and the Acquired Subsidiaries and have not materially malfunctioned or failed in the last three (3) years. Except

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as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, the Selling Entities and the Acquired Subsidiaries have implemented, and required that their third party vendors implement, commercially reasonable policies and security (a) regarding the collection, use, disclosure, retention, processing, transfer, confidentiality, integrity, and availability of Personal Information, and business proprietary or sensitive information, in its possession, custody, or control, or held or processed on its behalf, and (b) regarding the integrity and availability of the IT Systems. Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, (i) the IT Systems are free from malicious software, hardware, or any other implement designed to disrupt, damage, or gain unauthorized access to any software or hardware, and (ii) there has been no breach of or unauthorized access to the IT Systems, which impacted the confidentiality, integrity and availability of the IT Systems or resulted in the unauthorized access, modification, encryption, corruption, disclosure, transfer, use, or misappropriation of, any information contained therein.

(g)Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, all Handling of Personal Information by the Selling Entities and the Acquired Subsidiaries is in compliance with all Laws applicable to the Selling Entities and the Acquired Subsidiaries and with the Selling Entities’ and the Acquired Subsidiaries; Contracts and privacy policies. Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect, the Selling Entities and the Acquired Subsidiaries have not received any written notice of any claims, investigations, or alleged violations of law, regulation, or contract with respect to Personal Information or information security-related incidents, nor have such entities notified in writing, or been required by applicable law, regulation, or contract to notify in writing, any person or entity of any incidents relating to Personal Information or information security. The Selling Entities and the Acquired Subsidiaries have implemented, and required that their third party vendors implement written policies and procedures regarding Handling of Personal Information and maintain administrative, technical and physical safeguards that are reasonable and, in any event, in compliance with all applicable Laws and the Selling Entities’ and the Acquired Subsidiaries’ Contracts, except as, individually or in the aggregate, has not had and would not reasonably be expected to have, a Material Adverse Effect.

Section 5.14Taxes. Except as has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect:

(a)all Tax Returns relating to the Business or the Purchased Assets that are required by applicable Law to be filed by or with respect to any Selling Entity or any Acquired Subsidiary have been timely filed (taking into account any extension of time within which to file), and all such Tax Returns are true, complete, and accurate;

(b)each of the Selling Entities and the Acquired Subsidiaries has timely paid all Taxes relating to the Business or the Purchased Assets due and owing by it, including any Taxes required to be withheld from amounts owing to, or collected from, any employee, creditor, or other third party, other than Taxes not due as of the date of the filing of the Bankruptcy Case

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and the CCAA Proceedings as to which subsequent payment was not required by reason of the Bankruptcy Cases and the CCAA Proceedings or Taxes that are being contested in good faith in appropriate Proceedings and for which adequate reserves have been established in accordance with GAAP on the financial statements of the Selling Entities and the Acquired Subsidiaries;

(c)no deficiencies for Taxes relating to the Business or the Purchased Assets have been claimed, proposed or assessed by any Governmental Authority in writing against the Selling Entities and the Acquired Subsidiaries except for deficiencies which have been fully satisfied by payment, settled or withdrawn or adequately reserved for in accordance with GAAP on the financial statements of the Selling Entities and the Acquired Subsidiaries;

(d)there are no audits, examinations, investigations or other proceedings ongoing or pending against or with respect to the Selling Entities or any of the Acquired Subsidiaries with respect to any Taxes relating to the Business or the Purchased Assets and no written notification has been received by the Selling Entities or any of the Acquired Subsidiaries that such an audit, examination, investigation or other proceeding has been proposed or, to the Knowledge of Seller, threatened;

(e)none of the Acquired Subsidiaries has constituted a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a distribution of stock intended to qualify for tax-free treatment under Section 355(a) of the Code (or any similar provision of state, local, or non-U.S. Law) in the two years prior to the date of this Agreement;

(f)none of the Acquired Subsidiaries is a party to any Tax allocation, sharing, indemnity, or reimbursement agreement or arrangement (other than any customary Tax indemnification provisions in ordinary course commercial agreements or arrangements, in each case, that are not primarily related to Taxes);

(g)within the past six (6) years, none of the Acquired Subsidiaries have been a member of a consolidated Tax group other than a group of which the Selling Entities or any of the Acquired Subsidiaries has been the common parent;

(h)there are no Encumbrances for Taxes relating to the Business or the Purchased Assets upon any property or assets of the Selling Entities or the Acquired Subsidiaries , except for Permitted Encumbrances; and

(i)none of the Acquired Subsidiaries has entered into any “listed transaction” as defined in Section 6707A(c)(1) of the Code and Treasury Regulations Section 1.6011-4(b)(2).

Section 5.15Insurance. The Selling Entities and the Acquired Subsidiaries are insured by reputable institutions with policies in such amounts and with such deductibles and covering such risks as such Selling Entities and Acquired Subsidiaries reasonably believe are generally deemed adequate and customary for their respective industries. All premiums due and payable under the policies have been timely paid as of the date of this agreement and will be timely paid through the Closing Date. No Selling Entity nor any Acquired Subsidiary has been denied in

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writing any insurance coverage for which it has applied, except as would not have, and would not reasonably be expected to have, a Material Adverse Effect. Without limiting the generality of the foregoing, each of the Selling Entities and Acquired Subsidiaries carries director and officer insurance with customary coverage limits for a company of its size.

Section 5.16Title to Assets; Real Property.

(a)The Selling Entities and the Acquired Subsidiaries have good and valid title to, or have good and valid leasehold interests in, all tangible personal property that is included in the Business (other than the Excluded Assets), free and clear of all Encumbrances other than Permitted Encumbrances, except (i) to the extent that such Encumbrances will not be enforceable against such tangible personal property following the Closing in accordance with the Sale Order or the Canadian Sale Approval and Vesting Order, (ii) as set forth in Section 5.16(a) of the Seller Disclosure Schedule or (iii) as would not reasonably be expected to result in a Material Adverse Effect.

(b)Except as would not reasonably be expected to, individually or in the aggregate, result in a Material Adverse Effect, (i) a Selling Entity owns fee simple title to the Owned Real Property and (ii) a Selling Entity or an Acquired Subsidiary, as applicable, has valid leasehold interests in the real property leased pursuant to the Real Property Leases and the real property leased by the Acquired Subsidiaries (together, the “Seller Properties”), in each case sufficient to conduct the Business as currently conducted and free and clear of all Encumbrances (other than Permitted Encumbrances and except to the extent that such Encumbrances will not be enforceable against the Owned Real Property or the Real Property Leases following the Closing in accordance with the Sale Order or the Canadian Sale Approval and Vesting Order), assuming the timely discharge of all obligations owing under or related to the Seller Properties.

(c)Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, neither the Selling Entities nor any Acquired Subsidiaries has received written notice of any Proceedings in eminent domain, expropriation, condemnation or other similar Proceedings that are pending, and, to the Seller’s Knowledge, there are no such Proceedings threatened, affecting any portion of the Owned Real Property.

Section 5.17Environmental Matters.

(a)Except as has not had or would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect, each Selling Entity and each Acquired Subsidiary (i) is in compliance with all, and is not subject to any liability with respect to noncompliance with any, Laws relating to pollution, natural resources, Hazardous Materials, or the protection of the environment or to occupational health and safety (“Environmental Laws”), (ii) has and holds, or has applied for, all Environmental Permits necessary for the conduct of their business and the use of their properties and assets, as currently conducted and used, and (iii) is in compliance with their respective Environmental Permits.

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(b)Except as has not had or would not reasonably be expected to result in material liability for any Selling Entity or any of the Acquired Subsidiaries under Environmental Laws: (i) there are no Environmental Claims pending nor, to the Knowledge of Seller, threatened against any Selling Entity or any of the Acquired Subsidiaries; and (ii) none of the Selling Entities or any of the Acquired Subsidiaries has received any written notification of any allegation of actual or potential responsibility for any Release or threatened Release regarding any Hazardous Materials, the subject matter of which has not been resolved.

(c)None of the Selling Entities or any of the Acquired Subsidiaries has any material unresolved obligations pursuant to any consent decree or consent order or is otherwise subject to any material unresolved obligations pursuant to any judgment, decree, or judicial or administrative order, in each case, relating to compliance with Environmental Laws, Environmental Permits or to the investigation, sampling, monitoring, treatment, remediation, response, removal or cleanup of Hazardous Materials and no Proceeding is pending or, to the Knowledge of Seller, threatened with respect thereto.

(d) Neither the Selling Entity nor any Acquired Subsidiary has treated, stored, disposed of, arranged for or permitted the disposal of, transported, handled, released, or exposed any Person to, any Hazardous Materials except in compliance in all material respects with Environmental Laws.

Section 5.18Brokers. Except for Evercore Group, L.L.C. or as set forth in Section 5.18 of the Seller Disclosure Schedule, none of the Selling Entities and Acquired Subsidiaries have used any investment banker, broker, finder, agent or other Person in connection with the Transactions, and no Person is entitled to any investment banker, brokerage, financial advisory, finder’s or other similar fee or commission payable by any Selling Entity or Acquired Subsidiary in connection with the transactions contemplated by this Agreement.

Section 5.19Investment Company Act. No Selling Entity nor any Acquired Subsidiary is, and immediately following the Closing will not be, an investment company within the meaning of the Investment Company Act of 1940, as amended, or, directly or indirectly, controlled by or acting on behalf of any Person which is an investment company, within the meaning of said Act.

Section 5.20Foreign Corrupt Practices Act. Except as has not had and would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, no Selling Entity or Acquired Subsidiary or, to the Seller’s Knowledge, any director, officer, agent, employee or other person acting on behalf of such Selling Entity or Acquired Subsidiary has during the past three (3) years, in the course of its actions for, or on behalf of, such Selling Entity or Acquired Subsidiary (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any domestic government official “foreign official” (as defined in the U.S. Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder (collectively, the “FCPA”)) or employee from corporate funds; (iii) violated or is in violation of any provision of the FCPA or any applicable non-U.S. anti-bribery statute or

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regulation; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

Section 5.21OFAC; Anticorruption Laws.

(a)Except as has not had and would not reasonably be expected to, individually or in the aggregate, have a Material Adverse Effect, no Selling Entity or Acquired Subsidiary or, to the Knowledge of Seller, any director, officer, or employee acting on behalf of such Selling Entity or Acquired Subsidiary, is currently, or during the past three (3) years has been, subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”); and the Selling Entities will not directly or indirectly use the proceeds herefrom, or lend, contribute or otherwise make available such proceeds to any Subsidiary or any joint venture partner or other Person, for the purpose of financing the activities of or business with any Person, or in any country or territory, that currently is subject to any U.S. sanctions administered by OFAC or in any other manner that will result in a violation by any Person (including any Person participating in the Transactions whether as underwriter, advisor, investor or otherwise) of U.S. sanctions administered by OFAC.

(b)The Selling Entities and the Acquired Subsidiaries have implemented and maintain in effect policies and procedures designed to ensure compliance by the Selling Entities and the Acquired Subsidiaries and their respective directors, officers, employees and agents with Anticorruption Laws.  The Selling Entities, the Acquired Subsidiaries and their respective officers and employees and, to the Knowledge of Seller, their respective directors and agents, are in compliance with Anticorruption Laws in all material respects.

Section 5.22Material Customers and Material Suppliers.

(a)Concurrently with the execution of this Agreement, the Buyer has been provided with a complete and accurate list of the ten (10) largest customers (measured by revenue) of the Selling Entities and the Acquired Subsidiaries, taken as a whole (collectively, the “Material Customers”) for the twelve (12) month period ended December 31, 2019.  Except as disclosed on Section 5.22(a) of the Seller Disclosure Schedule, in connection with the Bankruptcy Case, or as would not reasonably be expected to have a Material Adverse Effect, (i) no Material Customer has materially reduced, or indicated in writing its present intention to materially reduce, its business with any Selling Entity or Acquired Subsidiary from the current levels or amounts of such business, and (ii) no Selling Entity or Acquired Subsidiary has received any written notice or communication to the effect that (A) any such customer has cancelled or terminated, or presently intends to cancel or terminate, its relationship with any Selling Entity or Acquired Subsidiary, or (B) any such customer intends to amend any material terms of any Material Contract with any Selling Entity or Acquired Subsidiary, or cease to purchase from or use the services of, or substantially reduce purchases from or the use of services of any Selling Entity or Acquired Subsidiary.

(b)Concurrently with the execution of this Agreement, the Buyer has been provided with a complete and accurate list of the ten (10) largest vendors and suppliers (measured by fees paid or payable) of the Selling Entities and the Acquired Subsidiaries, taken as

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a whole (collectively, the “Material Suppliers”), for the twelve (12) month period ended December 31, 2019. Except as disclosed on Section 5.22(b) of the Seller Disclosure Schedule, in connection with the Bankruptcy Case, or as would not reasonably be expected to have a Material Adverse Effect,  (i) no Material Supplier has materially reduced, or, indicated in writing its intention to materially reduce, its business with any Selling Entity or Acquired Subsidiary, or (ii) no Selling Entity or Acquired Subsidiary has received any written notice or written communication to the effect that (A) any such vendor or supplier has cancelled or terminated, or presently intends to cancel or terminate, its relationship with any Selling Entity or Acquired Subsidiary, (B) any such vendor or supplier intends to amend any material terms of any Material Contract with any Selling Entity or Acquired Subsidiary, cease to sell to, or substantially reduce sales to, any Selling Entity or Acquired Subsidiary, or (C) except in the ordinary course of business, any such vendor or supplier has increased or will increase the prices it charges any Selling Entity or Acquired Subsidiary or has reduced, will reduce or has threatened to reduce the discounts it offers to any Selling Entity or Acquired Subsidiary.

Section 5.23Affiliate Transactions. No Affiliate of the Business (other than the Selling Entities or the Acquired Subsidiaries), or any officer or director of the Selling Entities or the Acquired Subsidiaries (a) is a party to any agreement or transaction with the Selling Entities or the Acquired Subsidiaries having a potential or actual value or a contingent or actual liability exceeding $250,000, other than (i) loans and other extensions of credit to directors and officers of the Selling Entities or the Acquired Subsidiaries for travel, business or relocation expenses or other employment-related purposes in the ordinary course of business, (ii) employment arrangements in the ordinary course of business and (iii) the Seller Compensation and Benefit Programs, (b) has any material interest in any material property used by the Selling Entities or the Acquired Subsidiaries or (c) owns any material interest in, or is an officer, director, employee or consultant of, any Person which is, or is engaged in business as a Material Supplier or Material Customer.

Section 5.24GNC Newco Activities. GNC Newco, when organized by the Seller, shall have been organized solely for the purpose of consummating the transactions contemplated hereby and shall not have engaged in any activities or business, and shall not have incurred any Liabilities or obligations whatsoever, in each case, other than those requested by Buyer or otherwise related to its organization, the execution of this Agreement and the consummation of the transactions contemplated hereby.

Section 5.25Canadian Competition Act. Neither the aggregate value of the assets in Canada of the Acquired Subsidiaries and their Affiliates nor the gross revenues from sales in, from or into Canada of the Acquired Subsidiaries and their Affiliates, as determined in the manner prescribed in the Canadian Competition Act (including the Notifiable Transactions Regulations thereunder), as amended, exceed, in either case, $390 million Canadian dollars.

Section 5.26Canadian Cultural Business. None of the Acquired Subsidiaries carry on a cultural business (as such term is defined in the Investment Canada Act) in Canada.

ARTICLE VI  
REPRESENTATIONS AND WARRANTIES OF BUYER

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The Buyer hereby represents and warrants to the Selling Entities as follows:

Section 6.1Organization and Good Standing. Buyer is a corporation duly organized, validly existing and, to the extent applicable, in good standing (or its equivalent) under the laws of the People’s Republic of China and has the requisite corporate power and authority to own or lease all of its properties and assets and to carry on its business as it is being conducted on the date hereof. Buyer is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned or leased by it makes such licensing or qualification necessary, except for those licenses or qualifications the absence of which would not prevent or materially delay the transactions contemplated by this Agreement or any other Transaction Document to which Buyer is a party. Any Buyer Designee that executes and delivers any Transaction Document will be a corporation duly organized, validly existing and in good standing (or its equivalent) under the Laws of its jurisdiction of incorporation or organization as of the Closing Date.

Section 6.2Authority Relative to this Agreement.

(a)Buyer has all necessary power and authority to execute and deliver this Agreement and the other Transaction Documents to which it is party, to perform and comply with each of its obligations hereunder and thereunder and to consummate the transactions contemplated hereby or thereby. The execution and delivery by Buyer of this Agreement and the other Transaction Documents to which it is party, the performance and compliance by Buyer with each of its obligations herein and therein and the consummation by Buyer of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate or other action on the part of Buyer and no other corporate or other proceedings on the part of Buyer and no stockholder votes are necessary to authorize this Agreement, the other Transaction Documents to which it is party or the performance or consummation by Buyer of the transactions contemplated hereby and thereby. Buyer has duly and validly executed and delivered this Agreement, and the other Transaction Documents to which it is party will be duly executed and delivered by Buyer and, assuming the due and valid authorization, approval, execution and delivery by the Selling Entities of this Agreement and the other Transaction Documents, this Agreement and the other Transaction Documents to which Buyer is party constitutes or will constitute Buyer’s legal, valid and binding obligation, enforceable against Buyer in accordance with its terms, except as limited by Laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

(b)Each Buyer Designee that executes and delivers a Transaction Document shall have, as of the Closing Date, all necessary power and authority to execute and deliver the Transaction Documents to which it is party, to perform and comply with each of its obligations thereunder and to consummate the transactions contemplated thereby. The execution and delivery of each Transaction Document to which a Buyer Designee is a party, the performance and compliance by such Buyer Designee with each of its obligations therein and the consummation by such Buyer Designee of the transactions contemplated thereby have been duly and validly authorized and approved by all necessary corporate action on the part of such Buyer Designee and no other corporate or other proceedings on the part of such Buyer Designee and no

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stockholder votes are necessary to authorize the Transaction Documents to which it is party or the performance or consummation by such Buyer Designee of the transactions contemplated thereby. The Transaction Documents to which a Buyer Designee is party shall have been duly and validly executed and delivered prior to the Closing by each Buyer Designee that executes and delivers a Transaction Document, and, assuming the due authorization, approval, execution and delivery by the Selling Entities party thereto, shall constitute such Buyer Designee’s legal, valid and binding obligation, enforceable against such Buyer Designee in accordance with its terms, except as limited by Laws affecting the enforcement of creditors’ rights generally or by general equitable principles.

Section 6.3No Violation; Consents.

(a)The authorization, execution and delivery of this Agreement or the other Transaction Documents by the Buyer and/or any applicable Buyer Designee does not and will not, and the performance by Buyer and/or any applicable Buyer Designee of this Agreement and the other Transaction Documents to which it is party will not, with or without notice, lapse of time or both, (i) conflict with, result in breach or violation of, constitute a default under, or contravene, any provision of the organizational documents of Buyer or such Buyer Designee, (ii) assuming that all consents, approvals, authorizations and permits described in Section 6.3(b) have been obtained and all filings and notifications described in Section 6.3(b) have been made and any waiting periods thereunder have terminated or expired, conflict with, result in breach or violation of, constitute a default under, or contravene, any Law or Order applicable to Buyer, Buyer Designee, or any of their respective Affiliates, or by which any property or asset of Buyer or any such Buyer Designee is bound or affected or (iii) require any consent or approval under, result in any breach of or any loss of any benefit under, constitute a change of control or default (or an event which with notice or lapse of time or both would become a default) under or give to others any right of termination, vesting, amendment, acceleration or cancellation of, or result in the creation of an Encumbrance on any property or asset of Buyer or any such Buyer Designee, pursuant to, any Contract or Permit to which Buyer or any such Buyer Designee is a party, except, with respect to clauses (ii) and (iii), for any such conflicts, violations, breaches, defaults or other occurrences which would not reasonably be expected, individually or in the aggregate, to prevent or materially delay the transactions contemplated by this Agreement or any other Transaction Document to which Buyer or any such Buyer Designee is a party.

(b)Assuming the accuracy of the representations and warranties of the Selling Entities in Section 5.4(a), the execution, delivery and performance by Buyer and/or any applicable Buyer Designees of this Agreement and the other Transaction Documents to which it is party does not and will not, and the consummation by the Buyer or any such Buyer Designees of the transactions contemplated hereby and thereby and compliance by the Buyer and any such Buyer Designee with any of the terms or provisions hereof will not, require any consent, approval, authorization or permit of, or filing with or notification to, any Governmental Authority, except (i) under the Exchange Act and the rules and regulations of the NYSE, (ii) compliance with any applicable requirements under the under the HSR Act and of laws analogous to the HSR Act existing in foreign jurisdictions, (iii) the entry of the Sale Order by the Bankruptcy Court and the entry of the Canadian Sale Approval and Vesting Order by the

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Canadian Court or (iv) such other Consents and filings where failure to obtain such Consents or make such filings would not reasonably be expected, individually or in the aggregate, to prevent or materially delay the transactions contemplated by this Agreement or any other Transaction Document to which Buyer or any such Buyer Designee is a party.

Section 6.4Legal Proceedings and Orders. Except for the Bankruptcy Case and the CCAA Proceedings, is no Proceeding pending, or, to the Knowledge of Buyer, threatened that, individually or in the aggregate, would reasonably be expected to prevent or materially delay the transactions contemplated by this Agreement or any other Transaction Document to which Buyer is a party, and Buyer is not subject to any outstanding Order that, individually or in the aggregate, would reasonably be expected to prevent or materially delay the transactions contemplated by this Agreement or any other Transaction Document to which Buyer is a party.

Section 6.5Brokers. Buyer has not used any investment banker, broker, finder, agent or other Person in connection with the Transactions, and no Person is entitled to any investment banker, brokerage, financial advisory, finder’s or other similar fee or commission payable by the Buyer or any of its Affiliates in connection with the transactions contemplated by this Agreement. Such fees shall be paid in full by the Buyer.

Section 6.6Buyer Financing. The Buyer has delivered to the Seller a true and complete copy of the executed Aland Debt Commitment Letter and, upon its execution and delivery by the parties thereto, will cause to be delivered to the Seller a true and complete copy of the executed BOC Debt Commitment Letter (provided that provisions may be redacted with respect to fees, other economic terms and “market flex” items in a customary manner). Neither the Buyer nor any of its Affiliates has entered into any agreement, side letter or other arrangement relating to the financing of contemplated in the Debt Commitment Letters, that (A) reduces the aggregate amount of the Debt Financing or (B) imposes new or additional conditions or otherwise expands, amends or modifies any of the conditions to the receipt of the Debt Financing in a manner that would reasonably be expected to (1) materially delay or prevent the Closing, (2) make the funding of the Debt Financing (or satisfaction of the conditions to obtaining the Debt Financing) less likely to occur or (3) adversely impact the ability of the Buyer to enforce its rights against other parties to the Debt Commitment Letters or the definitive agreements with respect thereto when required pursuant to this Agreement. Assuming the Financing is consummated in accordance with the terms of the Debt Commitment Letters and the satisfaction of the conditions set forth in Article VIII, taking into account the proceeds of the Debt Financing and assuming full compliance with Section 7.18, the Buyer and GNC Newco (taken as a whole) will have sufficient cash in immediately available funds to pay the Deposit, the Cash Purchase Price and all of the fees, costs and expenses incurred in connection with the transactions contemplated hereby by the Buyer and its Affiliates. The commitments contained in the Debt Commitment Letters have not been withdrawn or rescinded in any respect. The Aland Debt Commitment Letter is, and, following its execution and delivery by the parties thereto, the BoC Debt Commitment Letter will be, in full force and effect and represent valid, binding and enforceable obligations of the Buyer and each other party thereto, to provide the financing contemplated thereby subject only to the satisfaction or waiver of the conditions set forth in the applicable Debt Commitment Letter as of the date hereof and except as limited by Laws affecting

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the enforcement of creditors’ rights generally, by general equitable principles or by the discretion of any Governmental Authority before which any Proceeding seeking enforcement may be brought (regardless of whether enforcement is sought in a proceeding at law or in equity). The Buyer has fully paid (or caused to be fully paid) any and all commitment fees and other amounts that are due and payable on or prior to the date of this Agreement in connection with the Debt Financing. As of the date hereof and to the Knowledge of the Buyer, no event has occurred which, with or without notice, lapse of time or both, would constitute a breach or default on the part of the Buyer or any other party thereto under any Debt Commitment Letter. As of the date hereof, the Buyer has no reason to believe that it or any other party thereto will be unable to satisfy on a timely basis any term of any Debt Commitment Letter. The only conditions precedent or other contingencies related to the funding of the Debt Financing on the Closing Date that will be included in the Debt Financing Documents shall be the conditions set forth in the Debt Commitment Letters. As of the date hereof, there is no fact or occurrence existing that, with or without notice, lapse of time or both, could reasonably be expected to (i) make any of the assumptions or any of the statements set forth in any Debt Commitment Letter inaccurate, (ii) result in any of the conditions in any Debt Commitment Letter not being satisfied, (iii) cause any Debt Commitment Letter to be ineffective or (iv) otherwise result in the Debt Financing not being available on a timely basis in order to consummate the transactions contemplated by this Agreement. As of the Closing Date, GNC Newco (assuming full compliance with Section 7.18) shall have adequate financial resources to pay or otherwise satisfy the Assumed Liabilities assumed by GNC Newco. Notwithstanding anything to the contrary herein, the Buyer makes no representations or warranties with respect to the BoC Debt Commitment Letter to the extent relating to (x) any action or inaction of the Seller or any of its Subsidiaries (including GNC Newco) or (y) any event, change, condition, circumstance, development, occurrence or effect relating to Seller or any of its Subsidiaries (including GNC Newco) prior to the Closing.

Section 6.7Anti-Money Laundering, Anti-Terrorism and Similar Laws.

(a)None of Buyer or any of its Affiliates, or, to Buyer’s knowledge, after reasonable review of publicly available information, any of Buyer’s beneficial owners is included on a Government List or is owned in any amount or controlled by any Person on a Government List, as amended from time to time.

(b)None of Buyer or any of its affiliates, or, to Buyer’s knowledge, after reasonable review of publicly available information, any of Buyer’s beneficial owners is acting, directly or indirectly, on behalf of terrorists, terrorist organizations or narcotics traffickers, including those Persons or entities that appear on any Government List, as amended from time to time.

(c)None of the funds to be used to purchase the Purchased Assets or in connection with the transactions contemplated by this Agreement or any other Transaction Document shall be knowingly derived from any activities that contravene any applicable Laws concerning money laundering, terrorism, narcotics trafficking, or bribery, or from any Person, entity, country, or territory on a Government List.

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Section 6.8Investment Canada Act and Canadian Competition Act. The Buyer is a “WTO Investor” or “Trade Agreement Investor” for the purposes of the Investment Canada Act, as amended. Neither (a) the aggregate value of the assets in Canada of the Buyer and its Affiliates nor (b) the gross revenues from sales in, from or into Canada of the Buyer and its Affiliates, as determined in the manner prescribed in the Canadian Competition Act (including the Notifiable Transactions Regulations thereunder), as amended, exceed, in either case, $10 million Canadian dollars.

Section 6.9Related Party. Either (A) (i) Buyer owns less than 50% of the stock of Harbin Pharmaceutical Group Co., Ltd. (“Harbin Listco”) and (ii) no direct, indirect or constructive owner  of Buyer (as determined under Code Section 267 principles) owns any stock of Harbin Listco (other than through direct or indirect ownership of Buyer) or (B) the aggregate amount of Harbin Listco stock held by Buyer and by any direct, indirect or constructive  owner of Buyer (as determined under Code Section 267 principles) will not result in Buyer’s acquisition of the Purchased Assets being subject to Section 267(a)(1) of the Code.

Section 6.10Reliance by Buyer. Buyer and its Affiliates have conducted and completed such review and investigation of the Business and its assets and liabilities as they deem necessary and appropriate and have had an opportunity to ask questions of the Selling Entities, or persons acting on the Selling Entities’ behalf, concerning the Business, the Purchased Assets, the Assumed Liabilities, and such other questions as Buyer and Buyer’s Affiliates have deemed necessary for their ability to satisfy their obligations under this Agreement. Buyer and Buyer’s Affiliates have not relied on any representations or statements by anyone except as explicitly set forth in the Transaction Documents.

ARTICLE VII  
COVENANTS OF THE PARTIES

Section 7.1Conduct of Business of Selling Entities. Except (v) as set forth on Section 7.1 of the Seller Disclosure Schedule, (w) as required by any Order of the Bankruptcy Court or the Canadian Court, (x) as required by applicable Law, (y) as expressly required by the terms of any Transaction Document, or (z) as otherwise consented to in writing by the Buyer (such consent not to be unreasonably withheld, conditioned or delayed), during the period commencing on the date of this Agreement and continuing through the Closing or the earlier termination of this Agreement in accordance with its terms:

(a)each of the Selling Entities shall, and shall cause each of the Acquired Subsidiaries to, use commercially reasonable efforts to (taking into account in each case (A) the fact that the Bankruptcy Case and the CCAA Proceedings has commenced, (B) the fact that the Business will be operated while in bankruptcy, the fact that the operation of the Business may require additional financing, (C) the fact that the continuing operation of the Business, including payments to suppliers, will be subject to the approval of the Bankruptcy Court and the Canadian Court, as applicable), and (D) any direct or indirect consequences of the ongoing COVID-19 pandemic, (i) operate the Business in the ordinary course of business, (ii)  preserve in all material respects the Purchased Assets and the material assets of the Acquired Subsidiaries (collectively,

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the “Material Assets”) (excluding sales of Inventory), (iii) maintain the Material Assets that are real or personal property in reasonably good operating condition (normal wear and tear excepted), (iv) maintain books, accounts and records relating to the Material Assets in accordance with past custom and practice in all material respects and (v) preserve its current relationships with the suppliers, vendors, customers, clients, and contractors related to the Material Assets or having business dealings related to the Business; and

(b)the Selling Entities shall not, and shall cause each of the Acquired Subsidiaries not to:

(i)acquire (by merger, consolidation, acquisition of stock or assets or otherwise), directly or indirectly, any material assets, securities, properties, interests or businesses for the conduct of the Business, tangible or intangible, other than in the ordinary course of business;

(ii)sell, lease (as lessor), sublicense, covenant not to assert, abandon, allow to lapse, cancel, transfer, fail to maintain, license, assign or otherwise dispose of (or permit to become subject to any additional Encumbrance, other than Permitted Encumbrances, Encumbrances arising under any Bankruptcy Court or Canadian Court orders relating to the use of cash collateral (as defined in the Bankruptcy Code) and Encumbrances arising in connection with any debtor-in-possession financing of the Selling Entities) any Material Asset (including any material GNC Names and Marks or any other material Business IP), other than (A) with respect to Business IP other than the GNC Names and Marks, non-exclusive licenses granted in the ordinary course of business, (B) the sale of Inventory in the ordinary course of business, (C) the collection of receivables, (D) the use of prepaid assets and Documentary Materials in the conduct of the Business, and (E) in connection with the store closings listed on Section 7.1 of the Seller Disclosure Schedule (the “Specified Stores”);

(iii)disclose any material trade secrets or material confidential or proprietary information included in the Business IP to any Person other than pursuant to sufficiently protective non-disclosure agreements, or knowingly take any action, or knowingly omit to do any act, whereby any material Business IP may become invalidated, abandoned, unmaintained, unenforceable or dedicated to the public domain;

(iv)incur or make any capital expenditures, except to the extent permitted by the terms of the Selling Entities’ existing financing arrangements (including any existing debtor-in-possession financing);

(v)conduct any store closings or “going out of business,” liquidation or similar sales, other than in connection with store closings in the ordinary course of business and the Specified Stores;

(vi)delay in any material respect the payment of any undisputed material trade accounts payable of the type being assumed by the Buyer under this Agreement,

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including undisputed amounts payable under Material Contracts (except to the extent such Material Contract is an Excluded Asset);

(vii)merge or consolidate with or into any legal entity, dissolve, liquidate or otherwise terminate its existence;

(viii)declare, set aside or pay any dividend or other distribution (whether in cash, stock or property or any combination thereof) in respect of any securities of any Acquired Subsidiary or Selling Entity, or repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock or voting securities of, or equity interests in, any Acquired Subsidiary or Selling Entity or any securities of any Acquired Subsidiary or Selling Entity convertible into or exchangeable or exercisable for capital stock or voting securities of, or equity interests in, Acquired Subsidiary or Selling Entity, or any warrants, calls, options or other rights to acquire any such capital stock, securities or interests, other than any transfers among Acquired Subsidiaries, among Selling Entities, or between any Acquired Subsidiary and any Selling Entity;

(ix)split, combine, consolidate, subdivide or reclassify any of the Acquired Subsidiaries’ capital stock, other equity interests or voting securities, or securities convertible into or exchangeable or exercisable for capital stock or other equity interests or voting securities, or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for its capital stock, other equity interests or voting securities or enter into silent partnership agreements granting the silent partner entitlements to its proceeds;

(x)amend the certificate of incorporation, bylaws or comparable organizational documents of any Selling Entity or Acquired Subsidiary in a manner that would reasonably be expected to materially delay or impede the Selling Entities’ ability to consummate the transactions contemplated hereby;

(xi)incur any indebtedness for borrowed money, enter into any capital lease or guarantee any such indebtedness, in each case that would constitute an Assumed Liability;

(xii)make any payments in respect of indebtedness for borrowed money other than payments due pursuant to the terms thereof;

(xiii)make any material loans, advances or capital contributions to, or investments in, any other Person (other than any other Selling Entity or Acquired Subsidiary) with respect to the Business;

(xiv)amend, terminate, cancel or modify, grant a waiver or consent with respect to or extend any Material Contract, in each case other than in the ordinary course of business;

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(xv)enter into (A) any Contract that materially limits or otherwise restricts in any material respect the conduct of the Business or the use or saleability of the Material Assets or that could reasonably be expected to, after the Closing Date, limit or restrict in any material respect the Business or Buyer’s or its Affiliates’ use of the Material Assets or (B) any joint venture agreement that involves a sharing of profits, cash flows, expenses or losses with other Persons related to or affecting the Business, the Material Assets or the Acquired Subsidiaries;

(xvi)(A) amend or modify (other than by automatic extension or renewal or otherwise in the ordinary course of business) or terminate (other than by expiration in accordance with its terms) any Material Contract, (B) enter into a Contract which, had it been entered into prior to the date hereof, would have been a Material Contract, (C) reject or terminate (other than by expiration in accordance with its terms) any Material Contract or seek Bankruptcy Court approval to do so, or (D) fail to use commercially reasonable efforts to oppose any action by a third party to so terminate (including any action by a third party to obtain Bankruptcy Court approval to terminate) any Material Contract, except in each case, to the extent the Buyer has indicated in writing that it wishes the Selling Entities to reject such Contract;

(xvii)make any change in any method of accounting or accounting practice or policy, except as required by applicable Law or GAAP;

(xviii)commence, settle or propose to settle any Proceedings that could reasonably be expected to materially diminish the value of the Material Assets or impair title thereto;

(xix)materially change any Tax accounting elections, methods, principles or practices relating to the Business or the Material Assets, except insofar as may be required by GAAP (or any interpretation thereof);

(xx)except as required by Law or Contracts, employee benefit plans in effect as of the date hereof, as provided in any incentive or retention program or similar arrangement approved by the Bankruptcy Court and/or Canadian Court (as applicable), as disclosed on Section 5.10(a) of the Seller Disclosure Schedule that provide that liabilities are solely the liability of the Selling Entities and not the liability of any Acquired Subsidiary, Buyer or any Buyer Affiliate, or solely with respect to Specified Employees, (A) pay any bonus or similar payment to, or increase the amount of the wages, salary, commissions, fringe benefits or other compensation or remuneration payable to, any Employees or Service Providers, other than immaterial changes for non-executive management Employees in the ordinary course of business, (B) become a party to, establish, amend, commence participation in, terminate or commit itself to the adoption of any plan that would be a Seller Compensation and Benefit Program or any stock option plan or other stock-based compensation plan, or any compensation, severance, pension, retirement, profit-sharing, welfare benefit, or other employee benefit plan or agreement with or for the benefit of any Employees or Service Providers, (C) accelerate the vesting of or lapsing of restrictions with respect to any stock-based compensation or

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other long-term incentive compensation under any Seller Compensation and Benefit Program, (D) grant any new awards under any Seller Compensation and Benefit Program, (E) amend or modify any outstanding award under any Seller Compensation and Benefit Program, (F) cause the funding of any rabbi trust or similar arrangement or take any action to fund or in any other way secure the payment of compensation or benefits under any Seller Compensation and Benefit Program, (G) enter into, amend or terminate any collective bargaining agreement or other agreement with a labor union, works council or similar organization, (H) forgive any loans, or issue any loans (other than routine travel advances issued in the ordinary course of business) to any Employees or Service Providers or (I) with respect to any Acquired Subsidiary, hire any employee or other service provider that would have annual compensation in excess of $250,000; or

(xxi)authorize any of the foregoing, or commit or agree to do any of the foregoing.

Section 7.2Conduct of Business of Buyer. Buyer agrees that, between the date of this Agreement and the Closing, it shall not, and shall cause its Affiliates not to, directly or indirectly, take any action that would, or would reasonably be expected to, individually or in the aggregate, prevent or materially impede, interfere with or delay the consummation of the transactions contemplated by this Agreement, except as required by any Order of the Bankruptcy Court or the Canadian Court, as required by applicable Law, or as otherwise consented to in writing by the Buyer.

Section 7.3Access to and Delivery of Information; Maintenance of Records.

(a)Between the date of this Agreement and the Closing Date, to the extent permitted by Law, the Selling Entities shall, during ordinary business hours and upon reasonable prior notice (i) give the Buyer and the Buyer’s Representatives reasonable access to the Seller’s accountants, counsel, financial advisors and other authorized outside representatives, officers and senior management in their respective principal places of business, all books, records and other documents and data in the locations in which they are normally maintained, and all offices and other facilities of the Selling Entities and the Acquired Subsidiaries; provided, however, that, in connection with such access, the Buyer and the Buyer’s Representatives shall minimize disruption to the Business, the Bankruptcy Case, the CCAA Proceedings and the Auction; provided,further, that in connection with the Buyer’s and/or the Buyer’s Representatives’ access of such offices and other facilities, the Buyer and/or the Buyer’s Representatives shall be accompanied at all times by a representative of the Selling Entities unless the Seller otherwise agrees, shall not materially interfere with the use and operation of such offices and other facilities, and shall comply with all reasonable safety and security rules and regulations for such offices and other facilities, (ii) permit the Buyer and the Buyer’s Representatives to make such reasonable inspections and copies of all books, records and other documents of the Selling Entities and the Acquired Subsidiaries as the Buyer may reasonably request and (iii) furnish the Buyer with such reasonably available financial and operating data and other information as the Buyer and the Buyer’s Representatives may from time to time reasonably request. Notwithstanding anything to the contrary set forth in this Section 7.3(a), no access to, or

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examination of, any information or other investigation shall be permitted to the extent that it would cause forfeiture of attorney-client or other legal privilege; provided, that the Parties shall reasonably cooperate in seeking to find a way to allow disclosure of such information to the extent doing so would not reasonably be likely to cause the forfeiture of such privilege with respect to such information.

(b)Between the Closing Date and complete dissolution and liquidation of the Selling Entities, the Buyer and the Buyer’s Representatives shall have reasonable access to the Selling Entities’ books and records, including all information pertaining to the Assumed Agreements and Assumed Real Property Leases, in the possession of the Selling Entities to the extent that (i) such books, records and information relate to any period prior to the Closing Date and are not already in the possession of the Buyer or the Buyer’s Representatives and (ii) such access is reasonably required by the Buyer in connection with the Assumed Liabilities, the operation of the Business following the Closing or the Purchased Assets. Such access shall be afforded by the Seller upon receipt of reasonable advance notice and during normal business hours. If any of the Selling Entities shall desire to dispose of any books and records constituting Excluded Assets prior to its dissolution, the Seller shall (x) give the Buyer at least thirty (30) days prior written notice of such disposition and (y) give the Buyer a reasonable opportunity, at the Buyer’s expense, to segregate and remove such books and records as the Buyer may select and/or to copy at Buyer’s sole cost and expense such books and records as the Buyer may select.

(c)Between the Closing Date and the earlier of (i) the complete dissolution and liquidation of the Selling Entities and (ii) two (2) years following the Closing Date, the Selling Entities and the Seller’s Representatives shall have reasonable access to all of the books and records of the Selling Entities and the Acquired Subsidiaries delivered to the Buyer at Closing or pursuant to Section 7.3(b) above, including all Documentary Materials and all other information pertaining to the Assumed Agreements and Assumed Real Property Leases to the extent that (i) such books, records and information relate to any period prior to the Closing Date and (ii) such access is reasonably required by the Selling Entities in connection with the Bankruptcy Case, the CCAA Proceedings, the Excluded Liabilities or the Excluded Assets; provided, however, that such access does not interfere in any material respect with the operation of the Business following the Closing; provided,further, that in connection with the Selling Entities and the Seller’s Representatives access to such books and records, to the extent such access requires the Selling Entities and/or the Seller’s Representatives to physically access offices or other facilities at which such books and record are located, then the Selling Entities and/or the Seller’s Representatives shall be accompanied at all times by a representative of the Buyer unless the Buyer otherwise agrees and shall comply with all reasonable safety and security rules and regulations for the offices and other facilities at which such books and records are located. Such access shall be afforded by the Buyer upon receipt of reasonable advance notice and during normal business hours, and the Buyer shall permit the Selling Entities and the Seller’s Representatives to make such reasonable copies of such books, records and information as they may reasonably request.

(d)Between the Closing Date and the earlier of (i) the complete dissolution and liquidation of the Selling Entities and (ii) two (2) years following the Closing Date, the Selling

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Entities and their Representatives shall have reasonable access to, and the reasonable assistance of, the employees of the Buyer, and to the assets, software and systems of the Buyer, to the extent necessary to (w) reconcile claims in connection with the Bankruptcy Case, the CCAA Proceedings and the wind down of any remaining business and assets of the Selling Entities, (x) wind down any remaining business and assets of the Selling Entities, (y) dissolve and liquidate the Selling Entities, and (z) perform of the obligations of the Selling Entities hereunder and under the other Transaction Documents, and Buyer shall cooperate, to the extent reasonably requested, therewith; provided, however, that such access or assistance does not interfere in any material respect with the operation of the Business following the Closing; and provided, further, that should the Selling Entities request assistance above and beyond that contemplated by this Section 7.3(d) (e.g., as to the incurrence by Buyer of out-of-pocket expenses), Buyer will cooperate reasonably with the Selling Entities subject to the Selling Entities’ reimbursement of such actual out-of-pocket expenses.

(e)All information obtained by the Buyer or the Buyer’s Representatives pursuant to this Section 7.3 shall be subject to the terms of the Confidentiality Agreement, the terms of which are incorporated herein by reference.

Section 7.4Expenses. Except to the extent otherwise specifically provided herein, in the Canadian Bidding Procedures Order, the Sale Order or the Canadian Sale Approval and Vesting Order, whether or not the transactions contemplated hereby are consummated, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be borne by the Party incurring such costs and expenses.

Section 7.5Further Assurances.

(a)Subject to the terms and conditions of this Agreement, at all times prior to the earlier of the Closing and the termination of this Agreement in accordance with its terms, each of the Parties shall use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things reasonably necessary, proper or advisable under applicable Laws to consummate and make effective the transactions contemplated by this Agreement.

(b)From time to time, on or after the Closing Date until the dissolution and liquidation of the Selling Entities, the Selling Entities shall execute and deliver such other instruments of transfer to the Buyer and its Affiliates as are reasonably necessary and as the Buyer may reasonably request in order to more effectively vest in GNC Newco all of the Selling Entities’ right, title and interest to the Purchased Assets, free and clear of all Encumbrances (other than Permitted Encumbrances).

(c)Except as set forth herein, nothing in this Section 7.5 shall (i) require the Selling Entities to make any expenditure or incur any obligation on their own or on behalf of the Buyer, (ii) require the Buyer to make any expenditure or incur any obligation on its own or on behalf of the Selling Entities; (ii) prohibit any Selling Entity from ceasing operations or winding up its affairs following the Closing, or (iii) prohibit the Selling Entities from taking such actions

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as are necessary to conduct the Auction, as are required by the Bankruptcy Court or as would otherwise be permitted under Section 7.1.

Section 7.6Public Statements. The initial press release relating to this Agreement shall be a joint press release, the text of which shall be agreed to in writing by the Buyer, on the one hand, and the Seller, on the other hand. Unless otherwise required by or reasonably necessary to comply with applicable Law or the rules or regulations of any applicable securities exchange, and except for disclosure of matters that become a matter of public record as a result of the Bankruptcy Case or the CCAA Proceedings and any filings or notices related thereto, the Buyer, on the one hand, and the Selling Entities, on the other hand, shall consult with each other before issuing any other press release or otherwise making any public statement with respect to this Agreement, the transactions contemplated hereby or the activities and operations of the other Parties and shall not issue any such release or make any such statement without the prior written consent of the Seller or the Buyer, respectively (such consent not to be unreasonably withheld, conditioned or delayed). From the date hereof until the earlier to occur of the Closing and the date that this Agreement is validly terminated, the Buyer shall not, and shall cause its Affiliates and Representatives not to, contact, or engage in any discussions or otherwise communicate with, any material suppliers or material customers of the Selling Entities concerning the Business or the transactions contemplated hereby without obtaining the prior written consent of Seller (such consent not to be unreasonably withheld, conditioned or delayed).

Section 7.7Governmental Authority Approvals and Cooperation.

(a)As promptly as reasonably practicable after the date of this Agreement, each of the Selling Entities and the Buyer shall (and shall cause their respective Affiliates to) use its commercially reasonable efforts to make any filings and notifications, and to obtain any Consents from Governmental Authorities (other than the Bankruptcy Court or the Canadian Court), required to be made and obtained under applicable Law in connection with the transactions contemplated by this Agreement as promptly as reasonably practicable.

(b)Each of the Buyer and the Seller shall, as promptly as reasonably practicable after the date of this Agreement (and, in any event, within ten (10) Business Days), file with the United States Federal Trade Commission (the “FTC”) and the United States Department of Justice (the “DOJ”) the notification and report form, to the extent the Parties determine that such filing is required to be filed with respect to the transactions contemplated hereby and any supplemental information requested in connection therewith pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). Any such notification and report form and supplemental information shall be in substantial compliance with the requirements of the HSR Act. Each of the Buyer and the Seller shall (and shall cause their respective Affiliates to) furnish to the other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of any filing or submission which is necessary under the HSR Act. The Seller and the Buyer shall keep each other apprised of the status of any substantive communications with, and any inquiries or requests for additional information from, the FTC and the DOJ relating to the transactions contemplated hereby. If such a filing is made, each of the Buyer and the Seller shall seek early termination of the waiting

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period under the HSR Act and use its commercially reasonable efforts to obtain any clearance required under the HSR Act for the consummation of the transactions contemplated hereby as promptly as reasonably practicable.

(c)The Buyer and the Seller shall use commercially reasonable efforts to resolve such objections, if any, as may be asserted by any Governmental Authority with respect to the transactions contemplated by this Agreement under the HSR Act, the Sherman Act, as amended, the Clayton Act, as amended, the Federal Trade Commission Act, as amended, and any other applicable United States federal or state or foreign Laws that are designed to prohibit, restrict or regulate actions having the purpose or effect of monopolization or restraint of trade (collectively, the “Antitrust Laws”). Each of the Buyer and the Seller shall use commercially reasonable efforts to take such action as may be reasonably required to cause the expiration of the notice periods under the HSR Act or other Antitrust Laws with respect to such transactions as promptly as possible after the execution of this Agreement. Notwithstanding anything to the contrary provided herein, none of the Parties nor any of their Affiliates shall be required (i) to hold separate (including by trust or otherwise) or divest any of its businesses, product lines or assets, including any of the Purchased Assets, or to enter into any consent decree or settlement agreement with any Governmental Authority, (ii) to agree to any limitation on the operation or conduct of any of their respective businesses or operations, including the Business, or (iii) to waive any of the applicable conditions to this Agreement set forth in Article VIII.

(d)Each Party (i) shall cooperate with each other Party in connection with the filings and Consents contemplated by this Section 7.7, (ii) shall promptly inform each other Party of any material substantive communication received by such Party from any Governmental Authority (other than the Bankruptcy Court or the Canadian Court) concerning this Agreement, the transactions contemplated hereby and any filing, notification or request for Consent related thereto, and (iii) shall permit each other Party to review in advance any proposed written communication or information submitted to any such Governmental Authority (other than the Bankruptcy Court or the Canadian Court) in response thereto and in good faith consider the other Party’s reasonable comments on drafts of any such communication or information. In addition, none of the Selling Entities or the Buyer shall (and shall ensure that their respective Affiliates do not) agree to participate in any substantive meeting, discussion, telephone call or conference with any Governmental Authority (other than the Bankruptcy Court or the Canadian Court) in respect of any filings, investigation or other inquiry with respect to this Agreement, the transactions contemplated hereby or any such filing, notification or request for Consent related thereto unless it consults with the other Parties in advance and, to the extent permitted by any such Governmental Authority and applicable Law, gives the other Parties the opportunity to attend and participate thereat, in each case to the maximum extent practicable. The Selling Entities and the Buyer shall, and shall cause their respective Affiliates to, furnish the Buyer or the Selling Entities (and the Buyer’s Representatives and the Seller’s Representatives, as applicable), as the case may be, copies of all material correspondence, filings and communications between it and its Affiliates (and the Buyer’s Representatives and the Seller’s Representatives, as applicable) on the one hand, and the Governmental Authority (other than the Bankruptcy Court or the Canadian Court) or members of its staff on the other hand, with respect to this Agreement, the transactions contemplated hereby or any such filing, notification or request for Consent related thereto (in

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each case, excluding documents and communications which are subject to preexisting confidentiality agreements or to the attorney-client privilege or work product doctrine). Each of the Selling Entities and the Buyer shall (and shall cause their respective Affiliates to) furnish each other Party with such necessary information and assistance as such other Party and its Affiliates may reasonably request in connection with its preparation of necessary filings, registrations or submissions of information to any Governmental Authority in connection with this Agreement, the transactions contemplated hereby and any such filing, notification or request for Consent related thereto.

(e)None of the Parties or their respective Affiliates shall take any action, or refrain from taking any action, or permit any action to be taken or not taken, that would reasonably be expected to have the effect of preventing, materially delaying, making illegal or otherwise materially interfering with any of the transactions contemplated by this Agreement. Without limiting the generality of the foregoing, none of the Parties or their respective Affiliates shall make any filing with any Governmental Authority pursuant to the Investment Canada Act in connection with the transactions contemplated by this Agreement without the prior agreement and consent of the other Parties.

Section 7.8Financing. The Buyer shall use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things necessary or advisable to arrange the Debt Financing as promptly as practicable following the date of this Agreement and to consummate the Debt Financing on the Closing Date, including the following:

(a)maintaining in effect the Debt Commitment Letters and not permitting any amendment or modification to be made to, not consenting to any waiver of any provision or remedy under, and not replacing, any Debt Commitment Letter, if such amendment, modification, waiver or replacement: (A) reduces the aggregate amount of the Debt Financing or (B) imposes new or additional conditions or otherwise expands, amends or modifies any of the conditions to the receipt of the Debt Financing in a manner that would reasonably be expected to (1) materially delay or prevent the Closing, (2) make the funding of the Debt Financing (or satisfaction of the conditions to obtaining the Debt Financing) less likely to occur or (3) adversely impact the ability of the Buyer to enforce its rights against other parties to the Debt Commitment Letters or the definitive agreements with respect thereto when required pursuant to this Agreement; provided, however, that (x) the Buyer may amend any Debt Commitment Letter to add lenders, lead arrangers, bookrunners, syndication agents or similar entities who had not executed such Debt Commitment Letter as of the date hereof and (y) the Buyer shall disclose to the Seller promptly its intention to amend, modify, waive or replace any Debt Commitment Letter, shall keep the Seller reasonably apprised of the status and proposed terms and conditions thereof, and shall promptly furnish to the Seller copies of any agreements or other documentation with respect to such amendment, modification, waiver or replacement (provided that the foregoing shall be subject to customary redaction with respect to fees, other economic terms and “market flex” items);

(b)satisfying on a timely basis all conditions to the Debt Financing;

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(c)providing the Buyer Guarantee in the form required by the BoC Debt Commitment Letter (if applicable);

(d)negotiating, executing and delivering Debt Financing Documents that reflect the terms contained in the Debt Commitment Letters (including any “market flex” provisions related thereto) and providing copies of drafts thereof exchanged with the Financing Sources to the Seller;

(e)in the event that the conditions set forth in Section 8.1 and Section 8.2 have been satisfied or, upon funding would be satisfied, directing the Financing Sources to fund the full amount of the Debt Financing at or prior to the Closing; and

(f)enforcing its rights under the Aland Debt Commitment Letter in the event of a Financing Failure Event in respect of the Aland Debt Commitment Letter,

in each case, subject to Seller’s compliance in all respects with Section 7.18.

In the event of a Financing Failure Event, the Buyer shall use its reasonable best efforts to arrange to obtain alternative financing from alternative sources on terms approved by the Seller in writing, such approval not to be unreasonably withheld (and the Buyer agrees that withholding its approval for any alternative financing shall be deemed to be reasonable in the event any material term of such alternative financing is less favorable to the Buyer (or any other loan party) in any material respect) (any such alternative financing on terms reasonably acceptable to the Seller, an “Alternative Financing”), in an aggregate amount sufficient to consummate the transactions contemplated hereby promptly following the occurrence of such event. The Buyer shall deliver to the Seller true and complete copies of all agreements pursuant to which any such alternative source shall have committed to provide the Buyer with any portion of such alternate financing.

Section 7.9Debt Financing Cooperation.

(a)The Seller shall use commercially reasonable efforts to provide such cooperation (and to cause the Selling Entities and the Acquired Subsidiaries and its and their respective personnel and advisors to use their respective commercially reasonable efforts to provide such cooperation) in connection with the arrangement of the Debt Financing as is reasonably requested by the Buyer; provided, however, that the Seller shall in no event be required to provide such assistance that may unreasonably interfere with its business operations. Such assistance shall include the following, each of which shall be at the Buyer’s written request with reasonable prior notice and at the Buyer’s sole cost and expense:

(i)participation in, and assistance with, the marketing efforts related to the Debt Financing, including timely delivery of any marketing materials;

(ii)timely delivery to Buyer and its Financing Sources of the Financing Information, the Financing Deliverables (provided that any documentation and other information about the Seller required under applicable “know your customer” and anti-money

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laundering rules and regulations (including the PATRIOT Act) shall be delivered not later than three (3) Business Days prior to the Closing Date to the extent that such documentation or information has been requested in writing by Buyer at least ten (10) Business Days prior to the Closing Date) and a customary flood certificate and related documentation;

(iii)participation by appropriate members of the senior management of the Seller in the negotiation of the Debt Financing Documents;

(iv)providing reasonable assistance to Buyer to facilitate Buyer’s satisfaction on a timely basis of all conditions precedent to obtaining the Debt Financing;

(v)requesting that its independent auditors as of the Closing cooperate with the Debt Financing; and

(vi)applying to the Bankruptcy Court for a change of name of GNC Newco to be effected prior to Closing as required under the Debt Financing Documents.

provided, however, that, (A) no obligation of the Seller, GNC Newco or any of Selling Entity or Acquired Subsidiary under any such certificate, document or instrument (other than the authorization and representation letters referred to above) shall be effective until the Closing and (B) none of the Seller, GNC Newco or any of Selling Entity or Acquired Subsidiary shall be required to take any action under any such certificate, document or instrument that is not contingent upon the Closing (including the entry into any agreement that is effective before the Closing) or that would be effective prior to the Closing; provided, however, that, subject to the foregoing proviso, the Seller shall, in connection with the Debt Financing contemplated by the BOC Commitment Letter, cause GNC Newco to deliver in its capacity as borrower under such financing any certificate, document or other instrument required to be delivered and to take any and all actions under any such certificate, documents or other instruments, in each case, prior to the Closing in order to ensure that the financing to be provided in accordance with the BOC Commitment Letter will be available to GNC Newco in order to consummate the Closing, in each case, solely to the extent such certificate, document or other instrument has been prepared and delivered to GNC Newco by Buyer. The Seller hereby consents to the use of all of its and its Subsidiaries’ corporate logos in connection with the initial syndication or marketing of the Debt Financing; provided, that such logos are used solely in a manner that is not intended to or reasonably likely to harm or disparage the Seller or any of its Subsidiaries or the reputation or goodwill of the Seller or any of its Subsidiaries.

(b)The Seller shall have the right to review and comment on marketing materials used in connection with the arrangement of the Debt Financing prior to the dissemination of such materials to potential lenders or other counterparties to any proposed financing transaction (or filing with any Governmental Authority); provided, however, that the Seller shall communicate in writing its comments, if any, to the Buyer and its counsel within a reasonable period of time under the circumstances and consistent with the time accorded to other participants who were asked to review and comment on such marketing materials.

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(c)The Buyer shall indemnify and hold harmless the Seller or any of Selling Entity, GNC Newco or Acquired Subsidiary, and each of their respective directors, officers, employees, agents and other Representatives, from and against any and all liabilities, costs or expenses suffered or incurred in connection with the Debt Financing or any assistance or activities provided in connection therewith; provided, however, that the foregoing shall not apply in the Seller’s or any of Selling Entity’s or Acquired Subsidiary’s, or any of their respective Representatives’, Fraud, willful misconduct or gross negligence. The Buyer shall promptly reimburse the Seller for all reasonable, documented out-of-pocket third party costs and expenses incurred by the Seller in connection with such cooperation.

Notwithstanding anything to the contrary herein, it is understood and agreed that the condition precedent set forth in Section 8.2(a), as applied to the Seller’s obligations under this Section 7.9, shall be deemed to be satisfied unless the Debt Financing has not been obtained as a direct result of the Seller’s willful and material breach of its obligations under this Section 7.9.

Section 7.10Employee Matters.

(a)Section 7.10(a) of the Seller Disclosure Schedule sets forth a list containing the names of Employees to whom the Buyer expects that neither the Buyer nor a Buyer Designee will make an offer of employment. At least ten (10) Business Days prior to the Closing, the Buyer will provide the Seller with an updated Section 7.10(a) of the Seller Disclosure Schedule setting forth a list of the names of all Employees to whom the Buyer or a Buyer Designee will not make an offer of employment (the “Specified Employees”). Prior to the Closing, the Buyer shall, or shall cause a Buyer Designee to, make an offer of employment, to commence as of the Closing, to each of the Employees who are not Specified Employees (each such Employee, an “Offered Employee”). Each Offered Employee who receives and accepts such an offer of employment with Buyer or a Buyer Designee is referred to herein as a “Transferred Employee”, and the Buyer shall, or shall cause the applicable Buyer Designee to, employ each Transferred Employee in accordance with such accepted offer as of the Closing. The Buyer hereby agrees that the offers to the Offered Employees shall include, and for the period immediately following the Closing through and including the twelve (12) month anniversary of the Closing, the Buyer shall, or shall cause the applicable Buyer Designee to, provide (i) a level of base salary and wages to each Transferred Employee that is no less favorable to the base salary and wages provided to such Offered Employee as of the date hereof, and (ii) benefit plans for the benefit or welfare of each Transferred Employee (each, a “Buyer Benefit Plan”), that are comparable in the aggregate to the benefits (except with respect to equity-based compensation) provided to such Offered Employee as of the date hereof. Notwithstanding the foregoing, for Transferred Employees in Canada, to the extent required by applicable Law, such offers will be on substantially similar basis as such Employees received from the Selling Entities as of the date hereof.

(b)The Selling Entities may elect to continue the employment of any Specified Employee following the Closing (such an Employee, a “Retained Employee”). Effective at or prior to the Closing, the Selling Entities shall terminate the employment of each Specified Employee (other than a Retained Employee) and each Offered Employee who does not accept an

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offer of employment with Buyer or a Buyer Designee prior to the Closing. Any Employee who (A) is terminated pursuant to this Section 7.10(b) or (B) is terminated at any other time on or after the date hereof and prior to the Closing at the direction or with the consent of the Buyer (such consent not to be unreasonably withheld, conditioned or delayed in the case of a proposed termination for “cause”) is referred to herein as a “Terminated Employee”.

(c)Following the Closing, the Buyer shall process the payroll for, and pay (or cause to be paid), the base wages, base salary and ordinary course sales commissions accrued during the payroll period in which the Closing Date falls (the “Closing Payroll Period”) with respect to each Employee employed at any time during the Closing Payroll Period other than Retained Employees. The Closing Payroll Period shall extend from the final payroll date preceding the Closing through and including the Closing Date. In connection therewith, the Buyer shall withhold and remit, on behalf of the Selling Entities, all applicable Taxes, including payroll taxes, as required by Law.

(d)The Selling Entities shall retain, pay and discharge the Liabilities of the Selling Entities for all current and deferred salary, wages, unused vacation, sick days, personal days or leave earned and/or accrued by each Employee through Closing. From and after the Closing, with respect to each Terminated Employee, the Buyer shall assume, pay and discharge the Liabilities of the Selling Entities for (i) all deferred salary, wages, unused vacation, sick days, personal days or leave earned and/or accrued by such Terminated Employee, (ii) any severance obligations or Liabilities, including any obligations or Liabilities that arise under any Seller Compensation and Benefit Program, and (iii) any Liabilities arising under an employee incentive or retention program or similar arrangement approved by the Bankruptcy Court and the Canadian Court. With respect to each Employee (other than a Retained Employee), the Buyer shall assume, pay and discharge the Liabilities of the Selling Entities under the WARN Act (provided, however, that to the extent that the WARN Act is applicable to any Terminated Employee, the Selling Entities shall comply with all procedural aspects thereof through the Closing Date, including giving any notice required prior to the Closing Date). To the extent required by applicable Law, Buyer shall assume, pay and discharge the Liabilities of the Selling Entities under Section 4980B of the Code (“COBRA”) (and any comparable state law) for all individuals who are “M&A qualified beneficiaries,” as such term is defined in U.S. Treasury Regulation Section 54.4980B-9, from and after the Closing. Buyer hereby acknowledges that it will be a “successor employer” for purposes of U.S. Treasury Regulation Section 54.4980B-9 and other applicable purposes.

(e)Transferred Employees shall receive credit for all purposes (including for purposes of eligibility to participate, vesting, benefit accrual and eligibility to receive benefits) under any Buyer Benefit Plan under which each Transferred Employee may be eligible to participate on or after the Closing to the same extent recognized by the Seller under comparable Seller Compensation and Benefit Programs as of the date hereof; provided, however, that such crediting of service shall not operate to duplicate any benefit or the funding of any such benefit or grant service credit with respect to benefit accrual under any defined benefit pension plan, retiree welfare plan or any frozen plan. With respect to any Buyer Benefit Plan that is a welfare benefit plan, program or arrangement and in which a Transferred Employee may be eligible to

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participate on or after the Closing, the Buyer shall, or shall cause the applicable Buyer Designee to, use commercially reasonable efforts to, (i) waive, or use reasonable efforts to cause its insurance carrier to waive, all limitations as to pre-existing, waiting period or actively-at-work conditions, if any, with respect to participation and coverage requirements applicable to each Transferred Employee under such Buyer Benefit Plan to the same extent waived under a comparable Seller Compensation and Benefit Program and (ii) provide credit to each Transferred Employee (and such Transferred Employee’s beneficiaries) for any co-payments, deductibles and out-of-pocket expenses paid by such Transferred Employee (and such Transferred Employee’s beneficiaries) under the comparable Seller Compensation and Benefit Program during the relevant plan year, up to and including the Closing; provided, however, that such credit shall not operate to duplicate any benefit or the funding of any such benefit;

(f)Buyer agrees to assume and honor and assume, or to cause a Buyer Designee to honor and assume, in accordance with their current terms, each of the Seller Compensation and Benefit Programs set forth on Section 7.10(f) of the Seller Disclosure Schedule and all trust agreements, insurance contracts, administrative service agreements and investment management agreements related to the funding and administrations of such Seller Compensation and Benefit Programs (the “Assumed Compensation and Benefit Programs”). Notwithstanding the foregoing, in no event will Buyer or any Buyer Designee honor and assume the GNC Live Well Later Non-Qualified Deferred Compensation Plan or the General Nutrition Centers, Inc. Deferred Compensation Plan listed on Section 7.10(f) of the Seller Disclosure Schedule (the “NQDPs”) unless (i) any and all rabbi trusts with respect to such plans are assumed by Buyer or a Buyer Designee, as applicable, at the time of any assumption of the NQDPs, with all assets in such rabbi trusts and (ii) all assets in such rabbi trusts following their transfer to Buyer or a Buyer Designee, as applicable, in accordance with clause (i) shall not be subject to the claims of the creditors of any Selling Entity after such transfer.

(g)Nothing in this Agreement is intended to (i) be treated as an amendment to any particular Seller Compensation and Benefit Program, (ii) prevent Buyer or its Affiliates from amending or terminating any of its benefit plans or, after the Closing, any Assumed Compensation and Benefit Program, in accordance their terms, (iii) prevent Buyer or its Affiliates, after the Closing, from terminating the employment of any Transferred Employee or other Service Provider, or (iv) create any third-party beneficiary rights in any Employee or Service Provider employee, any beneficiary or dependent thereof, or any collective bargaining representative thereof, with respect to the compensation, terms and conditions of employment and/or benefits that may be provided to any Employee or Service Provider or under any Seller Compensation and Benefit Program or any other plan maintained by Buyer or its Affiliates.

Section 7.11Tax Matters.

(a)Any sales, use, goods and services, harmonized sales, Québec sales, property transfer or gains, documentary, stamp, registration, recording or similar Tax payable in connection with the sale or transfer of the Purchased Assets and the assumption of the Assumed Liabilities and not exempted under the Sale Order or by Section 1146(a) of the Bankruptcy Code (“Transfer Taxes”) and that are recoverable by GNC Newco, GNC Canada Newco or the Buyer

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by way of input Tax credit, input Tax refund or other credit, refund or rebate, shall be borne by the Buyer. Any Transfer Taxes that are not recoverable by GNC Newco, GNC Canada Newco or the Buyer by way of input Tax credit, input Tax refund or other credit, refund or rebate shall be borne 50% by Buyer and 50% by Seller. The Buyer shall pay any Transfer Taxes to be borne by Buyer under the preceding two sentences in addition to the Purchase Price, either to the appropriate Selling Entities or to the relevant Government Authorities as required by applicable Law. The Selling Entities and Buyer shall use their commercially reasonable efforts and cooperate in good faith to minimize the incidence of any Transfer Taxes. Buyer shall prepare and file all necessary Tax Returns or other documents with respect to all such Transfer Taxes to the extent permitted under applicable Tax Law. Each Party shall reimburse the other for any Transfer Taxes paid by the other Party in excess of the amount that the other Party is required to bear pursuant to this Section 7.11(a).

(b)All Taxes and Tax Liabilities with respect to the Business and the Purchased Assets that relate to the Straddle Period shall be apportioned between the Pre-Closing Tax Period and Post-Closing Tax Period as follows: (i) in the case of Taxes other than income, sales and use, employment and withholding Taxes, on a per-diem basis, and (ii) in the case of income, sales and use, employment and withholding Taxes, as determined from the books and records of the Selling Entities as though the taxable year of the Selling Entities terminated at the close of business on the Closing Date.

(c)The Seller and Buyer agrees to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance as is reasonably necessary for the filing of Tax Returns, the making of any election relating to Taxes, the preparation for any audit or other proceeding by Governmental Authority and the prosecution or defense of any claim, suit or other proceeding relating to any Tax. Such information and assistance shall include providing reasonable access to any of the books and records of the Selling Entities and the Acquired Subsidiaries retained by the Selling Entities or delivered to the Buyer or any Buyer Designee at Closing or provided pursuant to Section 7.3(b). Access to books and records shall be afforded upon receipt of reasonable advance notice and during normal business hours.

(d)All refunds of Pre-Closing Income Taxes (including any interest received with respect thereto from the relevant taxing authority) (“Pre-Closing Refunds”) shall be paid to the Buyer as part of the Purchased Assets (and if received after the Closing, shall be paid to Buyer within ten (10) days after receipt thereof) and shall not be used to credit against any Taxes of the Selling Entities for Post-Closing Tax Periods. Pre-Closing Refunds shall include any refunds resulting from the carryback of net operating losses (from the Pre-Closing Tax Period and/or Post-Closing Tax Period) to Pre-Closing Tax Periods (including losses incurred as a result of the transactions contemplated by this Agreement). In order to accelerate and/or maximize any Pre-Closing Refunds, the Selling Entities shall: (i) carryback any net operating losses under applicable Law to Pre-Closing Tax Periods to the fullest extent permitted by applicable Law (including pursuant to Section 2303 of the CARES Act), (ii) not make any election to waive the carryback of any net operating loss under Section 172(b)(3) of the Code (as amended by Section 2303 of the CARES Act) (or any similar state, local, or non-U.S. Law); (iii) prepare any Tax

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Return (and shall amend any Tax Return for any Pre-Closing Tax Period to conform to the provisions of the CARES Act; provided, that a Selling Entity shall not be required to amend such Tax Return to the extent such amendment would reasonably be expected to increase the amount of any Taxes of the Selling Entity for any Pre-Closing Tax Period) in a manner that accelerates and/or maximizes Pre-Closing Refunds, to the extent such positions related to the Pre-Closing Refunds are at least at a “more-likely-than-not” level; (iv) not amend any Tax Return to the extent such amendment would reasonably be expected to adversely affect the amount or timing of any Pre-Closing Refunds; and (v) use reasonable best efforts to apply for and obtain all such Pre-Closing Refunds as expeditiously as possible, including by using any available short-form or accelerated (e.g., "quick refund" claim) procedures to claim such Pre-Closing Refunds such as filing the applicable IRS Form 4466 and 1139 and any short form or accelerated procedures under state or local Tax Law that will give rise to any Pre-Closing Refunds. If applicable and if requested by the Canadian Seller or the Buyer, the Canadian Seller and GNC Canada Newco shall make the election under section 167 of the Excise Tax Act (Canada) and under the corresponding provisions of any applicable provincial Tax legislation, in respect of the Purchased Assets sold by the Canadian Seller to GNC Canada Newco hereunder, and the Buyer shall cause GNC Canada Newco to file such election(s) within the time required by applicable Law. The Seller and Buyer agree to cooperate in good faith to make and file, or to cause GNC Canada Newco to make and file, such other Canadian Tax elections as the Seller and the Buyer reasonably agree are typical and reasonable in the circumstances. Prior to filing any Tax Return of a Selling Entity that could adversely affect the amount or timing of a Pre-Closing Refund (a “Refund Return”), Seller shall submit such Refund Return to Buyer for its review and approval (such approval not to be unreasonably withheld, conditioned or delayed). Seller shall incorporate (or cause the Selling Entity to incorporate) any reasonable comments made by Buyer: (y) to the extent such comments are relevant to the amount and/or timing of the Pre-Closing Refund and (z) to the extent such comment reflects at least a “more-likely-than-not” position (supported by written advice of a nationally recognized independent accounting or law firm if Seller disagrees with such position). Seller shall promptly notify Buyer upon receipt by Seller or any Selling Entity of any written notice of any inquiries, claims, assessments, audits or similar events with respect to Taxes that could adversely affect the timing and/or amount of any Pre-Closing Refund (a “Refund Tax Matter”) and shall keep the Buyer fully and timely informed with respect to the commencement, status and nature of any Refund Tax Matter. Buyer shall have the right to actively participate in the Refund Tax Matter and, if the subject matter of such Refund Tax Matter predominantly relates to the timing and/or amount of the Pre-Closing Refund, shall have the right to control the resolution of the issues related to the timing and/or amounts of the Pre-Closing Refunds; provided, however, Buyer shall not resolve such issues without the prior written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed. No Selling Entity shall settle or otherwise compromise any Refund Tax Matter without the prior written consent of Buyer, which consent shall not be unreasonably withheld, conditioned or delayed. The provisions of this Section 7.11(d) shall not terminate pursuant to Section 10.2 until all potential Pre-Closing Refunds are paid in full. Notwithstanding any other provision in this Agreement, any Pre-Closing Refunds shall be reduced by any unpaid Taxes with respect to any Pre-Closing Tax Period required to be paid to the IRS or other relevant taxing authority to the extent such unpaid Taxes have been imposed by the IRS or other relevant taxing

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authority prior to any Selling Entity’s receipt of such Pre-Closing Refunds and such Pre-Closing Refunds have not been paid to Buyer hereunder.

(e)For U.S. federal income Tax purposes (and applicable state, local and non-U.S. income Tax purposes), the Parties intend for the Asset and Liability Dropdown, taken together with the acquisition of the Acquired GNC Equity Interests, to be treated as the Selling Entities directly selling their assets to Buyer or one or more Buyer Designee in exchange for their respective portions of the Purchase Price.

(f)If prior to the receipt of any Pre-Closing Refunds Seller intends to liquidate or dissolve under state law, Seller may, pursuant to Treasury Regulations Section 1.1502-77(c) (and any equivalent provision of state or local law), designate GNC China Holdco, LLC or its successor (or GNC Successor Newco, if applicable) as the successor agent to Seller for all open tax years of the federal consolidated income tax group of Seller and its subsidiaries, and GNC China Holdco, LLC or its successor (or GNC Successor Newco, if applicable) shall cooperate with Seller in the preparation and execution of any documents that are to be filed with any taxing authority to effectuate such designation.

Section 7.12Submission for Bankruptcy Court Approval and Canadian Court Recognition.

(a)All of the Parties shall use their respective commercially reasonable efforts to have the Sale Hearing no later than September 17, 2020 and to have the Sale Order entered no later than 3 daysafter the conclusion of the Sale Hearing. Buyer agrees that it will promptly take such actions as are reasonably requested by the Selling Entities to assist in obtaining entry of such orders, including furnishing affidavits or other documents or information for filing with the Bankruptcy Court for the purposes, among others, of providing necessary assurances of performance by Buyer under this Agreement and demonstrating that Buyer is a “good faith” purchaser under section 363(m) of the Bankruptcy Code. The Selling Entities shall give notice under the Bankruptcy Code of the request for the relief specified in the Sale Motion to all Persons entitled to such notice, including all Persons that have asserted Encumbrances in the Purchased Assets and all non-debtor parties to the Assumed Agreements and the Assumed Real Property Leases, and other appropriate notice, including such additional notice as the Bankruptcy Court shall direct or as the Buyer may reasonably request, and provide appropriate opportunity for hearing, to all parties entitled thereto, of all motions, orders, hearings, or other Proceedings in the Bankruptcy Court relating to this Agreement or the transactions contemplated hereby. The Selling Entities shall be responsible for making all appropriate filings relating thereto with the Bankruptcy Court, which filings shall be submitted, to the extent practicable, to the Buyer prior to their filing with the Bankruptcy Court for the Buyer’s prior review.

(b)As promptly as possible, but in no event later than three (3) Business Days after the entry of the Sale Order, the Selling Entities shall bring a motion in the Canadian Court in the CCAA Proceedings seeking an order recognizing the Sale Order and vesting the Canadian Purchased Assets in the Buyer free and clear of all claims, liens and encumbrances whatsoever (other than permitted encumbrances identified in the Canadian Sale Approval and Vesting Order) (as approved, the “Canadian Sale Approval and Vesting Order”).

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(c)A list of the Assumed Agreements and Assumed Real Property Leases shall be filed as an exhibit to the Sale Motion (or, if required by the Bankruptcy Court, a motion to assume and assign the Assumed Agreements and the Assumed Real Property Leases), and shall be described in sufficient detail to provide adequate notice to the non-debtor parties to such Contracts. Upon revision of Section 2.1(e) or Section 2.1(f) of the Seller Disclosure Schedule in accordance with Section 2.5(b), the Seller shall add any Assumed Agreements or Assumed Real Property Leases, respectively, to such exhibit to the Sale Motion or remove any Assumed Agreements or Assumed Real Property Leases (other than Assumed Agreements and Assumed Real Property Leases irrevocably designated for assumption pursuant to Section 2.5(d)) from such exhibit, as applicable. Such exhibit shall set forth the amounts necessary to cure defaults under each Assumed Agreement and Assumed Real Property Lease shown thereon, as reasonably determined in good faith by the Seller. In cases in which the Seller is unable to establish that a default exists, the relevant cure amount shall be set at $0.00.

(d)Each Selling Entity and the Buyer shall consult with one another regarding pleadings which any of them intends to file with the Bankruptcy Court or the Canadian Court in connection with, or which might reasonably affect the Bankruptcy Court’s or the Canadian Court’s approval of, as applicable, the Bidding Procedures Order, the Sale Order, the Canadian Bidding Procedures Order or the Canadian Sale Approval and Vesting Order. Each Selling Entity shall promptly provide the Buyer and its counsel with copies of all notices, filings and orders of the Bankruptcy Court or the Canadian Court that such Selling Entity has in its possession (or receives) pertaining to the motion for approval of the Bidding Procedures Order, the Sale Order, the Canadian Bidding Procedures Order or the Canadian Sale Approval and Vesting Order or any other order related to any of the transactions contemplated by this Agreement, but only to the extent such papers are not publicly available on the Bankruptcy Court’s docket or otherwise made available to the Buyer and its counsel, including on the website of the information officer appointed pursuant to the CCAA.

(e)If the Bidding Procedures Order, the Sale Order, the Canadian Bidding Procedures Order, the Canadian Sale Approval and Vesting Order or any other orders of the Bankruptcy Court or the Canadian Court relating to this Agreement or the transactions contemplated hereby shall be appealed by any Person (or if any petition for certiorari or motion for reconsideration, amendment, clarification, modification, vacation, stay, rehearing or reargument shall be filed with respect to the Bidding Procedures Order, the Sale Order, the Canadian Bidding Procedures Order, the Canadian Sale Approval and Vesting Order or other such order), subject to rights otherwise arising from this Agreement, the Selling Entities and the Buyer shall use their commercially reasonable efforts to prosecute such appeal, petition or motion and obtain an expedited resolution of any such appeal, petition or motion.

Section 7.13Overbid Procedures; Adequate Assurance.

(a)The Selling Entities and Buyer acknowledge that this Agreement and the sale of the Purchased Assets are subject to higher and better bids and Bankruptcy Court and Canadian Court approval. The Buyer and the Selling Entities acknowledge that the Selling Entities must take reasonable steps to demonstrate that they have sought to obtain the highest or otherwise best

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price for the Purchased Assets, including giving notice thereof to the creditors of the Selling Entities and other interested parties, providing information about the Selling Entities’ business to prospective bidders, entertaining higher and better offers from such prospective bidders, and, in the event that additional qualified prospective bidders desire to bid for the Purchased Assets, conducting an auction (the “Auction”).

(b)The bidding procedures to be employed with respect to this Agreement and any Auction shall be those reflected in the Bidding Procedures Order. Buyer agrees to be bound by and accept the terms and conditions of the Bidding Procedures Order as approved by the Bankruptcy Court and the Canadian Court. Buyer agrees and acknowledges that the Selling Entities and their Affiliates and the Seller’s Representatives are and may continue soliciting inquiries, proposals or offers for the Purchased Assets in connection with any alternative transaction pursuant to the terms of the Bidding Procedures Order and agrees and acknowledges that the bidding procedures contained in the Bidding Procedures Order may be supplemented by other customary procedures not inconsistent with the matters otherwise set forth therein and the terms of this Agreement.

(c)If an Auction is conducted, and the Buyer is not the prevailing bidder at the Auction but is the next highest bidder at the Auction, Buyer shall serve as a back-up bidder (the “Back-up Bidder”) and keep the Buyer’s bid to consummate the transactions contemplated by this Agreement on the terms and conditions set forth in this Agreement (as the same may be improved upon in the Auction) open and irrevocable, notwithstanding any right of Buyer to otherwise terminate this Agreement pursuant to Article IX hereof, until the earlier of (i) 5:00 p.m. (prevailing Eastern time) on October 15, 2020 (the “Outside Back-up Date”) or (ii) the date of the consummation of a Third-Party Sale. Following the Sale Hearing and prior to the Outside Back-up Date, if the prevailing bidder in the Auction fails to consummate the Third-Party Sale as a result of a breach or failure to perform on the part of such prevailing bidder and the purchase agreement with such prevailing bidder is terminated, the Back-up Bidder (as the next highest bidder at the Auction) will be deemed to have the new prevailing bid, and the Selling Entities will be authorized, without further order of the Bankruptcy Court or the Canadian Court, to consummate the transactions contemplated by this Agreement on the terms and conditions set forth in this Agreement (as the same may be improved upon in the Auction) with the Back-up Bidder so long as Buyer has not previously terminated this Agreement in accordance with its terms.

(d)Buyer shall provide adequate assurance as required under the Bankruptcy Code of the future performance by Buyer or any applicable Buyer Designee of each Assumed Agreement and each Assumed Real Property Lease and/or evidence as may be required under the CCAA that the Buyer or any applicable Buyer Designee will be able to perform the obligations of each Canadian Assumed Agreement and each Canadian Assumed Real Property Lease. Buyer agrees that it will, and will cause its Affiliates to, reasonably cooperate with the Selling Entities to obtain a Bankruptcy Court finding that there has been an adequate demonstration of adequate assurance of future performance under the Assumed Agreements and Assumed Real Property Lease and/or a Canadian Court finding that the Buyer or any applicable Buyer Designee will be able to perform the obligations of each Canadian Assumed Agreement and each Canadian

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Assumed Real Property Lease, including furnishing affidavits, non-confidential financial information and other non-confidential documents or information for filing with the Bankruptcy Court and/or the Canadian Court and making the Buyer’s Representatives available to testify before the Bankruptcy Court and/or the Canadian Court upon reasonable prior notice.

(e)The Selling Entities and the Buyer agree, and the motion to approve the Bidding Procedures Order and/or the Canadian Bidding Procedures Order shall reflect the fact, that the provisions of this Agreement, including this Section 7.13 and Section 7.14, are reasonable, were a material inducement to the Buyer to enter into this Agreement and are designed to achieve the highest and best price for the Purchased Assets.

Section 7.14Termination Fee.

(a)If (i) (x) an Auction takes place and the Buyer is not identified as the Successful Bidder, (y) at the time the Successful Bidder is identified, the Buyer is not in material breach of this Agreement such that the conditions in Section 8.3(a) and Section 8.3(b) would not then be satisfied, and (z) a sale of all or substantially all of the Purchased Assets to a Person (a “Third-Party”) other than GNC Newco, the Buyer or an Affiliate of the Buyer (a “Third-Party Sale”) is consummated or (ii) a stand-alone Chapter 11 plan of reorganization, including the Restructuring, under which the Selling Entities’ secured lenders receive a material portion of the equity and/or debt in the reorganized Seller (a “Restructuring Transaction”) is consummated, then, in each case, the Buyer will be entitled to receive, without further order of the Bankruptcy Court or the Canadian Court, from the proceeds of such Third-Party Sale, (A) an amount in cash equal to $22,800,000 (the “Termination Fee”) plus (B) the amount of the Buyer’s reasonable documented out-of-pocket expenses (including expenses of outside counsel, accountants and financial advisers) incurred in connection with the Buyer’s evaluation, consideration and negotiation of a possible transaction with the Seller and in connection with the transactions contemplated hereby, up to a maximum amount of $3 million (the “Expense Reimbursement” and together with the Termination Fee, the “Termination Payment”); provided, that the Termination Payment shall not be payable to the Buyer in the event a Restructuring Transaction is consummated following the termination of this Agreement (I) by the Seller pursuant to Section 9.1(f), Section 9.1(i) or Section 9.1(k), (II) by the Seller or Buyer pursuant to Section 9.1(a) or Section 9.1(j), (III)pursuant to any other provision of Section 9.1 at a time when the Seller would have been permitted to terminate this Agreement pursuant to Section 9.1(f),Section 9.1(i) or Section 9.1(k) or (IV) by the Seller at a time when the Deposit shall have become payable to Seller as a result of a Buyer Default Termination; provided, further, that in no event shall Buyer be entitled to receive Expense Reimbursement on more than one occasion, and to the extent Buyer shall have received any Expense Reimbursement pursuant to Section 7.14(b) prior to the payment of any Termination Payment pursuant to this Section 7.14(a), such Termination Payment shall be reduced by the amount of Expense Reimbursement previously paid.

(b)If Buyer terminates this Agreement pursuant to Section 9.1(g)(ii), notwithstanding the consummation of a Third-Party Sale or Restructuring Transaction, the Buyer shall be entitled to receive the Expense Reimbursement.

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(c)If the Termination Payment becomes payable pursuant to Section 7.14(a), such Termination Payment shall be made by wire transfer of immediately available funds to an account designated by the Buyer from the proceeds of the applicable Third-Party Sale or otherwise upon consummation of a Restructuring Transaction, as applicable, and such payment shall be made on or before the first (1^st) Business Day following the consummation of such Third-Party Sale or Restructuring Transaction, as applicable. If the Expense Reimbursement becomes payable pursuant to Section 7.14(b), such Expense Reimbursement shall be paid by wire transfer of immediately available funds to an account designated by Buyer directly from the Seller, and such payment shall be made on or before the fifth (5^th) Business Day following the termination of this Agreement. The claim of the Buyer in respect of the Termination Payment or the Expense Reimbursement, as applicable, shall constitute a super-priority administrative expense claim, senior to all other administrative expense claims of the Selling Entities, as administrative expenses under Sections 503 and 507(b) of the Bankruptcy Code in the Bankruptcy Case and shall be paid in cash, prior to delivery of any sale proceeds to any Third-Party including any secured lender; provided, that such super-priority claim shall be junior to the DIP Obligations.

(d)The Parties acknowledge and agree that the Buyer’s entitlement to the Termination Payment under Section 7.14(a) or the Expense Reimbursement under Section 7.14(b) will constitute liquidated damages (and not a penalty) and, if the Buyer retains such amount, then notwithstanding anything to the contrary contained herein, such Termination Payment or Expense Reimbursement, as applicable, shall be the sole and exclusive remedy available to the Buyer and any other Person against the Selling Entities and their Affiliates in connection with this Agreement and the transactions contemplated hereby (including as a result of the failure to consummate the Closing or for a breach or failure to perform hereunder or otherwise) and none of the Selling Entities or their Affiliates shall have any further Liability relating to or arising out of this Agreement or the transactions contemplated hereby. For the avoidance of doubt, (i) under no circumstances shall the Buyer or any of its Affiliates be entitled to monetary damages other than retention of the Termination Payment under Section 7.14(a) or the Expense Reimbursement under Section 7.14(b), and (ii) while the Buyer may pursue both a grant of specific performance in accordance with Section 10.13 and retaining the Termination Payment pursuant to Section 7.14(a) or the Expense Reimbursement under Section 7.14(b), under no circumstances shall the Buyer or any of its Affiliates be permitted or entitled to receive both a grant of specific performance and any money damages, including retention of all or any portion of the Termination Payment.

Section 7.15Transfer of Purchased Assets; Substitution of Letters of Credit; Payments Received.

(a)The Buyer will make commercially reasonable arrangements for GNC Newco to take possession of the Purchased Assets following the Closing, and, at the Buyer’s expense, to transfer the same to a location owned or operated by the Buyer or a Buyer Designee, to the extent necessary, as promptly as practicable following the Closing.

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(b)On the Closing Date, Buyer shall, at its sole cost and expense, (i) replace any letters of credit, banker’s acceptance or similar credit transaction that secure any Liabilities of any Selling Entity relating to the Purchased Assets and (ii) use commercially reasonable efforts to cause such letters of credit, banker’s acceptance or similar credit transaction to be released and returned to the Seller.

(c)The Selling Entities, on the one hand, and Buyer, on the other hand, each agree that, after the Closing, each will hold and will promptly transfer and deliver to the other, from time to time as and when received by such Party or its Affiliates, any cash, checks with appropriate endorsements or other property that such party or its Affiliates may receive on or after the Closing which properly belongs to the Buyer or the Selling Entities, respectively, or their respective Affiliates.

Section 7.16Post-Closing Operation of the Seller; Name Changes. The Selling Entities hereby acknowledge and agree that upon the Closing, as between the Parties, Buyer and its Affiliates shall solely and exclusively own, and shall have the sole and exclusive right to the use, the GNC Names and Marks (including any and all domain names, social media usernames, accounts and handles, and similar media rights containing any GNC Names and Marks). After the Closing Date, none of the Selling Entities, nor any of their respective Affiliates shall (or shall permit any other Person to) (i) use any GNC Names or Marks, any abbreviation, variation, derivative, translation, or transliteration thereof confusingly similar thereto, or any other Mark confusingly similar thereto, (ii) in any way represent that it is, or otherwise hold itself out as being, affiliated with Buyer or any of its Affiliates or (iii) use, practice, or disclose to any Person any Business IP. In furtherance thereof, as promptly as practicable (but in no event later than sixty (60) days following) the Closing Date, the Selling Entities shall, and shall cause their respective Affiliates to, completely and permanently obliterate, mask or remove all GNC Names and Marks (or any confusingly similar abbreviation, variation, derivative, translation, or transliteration thereof or any other Mark confusingly similar thereto) from all documents, materials, buildings, vehicles, and other assets that are owned by (or in the possession, custody, or control of) the Selling Entities or any of their respective Affiliates. The Sale Order and the Canadian Approval and Vesting Order shall provide for the modification of the caption in the Proceedings before the Bankruptcy Court and in the CCAA Proceedings, respectively, to reflect the change in the name of Seller, except that during the pendency of such Proceedings, Seller shall be permitted to use the name “GNC Holdings, Inc.” solely as a former name for legal and noticing purposes in connection with the Bankruptcy Case and the CCAA Proceedings, but for no other purpose. As promptly as possible after the Closing (but in no event later than sixty (60) days following the Closing Date), the Selling Entities and their Affiliates shall promptly file with the applicable Governmental Authorities all documents reasonably necessary to delete from their names all GNC Names and Marks (or any confusingly similar abbreviation, variation, derivative, translation, or transliteration thereof or any other Mark confusingly similar thereto) and shall do or cause to be done all other acts, including the payment of any fees required in connection therewith, to cause such documents to become effective as promptly as reasonably practicable. The Selling Entities acknowledge and agree that from and after Closing, all goodwill, rights or benefits arising from the Selling Entities’ or any of its Affiliates’ use of any GNC Names and Marks in accordance with this Section 7.16 shall accrue absolutely to Buyer and its Affiliates.

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Section 7.17Purchased Assets “AS IS;” Certain Acknowledgements.

(a)Buyer agrees, warrants and represents that (a) Buyer is purchasing the Purchased Assets on an “AS IS” and “WITH ALL FAULTS” basis based solely on Buyer’s own investigation of the Purchased Assets and (b) neither the Selling Entities nor any of the Seller’s Representatives has made any warranties, representations or guarantees, express, implied or statutory, written or oral, respecting the Purchased Assets, any part of the Purchased Assets, the financial performance of the Purchased Assets or the Business, or the physical condition of the Purchased Assets, except as set forth in this Agreement. Buyer further acknowledges that the consideration for the Purchased Assets specified in this Agreement has been agreed upon by the Selling Entities and Buyer after good-faith arms-length negotiation in light of Buyer’s agreement to purchase the Purchased Assets “AS IS” and “WITH ALL FAULTS.” Buyer agrees, warrants and represents that, except as set forth in this Agreement, Buyer has relied, and shall rely, solely upon its own investigation of all such matters, and that Buyer assumes all risks with respect thereto. EXCEPT AS SET FORTH IN ARTICLE V OF THIS AGREEMENT, THE SELLING ENTITIES MAKE NO EXPRESS WARRANTY, NO WARRANTY OF MERCHANTABILITY, NO WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, AND NO IMPLIED OR STATUTORY WARRANTY WHATSOEVER WITH RESPECT TO ANY REAL OR PERSONAL PROPERTY OR ANY FIXTURES OR THE PURCHASED ASSETS.

(b)Buyer acknowledges and agrees that it (a) has had an opportunity to discuss the Business with the management of Seller and has been afforded the opportunity to ask questions of and receive answers from management of Seller, and (b) has had reasonable access to the books and records of the Selling Entities and the Acquired Subsidiaries, (c) has conducted its own independent investigation of the Selling Entities and the Acquired Subsidiaries, the Business, the Purchased Assets, the Assumed Liabilities and the transactions contemplated hereby. In connection with the investigation by Buyer, Buyer has received or may receive from the Selling Entities certain projections, forward-looking statements and other forecasts and certain business plan information. Buyer acknowledges and agrees neither the Selling Entities nor any other Person will have or be subject to any Liability or indemnification obligation to Buyer or any other Person resulting from the distribution to, or use by, Buyer or any of its Affiliates or any of the Buyer’s Representatives of any information provided to Buyer or any of its Affiliates or any of the Buyer’s Representatives by the Selling Entities or any of the Seller’s Representatives, including any information, documents, projections, forward-looking statements, forecasts or business plans or any other material made available in any “data room,” any confidential information memoranda or any management presentations in expectation of or in connection with the transactions contemplated by this Agreement.

(c)Except for the representations and warranties contained in Article V, Buyer acknowledges that none of the Selling Entities nor any other Person on behalf of any Selling Entity makes any express or implied representation or warranty with respect to the Selling Entities, the Purchased Assets or the Business, or with respect to any information provided to Buyer or any of its Affiliates or any Representative of the Buyer, and the Selling Entities hereby disclaim any other representations or warranties made by the Selling Entities or any other Person

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with respect to the execution and delivery of this Agreement, the Purchased Assets, the Business or the transactions contemplated hereby. Buyer has not relied on any representation, warranty or other statement by any Person on behalf of the Selling Entities, other than the representations and warranties of the Selling Entities expressly contained in Article V. Buyer acknowledges and agrees that the representations and warranties set forth in Article V are made solely by the Selling Entities, and no Affiliate of the Selling Entities, Representative of the Seller or other Person shall have any responsibility or Liability related thereto. Nothing contained herein shall limit the Buyer’s ability to make a claim against the Selling Entities for Fraud.

Section 7.18Formation of Newcos; Canadian Stores;

(a)As promptly as practicable following the date hereof, the Seller shall take all steps necessary to form (i) a Delaware limited liability company (“GNC Newco”), which shall be treated as a disregarded entity for U.S. federal (and applicable state and local) income Tax purposes, with all outstanding equity interests of GNC Newco being owned by the Seller, and (ii) a Nova Scotia unlimited liability company (“GNC Canada Newco”), with all outstanding equity interests of GNC Canada Newco being owned by GNC Newco. Immediately prior the Asset and Liability Dropdown, GNC Newco shall sell 51% of the issued and outstanding voting shares of GNC Canada Newco to ZT Biopharmaceutical LLC for nominal consideration. The Seller shall cause GNC Newco and GNC Canada Newco not to engage in any activities or business, and not to incur any Liabilities or obligations whatsoever, in each case, other than those related to its organization, the execution of this Agreement and the consummation of the transactions contemplated hereby and the execution of the BOC Debt Commitment Letter and any credit agreement and related agreements contemplated thereunder, and the consummation of the transactions contemplated thereby. Without limiting the generality of the foregoing, subject to Section 7.9, the Seller shall cause GNC Newco to execute, deliver and perform its obligations under the credit agreement contemplated by the BoC Debt Commitment Letter and take all actions necessary to consummate the transactions contemplated.

(b)At any time after the date hereof, if the Seller and Buyer shall mutually agree in writing, the Seller shall form a Delaware corporation as a wholly owned, direct Subsidiary of General Nutrition Centers, Inc. (“GNC Successor Newco”), solely for the purposes set forth in Section 7.11(f) of this Agreement. If GNC Successor Newco is formed in accordance with the foregoing sentence, Section 2.1(l) of the Seller Disclosure Schedule shall be updated to replace GNC China Holdco, LLC with GNC Successor Newco.

(c)Notwithstanding anything to the contrary herein, the Buyer shall provide written notice to the Seller no later than fourteen (14) days after the date hereof to the extent Buyer wishes to designate (i) any Purchased Assets owned by the Canadian Seller as additional Excluded Assets or (ii) any Assumed Liabilities of the Canadian Seller as additional Excluded Liabilities.

Section 7.19Release.

(a)Effective as of the Closing, each of Buyer, on behalf of itself and its officers, directors and equityholders, and the Acquired Subsidiaries (each, a “Buyer Releasing Party”)

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each hereby unconditionally and irrevocably and forever releases and discharges any present or former directors, managers, officers, employees or agents of the Seller, the other Selling Entities and the Acquired Subsidiaries (each, a “Seller Released Party”), of and from, and hereby unconditionally and irrevocably waive, any and all (i) D&O Claims and (ii) other claims, debts, losses, expenses, proceedings, covenants, liabilities, suits, judgments, damages, actions and causes of action, obligations, accounts, and liabilities of any kind or character whatsoever, known or unknown, suspected or unsuspected, in contract, direct or indirect, at law or in equity, including in each case any of the foregoing that are Purchased Assets under this Agreement that such Buyer Releasing Party ever had, now has or ever may have or claim to have against any Seller Released Party, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever arising prior to the Closing (including in respect of the management or operation of the Business).

(b)Effective as of the Closing, each Buyer Releasing Party hereby unconditionally and irrevocably and forever releases, discharges and waives any and all preference or avoidance claims and actions that constitute Purchased Assets under Section 2.1(y) of this Agreement that such Buyer Releasing Party ever had, now has or ever may have or claim to have, for or by reason of any matter, circumstance, event, action, inaction, omission, cause or thing whatsoever arising prior to the Closing.

(c)Buyer, on behalf of itself and the other Buyer Releasing Parties, expressly waive all rights afforded by any statute which limits the effect of a release with respect to unknown claims. Buyer, on behalf of itself and the other Buyer Releasing Parties, understand the significance of this release of unknown claims and waiver of statutory protection against a release of unknown claims, and acknowledge and agree that this waiver is an essential and material term of this Agreement. Buyer, on behalf of itself and the other Buyer Releasing Parties, acknowledges that each Seller Released Party will be relying on the waivers and releases provided in this Section 7.19 in connection with entering into this Agreement and that this Section 7.19 is intended for the benefit of, and to grant third party rights to each Seller Released Party to enforce this Section 7.19.

(d)Each beneficiary of a release under this Section 7.19 shall be a third party beneficiary of this Section 7.19 with the full power to enforce the terms of this Section 7.19 as if it were a party to this Agreement for such purpose.

Section 7.20Withholding. Notwithstanding anything herein to the contrary, any Selling Entity, Buyer, GNC Newco, GNC Canada Newco or any of their Affiliates shall be entitled to deduct and withhold from any amounts payable by them (including the Guarantee Fee) pursuant to this Agreement such amounts as it is required to deduct and withhold with respect to such payment under any provision of U.S. federal, state, local or non-U.S. Tax law. The parties will work in good faith to minimize any such withholding. Any amounts so deducted and withheld shall be paid over to the appropriate Governmental Authority and, to the extent so paid to the Governmental Authority, shall be treated for all purposes as having been paid to the Party that would otherwise have received such amount but for the required withholding.

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ARTICLE VIII  
CONDITIONS TO CLOSING

Section 8.1Conditions to Each Party’s Obligations to Effect the Closing. The respective obligations of each Party to consummate the Closing shall be subject to the satisfaction or, to the extent permitted by applicable Law, waiver in a joint writing by Buyer and Seller, at or prior to the Closing, of the following conditions:

(a)no Law or final, non-appealable Order shall have been enacted, entered, promulgated, adopted, issued or enforced by the Bankruptcy Court, the Canadian Court or any other Governmental Authority having competent jurisdiction that is then in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting the consummation of the transactions contemplated hereby;

(b)all filing and waiting periods applicable (including any extensions thereof) to the consummation of the transactions contemplated by this Agreement under the HSR Act shall have expired or been terminated;

(c)the Bankruptcy Court shall have entered a Sale Order and such Sale Order shall be a Final Order (unless such Final Order requirement is waived by the Buyer); and

(d)the Canadian Court shall have entered the Canadian Sale Approval and Vesting Order (unless such requirements are waived by the Buyer).

Section 8.2Conditions to Obligations of the Buyer. The obligation of the Buyer to consummate the Closing shall be subject to the satisfaction or, to the extent permitted by applicable Law, waiver at or prior to the Closing of the following additional conditions:

(a)the Selling Entities shall have performed and complied in all material respects with the covenants contained in this Agreement which are required to be performed and complied with by it on or prior to the Closing Date;

(b)(i) the representations and warranties of the Selling Entities set forth in Section 5.8(a) shall be true and correct in all respects as of date of this Agreement and as of the Closing Date as though made at and as of the Closing Date, (ii) the representations and warranties of the Selling Entities set forth in Section 5.1, Section 5.2, Section 5.3, Section 5.4(a)(i) and Section 5.18 shall be true and correct in all material respects as of date of this Agreement and as of the Closing Date as though made at and as of the Closing Date (except for those representations and warranties which address matters only as of an earlier date in which case such representation or warranty shall have been true and correct as of such earlier date), and (iii) each of the other representations and warranties of the Selling Entities set forth in Article V (disregarding for these purposes any exception in such representations and warranties relating to materiality or a Material Adverse Effect) shall be true and correct as of the date of this Agreement and as of the Closing Date as though made at and as of the Closing Date (except for those representations and warranties which address matters only as of an earlier date in which case such representation or

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warranty shall have been true and correct as of such earlier date), except for such failures to be true and correct as would not reasonably be expected to have a Material Adverse Effect;

(c)the Buyer shall have received a certificate from an officer of the Seller to the effect that, to such officer’s knowledge, the conditions set forth in Sections 8.2(a) and (b) have been satisfied;

(d)the Buyer shall have received the other items to be delivered to it pursuant to Section 4.2.

Any condition specified in this Section 8.2 may be waived by the Buyer; provided, however, that no such waiver shall be effective against the Buyer unless it is set forth in a writing executed by the Buyer.

Section 8.3Conditions to Obligations of the Selling Entities. The obligation of the Selling Entities to consummate the Closing shall be subject to the satisfaction or, to the extent permitted by applicable Law, waiver at or prior to the Closing of the following additional conditions:

(a)the Buyer shall have performed and complied in all material respects with the covenants and agreements contained in this Agreement which are required to be performed and complied with by the Buyer on or prior to the Closing Date;

(b)(i) the representations and warranties of the Buyer set forth in Section 6.9 shall be true and correct in all respects as of the date of this Agreement and as of the Closing Date as though made at and as of the Closing Date and (ii) each of the other representations and warranties of the Buyer set forth in Article VI (disregarding for these purposes any exception in such representations and warranties relating to materiality) shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date as though made at and as of the Closing Date (except for those representations and warranties which address matters only as of an earlier date in which case such representation or warranty shall have been true and correct as of such earlier date);

(c)the Seller shall have received a certificate from an officer of the Buyer to the effect that, to such officer’s knowledge, the conditions set forth in Section 8.3(a) and (b) have been satisfied;

(d)at the Closing and upon execution and delivery of the Second Lien Credit Agreement, all conditions precedent to the effectiveness of the Second Lien Credit Agreement shall have been satisfied or waived by the Seller and giving effect to the Closing there shall not exist any Default or Event of Default (in each case, as defined in the Second Lien Credit Agreement);

(e)the Seller shall have received the other items to be delivered to it pursuant to Section 4.3;

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(f)the Estimated TLB Cash Distribution Amount is equal to or greater than $185,000,000; and

(g)at the Closing, the Vendor Agreement shall not have been terminated and no provision of the Vendor Agreement shall have been amended or waived in any material respect.

Any condition specified in this Section 8.3 may be waived by the Seller; provided, however, that no such waiver shall be effective against the Seller unless it is set forth in a writing executed by the Seller.

Section 8.4Frustration of Closing Conditions. None of the Selling Entities or Buyer may rely on or assert the failure of any condition set forth in Article VIII to be satisfied if such failure was proximately caused by such Party’s failure to comply with this Agreement in all material respects.

ARTICLE IX  
TERMINATION; WAIVER

Section 9.1Termination. Subject to Section 7.13(c), this Agreement may be terminated at any time prior to the Closing by:

(a)mutual written consent of the Seller and the Buyer;

(b)the Seller or the Buyer, if the Bankruptcy Court, the Canadian Court or any other Governmental Authority having competent jurisdiction shall have enacted, entered, promulgated, adopted, issued or enforced any Law or Order that has the effect of making the consummation of the transactions contemplated by this Agreement illegal or otherwise prohibits the consummation of the transactions and such Law or Order shall have become final and non-appealable; provided, however, that the Party seeking to terminate this Agreement pursuant to this Section 9.1(b) shall have complied with its obligations under Section 7.7; and provided, further, that the Buyer may not terminate this Agreement pursuant to this Section 9.1(b) if the consummation of the Transactions would not have been illegal or otherwise prohibited had the Buyer obtained all required PRC Approvals;

(c)the Seller or the Buyer, if the Bidding Procedures Order ceases to be in full force and effect, or is revoked, rescinded, vacated, reversed or stayed, or otherwise rendered ineffective by a court of competent jurisdiction;

(d)the Seller, if the Sale Order has not been entered by the Bankruptcy Court by September 24, 2020 or the Canadian Sale Approval and Vesting Order has not been granted by the Canadian Court by the date that is ninety-five (95) days after the Petition Date; provided, however, that the Seller shall not be entitled to terminate this Agreement pursuant to this Section 9.1(d) if, at the time of such termination, Buyer would then be entitled to terminate this Agreement pursuant to Section 9.1(g);

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(e)the Buyer, if the Sale Order has not been entered by the Bankruptcy Court by September 24, 2020 or the Canadian Sale Approval and Vesting Order has not been granted by the Canadian Court by the date that is ninety-five (95) days after the Petition Date; provided, however, that the Buyer shall not be entitled to terminate this Agreement pursuant to this Section 9.1(e) if, at the time of such termination, Seller would then be entitled to terminate this Agreement pursuant to Section 9.1(f);

(f)the Seller if:

(i)any of the representations and warranties of Buyer contained in Article VI shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement (as if made on and as of such subsequent date), such that the condition set forth in Section 8.3(b) would not then be satisfied; or

(ii)Buyer shall have failed to perform or comply with any of the covenants or agreements contained in this Agreement to be performed and complied with by the Buyer such that the condition set forth in Section 8.3(a) would not then be satisfied;

provided, however, that if an inaccuracy in any of the representations and warranties of Buyer or a failure to perform or comply with a covenant or agreement by the Buyer is curable by the Buyer within ten (10) Business Days after the date of written notice from the Seller to the Buyer of the occurrence of such inaccuracy or failure, then the Seller may not terminate this Agreement under this Section 9.1(f) on account of such inaccuracy or failure (x) prior to delivery of such written notice to the Buyer or during the ten (10) Business Day period commencing on the date of delivery of such notice or (y) following such ten (10) Business Day period, if such inaccuracy or failure shall have been fully cured during such ten (10) Business Day period; provided, further, that Seller shall not be permitted to terminate this Agreement pursuant to this Section 9.1(f) if at the time of such termination, (I) any of the representations and warranties of Seller contained in Article VI shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement (as if made on and as of such subsequent date), such that the condition set forth in Section 8.2(b) would not then be satisfied or (II) Seller shall have failed to perform or comply with any of the covenants or agreements contained in this Agreement to be performed and complied with by the Seller such that the condition set forth in Section 8.2(a) would not then be satisfied; provided, further, that the Seller shall not be permitted to terminate this Agreement under this Section 9.1(f) based on Buyer’s breach of Section 6.6 or based on Buyer’s failure to consummate the Closing as required under the terms and conditions of this Agreement as a result of a Financing Failure Event or a failure to obtain Alternative Financing, in all cases, until one (1) Business Day prior to the Outside Date so long as Buyer remains in compliance in all material respects with its obligations under Section 7.8 to secure Alternative Financing.

(g)the Buyer if:

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(i)any of the representations and warranties of the Selling Entities contained in Article V shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement (as if made on and as of such subsequent date), such that the condition set forth in Section 8.2(b) would not then be satisfied; or

(ii)the Selling Entities shall have failed to perform or comply with any of the covenants or agreements contained in this Agreement to be performed and complied with by the Selling Entities, such that the condition set forth in Section 8.2(a) would not then be satisfied;

provided, however, that if an inaccuracy in any of the representations and warranties of the Selling Entities or a failure to perform or comply with a covenant or agreement by any of the Selling Entities is curable by it within ten (10) Business Days after the date of written notice from the Buyer to the Seller of the occurrence of such inaccuracy or failure, then the Buyer may not terminate this Agreement under this Section 9.1(g) on account of such inaccuracy or failure (x) prior to delivery of such written notice to the Seller or during the ten (10) Business Day period commencing on the date of delivery of such notice or (y) following such ten (10) Business Day period, if such inaccuracy or failure shall have been fully cured during such ten (10) Business Day period; provided, further, that the Buyer shall not be permitted to terminate this Agreement pursuant to this Section 9.1(g) if at the time of such termination, (I) any of the representations and warranties of Buyer contained in Article V shall be inaccurate as of the date of this Agreement, or shall have become inaccurate as of a date subsequent to the date of this Agreement (as if made on and as of such subsequent date), such that the condition set forth in Section 8.3(b) would not then be satisfied or (II) Buyer shall have failed to perform or comply with any of the covenants or agreements contained in this Agreement to be performed and complied with by the Buyer such that the condition set forth in Section 8.3(a) would not then be satisfied;

(h)the Buyer, if (i) (A) the Seller enters into a definitive agreement providing for a Third-Party Sale, and the Buyer is not the Back-up Bidder at the Auction, or (B) Seller enters into a definitive agreement providing for a Third-Party Sale, the Buyer is the Back-up Bidder, and the Third-Party Sale is consummated or (ii) the Bankruptcy Case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code and neither such dismissal nor conversion expressly contemplates the transactions provided for in this Agreement;

(i)the Seller, if:

(i)as a result of Buyer’s failure to obtain any required PRC Approval, the condition set forth in Section 8.1(a) is not satisfied on the date that is three (3) Business Days after the date on which all of the other conditions set forth in Article VIII have been satisfied or, to the extent permitted by applicable Law, waived by the applicable Party in writing (other than conditions which by their nature are to be satisfied at the Closing) and the Seller has certified to the Buyer in writing that the Selling Entities are ready, willing and able to effect the Closing; provided, that the right to terminate this Agreement under

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this Section 9.1(i)(i) shall not be available to the Seller if any of the Selling Entities is then in material breach of this Agreement and such breach is the primary cause of the failure to obtain such required PRC Approval;

(ii)the Buyer’s representation in Section 6.9 is determined to not be true and correct in any respect as of the date of this Agreement or as of the date of such termination by the Seller (which inaccuracy shall not be subject to any cure period);

(iii)the condition set forth in Section 8.3(d) is not satisfied (other than as a result of the Asset and Liability Dropdown) on the date that is three (3) Business Days prior to the Outside Date and the Seller has certified to the Buyer in writing that the Selling Entities are ready, willing and able to effect the Closing; provided, that the right to terminate this Agreement under this Section 9.1(i)(iii) shall not be available to the Seller if any of the Selling Entities is then in material breach of this Agreement and such breach is the primary cause of the failure to satisfy the condition set forth in Section 8.3(d); or

(iv)the condition set forth in Section 8.3(g) is not satisfied at a time when all of the other conditions set forth in Article VIII have been satisfied or, to the extent permitted by applicable Law, waived by the applicable Party in writing (other than conditions which by their nature are to be satisfied at the Closing) and the Seller has certified to the Buyer in writing that the Selling Entities are ready, willing and able to effect the Closing;

(j)the Buyer or the Seller, if the Closing has not occurred by October 15, 2020 (the “Outside Date”); provided, that the right to terminate this Agreement under this Section 9.1(j) shall not be available to any Party if such Party is then in material breach of this Agreement that is the primary cause of the failure of the Closing to occur prior to such date; provided, further, that the right to terminate this Agreement pursuant to this Section 9.1(j) shall not be available to any Party in the event that the other Party or Parties have initiated Proceedings prior to the Outside Date to specifically enforce this Agreement which such Proceedings are still pending; or

(k)the Seller, if the condition to the obligations of the Selling Entities set forth in Section 8.3(f) has not been satisfied at the time at which all other conditions set forth in Sections 8.1, 8.2 and 8.3 have been satisfied; provided, however, that if at any time within three (3) Business Days of the delivery of a termination notice by the Seller pursuant to this Section 9.1(k) the Buyer provides written notice to the Seller that it elects to increase the Cash Purchase Price to an amount that would result in the condition set forth in Section 8.3(f) being satisfied (the “Cash Increase Amount”), then the Seller shall not have the right to terminate this Agreement pursuant to this Section 9.1(k);

provided, that neither the Buyer nor the Seller shall have the right to terminate this Agreement pursuant to any of Section 9.1(c)(i), Section 9.1(d) or Section 9.1(e) if the action or inaction of such Party or any of its Affiliates is the primary cause of the failure of the applicable milestones to occur on or prior to the applicable dates.

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Section 9.2Procedure and Effect of Termination. In the event of termination of this Agreement by either Seller or Buyer pursuant to Section 9.1, written notice thereof shall forthwith be given by the terminating Party to the other Party and this Agreement shall terminate and the transactions contemplated hereby shall be abandoned, without further action by any of the Parties; provided, however, that (a) no Party shall be relieved of or released from any Liability arising from any intentional breach by such Party of any provision of this Agreement and (b) this Section 9.2, Section 3.2, Section 7.3(e), Section 7.14, Article X and the Confidentiality Agreement shall remain in full force and effect and survive any termination of this Agreement.

Section 9.3Extension; Waiver. At any time prior to the Closing, the Selling Entities, on the one hand, or the Buyer, on the other hand, may, to the extent permitted by applicable Law (a) extend the time for the performance of any of the obligations or other acts of the Buyer (in the case of an agreed extension by the Selling Entities) or the Selling Entities (in the case of an agreed extension by the Buyer), (b) waive any inaccuracies in the representations and warranties of the Buyer (in the case of a wavier by the Selling Entities) or the Selling Entities (in the case of a waiver by the Buyer) contained herein or in any document delivered pursuant hereto, (c) waive compliance with any of the agreements of the Buyer (in the case of a wavier by the Selling Entities) or the Selling Entities (in the case of a waiver by the Buyer) contained herein, or (d) waive any condition to its obligations hereunder. Any agreement on the part of the Selling Entities, on the one hand, or the Buyer, on the other hand, to any such extension or waiver shall be valid only if set forth in a written instrument signed on behalf of the Selling Entities or the Buyer, as applicable. The failure or delay of any Party to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of those rights, nor shall any single or partial exercise of any right under this Agreement preclude any other or further exercise of any rights hereunder.

ARTICLE X  
MISCELLANEOUS PROVISIONS

Section 10.1Amendment and Modification. This Agreement may be amended, modified or supplemented only by a written instrument signed by the Seller, on behalf of each of the Selling Entities, and the Buyer. Notwithstanding the foregoing, the provisions set forth in this Section 10.1 and Sections 10.4 and 10.9 (and the defined terms used in such Sections) may not be amended, modified or altered in any manner adverse to the Financing Sources in any material respect without the prior written consent of the Financing Sources.

Section 10.2Survival. None of the representations and warranties of the Parties in this Agreement, in any instrument delivered pursuant to this Agreement, or in the Schedules or Exhibits attached hereto shall survive the Closing, and no Party hereto shall, or shall be entitled to, make any claim or initiate any action against any other Party with respect to any such representation or warranty from or after the Closing. None of the covenants or agreements of the Parties in this Agreement shall survive the Closing, and no Party hereto shall, or shall be entitled to, make any claim or initiate any action against any other Party with respect to any such covenant or agreement from or after the Closing, other than (a) the covenants and agreements of

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the Parties contained in this Article X, Article III and Article IV, (b) those other covenants and agreements contained herein that by their terms apply, or that are to be performed in whole or in part, after the Closing, which shall survive the consummation of the transaction contemplated by this Agreement until fully performed and (c) any rights or remedies of any Person for breach of any such surviving covenant or agreement.

Section 10.3Notices. All notices or other communications required or permitted under, or otherwise made in connection with, this Agreement shall be in writing and shall be deemed to have been duly given or made (a) when delivered in person, (b) upon confirmation of receipt when transmitted by email, (c) upon receipt after dispatch by registered or certified mail, postage prepaid, or (d) on the next Business Day if transmitted by national overnight courier (with confirmation of delivery), in each case, addressed as follows:

(a)If to any Selling Entity or the Selling Entities, to:

GNC Holdings, Inc. 
300 Sixth Avenue 
Pittsburgh, Pennsylvania 15222 
Attention: Tricia Tolivar 
  Susan M. Canning

Email: tricia-tolivar@gnc-hq.com 
 susan-canning@gnc-hq.com

with a mandated copy (which shall not constitute notice) to: 
 
Latham & Watkins LLP 
330 Wabash Avenue 
Chicago, IL 60611 
Attention:  Rick Levy 
  Caroline Reckler 
  Jason Morelli 
Email: richard.levy@lw.com 
 caroline.reckler@lw.com 
 jason.morelli@lw.com

and

Milbank LLP 
2029 Century Park East 
33^rd Floor 
Los Angeles, CA 90067 
Attention: Brett Goldblatt 
  Mark Shinderman 
Email:  bgoldblatt@milbank.com 
  mshinderman@milbank.com

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(b)If to the Buyer, to:

Harbin Pharmaceutical Group Holding Co., Ltd

No. 68, Limin West Fourth Street

Limin Development Zone

Harbin, People’s Republic of China

and

28/F, CITIC Tower, 1 Tim Mei Avenue, Central, Hong Kong 
Attention: Yong Kai Wong  

E-mail:  yongkaiwong@citiccapital.com; yongkaiwong@hayao.com 
 
with a mandated copy (which shall not constitute notice) to: 
 
White & Case LLP 
1221 Avenue of the Americas 
New York, NY 10020-1095 
Attention: Chang-Do Gong 
Email: cgong@whitecase.com

and to: 
 
White & Case LLP 
Southeast Financial Center 
200 South Biscayne Boulevard, Suite 4900 
Miami, Florida 33131-2352 
Attention: Richard Kebrdle 
Email: rkebrdle@whitecase.com

Section 10.4Assignment. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any Party (whether by operation of law or otherwise) without the prior written consent of the other Parties, and any such assignment shall be null and void; provided, however, that the rights of the Buyer under this Agreement may be assigned by the Buyer, without the prior written consent of any Selling Entity, to one or more Buyer Designees, so long as the Buyer shall continue to remain obligated in full hereunder. No assignment by any Party shall relieve such Party (including an assignment by Buyer to any Buyer Designee) of any of its obligations hereunder. Any attempted or purported assignment in violation of this Section 10.4 will be deemed void ab initio. Notwithstanding the foregoing, the Buyer and a Buyer Designeemay transfer or assign its rights under this Agreement to any Financing Source pursuant to the terms of any Debt Financing for purposes of creating a security interest herein or otherwise assigning as collateral in respect of such Debt Financing without the prior written consent of the Seller. Subject to the foregoing, this Agreement and all of the provisions hereof shall be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns, including, in the case of the Selling

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Entities (other than the Canadian Seller), the trustee in the Bankruptcy Case and, in the case of the Canadian Seller, any trustee or receiver appointed in respect of the Canadian Seller; provided, that the Financing Sources are intended to and shall be express third parties beneficiaries of and have the right to enforce this Section 10.4 and Sections 10.1, 10.8 and 10.9.

Section 10.5Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Party. Upon a determination that any term or other provision of this Agreement is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.

Section 10.6Governing Law. Except to the extent the mandatory provisions of the Bankruptcy Code apply, this Agreement, and all claims and causes of action arising out of, based upon, or related to this Agreement or the negotiation, execution or performance hereof, shall be governed by, and construed, interpreted and enforced in accordance with, the Laws of the State of Delaware, without regard to choice or conflict of law principles that would result in the application of any Laws other than the Laws of the State of Delaware.

Section 10.7Acknowledgement and Release. The Buyer acknowledges that the Selling Entities are the sole Persons bound by, or liable with respect to, the obligations and Liabilities of the Selling Entities under this Agreement and the other Transaction Documents, and that no Affiliate of any Selling Entity or any of their respective subsidiaries or any current or former officer, director, stockholder, agent, attorney, employee, representative, advisor or consultant of any Selling Entity or any such other Person shall be bound by, or liable with respect to, any aspect of this Agreement and the other Transaction Documents.

Section 10.8Financing Source Matters. The parties hereby agree that the Financing Sources shall not have any liability (whether in contract or in tort, in law or in equity, or granted by statute or otherwise) for any liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever arising under, out of, in connection with or related in any manner to this Agreement or based on, in respect of or by reason of this Agreement or its negotiation, execution, performance or breach, and each Selling Entity waives any rights or claims against any Financing Sources in connection with this Agreement, the Debt Financing Documents and the transactions contemplated hereby and thereby; provided, that nothing in this Section 10.8 shall limit any liability or obligations of the Financing Sources to any Selling Entity (or any of their respective Affiliates) that is a party to any of the Debt Commitment Letters, the Debt Financing Documents or the other definitive agreements related thereto under and pursuant to the terms of the such Debt Commitment Letters, Debt Financing Documents and other definitive agreements related thereto.

Section 10.9Submission to Jurisdiction; WAIVER OF JURY TRIAL.

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(a)Any action, claim, suit or Proceeding arising out of, based upon or relating to this Agreement or the transactions contemplated hereby other than the CCAA Proceedings and the Proceeding related thereto shall be brought solely in the Bankruptcy Court (or any court exercising appellate jurisdiction over the Bankruptcy Court). Each Party hereby irrevocably submits to the exclusive jurisdiction of the Bankruptcy Court (or any court exercising appellate jurisdiction over the Bankruptcy Court) in respect of any action, claim, suit or Proceeding arising out of, based upon or relating to this Agreement or any of the rights and obligations arising hereunder, and agrees that it will not bring any action arising out of, based upon or related thereto in any other court; provided, however, that, if the Bankruptcy Case and the CCAA Proceedings are dismissed, any action, claim, suit or Proceeding arising out of, based upon or relating to this Agreement or the transactions contemplated hereby shall be heard and determined solely in the Chancery Court of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Chancery Court of the State of Delaware declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware and any direct appellate court therefrom). Each Party hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any such action, claim, suit or Proceeding, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve process in accordance with Section 10.3, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by applicable Law, any claim that (i) the suit, action or Proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or Proceeding is improper or (iii) this Agreement or any other agreement or instrument contemplated hereby or entered into in connection herewith, or the subject matter hereof or thereof, may not be enforced in or by such courts. Each Party agrees that notice or the service of process in any action, claim, suit or Proceeding arising out of, based upon or relating to this Agreement or any of the rights and obligations arising hereunder or thereunder, shall be properly served or delivered if delivered in the manner contemplated by Section 10.3.

(b)EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY AND ALL RIGHT SUCH PARTY MAY HAVE TO TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT OR PROCEEDING (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) BETWEEN THE PARTIES HERETO ARISING OUT OF, BASED UPON OR RELATING TO THIS AGREEMENT, THE OTHER TRANSACTION DOCUMENTS, THE DEBT FINANCING DOCUMENTS OR THE DEBT COMMITMENT LETTERS (INCLUDING ANY ACTION, CLAIM, SUIT OR PROCEEDING INVOLVING OR AGAINST THE FINANCING SOURCES) OR THE NEGOTIATION, EXECUTION OR PERFORMANCE HEREOF OR THEREOF.

Section 10.10Counterparts. This Agreement, the agreements referred to herein, and each other agreement or instrument entered into in connection herewith or therewith or contemplated hereby or thereby, and any amendments hereto or thereto, to the extent signed and delivered by means of a photographic, photostatic, facsimile, portable document format (.pdf), or

102

similar reproduction of such signed writing using a facsimile machine or electronic mail shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No party hereto or to any such agreement or instrument shall raise the use of a facsimile machine or electronic mail to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of a facsimile machine or electronic mail as a defense to the formation or enforceability of a contract and each such party forever waives any such defense.

Section 10.11Incorporation of Schedules and Exhibits. All Schedules and all Exhibits attached hereto and referred to herein are hereby incorporated herein by reference and made a part of this Agreement for all purposes as if fully set forth herein.

Section 10.12Entire Agreement. This Agreement (including all Schedules and all Exhibits), the Confidentiality Agreement and the other Transaction Documents constitute the entire agreement among the Parties with respect to the subject matter hereof and supersede all prior agreements and understandings among the Parties with respect thereto.

Section 10.13Remedies. The Parties agree that irreparable damage may occur in the event that any provision of this Agreement were not performed in accordance with its specific terms or was otherwise breached and that monetary damages may not be an adequate remedy for any breach or threatened breach of any of the provisions of this Agreement. It is accordingly agreed that, subject to Section 3.2, (i) the Parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement, and any such injunction shall be in addition to any other remedy to which any Party is entitled, at law or in equity, (ii) the parties waive any requirement for the securing or posting of any bond in connection with the obtaining of any specific performance or injunctive relief and (iii) the parties will waive, in any action for specific performance, the defense of adequacy of a remedy at Law. A Party’s pursuit of specific performance at any time will not be deemed an election of remedies or waiver of the right to pursue any other right or remedy to which such party may be entitled, including the right to pursue remedies for liabilities or damages incurred or suffered by the other party in the case of a breach of this Agreement.

Section 10.14Bulk Sales or Transfer Laws. The Buyer hereby waives compliance by the Selling Entities with the provisions of the bulk sales or transfer laws of all applicable jurisdictions. The Selling Entities agree to cooperate with the Buyer, upon the reasonable request of the Buyer and at the Buyer’s expense, in making any bulk sales filings the Buyer may, in its sole discretion, decide to file.

Section 10.15Seller Disclosure Schedule. It is expressly understood and agreed that (a) the disclosure of any fact or item in any section of the Seller Disclosure Schedule shall be deemed disclosure with respect to any other Section or subsection of the Seller Disclosure Schedule to the extent the applicability of the disclosure to such other Section or subsection is reasonably apparent on the face of such disclosure, (b) the disclosure of any matter or item in the Seller Disclosure Schedule shall not be deemed to constitute an acknowledgement that such matter or item is required to be disclosed therein, and (c) the mere inclusion of an item in the

103

Seller Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission that such item represents a material exception or material fact, event or circumstance or that such item has had or would be reasonably likely to have a Material Adverse Effect.

Section 10.16Mutual Drafting; Headings; Information Made Available. The Parties participated jointly in the negotiation and drafting of this Agreement and the language used in this Agreement shall be deemed to be the language chosen by the Parties to express their mutual intent. If an ambiguity or question of intent or interpretation arises, then this Agreement will accordingly be construed as drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. The descriptive headings and table of contents contained in this Agreement are included for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. To the extent this Agreement refers to information or documents to be made available (or delivered or provided) to Buyer or its Representatives, the Selling Entities shall be deemed to have satisfied such obligation if the Seller or any of its Representatives has made such information or document available (or delivered or provided such information or document) to Buyer or any of its Representatives, whether in an electronic data room, via electronic mail, in hard copy format or otherwise.

Section 10.17Approval of the Bankruptcy Court and the Canadian Court. Notwithstanding anything herein to the contrary, any and all rights, interests or obligations under this Agreement are subject to approval of the Bankruptcy Court and the Canadian Court, as applicable.

Section 10.18Non-Recourse. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto and no other Person that is not a party hereto shall have any liability for any Liabilities of the parties to this Agreement or for any claim (whether in tort, contract or otherwise) based on, in respect of, or by reason of, the transactions contemplated hereby or in respect of any oral representations made or alleged to be made in connection herewith. In no event shall any party hereto or any of its Affiliates, and the parties here agree not to and to cause their respective Affiliates not to, seek to enforce this Agreement against, make any claims for breach of this Agreement against, or seek to recover monetary damages from, any Person not a party to this Agreement.

Section 10.19Actions of Seller. Notwithstanding anything to the contrary in this Agreement, the parties hereto acknowledge and agree that (a) any consent, approval, waiver or notice to be provided by the Seller or any Selling Entity under this Agreement that would adversely affect the issuance of the Second Lien Loans or the portion of the Cash Purchase Price distributable to the Seller’s secured lenders shall only be provided if such consent, approval, waiver or notice has been approved in writing by the Required Ad Hoc Group Crossover Lenders, (b) neither the Seller nor any Selling Entity shall amend or waive any of the conditions set forth in Section 8.1 or Section 8.3 or cause the Closing to occur prior to the satisfaction of

104

such conditions without the prior written approval of the Required Ad Hoc Group Crossover Lenders, and (c) neither the Seller nor any Selling Entity shall amend or waive the last sentence of Section 3.1(c), the proviso at the end of Section 7.14(c) or any other provision of this Agreement that would adversely impact the receipt by the holders of FILO Term Loans of an amount of the Cash Purchase Price necessary to repay the FILO Term Loans and all related DIP Obligations in full at closing, in each case, without the prior written approval of the Required Ad Hoc Group Crossover Lenders and the Required FILO Ad Hoc Group Members. Each Ad Hoc Group Crossover Lender and Ad Hoc Group FILO Lenders shall be a third party beneficiary of this Section 10.19 with the full power to enforce the terms of this Section 10.19 as if it were a party to this Agreement for such purpose.

* * * * *

105

IN WITNESS WHEREOF, the Parties hereto have caused this Stalking Horse Agreement to be executed as of the date first written above.

GNC HOLDINGS, INC.


By: 
Name:

Title:

[SELLING ENTITIES]


 
By: 
Name: 
Title:

HARBIN PHARMACEUTICAL GROUP HOLDING CO., LTD.


 
By: 
Name:

Title:

[Signature Page to Stalking Horse Agreement]

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Kenneth A. Martindale, certify that:

1.          I have reviewed this Form 10-Q of GNC Holdings, Inc.;

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.          The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.          The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Kenneth A. Martindale
Date: August 10, 2020	Kenneth A. Martindale
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Tricia K. Tolivar, certify that:

1.          I have reviewed this Form 10-Q of GNC Holdings, Inc.;

2.          Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.          Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.          The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.          The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Tricia K. Tolivar
Date: August 10, 2020	Tricia K. Tolivar
	Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of GNC Holdings, Inc. (the “Company”), for the quarterly period ended June 30, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Kenneth A. Martindale, as Chief Executive Officer of the Company, and Tricia K. Tolivar, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his or her knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kenneth A. Martindale
Name:	Kenneth A. Martindale
Title:	Chief Executive Officer
	(Principal Executive Officer)
Date:	August 10, 2020

/s/ Tricia K. Tolivar
Name:	Tricia K. Tolivar
Title:	Chief Financial Officer
	(Principal Financial Officer)
Date:	August 10, 2020

This certification accompanies the Report pursuant to § 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

XML

Cover Page - shares	6 Months Ended
	Jun. 30, 2020	Aug. 05, 2020
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	001-35113
Entity Registrant Name	GNC Holdings, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-8536244
Entity Address, Address Line One	300 Sixth Avenue
Entity Address, Postal Zip Code	15222
Entity Address, City or Town	Pittsburgh,
Entity Address, State or Province	PA
City Area Code	412
Local Phone Number	288-4600
Title of 12(b) Security	Class A common stock, par value $0.001 per share
Trading Symbol	GNCIQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		84,040,526
Entity Central Index Key	0001502034
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 80,740	$ 117,046
Restricted cash (Note 3)	15,688	0
Receivables, net of allowance for credit losses of $32,726 and $22,648, respectively (Note 2)	77,413	101,234
Receivables due from related parties (Note 9)	10,094	8,946
Inventory (Note 5)	275,170	387,655
Prepaid and other current assets	37,183	24,880
Total current assets	496,288	639,761
Long-term assets:
Goodwill (Note 7)	73,552	79,109
Brand name (Note 7)	189,000	300,720
Other intangible assets, net	68,493	71,298
Property, plant and equipment, net (Note 6)	66,597	86,916
Right-of-use assets (Note 6)	248,340	350,579
Equity method investments (Note 9)	42,077	97,930
Investment in GNC Canada (Note 3)	13,570	0
Deferred tax assets (Note 15)	26,542	0
Other long-term assets	18,603	24,274
Total long-term assets	746,774	1,010,826
Total assets	1,243,062	1,650,587
Current liabilities:
Debtor-in-possession financing (Note 3)	305,000	0
Accounts payable	6,435	150,742
Accounts payable due to related parties (Note 9)	3,340	11,720
Current portion of long-term debt (Note 8)	0	180,566
Current lease liabilities	0	112,005
Deferred revenue and other current liabilities	40,507	105,792
Total current liabilities	355,282	560,825
Long-term liabilities:
Long-term debt (Note 8)	0	681,999
Deferred income taxes	315	31,586
Lease liabilities	2,018	330,510
Other long-term liabilities	208	41,535
Total long-term liabilities	2,541	1,085,630
Total liabilities not subject to compromise	357,823	1,646,455
Liabilities subject to compromise	1,153,564	0
Total liabilities	1,511,387	1,646,455
Contingencies (Note 11)
Mezzanine equity:
Convertible preferred stock (Note 12)	211,395	211,395
Stockholders’ deficit:
Common stock	131	131
Additional paid-in capital	1,013,854	1,012,076
Retained earnings	234,850	518,605
Treasury stock, at cost	(1,725,349)	(1,725,349)
Accumulated other comprehensive loss	(3,206)	(12,726)
Total stockholders’ deficit	(479,720)	(207,263)
Total liabilities, mezzanine equity and stockholders’ deficit	$ 1,243,062	$ 1,650,587

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Allowance for doubtful accounts	$ 32,726	$ 22,648

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Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Revenue (Note 4)	$ 343,538	$ 533,997	$ 816,119	$ 1,098,760
Cost of sales, including warehousing, distribution and occupancy	255,305	340,253	591,171	701,925
Gross profit	88,233	193,744	224,948	396,835
Selling, general and administrative	127,115	143,840	271,657	292,143
Long-lived asset impairments and other store closing costs	20,201	0	177,715	0
Loss on net asset exchange for the formation of the joint ventures (Note 9)	0	1,779	1,655	21,293
Other income, net	(565)	(593)	(1,528)	(801)
Operating (loss) income	(58,518)	48,718	(224,551)	84,200
Interest expense, net (Note 8)	22,057	24,964	69,502	57,920
Gain on convertible debt repurchase	0	(3,214)	0	(3,214)
Loss on forward contracts for the issuance of convertible preferred stock	0	0	0	16,787
Reorganization items, net	15,429	0	15,429	0
(Loss) income before income from equity method investments and income taxes	(96,004)	26,968	(309,482)	12,707
Income tax (benefit) expense (Note 15)	(11,386)	13,030	(64,421)	14,986
(Loss) income before income from equity method investments	(84,618)	13,938	(245,061)	(2,279)
Income (loss) from equity method investments (Note 9)	949	2,120	(38,694)	3,075
Net (loss) income	$ (83,669)	$ 16,058	$ (283,755)	$ 796
(Loss) earnings per share (Note 13):
Basic (in dollars per share)	$ (1.06)	$ 0.13	$ (3.51)	$ (0.09)
Diluted (in dollars per share)	$ (1.06)	$ 0.11	$ (3.51)	$ (0.09)
Weighted average common shares outstanding (Note 13):
Basic weighted-average shares (in shares)	83,936	83,663	83,916	83,587
Diluted weighted-average shares (in shares)	83,936	140,942	83,916	83,587

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Net (loss) income		$ (83,669)	$ 16,058	$ (283,755)	$ 796
Other comprehensive gain (loss):
Periodic revaluation of interest rate swap, net of tax	[1]	0	(2,830)	(3,542)	(4,295)
Reclassification adjustment for interest recognized in Consolidated Statement of Operations, net of tax	[2]	0	268	871	504
Net change in unrecognized loss on interest rate swaps, net of tax		0	(2,562)	(2,671)	(3,791)
Deferred loss recognized on interest rate swap, net of $3.4 million tax expense		0	0	7,459	0
Foreign currency translation gain (loss)		251	186	(896)	625
Deconsolidation of GNC Canada - currency translation		5,628	0	5,628	0
Other comprehensive gain (loss)		5,879	(2,376)	9,520	(3,166)
Comprehensive (loss) income		$ (77,790)	$ 13,682	$ (274,235)	$ (2,370)

[1] Net of tax benefit of $1.3 million for the three months ended June 30, 2019, and net of tax benefit of $1.6 million and $1.9 million, respectively, for the six months ended June 30, 2020 and 2019.

[2] Net of tax expense of $0.1 million, respectively, for the three months ended June 30, 2019, and net of tax expense of $0.4 million and $0.2 million, respectively, for the six months ended June 30, 2020 and 2019.

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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement of Comprehensive Income [Abstract]
Tax expense from deferred loss		$ 3.4
Tax expense (benefit) before reclassification	$ (1.3)	(1.6)	$ (1.9)
Tax expense from reclassification	$ 0.1	$ 0.4	$ 0.2

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Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands	Total	Cumulative Effect, Period of Adoption, Adjustment	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings	Retained Earnings Cumulative Effect, Period of Adoption, Adjustment	Accumulated Other Comprehensive Loss
Beginning balance (in shares) at Dec. 31, 2018			83,886
Beginning balance at Dec. 31, 2018	$ (114,310)	$ (59,936)	$ 130	$ (1,725,349)	$ 1,007,827	$ 613,637	$ (59,936)	$ (10,555)
Increase (Decrease) in Stockholders' Equity
Comprehensive income	(16,052)					(15,262)		(790)
Restricted stock awards (in shares)			121
Restricted stock awards	0
Minimum tax withholding requirements (in shares)			(41)
Minimum tax withholding requirements	(120)				(120)
Stock-based compensation	1,334				1,334
Ending balance (in shares) at Mar. 31, 2019			83,966
Ending balance at Mar. 31, 2019	(189,084)		$ 130	(1,725,349)	1,009,041	538,439		(11,345)
Beginning balance (in shares) at Dec. 31, 2018			83,886
Beginning balance at Dec. 31, 2018	(114,310)	$ (59,936)	$ 130	(1,725,349)	1,007,827	613,637	$ (59,936)	(10,555)
Increase (Decrease) in Stockholders' Equity
Comprehensive income	(2,370)
Ending balance (in shares) at Jun. 30, 2019			84,579
Ending balance at Jun. 30, 2019	(173,852)		$ 130	(1,725,349)	1,010,591	554,497		(13,721)
Beginning balance (in shares) at Mar. 31, 2019			83,966
Beginning balance at Mar. 31, 2019	(189,084)		$ 130	(1,725,349)	1,009,041	538,439		(11,345)
Increase (Decrease) in Stockholders' Equity
Comprehensive income	13,682					16,058		(2,376)
Restricted stock awards (in shares)			628
Restricted stock awards	0
Minimum tax withholding requirements (in shares)			(15)
Minimum tax withholding requirements	(108)				(108)
Stock-based compensation	1,658				1,658
Ending balance (in shares) at Jun. 30, 2019			84,579
Ending balance at Jun. 30, 2019	(173,852)		$ 130	(1,725,349)	1,010,591	554,497		(13,721)
Beginning balance (in shares) at Dec. 31, 2019			84,564
Beginning balance at Dec. 31, 2019	(207,263)		$ 131	(1,725,349)	1,012,076	518,605		(12,726)
Increase (Decrease) in Stockholders' Equity
Comprehensive income	(196,445)					(200,086)		3,641
Restricted stock awards (in shares)			68
Restricted stock awards	0
Minimum tax withholding requirements (in shares)			(24)
Minimum tax withholding requirements	(54)				(54)
Stock-based compensation	1,372				1,372
Ending balance (in shares) at Mar. 31, 2020			84,608
Ending balance at Mar. 31, 2020	(402,390)		$ 131	(1,725,349)	1,013,394	318,519		(9,085)
Beginning balance (in shares) at Dec. 31, 2019			84,564
Beginning balance at Dec. 31, 2019	(207,263)		$ 131	(1,725,349)	1,012,076	518,605		(12,726)
Increase (Decrease) in Stockholders' Equity
Comprehensive income	(274,235)
Ending balance (in shares) at Jun. 30, 2020			84,041
Ending balance at Jun. 30, 2020	(479,720)		$ 131	(1,725,349)	1,013,854	234,850		(3,206)
Beginning balance (in shares) at Mar. 31, 2020			84,608
Beginning balance at Mar. 31, 2020	(402,390)		$ 131	(1,725,349)	1,013,394	318,519		(9,085)
Increase (Decrease) in Stockholders' Equity
Comprehensive income	(77,790)					(83,669)		5,879
Restricted stock awards (in shares)			(546)
Restricted stock awards	0
Minimum tax withholding requirements (in shares)			(21)
Minimum tax withholding requirements	(10)				(10)
Stock-based compensation	470				470
Ending balance (in shares) at Jun. 30, 2020			84,041
Ending balance at Jun. 30, 2020	$ (479,720)		$ 131	$ (1,725,349)	$ 1,013,854	$ 234,850		$ (3,206)

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands		6 Months Ended
		Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net (loss) income		$ (283,755)	$ 796
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Depreciation and amortization expense		14,845	18,704
Reorganization items, net		13,386	0
Loss (income) from equity method investments		38,694	(3,075)
Amortization of debt costs		21,954	12,364
Stock-based compensation		1,842	2,992
Long-lived asset impairments and other store closing costs		177,715	0
Loss on forward contracts for the issuance of convertible preferred stock		0	16,787
Loss on net asset exchange for the formation of the joint ventures		1,655	21,293
Gain on convertible debt repurchase		0	(3,214)
Interest expense recognized on interest rate swap		10,810	0
Distribution from equity investments		1,399	0
Deferred income tax benefit		(61,344)	(5,859)
Other		(2,106)	(398)
Changes in assets and liabilities:
Decrease (increase) in receivables		20,559	(4,400)
Decrease (increase) in inventory		88,146	(706)
Decrease (increase) in prepaid and other current assets		(12,841)	874
Increase (decrease) in accounts payable		(51,772)	24,886
Increase (decrease) in deferred revenue and accrued liabilities		53,125	(222)
Decrease in net lease liabilities		(33,998)	(18,556)
Other operating activities		(1,755)	3,057
Net cash (used in) provided by operating activities		(3,441)	65,323
Cash flows from investing activities:
Capital expenditures		(5,970)	(6,460)
Refranchising proceeds, net of store acquisition costs		408	1,520
Proceeds from net asset exchange		18,211	101,000
Deconsolidation of GNC Canada		(4,293)	0
Capital contribution to the joint ventures		0	(13,079)
Interest rate swap settlement		(8,990)	0
Net cash (used in) provided by investing activities		(634)	82,981
Cash flows from financing activities:
Proceeds from debtor-in-possession financing		30,000	0
Fees associated with the issuance of debtor-in-possession financing		(7,300)	0
Borrowings under revolving credit facility		60,000	22,000
Payments on revolving credit facility		(60,000)	(22,000)
Proceeds from the issuance of convertible preferred stock		0	199,950
Payments on convertible notes repurchase		0	(24,708)
Original issuance discount and revolving credit facility fees		0	(10,365)
Fees associated with the issuance of convertible preferred stock		0	(12,814)
Minimum tax withholding requirements		(64)	(228)
Net cash used in financing activities		(14,992)	(119,251)
Effect of exchange rate changes on cash and cash equivalents and restricted cash		(1,551)	(384)
Net (decrease) increase in cash and cash equivalents and restricted cash		(20,618)	28,669
Beginning balance, cash and cash equivalents and restricted cash		117,046	67,224
Ending balance, cash and cash equivalents and restricted cash		96,428	95,893
Non-cash investing activities:
Net assets contributed to the joint ventures (Note 9)	[1]	0	202,487
Net assets removed in deconsolidation of GNC Canada (Note 3)	[1]	14,342	0
Tranche B-1
Cash flows from financing activities:
Payments on term loan facility		0	(147,312)
Tranche B-2
Cash flows from financing activities:
Payments on term loan facility		$ (37,628)	$ (123,774)

[1] Capital expenditures included in current liabilities were not material during the six months ended June 30, 2020 and June 30, 2019.

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NATURE OF BUSINESS

6 Months Ended

Jun. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NATURE OF BUSINESS

NATURE OF BUSINESS

        GNC Holdings, Inc., a Delaware corporation ("GNC," “Holdings,” and collectively with its subsidiaries and, unless the context requires otherwise, its and their respective predecessors, the “Company”), is a global health and wellness brand with a diversified, omni-channel business. The Company's assortment of performance and nutritional supplements, vitamins, herbs and greens, health and beauty, food and drink and other general merchandise features innovative private-label products as well as nationally recognized third-party brands, many of which are exclusive to GNC.

        The Company's operations consist of three reportable segments, U.S. and Canada, International, and Manufacturing / Wholesale (refer to Note 14. "Segments" for more information). Corporate retail store operations are located in the United States, Canada, Puerto Rico, Ireland and, prior to the joint venture transaction with Harbin Pharmaceutical Group Co., Ltd ("Harbin") in February 2019, China. Franchise locations exist in the United States and approximately 50 other countries. Products can also be purchased through GNC.com, Amazon.com and other marketplaces and select wholesale partners. Additionally, the Company licenses the use of its trademarks and trade names. Prior to the formation of the manufacturing joint venture with International Vitamin Corporation ("IVC") (the "Manufacturing JV") in March 2019, the Company purchased raw materials, manufactured products and sold the finished products through its reportable segments. Following the establishment of the Manufacturing JV, the Company's operations consist of wholesale and retail sales. Refer to Note 9. "Equity Method Investments" for more information on the Company's joint ventures.

Voluntary Filing Under Chapter 11

On June 23, 2020 (the “Petition Date”), the Company and certain of its U.S. subsidiaries (collectively, the “Debtors”) filed a Restructuring Support Agreement (the "RSA") and commenced voluntary Chapter 11 proceedings (the “Chapter 11 Cases”) under Title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). See Note 3. "Reorganization and Chapter 11 Proceedings" for listing of our non-Debtor subsidiaries. The Debtors have requested that the Chapter 11 proceedings be jointly administered under the caption In re GNC Holdings, Inc., et al., Case No. 20-11662. Documents and other information related to the Chapter 11 Cases is available online through Prime Clerk, our claims administrator for the Chapter 11 Cases. In addition, the Company’s Canadian subsidiary voluntarily commenced parallel proceedings under the Companies' Creditors Arrangement Act ("CCAA") in Canada in the Ontario Superior Court of Justice on June 24, 2020 (the “Canadian Petition Date”). As a result, we deconsolidated General Nutrition Centres Company (“GNC Canada”), our wholly owned subsidiary, subsequent to the Canadian Petition Date. As such, all amounts presented in these Consolidated Financial Statements and notes thereto exclude the operating results and cash flows of GNC Canada subsequent to June 24, 2020 and the assets, liabilities and equity of GNC Canada as of June 30, 2020. Prior period amounts have not been adjusted.

The Consolidated Financial Statements included herein have been prepared in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic No. 852, Reorganizations. See Note 3. "Reorganization and Chapter 11 Proceedings" for further details.

Going Concern

The Company has continued to experience negative same store sales and declining gross profit. The Company has closed underperforming stores under its store optimization strategy and implemented cost reduction measures to help mitigate the effect of these declines and improve its financial position and liquidity. However, our business has been further adversely affected by the outbreak of the coronavirus, or COVID-19. Due to the COVID-19 pandemic, U.S. and Canada company-owned and franchise retail store temporary closures reached approximately 1,400 stores, or 40%, in April 2020 and have steadily re-opened since then. 551 of these stores have been permanently closed with an effective date in June 2020, in connection with the Chapter 11 Cases in which the Bankruptcy Court authorized the Debtors to reject certain unexpired U.S and Canada company-owned and franchise leases as discussed further in Note 3. "Reorganization and Chapter 11 Proceedings." As of June 30, 2020, the Company had over 100, or 4%, of the U.S. and Canada company-owned and franchise retail stores temporarily closed due to the COVID-19 pandemic. There is significant uncertainty relating to the impacts of COVID-19 on the Company’s business going forward due to various global macroeconomic, operational and supply chain risks.

Additionally, economic conditions and the risks and uncertainties associated with the Chapter 11 Cases, raise substantial doubt about our ability to continue as a going concern. We currently expect that the Company’s cash flows, cash on hand and financing obtained during the course of bankruptcy should provide sufficient liquidity for the Company during the Chapter 11 Cases. However, the significant risks and uncertainties related to the Company’s liquidity and the Chapter 11 Cases raise substantial doubt about the company’s ability to continue as a going concern within twelve months from the report release date of August 10, 2020.

The accompanying Consolidated Financial Statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") assuming that the Company will continue as a going concern, which contemplates continuity of operations, the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company's ability to continue as a going concern is dependent on many factors, including the consummation of the Chapter 11 Cases in a timely manner, the ability to reopen its stores as a result of the potential recovery from COVID-19 and its ability to restructure certain leasing arrangements pursuant to the provisions of the Bankruptcy Code. The Company filed a Plan of Reorganization (the "Plan") on July 15, 2020 with the Bankruptcy Court which supports our going concern assessment. However, the outcome of the Chapter 11 Cases is subject to significant uncertainty and depends upon factors outside of the Company’s control, including actions of the Bankruptcy Court and the Company’s creditors. There can be no assurance that the Company will confirm and consummate the Plan as contemplated by the RSA entered into by the Debtors on June 23, 2020 or complete an alternative plan of reorganization.

Delisting of Common Units from NYSE

On June 30, 2020, the Company’s common stock was suspended from trading on the New York Stock Exchange (the “NYSE”) as a result of the Debtors’ filing of the Chapter 11 Cases. Effective July 1, 2020, trades in the Company’s common stock are quoted on the OTC Pink Marketplace under the symbol “GNCIQ.” On July 1, 2020, the NYSE filed a Form 25 to delist the Company’s common stock and to remove it from registration under Section 12(b) of the Exchange Act.

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BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION  

        The accompanying unaudited Consolidated Financial Statements, which have been prepared in accordance with the applicable rules of the SEC, include all adjustments that management considers necessary to fairly state the Company's results of operations, financial position and cash flows. The December 31, 2019 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on March 25, 2020 (the "2019 10-K"). Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2020.

The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business due to various global macroeconomic, operational and supply chain risks as a result of COVID-19. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Furthermore, while operating as debtors-in-possession ("DIP") under Chapter 11, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business and subject to restrictions of the DIP financing and applicable orders of the Bankruptcy Court, for amounts other than those reflected in the accompanying unaudited Consolidated Financial Statements. Any such actions occurring during the Chapter 11 Cases confirmed by the Bankruptcy Court could materially impact the amounts and classifications of assets and liabilities reported in the unaudited Consolidated Financial Statements.

Restricted cash comprises current cash that is restricted as to withdrawal or usage. As of June 30, 2020, the Company had $15.7 million of restricted cash related to funds in escrow from the postpetition DIP financing obtained in the course of bankruptcy.

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-used software. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Accordingly, the Company has adopted this ASU in the first quarter of 2020, which did not have a material impact on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which introduces a new model to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company has adopted this ASU in the first quarter of 2020, which did not have a material impact on its Consolidated Financial Statements.

The majority of the Company's domestic store and e-commerce revenues are received as cash at the point of sales. The majority of the Company's franchise and wholesale revenues are billed with varying terms for payment. An allowance for credit losses is established based on the aging of the accounts receivable balances, financial condition of our franchisees and other third-party customers, historical write-off experience and current and future economic and market conditions.

The allowance for credit losses related to accounts receivable, and changes for the three and six months then ended June 30, 2020 are as follows:

(in thousands)	Balance at December 31, 2019		Charged to costs and expenses		Deduction		Balance at March 31, 2020		Charged to costs and expenses		Deduction		Balance at June 30, 2020
Vendor allowance(1)	$	14,033	$	5,439	$	(6,707)	$	12,765	$	2,698	$	—	$	15,463
Trade accounts receivable allowance (2)	8,615		9,224		(3,214)		14,625		3,164		(526)		17,263

(1) Changes to vendor allowance reserves are recorded as cost of sales on the Consolidated Statement of Operations.

(2) Changes to trade accounts receivable allowance are recorded as selling, general and administrative on the Consolidated Statement of Operations.

The Company records credit losses for vendor allowance reserves and trade accounts receivable for balances estimated to be uncollectible considering the aging of receivable balances and financial condition of our vendors and franchisees. Due to the estimated adverse impacts from COVID-19, the Company recognized an $8.7 million allowance for credit losses for its franchisees and other third-party customers and $4.6 million vendor allowance reserves during the first quarter of 2020. Refer to Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

Recently Issued Accounting Pronouncements

        In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, which simplifies accounting for income taxes by eliminating certain exceptions to ASC 740 related to the general approach for intraperiod tax allocation, methodology for calculating income taxes in an interim period and recognition of deferred taxes when there are investment ownership changes. The new guidance also simplifies aspects of accounting for franchise taxes and interim period effects of enacted changes in tax laws or rates. The new guidance provides clarification on accounting for transactions that result in a step-up in the tax basis of goodwill and allocation of consolidated income tax expense to separate financial statements of entities not subject to income tax. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The Company is evaluating the impact this standard will have on its Consolidated Financial Statements and related disclosures.

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REORGANIZATION AND CHAPTER 11 PROCEEDINGS

6 Months Ended

Jun. 30, 2020

Reorganizations [Abstract]

REORGANIZATION AND CHAPTER 11 PROCEEDINGS

Reorganization and Chapter 11 Proceedings

On the Petition Date, the Chapter 11 Cases were filed. The Debtors filed certain motions and applications intended to limit the disruption of the Chapter 11 Cases on its operations. Since the commencement of the Chapter 11 Cases, the Debtors have continued to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.

Chapter 11 Accounting

The Company has applied ASC 852 in preparing our Consolidated Financial Statements. ASC 852 requires the financial statements for periods subsequent to the Petition Date to distinguish transactions and events that are directly associated with the Company's reorganization from the ongoing operations of the business. Accordingly, certain expenses and gains incurred during the Chapter 11 Cases are recorded within Reorganization items, net in the unaudited Consolidated Statements of Operations. In addition, prepetition obligations that are unsecured or undersecured that may be impacted by the Chapter 11 Cases have been classified on the unaudited Consolidated Balance Sheet at June 30, 2020 as liabilities subject to compromise. These liabilities are reported at the amounts the Company currently anticipates will be allowed by the Bankruptcy Court, even if they may be settled for lesser amounts.

Under the Bankruptcy Code, the Debtors may assume, assume and assign or reject executory contracts and unexpired leases subject to the approval of the Bankruptcy Court and certain other conditions. Generally, the rejection of an executory contract or unexpired lease is treated as a prepetition breach of such executory contract or unexpired lease and, subject to certain exceptions, relieves the Debtors of performing their future obligations under such executory contract or unexpired lease but entitles the contract counterparty or lessor to a pre-petition general unsecured claim for damages caused by such deemed breach subject, in the case of the rejection of unexpired leases of real property, to certain caps on damages. Counterparties to such rejected contracts or leases may assert unsecured claims in the Bankruptcy Court against the applicable Debtor’s estate for such damages. Generally, the assumption or assumption and assignment of an executory contract or unexpired lease requires the Debtors to cure existing monetary defaults under such executory contract or unexpired lease and provide adequate assurance of future performance thereunder. Accordingly, any description of an executory contract or unexpired lease with the Debtor in this quarterly report, including where applicable a quantification of the Company’s obligations under any such executory contract or unexpired lease with the Debtor is qualified by any overriding rejection rights the Company has under the Bankruptcy Code.

Leases

Due to the adverse impacts of COVID-19, the Company withheld rent and other occupancy payments beginning in April 2020 for certain of its retail locations as management negotiated with landlords for rent concessions. The Company had unpaid rent and other occupancy payments of approximately $47 million as of June 30, 2020. In the event that withholding these rent payments would constitute an event of default per the lease agreement, management intends to negotiate resolution with the landlord. If such negotiations are not successful, the lease liabilities associated with those leases could become immediately due and payable. We also intend to reject certain lease arrangements throughout the Chapter 11 Cases.

On July 20, 2020, the Bankruptcy Court authorized the Debtors to reject certain unexpired U.S and Canada company-owned and franchise leases, 551 of which were rejected with an effective termination date in June 2020. As a result, for each rejected lease, we have extinguished the related right-of-use asset and lease liability, and recorded the expected allowed claim amount in liabilities subject to compromise ("LSTC") as of June 30, 2020, the effects of which were not material.

As of June 30, 2020, the Company identified a trigger event as it relates to the impairment of certain right-of-use assets. See further discussion in Note 6. "Property, Plant and Equipment, Net." For any leases not rejected by the Bankruptcy Court as of August 10, 2020, we have continued to account for these leases under ASC 842, amortizing the right-of-use assets and evaluating for impairment and/or revisions to the assets' useful lives. We anticipate rejecting additional leases in the course of bankruptcy. As of the Petition Date, we have classified all lease liabilities within LSTC.

Automatic Stay

Subject to certain specific exceptions under the Bankruptcy Code, the Chapter 11 Cases automatically stayed most judicial or administrative actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to pre-petition claims. Absent an order from the Bankruptcy Court, substantially all of the Debtors’ pre-petition liabilities are subject to settlement under the Bankruptcy Code.

Deconsolidation of GNC Canada

GNC Canada filed parallel proceedings in the Canadian Court. Any significant business decision which would impact our Canadian business requires the approval of both the U.S. and Canadian Courts as they have equal and plenary authority. As joint control by the U.S. and Canadian Courts does not constitute continued common control by the parent, the Company has deconsolidated GNC Canada effective as of the Canadian Petition Date consistent with ASC 810, Consolidation. Additionally, as the Company does not have significant influence over GNC Canada while in bankruptcy, GNC will record and account for its investment in GNC Canada using the cost method under ASC 321, Investments - equity securities, as of the date of deconsolidation. The operating results of GNC Canada are reflected in our Consolidated Statements of Operations through the date of deconsolidation.

We recorded a $5.0 million loss within Reorganization items, net related to the deconsolidation of GNC Canada during the three and six months ended June 30, 2020. The loss reflects the re-measurement of our net investment in GNC Canada to its estimated fair value of $13.6 million. Included in the loss was the reclassification of $5.6 million of cumulative foreign currency translation adjustments related to GNC Canada from Accumulated other comprehensive loss.

Subsequent to the deconsolidation, transactions with GNC Canada are no longer eliminated in consolidation and are considered related party transactions. Transactions between GNC and GNC Canada were not material during the 6 days ended June 30, 2020.

Prepetition professional fees

Expenses, gains and losses that are realized or incurred before the Petition Date and in relation to the Chapter 11 Cases are recorded under selling, general and administrative charges on our Consolidated Statements of Operations. Prepetition professional fees related to the Chapter 11 Cases were $34.2 million for the three and six months ended June 30, 2020.

Debtor-In-Possession (“DIP”) Financing

Debtor-in-Possession Credit Agreements

In connection with the Chapter 11 Cases, on June 24, 2020, GNC Corporation and General Nutrition Centers, Inc. (collectively, the “Borrower”) entered into the following DIP financing arrangements (collectively, the "DIP Credit Agreements"):

1. The Borrower entered into a Debtor-in-Possession Term Loan Credit Agreement (the “DIP Term Loan Credit Agreement”), with GLAS Trust Company, LLC, as administrative agent and collateral agent, and the lenders party thereto (collectively, the “TL DIP Lenders”), to obtain a senior secured super-priority DIP term loan (the “DIP Term Loan Facility”), consisting of:

(i) $100 million of new cash (the “New Money DIP”), which term loan shall accumulate interest based on an adjusted LIBOR rate plus an applicable margin of 13.00%, with a 1.00% LIBOR floor, and

(ii) $100 million in aggregate principal of the prepetition Tranche B-2 Term Loans which were converted into a separate tranche of DIP Facility loans (the “Rollup Term Loans”) on July 21, 2020. As of June 30, 2020, the prepetition Tranche B-2 Term Loans were classified in LSTC.

2. The Borrower entered into a Debtor-in-Possession Amended and Restated ABL Credit Agreement (the “DIP FILO Credit Agreement”), with JPMorgan Chase Bank, N.A., as administrative agent and collateral agent,

and the lenders party thereto (collectively, the “FILO DIP Lenders”), to obtain a senior secured super-priority DIP FILO facility (the “DIP Rollover Facility”). The DIP Rollover Facility consists of the refinancing of all $275 million of the Debtors’ prepetition FILO term loan under its ABL Credit Agreement, dated as of February 28, 2018 (as amended, the “ABL Credit Agreement”). The DIP Rollover Facility is subject to interest based on an adjusted LIBOR rate plus an applicable margin of 9.00%, with a 1.00% LIBOR floor.

DIP Term Loan Facility

Amounts borrowed against the DIP Term Loan Facility as of June 30, 2020 were $30.0 million, of which $15.7 million was held in escrow in accordance with terms of the DIP Term Loan Credit Agreement. The amounts in escrow were recorded as restricted cash within the Consolidated Balance Sheets.

The TL DIP Lenders shall provide an additional $70 million in new money term loans in addition to the $30 million in new money term loans provided pursuant to the Interim DIP Order and $100 million in amounts outstanding pursuant to the Debtors’ prepetition term loan facility would be “rolled-up” into amounts outstanding under the DIP Term Loan Facility, which term loan shall accumulate interest based on an adjusted LIBOR rate plus an applicable margin of 13.00%, with a 1.00% LIBOR floor. The TL DIP Lenders are entitled to receive cash interest payments on the New Money DIP and Rollup Term Loans through the pendency of the Chapter 11 Cases. The associated fees and expenses under the New Money DIP include (i) a 6.00% backstop premium, (ii) a 4.00% upfront fee and (iii) a 3.00% exit fee.

Borrowings under the DIP Term Loan Facility are secured by (i) a super priority lien on the collateral under the existing term loan (the “Term Loan Facility”) under the Amended and Restated Term Loan Agreement, dated as of February 28, 2018 (the "Term Loan Agreement"), as well as the unencumbered collateral of the Debtors, and (ii) a second priority lien on the existing collateral under the existing ABL Facility, junior to the lien in favor of the lenders thereunder. The DIP Term Loan Credit Agreement has various customary covenants, as well as covenants mandating compliance by the Debtors with a 13-week budget, variance testing and reporting requirements, among others.

The scheduled maturity of the DIP Term Loan Facility will be the earlier of six months from June 24, 2020 or the date of consummation of the Plan approved in the RSA, after which consummation (i) the outstanding New Money DIP amounts under the DIP Term Loan Facility would convert into the Exit FLFO Facility (as defined below), and (ii) the Rollup Term Loans would convert into the Exit FLSO Facility (as defined below), in each case upon the consummation of the Plan and the conclusion of the Chapter 11 Cases.

DIP Rollover Facility

The DIP FILO Credit Agreement amends and restates the ABL Credit Agreement and provided Borrower with approximately $30 million of additional liquidity by (i) removing certain cash dominion blockers effective upon Borrower’s paydown of the revolving credit facility under the ABL Credit Agreement (which paydown Borrower completed immediately upon receipt of interim approval of the DIP Facilities from the Bankruptcy Court), (ii) and adding $17.5 million to the borrowing base.

The scheduled maturity of the DIP Rollover Facility will be the earlier of six months from June 24, 2020 or the date of consummation of the Plan approved in the RSA, after which consummation the outstanding amounts under the DIP Rollover Facility would convert into a new FILO exit facility (the “FILO Exit Facility”) to the DIP FILO Credit Agreement upon the consummation of the Plan. The FILO Exit Facility contemplates a four-year maturity with an initial interest rate of LIBOR plus 9.00% with a 1% LIBOR floor, with the ability to step down to LIBOR plus 7.00% with a 1.00% LIBOR floor if certain conditions are satisfied, with mandatory prepayments required in certain circumstances. Other terms are customary and/or consistent with the DIP Rollover Facility or the ABL Credit Agreement.

The DIP Rollover Facility is subject to any additional fees, or to budget reporting covenants beyond those required under the Term Loan DIP Credit Agreement.

DIP Backstop Commitment Letter

On June 23, 2020, prior to commencement of the Chapter 11 Cases, the Company and certain of its subsidiaries received a DIP Backstop Commitment Letter (the “Commitment Letter”) from the TL DIP Lenders for financing of (i) the New Money DIP and (ii) the Rollup Term Loans.

If the Plan is consummated, the Commitment Letter contemplates that the New Money DIP will convert on a dollar-for-dollar basis into a first-lien-first-out term loan exit facility (the “Exit FLFO Facility”). The Exit FLFO Facility is contemplated to have a 4-year maturity and an interest rate of LIBOR plus an applicable margin of 10.00%, with a 1.00% LIBOR floor, with the borrowings thereunder secured by the same liens as the borrowings under the DIP Term Loan Facility. The Rollup Term Loans, together with an additional $50 million converted from the amounts outstanding under the Term Loan Facility, will convert on a dollar-for-dollar basis into a first-lien-second-out term loan exit facility (the “Exit FLSO Facility”). The Exit FLSO Facility is contemplated to have a 4.25-year term and an interest rate of, at the option of the borrower, LIBOR plus 9.00% cash interest (with a 1.00% LIBOR floor) plus an additional 3.00% interest paid-in-kind or LIBOR plus 11.50% cash interest (with a 1.00% LIBOR floor), with the borrowings thereunder secured by the same liens as the borrowings under the DIP Term Loan Facility, but with second-out payment priority.

Restructuring Support Agreement

On June 23, 2020, the Debtors entered into the RSA with creditors holding, in the aggregate, approximately (a) 92% of the aggregate outstanding principal amount of the Company’s Tranche B-2 Term Loan (the TL DIP Lenders), and (b) 87% of the aggregate outstanding principal amount of the Company’s ABL FILO Term Loan (the FILO DIP Lenders, and collectively with the TL Creditors, the “Consenting Creditors”).

The RSA incorporates the economic terms agreed to by the parties for the Plan. The RSA also contemplates that a significant majority of the Consenting Creditors have agreed that the Company will pursue on a parallel path basis a going concern sale of the business of the Debtors pursuant to Section 363 of the Bankruptcy Code the highest and best sale offer pursuant to this sale process, the “Sale Transaction”). As further discussed in Note 16. "Subsequent Events," on August 7, 2020, the Company reached an agreement for a stalking horse bid with Harbin Pharmaceutical Group Holding Co., Ltd ("Harbin Buyer") ("the Bid") and the Debtors will seek the Bankruptcy Court’s approval of the Bid and any related bid protections. Any such Sale Transaction would be executed through an auction process supervised by the Bankruptcy Court at which higher and better bids may be presented.

The DIP financing will provide the Debtors with at least $130 million in liquidity during the Chapter 11 Cases. If the Plan is consummated in exchange for providing the liquidity offered by the DIP Credit Agreements and in consideration for converting $100 million of prepetition Tranche B-2 Term Loans into the Exit FLSO Facility (as defined and described above), the holders of the prepetition Tranche B-2 Term Loans will also own 100% of the common stock in the reorganized Debtors (the “New Common Shares”), subject to dilution by a management incentive plan providing for 10% of the New Common Shares to be awarded to management and employees as well as a proposed equity distribution to general unsecured creditors. If the Plan is approved and the class of unsecured creditors votes to accept the approved Plan, they will have a choice to receive 3-year warrants for 5% of the pro forma equity of the reorganized Debtors or elect to receive their pro rata share of $250,000 in cash.

Pursuant to the RSA, each of the Debtors and Consenting Creditors has made certain customary commitments to each other. The Debtors have agreed to, among other things, use commercially reasonable efforts to implement the restructuring contemplated by the RSA; implement the Plan in a timely manner if the Sale Transaction is not consummated; respond to diligence and status update requests from certain of the Consenting Creditors’ representatives; and satisfy certain other covenants. The Consenting Creditors have committed to support and vote for the Plan and have agreed to use commercially reasonable efforts to take, or refrain from taking, certain actions in furtherance of such support. Certain of the Consenting Creditors have also agreed to provide debtor-in-possession financing pursuant to the DIP Credit Agreements.

The RSA contains milestones for the progress of the Chapter 11 Cases (the “Milestones”), which include the dates by which the Debtors are required to, among other things, obtain certain orders of the Bankruptcy Court and consummate the Debtors’ emergence from bankruptcy. Among other dates set forth in the RSA, the agreement contemplates that the Bankruptcy Court shall have entered the Interim DIP order no later than three business days after the Petition Date, the Final DIP Order no later than 35 days after the Petition Date and the Disclosure Statement Order no later than 45 days after the Petition Date and that the Company shall have emerged from

bankruptcy no later than 141 days after the Petition Date, subject in each case to an extension or waiver of such dates by the requisite Consenting Creditors under the terms of the RSA. As of August 10, 2020, GNC has achieved or extended all Milestones required up to the report release date of August 10, 2020.

The transactions contemplated by the RSA are subject to approval by the Bankruptcy Court, among other conditions. Accordingly, no assurance can be given that the transactions described therein will be consummated.

Plan of Reorganization

On July 15, 2020, the Debtors filed a joint plan of reorganization (the “Plan of Reorganization”) and a related disclosure statement (as amended, the “Disclosure Statement”) with the Bankruptcy Court. On August 7, 2020, the Debtors filed an amended Plan of Reorganization. On August 19, 2020, the Bankruptcy Court will hold a hearing to consider approval of the Disclosure Statement.

Reorganization Items, net

The accounting standards require that the Consolidated Financial Statements, for the periods incurred after the Petition Date as a direct result of the Chapter 11 Cases, distinguish transactions and events that are directly associated with the Chapter 11 Cases from the ongoing operations of the business. Accordingly, certain expenses (including professional fees), realized gains and losses, and provisions for losses that are realized or incurred during the Chapter 11 Cases are recorded in reorganization items, net in the Consolidated Statements of Operations. Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Bankruptcy and are consisted of the following for the three and six months ended June 30, 2020:

	Three months ended June 30, 2020		Six months ended June 30, 2020
	(in thousands)
Debtor-in-possession financing costs	$	7,300	$	7,300
Professional fees	2,043		2,043
Prepetition debt issuance costs and debt discount	1,039		1,039
Loss on deconsolidation of GNC Canada	5,047		5,047
Total reorganization items, net	$	15,429	$	15,429

	Six months ended June 30,
	2020		2019
Cash paid during the period for:
Reorganization items, net	$	7,532	$	—

Claims and Claims Resolution Process

To the best of our knowledge, after making reasonable efforts, we have notified all of our known current or potential creditors that the Debtors have filed the Chapter 11 Cases. On July 21, 2020 each of the Debtors filed their respective Schedules of Assets and Liabilities (the “Schedules”) and Statements of Financial Affairs (the “Statements”) (collectively, the “Schedules and Statements”) with the Bankruptcy Court. These documents set forth, among other things, the assets and liabilities of each of the Debtors, the unexpired leases of the Debtors, including executory contracts to which each of the Debtors is a party, are subject to the qualifications and assumptions included therein, and are subject to amendment or modification as our Chapter 11 Cases proceed. The Schedules and Statements may be subject to further amendment or modification after filing.

Pursuant to the Federal Rules of Bankruptcy Procedure, creditors who wish to assert prepetition claims against us and whose claim (i) is not listed in the Schedules and Statements or (ii) is listed in the Schedules and Statements as disputed, contingent, or unliquidated, must file a proof of claim with the Bankruptcy Court prior to the bar date set by the court. The general bar date for creditors to file claims or contest claim amounts is scheduled for August 28, 2020 and the governmental bar date is scheduled for December 21, 2020 (collectively, the "Bar Dates").

As of August 7, 2020, approximately 763 claims totaling $62.7 million have been filed with the Bankruptcy Court against the Debtors by approximately 633 claimants. We expect additional claims to be filed prior to the Bar Dates. In addition, creditors who have already filed claims may amend or modify their claims in ways we cannot reasonably predict. The amounts of these additional claims and/or amendments or modifications to claims already filed may be material. We anticipate the claims filed against the Debtors in the Chapter 11 Cases will be numerous. We expect the process of resolving claims filed against the Debtors to be complex and lengthy. We plan to investigate and evaluate all filed claims in connection with the Chapter 11 Cases. As part of the process, we will work to resolve differences in amounts scheduled by the Debtors and the amounts claimed by creditors, including through the filing of objections with the Bankruptcy Court where necessary. Accordingly, the ultimate number and amount of claims that will be allowed against the Debtors is not presently known, nor can the ultimate recovery with respect to allowed claims be reasonably estimated.

See Note 12. "Mezzanine Equity," for further details discussing classification of mezzanine equity.

Liabilities Subject to Compromise

The accompanying unaudited Consolidated Balance Sheet as of June 30, 2020 includes amounts classified as liabilities subject to compromise, which represent unsecured or undersecured prepetition liabilities. These amounts include the Company's current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases and may differ from actual future settlement amounts paid. Differences between liabilities estimated and claims filed, or to be filed, will be investigated and resolved in connection with the claims resolution process. The Company will continue to evaluate these liabilities throughout the Chapter 11 Cases and adjust estimates as necessary. Liabilities subject to compromise consisted of the following:

	June 30, 2020
	(in thousands)
Accounts payable	$	61,128
Accrued interest	3,744
Lease liabilities	329,790
Other liabilities	188,971
Tranche B-2 Term Loan	410,834
Notes	159,097
Total Liabilities subject to compromise	$	1,153,564

The principal balance on the Tranche B-2 Term Loan and Notes of $410.8 million and $159.1 million, respectively, has been reclassified from long-term debt to LSTC as of June 30, 2020. See also Note 8. "Debt / Interest Expense" for further details.

Effective as of the Petition Date, we ceased recording interest expense on outstanding prepetition debt subject to compromise. Contractual interest expense represents amounts due under the contractual terms of outstanding prepetition debt classified as LSTC. For the quarter ended June 30, 2020, contractual interest expense of $0.8 million related to LSTC has not been recorded in the Consolidated Financial Statements.

Accrued interest on the prepetition debt subject to compromise was also reclassified from accrued liabilities to LSTC as of June 30, 2020. We have not made any interest payments on our prepetition debt subject to compromise since the commencement of the Chapter 11 Cases.

Employee Retention Program

On July 20, 2020, the Bankruptcy Court approved the Debtors' Key Employee Retention Program ("KERP"). The KERP is designed to enhance retention of key employees and provides a maximum award pool of approximately $3.1 million.

Debtor Financial Statements

Debtors Condensed Combined Financial Statements

The Company has seventeen wholly-owned entities that are considered non-debtors (“Non-Debtors”).

•Nutra Insurance Company

•GNC Korea Limited

•GNC Hong Kong Limited

•GNC (Shanghai) Trading Co., Ltd.

•GNC China JV Holdco Limited

•GNC (Shanghai) Food Technology Limited

•GNC South Africa (Pty) Ltd.

•GNC Jersey One Limited

•GNC Jersey Two Unlimited

•THSD Unlimited Company

•GNC Live Well Ireland

•GNC Colombia SAS

•GNC Newco Parent, LLC

•Nutra Manufacturing, LLC

•GNC Supply Purchaser, LLC

•GNC Intermediate IP Holdings, LLC

•GNC Intellectual Property Holdings, LLC

With the exception of cash and cash equivalents, brand name and equity method investments in the amounts of $5.1 million, $24.8 million and $42.1 million, respectively, the balance sheet, results of operations and cash flow activity of the Non-Debtors is not material to the consolidated financial statements of GNC as of and for the period ended June 30, 2020. See Note 9. "Equity Method Investments" for more information on the Company's equity method investments.

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REVENUE

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

        Revenue is recognized when obligations under the terms of a contract with the customer are satisfied. Generally, this occurs with the transfer of control of products or services. The Company satisfies performance obligations either over time or at a point in time as discussed in further detail below. Revenue is measured as the amount of consideration expected to be received in exchange for transferring goods or providing services. Applicable sales tax collected concurrent with revenue-producing activities is excluded from revenue.

Due to the deconsolidation of GNC Canada, as further discussed in Note 1. "Nature of Business," all amounts presented in this footnote exclude the operating results of GNC Canada subsequent to June 24, 2020.

U.S. and Canada Revenue

The following is a summary of revenue disaggregated by major source in the U.S. and Canada segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
U.S. company-owned product sales: (1)	(in thousands)
Protein	$	51,509	$	77,160	$	125,317	$	157,345
Performance supplements	42,694		73,083		110,685		147,824
Weight management	16,122		29,607		36,639		60,373
Vitamins	36,866		44,936		85,828		91,944
Herbs / Greens	10,699		15,536		24,504		31,391
Wellness	26,185		46,370		65,267		93,515
Health / Beauty	29,869		46,535		69,354		92,888
Food / Drink	11,370		26,259		30,569		54,483
General merchandise	3,218		5,519		8,089		12,318
Total U.S. company-owned product sales	228,532		365,005		556,252		742,081
Wholesale sales to franchisees	36,444		59,869		87,500		118,126
Royalties and franchise fees	6,907		8,175		14,234		16,647
Sublease income	9,738		10,498		19,980		21,474
Cooperative advertising and other franchise support fees	2,605		4,754		7,013		9,821
Other (2)	15,980		27,759		39,408		57,067
Total U.S. and Canada revenue	$	300,206	$	476,060	$	724,387	$	965,216

(1)Includes e-commerce sales.

(2)Includes revenue primarily related to operations in Canada through deconsolidation date of June 24, 2020, and the loyalty programs, myGNC Rewards and PRO Access.

International Revenues

        The following is a summary of revenue disaggregated by major source in the International reportable segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Wholesale sales to franchisees	$	15,637	$	27,019	$	35,820	$	52,456
Royalties and franchise fees	4,001		6,332		10,509		12,319
Other (1)	9,295		6,097		16,149		15,596
Total International revenue	$	28,933	$	39,448	$	62,478	$	80,371

(1)Includes revenue related to China operations prior to the transfer of the China business to the HK JV and China JV, which was effective February 13, 2019, wholesale sales to the HK JV and China JV, and revenue from company-owned locations in Ireland.

Manufacturing / Wholesale Revenue

The following is a summary of revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Third-party contract manufacturing(1)	$	—	$	—	$	—	$	15,783
Intersegment sales(1)	—		—		—		35,505
Wholesale partner sales	14,399		18,489		29,254		37,390
Total Manufacturing / Wholesale revenue	$	14,399	$	18,489	$	29,254	$	88,678

(1)As a result of the transfer of the Nutra manufacturing business to the newly formed Manufacturing JV effective March 1, 2019, no third-party contract manufacturing and intersegment sales were recognized thereafter.

Revenue by Geography

        The following is a summary of revenue by geography:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Total revenues by geographic areas(1):	(in thousands)
United States	$	334,411	$	510,762	$	787,284	$	1,048,805
Foreign	9,127		23,235		28,835		49,955
Total revenues	$	343,538	$	533,997	$	816,119	$	1,098,760

(1) Geographic areas are defined based on legal entity jurisdiction.

Balances from Contracts with Customers

        Contract liabilities include payments received in advance of performance under the contract, and are realized with the associated revenue recognized under the contract. The Company's PRO Access and loyalty program points are recorded within deferred revenue and other current liabilities on the Consolidated Balance Sheets. Deferred franchise and license fees are recorded within deferred revenue and other current liabilities and other long-term liabilities on the Consolidated Balance Sheets.

The following table presents changes in the Company’s contract liabilities:

	Six months ended June 30, 2020
	Balance at Beginning of Period		Recognition of revenue included in beginning balance		Contract liability, net of revenue, recognized during the period		Balance at End of Period
	(in thousands)
Deferred franchise and license fees	$	28,293	$	(4,934)	$	2,168	$	25,527
PRO Access and loyalty program points (1)	22,896		(16,909)		12,194		18,181
Gift card liability (1)	3,110		(1,502)		274		1,882

	Six months ended June 30, 2019
	Balance at Beginning of Period		Recognition of revenue included in beginning balance		Contract liability, net of revenue, recognized during the period		Balance at End of Period
	(in thousands)
Deferred franchise and license fees	$	33,464	$	(5,533)	$	2,247	$	30,178
PRO Access and loyalty program points (1)	24,836		(18,093)		19,207		25,950
Gift card liability (1)	3,416		(1,793)		343		1,966

(1) Net of estimated breakage

As of June 30, 2020, the Company had deferred franchise fees with unsatisfied performance obligations extending throughout 2030 of $25.5 million, of which $5.7 million is expected to be recognized over the next 12 months. The Company has elected to use the practical expedient allowed under the rules of adoption to not disclose the duration of the remaining unsatisfied performance obligations for contracts with an original expected length of one year or less.

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INVENTORY

3 Months Ended

Mar. 31, 2020

Inventory Disclosure [Abstract]

INVENTORY

INVENTORY

        The net realizable value of inventory consisted of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Finished product ready for sale	$	275,170	$	387,655
Inventory	$	275,170	$	387,655

As a result of the COVID-19 pandemic, the Company temporarily closed up to 40% company-owned and franchise stores from March through June 2020, and sales trends have significantly declined beginning in the second half of March 2020. Due to the store closures, decline in sales trends and estimated adverse impacts on the Company's business as a result of COVID-19, the Company recorded $18.2 million inventory obsolescence reserves during the first quarter of 2020, of which $17.8 million was recorded within the U.S. and Canada segment and $0.4 million was recorded within the Manufacturing and Wholesale segment. As a result of filing the Chapter 11 Cases on June 23, 2020, the Company expects vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC and therefore recorded $12.6 million in inventory reserves during the three months ended June 30, 2020 within the U.S and Canada segment. Refer to Note 3. "Reorganization and Chapter 11 Proceedings" for more information on the Chapter 11 Cases.

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PROPERTY, PLANT AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT AND EQUIPMENT, NET

PROPERTY, PLANT AND EQUIPMENT, NET

The following is a summary of impairment charges and other store closing costs:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Right-of-use asset	$	18,199	$	—	$	39,422	$	—
Property and equipment	2,002		—		13,227		—
Other store closing costs	—		—		7,897		—
Total impairment and other store closing costs	$	20,201	$	—	$	60,546	$	—

As a result of the COVID-19 pandemic, the Company temporarily closed up to 40% of its company-owned and franchise stores from March through June 2020, and sales trends have significantly declined beginning in the second half of March 2020. During the first quarter of 2020, due to the store closures, decline in sales trends and estimated adverse impact from COVID-19, the Company recorded $40.3 million of impairment charges and other store closing costs, of which $21.2 million related to right-of-use asset impairments, $11.2 million related to property and equipment impairment and $7.9 million related to other store closing costs. Refer to Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

In connection with the Chapter 11 Cases, the Company launched liquidation sales in June 2020 in approximately 500 U.S and Canada company-owned stores which are expected to close during the third quarter of 2020. As a result of the liquidation sales and planned store closures, the Company recorded $20.2 million impairment charges, of which $18.2 million related to right-of use asset impairments and $2.0 million related to property and equipment impairment. Refer to Note 3. "Reorganization and Chapter 11 Proceedings" for more information on the Chapter 11 Cases.

The impairment test was performed at the individual store level, as it is the lowest level in which identifiable cash flows are largely independent of other groups of assets and liabilities. If the undiscounted estimated cash flows were less than the carrying value of the asset group, an impairment charge was calculated by subtracting the estimated fair value of the asset group from its carrying value. Fair value for property, plant and equipment was estimated using a discounted cash flow method (income approach) utilizing the undiscounted cash flows computed in the first step of the test. Fair value for right-of-use assets was estimated using a discounted cash flow method (income approach) based on market participant assumptions.

During the first quarter of 2020, the Company sold its owned location in Boston, MA and recorded a $2.1 million pre-tax gain from the sale recognized within other income, net on the Company's Consolidated Statement of Operations.

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GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

Due to the significant decline in the Company's share price in the first quarter of 2020 and estimated adverse impacts from the COVID-19 pandemic, management concluded a triggering event occurred in the first quarter requiring an impairment test of its definite-lived intangible assets, indefinite-lived intangible brand name asset and the goodwill of all reporting units. No impairment was recorded for the Company's definite-lived intangible assets.

Brand Name

In the first quarter of 2020, management performed an impairment test for its brand intangible asset, and concluded that the estimated fair value under the relief from royalty method (income approach) was less than its carrying value, which resulted in an impairment charge of $111.7 million. The brand name impairment test was performed in totality as it represents a single unit of account and $88.6 million of the charge was allocated to the U.S. and Canada and the remaining amount was allocated to the International segment. Key assumptions included in the estimation of the fair value include the following:

•Future cash flow assumptions - Future cash flow assumptions include retail sales from the Company’s corporate retail store operations, GNC.com retail sales, wholesale partner sales, China JV and HK JV retail sales, and domestic and international franchise retail sales. Sales were based on organic growth and were derived from historical experience and assumptions regarding future growth, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business. The Company's analysis incorporated an assumed period of cash flows of 10 years with a terminal value.

•Royalty rate - The royalty rates utilized consider external market evidence and internal financial metrics including a review of available returns after the consideration of property, plant and equipment, working capital and other intangible assets. The royalty rate used to estimate the fair values of the Company's reporting units was within a range of 0% - 3%.

•Discount rate - The discount rate was based on an estimated weighted average cost of capital ("WACC") for each business supported by the GNC brand name. The components of WACC are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. The WACC used to estimate the fair values of the Company's reporting units was within a range of 20% to 22%. Any difference between the WACC among reporting units is primarily due to the precision with which management expects to be able to predict the future cash flows of each reporting unit.

No impairment was recorded during the second quarter of 2020 for brand name.

Goodwill

Management performed an impairment test of the Company's goodwill. The results of the impairment test indicated no impairments for GNC.com, International Franchise and Wholesale reporting units. However, The Health Store reporting unit had a fair value below its carrying value, which resulted in a $5.5 million goodwill impairment charge, which was recorded within the International segment.

The Company estimated the fair values of its reporting units in the first quarter of 2020 using a discounted cash flow method (income approach) weighted 50% and a guideline company method (market approach) weighted 50%. The key assumptions used under the income approach include the following:

•Future cash flow assumptions - The Company's projections for its reporting units were based on organic growth and were derived from historical experience and assumptions regarding future growth and profitability trends, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business. The Company's analysis incorporated an assumed period of cash flows of 10 years with a terminal value.

•Discount rate - The discount rate was based on an estimated WACC for each reporting unit. The components of WACC are the cost of equity and the cost of debt, each of which requires judgment by management to estimate. The Company developed its cost of equity estimate based on perceived risks and predictability of future cash flows. The WACC used to estimate the fair values of the Company's reporting units was within a range of 20% to 22%. Any difference between the WACC among reporting units is primarily due to expectation of achieving the future cash flows of each reporting unit.

The guideline company method involves analyzing transaction and financial data of publicly-traded companies to develop multiples, which are adjusted to account for differences in growth prospects and risk profiles of the reporting unit and comparable.

No impairment was recorded during the second quarter of 2020 for goodwill.

Goodwill Roll-Forward

The following table summarizes the Company's goodwill activity by reportable segment:

	U.S. and Canada		International		Manufacturing / Wholesale			Total
	(in thousands)
Goodwill at December 31, 2019
Gross	$	389,895	$	43,330	$	141,299		$	574,524
Accumulated impairments	(380,644)		—		(114,771)			(495,415)
Goodwill	9,251		43,330		26,528			79,109
2020 Activity:
Impairment	—		(5,451)		—			(5,451)
Translation effect of exchange rates	—		(106)		—			(106)
Total 2020 activity	—		(5,557)		—		—	(5,557)
Balance at June 30, 2020
Gross	389,895		43,224		141,299			574,418
Accumulated impairments	(380,644)		(5,451)		(114,771)			(500,866)
Goodwill	$	9,251	$	37,773	$	26,528		$	73,552

Intangible Assets

The following table reflects the gross carrying amount and accumulated amortization for each major definite-lived intangible assets:

		June 30, 2020						December 31, 2019
	Weighted-Average Life	Cost		Accumulated Amortization/Impairment		Carrying Amount		Cost		Accumulated Amortization/Impairment		Carrying Amount
		(in thousands)
Brand name	Indefinite	$	720,000	$	(531,000)	$	189,000	$	720,000	$	(419,280)	$	300,720
Retail agreements	30.3	31,000		(14,145)		16,855		31,000		(13,619)		17,381
Franchise agreements	25	70,000		(37,217)		32,783		70,000		(35,817)		34,183
Manufacturing agreements	25	40,000		(21,267)		18,733		40,000		(20,467)		19,533
Other intangibles	7	640		(581)		59		639		(529)		110
Franchise rights	3	7,566		(7,503)		63		7,566		(7,475)		91
Total		$	869,206	$	(611,713)	$	257,493	$	869,205	$	(497,187)	$	372,018

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DEBT / INTEREST EXPENSE

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

DEBT / INTEREST EXPENSE

DEBT / INTEREST EXPENSE

        Debt consisted of the following: 

	June 30, 2020		December 31, 2019
	(in thousands)
DIP Financing:
DIP Financing - New Money DIP	$	30,000	$	—
DIP Financing - DIP FILO	275,000		—
Total DIP Financing	305,000		—
Liabilities subject to compromise:
Tranche B-2 Term Loan	410,834		—
Notes	159,097		—
Total liabilities subject to compromise	569,931		—
Long-term debt, including the current portion:
Tranche B-2 Term Loan (net of $7.0 million discount)	—		441,500
FILO Term Loan (net of $8.2 million discount)	—		266,814
Notes (net of $3.9 million conversion feature and $0.5 million discount)	—		154,675
Debt issuance costs	—		(424)
Total long-term debt, including the current portion	—		862,565
Total debt	$	874,931	$	862,565

DIP Financing

As described further in Note 3. "Reorganization and Chapter 11 Proceedings," in connection with the Chapter 11 Cases, the Company entered into the DIP Credit Agreements on June 24, 2020.

Prepetition Debt

On February 28, 2018, the Company amended and restated its Senior Credit Facility (the "Amendment," and the Senior Credit Facility as so amended, the Term Loan Agreement), which included an extension of the maturity date of the Tranche B-2 Term Loan. In the event that all outstanding amounts under the convertible senior notes exceeding $50.0 million are not repaid, refinanced, converted or effectively discharged prior to May 16, 2020, the Springing Maturity Date, the maturity date of the Tranche B-2 Term Loan became the Springing Maturity Date, subject to certain adjustments. On February 28, 2018, the Company also entered into the ABL Credit Agreement, consisting of:

•a $275.0 million asset-based Term Loan Facility advanced on a “first-in, last-out” basis (the "FILO Term Loan") with a maturity date of December 2022 (which maturity date will become May 2020, subject to certain adjustments, should the Springing Maturity Date be triggered); and

•a $100.0 million asset-based Revolving Credit Facility (the "Revolving Credit Facility") with a maturity date of August 2022 (which maturity date will become May 2020, subject to certain adjustments, should the Springing Maturity Date be triggered). In connection with the transfer of the Nutra manufacturing and Anderson facility net assets to the Manufacturing JV with IVC, the Revolving Credit Facility commitment was reduced from $100.0 million to $81.0 million effective March 2019. As of March 31, 2020, there were $30.0 million borrowings outstanding on the Revolving Credit Facility. At June 30, 2020, the Company had $19.9 million available under the Revolving Credit Facility, after giving effect to $30.0 million borrowing outstanding, $4.5 million utilized to secure letters of credit and a $26.6 million reduction to borrowing ability as a result of decrease in net collateral.

        The Tranche B-2 Term Loan requires annual aggregate principal payments of at least $43 million and bears interest at a rate of, at the Company's option, LIBOR plus a margin of 8.75% per annum subject to change under certain circumstances (with a minimum and maximum margin of 8.25% and 9.25%, respectively, per annum), or prime plus a margin of 7.75% per annum subject to change under certain circumstances (with a minimum and maximum margin of 7.25% and 8.25%, respectively, per annum). Any mandatory repayments as defined in the credit agreement shall be applied to the remaining annual aggregate principal payments in direct order of maturity. The Company paid $100 million on the Tranche B-2 Term Loan in November 2018 and elected to use the payment to satisfy the scheduled amortization payments on the Term Loan Facility through December 2020. The Term Loan Agreement is secured by a (i) first lien on certain assets of the Company primarily consisting of capital stock issued by General Nutrition Centers, Inc. and its subsidiaries, intellectual property and equipment (“Term Priority Collateral”) and (ii) second lien on certain assets of the Company primarily consisting of inventory and accounts receivable (“ABL Priority Collateral”). The Term Loan Agreement is guaranteed by all material, wholly-owned domestic subsidiaries of the Company (the “U.S. Guarantors”) and by GNC Canada, an unlimited liability company organized under the laws of Nova Scotia (together with the U.S. Guarantors, the “Guarantors”).

        There are no scheduled amortization payments associated with the FILO Term Loan, which bears interest at a rate of, at the Company's option, LIBOR plus a margin of 7.00% per annum subject to decrease under certain circumstances (with a minimum possible interest rate of LIBOR plus a margin of 6.50% per annum) or prime plus a margin of 6.00% per annum subject to decrease under certain circumstances (with a minimum possible interest rate of prime plus a margin of 5.50% per annum). Outstanding borrowings under the Revolving Credit Facility bear interest at a rate of LIBOR plus 1.50% per annum (subject to an increase of 0.25% or 0.50% based on the amount available to be drawn under the Revolving Credit Facility) or prime plus a margin of 0.50% per annum (subject to an increase of 0.25% or 0.50% based on the amount to be drawn under the Revolving Credit Facility). The Company is also required to pay an annual fee to revolving lenders equal to 1.5% per annum (subject to an increase of 0.25% or 0.50% based on the amount available to be drawn under the Revolving Credit Facility) on outstanding letters of credit and an annual commitment fee of 0.375% on the undrawn portion of the Revolving Credit Facility, which is subject to an increase to 0.5% based on the amount available to be drawn under the Revolving Credit Facility. The FILO Term Loan and Revolving Credit Facility are secured by a (i) first lien on ABL Priority Collateral and (ii) second lien on Term Priority Collateral. The FILO Term Loan and Revolving Credit Facility are guaranteed by the Guarantors.

        Under the Company’s Credit Agreements, the Company is required to make certain mandatory prepayments, including a requirement to prepay first the Tranche B-2 Term Loan (until repaid in full) and second the FILO Term Loan (until repaid in full, but only if such prepayment is permitted under the ABL Credit Agreement) in each case annually with amounts based on excess cash flow, as defined in the Company’s Credit Facilities, based on the results of the Company for the prior fiscal year. The payment will be 75% of excess cash flow for each such fiscal year, subject to a reduction to 50% based on the attainment of a certain Consolidated Net First Lien Leverage Ratio, and will be reduced by certain scheduled debt payment amounts. Based on the Company's results for the year ended December 31, 2019, the Company made an excess cash flow payment of $25.9 million in April 2020. The Company made an excess cash flow payment of $9.8 million in April 2019 with respect to the year ending December 31, 2018.

As discussed in Note 3, “Reorganization and Chapter 11 Proceedings,” the Chapter 11 Cases automatically stayed actions against the Debtors and efforts by creditors to collect on or otherwise exercise rights or remedies with respect to prepetition debt. All of the Debtors’ prepetition debt excluding those amounts converted into DIP financing, are included in liabilities subject to compromise as of June 30, 2020.

At June 30, 2020, the Company's contractual interest rates under the Tranche B-2 Term Loan, the FILO Term Loan and the Revolving Credit Facility were 10.1%, 8.0% and 4.0%, respectively, which consist of LIBOR plus the applicable margin rate and in the case of Revolving Credit Facility at Prime rate plus the applicable margin rate. At December 31, 2019, the interest rates under the Tranche B-2 Term Loan and the FILO Term Loan were 10.6%, and 8.8%, respectively.

        The Company’s Credit Facilities contain customary covenants, including limitations on the ability of the Borrower to, among other things, incur debt, grant liens on their assets, enter into mergers or liquidations, sell assets, make investments or acquisitions, make optional payments in respect of, or modify, certain other debt instruments, pay dividends or other payments on capital stock, or enter into arrangements that restrict their ability to pay dividends or grant liens. Despite these limitations, the Company has the ability to discharge the liabilities of GNC Holdings, Inc. in the ordinary course of business through a variety of alternatives, including a restricted payment basket, a junior lien debt incurrence basket, and repayment of intercompany debt.

 In addition, the Term Loan Agreement requires compliance, as of the end of each fiscal quarter of the Company, with a maximum Consolidated Net First Lien Leverage Ratio currently set at 4.25 to 1.00. If the Company’s availability under the Revolving Credit Facility is less than the greater of (i) 12.5% of the borrowing base or (ii) $12.5 million, then the ABL Credit Agreement requires compliance as of the end of each fiscal quarter with a minimum Fixed Charge Coverage Ratio of 1.00 to 1.00.

Prior to the issuance of our Form 10-Q for the quarter ended March 31, 2020, we determined that we did not have the ability to pay the accelerated maturity payment due on the Springing Maturity Date and therefore obtained an extension for the accelerated maturity payment to June 30, 2020. On the Petition Date, the filing of the Chapter 11 Cases constituted an event of default that accelerated obligations under the following debt instruments and agreements:

•the Amended and Restated Term Loan Agreement, dated as of February 28, 2018 (as amended), among the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto with respect to approximately $410.8 million of borrowings outstanding, plus accrued and unpaid interest thereon;

•the ABL Credit Agreement, dated as of February 28, 2018 (as amended), among the Borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto with respect to approximately $335 million of borrowings outstanding, plus accrued and unpaid interest thereon; and

•the indenture, dated August 10, 2015, by and among the Company, as issuer, certain other subsidiaries of the Company, as guarantors, and BNY Mellon Trust Company, N.A., as the trustee with respect to an aggregate principal amount of approximately $157.6 million of 1.5% convertible senior unsecured notes due 2020 (the "Indenture"). 

        As of June 30, 2020, the Company maintains $159.1 million in principal amount of its 1.5% convertible Notes outstanding. The Notes, classified within LSTC at June 30, 2020 and debt at December 31, 2019, consist of the following components:

	June 30, 2020		December 31, 2019
	(in thousands)
Liability component
Principal	$	159,097	$	159,097
Conversion feature	—		(3,898)
Discount related to debt issuance costs	—		(524)
Net carrying amount	$	159,097	$	154,675

Interest Rate Swaps

        On June 13, 2018, the Company entered into two interest rate swaps with notional amounts of $275 million and $225 million to limit the exposure of its variable interest rate debt by effectively converting it to a fixed interest rate. The Company receives payments based on the one-month LIBOR and makes payments based on a fixed rate. The Company receives payments with a floor of 0.00% and 0.75%, respectively, on the $275 million and $225

million interest rate swaps, which aligns with the related debt instruments. The interest rate swap agreements had an effective date of June 29, 2018. The $225 million interest rate swap expires on February 28, 2021, and the $275 million interest rate swap expires on June 30, 2021. The notional amount of the $225 million interest rate swap has scheduled decreases to $175 million on June 30, 2019, $125 million on June 30, 2020 and $75 million on December 31, 2020. The Company designated these instruments as cash flow hedges deemed effective upon initiation. The interest rate swaps are recognized on the balance sheet at fair value. When the cash flow hedges are deemed effective, changes in fair value are recorded within other comprehensive loss on the Consolidated Balance Sheets and reclassified into the Consolidated Statement of Operations as interest expense in the period in which the underlying transaction affects earnings.

As of March 31, 2020, the Company's expectation was that it could not reduce the outstanding balance on the Notes to below $50 million before the Springing Maturity date, which would result in acceleration of the maturity date of the Tranche B-2 and the FILO Term Loan. As such, the Company deemed the cash flow hedges as ineffective as the forecasted hedging transactions were not expected to occur by the end of the originally specified time period. The Company reclassified a $10.8 million pre-tax loss previously deferred within accumulated other comprehensive loss to interest expense during the three months ended March 31, 2020.

In connection with the closing of the debtor-in-possession financing, the Company agreed to settle and terminate the outstanding swap agreements for $9.8 million on June 29, 2020, of which $9.0 million was classified in the Consolidated Statement of Cash Flows as cash flows from investing activities for the settlement of the liability and $0.8 million classified as cash flows from operating activities for settlement of the interest.

The fair values of the derivative financial instruments included in the Consolidated Balance Sheets consisted of the following:

	Fair Value at
Balance Sheet Classification	June 30, 2020		December 31, 2019
	(in thousands)
Other current liabilities	$	—	$	5,013
Other long-term liabilities	—		1,927
Total liabilities	$	—	$	6,940

Interest Expense 

        As discussed in Note 3. "Reorganization and Chapter 11 Proceedings," upon the Petition Date, GNC ceased recording interest expense on prepetition debt subject to compromise. For the quarter ended June 30, 2020, contractual interest expense of $0.8 million related to LSTC has not been recorded in the Consolidated Financial Statements. Interest expense consisted of the following:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
DIP Financing	$	58	$	—	$	58	$	—
Tranche B-1 Term Loan coupon	—		—		—		928
Tranche B-2 Term Loan coupon	10,310		12,954		22,649		29,422
FILO Term Loan coupon	6,861		6,826		13,687		13,578
Revolving Credit Facility	534		96		683		219
Amortization of discount and debt issuance costs	3,499		2,522		18,554		8,565
Subtotal	21,262		22,398		55,631		52,712
Notes:
Coupon	551		729		1,147		1,436
Amortization of conversion feature	1,442		1,611		2,984		3,312
Amortization of discount and debt issuance costs	200		242		417		486
Total Notes	2,193		2,582		4,548		5,234
Loss on interest rate swap	(1,356)		—		9,454		—
Other	(42)		(16)		(131)		(26)
Interest expense, net	$	22,057	$	24,964	$	69,502	$	57,920

During the first quarter, the Company accelerated the amortization of original issuance discount and deferred financing fees for the Tranche B-2 Term Loan, FILO Term Loan and the Revolving Credit Facility of $12.4 million to the Springing Maturity Date.

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EQUITY METHOD INVESTMENTS

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

EQUITY METHOD INVESTMENTS

EQUITY METHOD INVESTMENTS         The Company's interests in the Manufacturing, HK and China joint ventures, which are Non-Debtors as discussed in Note 3. "Reorganization and Chapter 11 Proceedings," are accounted for as equity method investments due to the Company’s ability to exercise significant influence over management decisions of the joint ventures. Under the equity method, the Company's share of profits and losses from the joint ventures is recorded within income from equity method investments on the Consolidated Statement of Operations. The following table provides a reconciliation of equity method investments on the Company’s Consolidated Balance Sheets:

	June 30, 2020		December 31, 2019
	(in thousands)
Manufacturing JV	$	56,684	$	75,434
Manufacturing JV capital contribution	10,714		10,714
HK JV and China JV	10,206		10,342
Income from equity method investments	5,567		5,296
Distributions received from equity method investments	(5,254)		(3,856)
Manufacturing JV other-than-temporary impairment	(35,840)		—
Total equity method investments	$	42,077	$	97,930

In February 2019, the Company contributed its China business in exchange for 35% ownership of each of the formed joint ventures with Harbin, the HK JV and China JV. The HK JV includes the operation of the cross-border China e-commerce business, and has an exclusive right to use the Company’s trademarks to manufacture and distribute the Company’s products in China (excluding Hong Kong, Taiwan and Macau) via e-commerce channels. The China JV is a retail-focused joint venture to operate GNC's brick-and-mortar retail business in China and it will have an exclusive right to use the Company's trademarks to manufacture and distribute the Company's products in China (excluding Hong Kong, Taiwan and Macau) via retail stores and pharmacies. The HK JV closed in February 2019 and the Company anticipates completing the formation of a second, retail-focused joint venture located in China (the “China JV”) with Harbin in the second half of 2020, following the satisfaction of certain routine regulatory and legal requirements.

        In March 2019, the Company entered into a strategic joint venture with IVC regarding the Company's manufacturing business. The Manufacturing JV is responsible for the manufacturing of the products previously produced by the Company at the Nutra manufacturing facility. The Company received $99.2 million from IVC and contributed the net assets of the Nutra manufacturing and Anderson facilities in exchange for an initial 43% equity interest in the Manufacturing JV. In addition, the Company made a capital contribution of $10.7 million to the Manufacturing JV to fund its share of short-term working capital needs. Under the terms of the agreement, IVC has the ability to pay an additional $75.0 million over a four year period from the effective date of the transaction as IVC's ownership of the joint venture increases to 100%. The subsequent purchase price for each year is $18.8 million, adjusted up or down based on the Company's future purchases from the Manufacturing JV. The Company received the first subsequent purchase price of $15.6 million during the first quarter of 2020. As a result, the Company's ownership of the Manufacturing JV decreased to 32% in March 2020.

Gain (loss) from the net asset exchange

In connection with the formation of the joint ventures effective in the first quarter of 2019, the Company deconsolidated its China business and its Nutra manufacturing business which resulted in a pre-tax gain of $5.8 million and loss of $27.1 million, respectively, recorded within loss on net asset exchange for the formation of the joint ventures on the Consolidated Statements of Operations. The $5.8 million gain from the Harbin transaction was calculated based on the difference between the fair value of the 35% equity interest in the HK JV and China JV, less the carrying value of the contributed China business, including $2.4 million of cash, and third-party closing fees. The $27.1 million loss from the Manufacturing JV transaction was calculated based on the fair value of the 43% equity interest retained in the Manufacturing JV and the $101 million in cash received, less a $1.8 million working capital purchase price adjustment in the second quarter of 2019, less the carrying value of the contributed Nutra and Anderson facilities and third-party closing fees.

As mentioned above, the Company received $15.6 million from IVC in connection with the subsequent purchase of the ownership of the Manufacturing JV in the first quarter of 2020, which resulted in a pre-tax loss of $3.1 million on net asset exchange calculated based on the difference between the cash receipt and the purchase price of $18.8 million. The loss was recorded in (loss) income from equity method investment within the Consolidated Statement of Operations. Additionally, in the first quarter of 2020, the Company recognized a $1.7 million purchase price adjustment related to the Harbin transaction, which was recorded as a loss on net asset exchange within the Consolidated Statements of Operations during the three months ended March 31, 2020.

Other-Than-Temporary Impairment

Due to the current and estimated adverse impacts from the COVID-19 pandemic and the Company's store closures, management expects a decrease in future purchases from the Manufacturing JV resulting in a decline in the value of its equity method investment in the Manufacturing JV. The decline in value was determined to be other-than-temporary which required the equity method investment to be written down to its fair value. The Company recognized $35.8 million other-than-temporary impairment related to its equity method investment in the Manufacturing JV, which was recorded within (loss) income from equity method investment on the Consolidated Statement of Operations during the three months ended March 31, 2020. This impairment charge was derived using Level 3 inputs and was primarily driven by the projected future purchase price of the equity interest in the Manufacturing JV from IVC under the terms of the agreement. As a result of the impairment, the carrying amount of the Company's equity method investment in the Manufacturing JV was $35.8 million less than its share of underlying equity in net assets as of June 30, 2020. No impairment triggers were identified as it relates to our equity method investments as of June 30, 2020.

Related Party Transactions

The Company's related party transactions with the Manufacturing, HK and China joint ventures are as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Manufacturing JV finished goods purchases	$	39,783	$	51,632	$	76,220	$	72,392
HK JV revenue, primarily wholesale and royalties	6,537		2,087		10,349		4,274

	June 30, 2020		December 31, 2019
	(in thousands)
Manufacturing JV accounts payable1	$	18,714	$	11,720
HK JV accounts receivable	10,094		8,946

¹ On Petition Date, all prepetition Manufacturing JV accounts payable has been classified in LSTC.

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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS

        ASC 820, Fair Value Measurements and Disclosures defines fair value as a market-based measurement that should be determined based on the assumptions that marketplace participants would use in pricing an asset or liability. As a basis for considering such assumptions, the standard establishes a three-tier fair value hierarchy which prioritizes the inputs used in measuring fair value as follows:

Level 1 — observable inputs such as quoted prices in active markets for identical assets and liabilities;

Level 2 — observable inputs such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, other inputs that are observable, or can be corroborated by observable market data; and

Level 3 — unobservable inputs for which there are little or no market data, which require the reporting entity to develop its own assumptions.

        The carrying amounts of cash and cash equivalents, restricted cash, receivables, accounts payable, accrued liabilities and the Revolving Credit Facility approximate their respective fair values. Based on the interest rates currently available and their underlying risk, the carrying value of franchise notes receivable recorded in other long-term assets approximates its fair value.

        The carrying value and estimated fair value of the Term Loan Facility, net of discount, Notes (net of the equity component classified in stockholders' equity and discount) and the interest rate swaps were as follows:

	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Liabilities not subject to compromise:
Tranche B-2 Term Loan	$	—	$	—	$	441,500	$	414,321
FILO Term Loan	—		—		266,814		265,851
Notes	—		—		154,675		148,488
DIP Financing - New Money DIP	30,000		30,000		—		—
DIP Financing - DIP FILO	275,000		275,000		—		—
Interest rate swaps	—		—		6,940		6,940
Liabilities subject to compromise:
Tranche B-2 Term Loan	$	410,834	$	292,033	$	—	$	—
Notes	159,097		795		—		—

        The fair values of the term loans were determined using the instruments' trading value in markets that are not active, which are considered Level 2 inputs. The fair value of the Notes was determined based on quoted market prices and bond terms and conditions, which are considered Level 2 inputs. The Company's interest rate swaps are carried at fair value, which is based primarily on Level 2 inputs utilizing readily observable market data, such as LIBOR forward rates, for all substantial terms of the interest rate swap contracts and the assessment of nonperformance risk.

As a result of the Debtors filing for relief under Chapter 11 as further discussed in Note 3. "Reorganization and Chapter 11 Proceedings," GNC’s prepetition debt, except for the FILO Term Loan which rolled into the DIP ABL FILO Facility, is classified as liabilities subject to compromise as of June 30, 2020. As of June 30, 2020, the estimated carrying amount and fair value of GNC’s DIP Term Loan is $275.0 million and is classified as Level 2 within the fair value hierarchy. The fair values of debt instruments classified as Level 2 instruments are valued using market prices we obtain from external third parties.

As described in Note 6. "Property, Plant and Equipment, Net," and Note 7. "Goodwill and Intangible Assets, Net," the Company recorded long-lived asset impairments during the six months ended June 30, 2020. This resulted in the following assets being measured at fair value on a non-recurring basis using Level 3 inputs:

•the indefinite-lived brand name intangible asset at June 30, 2020;

•goodwill at June 30, 2020 for the Health Store reporting unit;

•property and equipment and right-of-use assets at certain of the Company's stores at June 30, 2020;

•equity method investment in the Manufacturing JV at June 30, 2020.

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CONTINGENCIES

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

CONTINGENCIES

CONTINGENCIES

On June 23, 2020, the Debtors filed the Chapter 11 Cases seeking relief under the Bankruptcy Code. The commencement of the Chapter 11 Cases automatically stayed all of the proceedings and actions against the Debtors. See Note 3. "Reorganization and Chapter 11 Proceedings" for a description of the Chapter 11 Cases.

        The Company is engaged in various legal actions, claims and proceedings arising in the normal course of business, including claims related to breach of contracts, product liability matters, intellectual property matters and employment-related matters resulting from the Company's business activities.

        The Company's contingencies are subject to substantial uncertainties, including for each such contingency the following, among other factors: (i) the procedural status of the case; (ii) whether the case has or may be certified as a class action suit; (iii) the outcome of preliminary motions; (iv) the impact of discovery; (v) whether there are significant factual issues to be determined or resolved; (vi) whether the proceedings involve a large number of parties and/or parties and claims in multiple jurisdictions or jurisdictions in which the relevant laws are complex or unclear; (vii) the extent of potential damages, which are often unspecified or indeterminate; and (viii) the status of

settlement discussions, if any, and the settlement posture of the parties. Consequently, except as otherwise noted below with regard to a particular matter, the Company cannot predict with any reasonable certainty the timing or outcome of the legal matters described below, and the Company is unable to estimate a possible loss or range of loss for such matters. If the Company ultimately is required to make any payments in connection with an adverse outcome in any of the matters discussed below, it is possible that it could have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

        As a manufacturer, prior to the formation of the Manufacturing JV, and retailer of nutritional supplements and other consumer products that are ingested by consumers or applied to their bodies, the Company has been and is currently subjected to various product liability claims. Although the effects of these claims to date have not been material to the Company, it is possible that current and future product liability claims could have a material adverse effect on its business or financial condition, results of operations or cash flows. The Company currently maintains product liability insurance with a deductible/retention of $4.0 million per claim with an aggregate cap on retained loss of $10.0 million per policy year. GNC was granted an automatic stay order by the Bankruptcy Court continuing the provisions under existing insurance arrangements. The Company typically seeks and has obtained contractual indemnification from most parties that supply raw materials for its products or that manufacture or market products it sells. The Company also typically seeks to be added, and has been added, as an additional insured under most of such parties' insurance policies. However, any such indemnification or insurance is limited by its terms and any such indemnification, as a practical matter, is limited to the creditworthiness of the indemnifying party and its insurer, and the absence of significant defenses by the insurers. Consequently, the Company may incur material product liability claims, which could increase its costs and adversely affect its reputation, revenue and operating income.

Litigation

        DMAA / Aegeline Claims.  Prior to December 2013, the Company sold products manufactured by third parties that contained derivatives from geranium known as 1.3-dimethylpentylamine/ dimethylamylamine/ 13-dimethylamylamine, or "DMAA," which were recalled from the Company's stores in November 2013, and/or Aegeline, a compound extracted from bael trees. As of June 30, 2020, the Company was named in 27 personal injury lawsuits involving products containing DMAA and/or Aegeline. On July 22, 2020, all matters pending in the United States District Court for the District of Hawaii were dismissed.

        The remaining matters are currently stayed pending final resolution.

        The Company is contractually entitled to indemnification by its third-party vendors with regard to these matters, although the Company’s ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of the vendors and/or their insurance coverage and the absence of any significant defenses available to their insurers.

California Wage and Break Claims. On February 29, 2012, former Senior Store Manager, Elizabeth Naranjo, individually and on behalf of all others similarly situated, sued General Nutrition Corporation in the Superior Court of the State of California for the County of Alameda. The complaint contains eight causes of action, alleging, among other matters, meal, rest break and overtime violations for which indeterminate money damages for wages, penalties, interest, and legal fees are sought. In June 2018, the Court granted in part and denied in part the Company's Motion for Decertification. In August 2018, the plaintiff voluntarily dismissed the class action claims alleging overtime violations. In November 2019, GNC filed a renewed Motion for Decertification, which was denied by the Court in January 2020. There is no trial date currently scheduled. As of June 30, 2020, an immaterial liability has been accrued in the accompanying financial statements. The Company intends to vigorously defend against the remaining class action claims asserted in this action.

Pennsylvania Fluctuating Workweek. On September 18, 2013, Tawny Chevalier and Andrew Hiller commenced a class action in the Court of Common Pleas of Allegheny County, Pennsylvania. Plaintiff asserted a claim against the Company for a purported violation of the Pennsylvania Minimum Wage Act ("PMWA"), challenging the Company's utilization of the "fluctuating workweek" method to calculate overtime compensation, on behalf of all employees who worked for the Company in Pennsylvania and who were paid according to the fluctuating workweek method. In October 2014, the Court entered an order holding that the use of the fluctuating workweek method violated the PMWA. In September 2016, the Court entered judgment in favor of Plaintiffs and the class in an immaterial amount, which has been recorded as a charge in the accompanying Consolidated Financial Statements. Plaintiffs subsequently filed a petition for an award of attorney's fees, costs and incentive payment. The court awarded an immaterial amount in legal fees. The Company appealed the adverse judgment and the award of attorney's fees. On December 22, 2017, the Pennsylvania Superior Court held that the Company correctly determined the "regular rate" by dividing weekly compensation by all hours worked (rather than 40), but held that

the regular rate must be multiplied by 1.5 (rather than 0.5) to determine the amount of overtime owed. Taking accumulated interest into account, the net result of the Superior Court's decision was to reduce the Company's liability by an immaterial amount, which has been reflected in the accompanying Consolidated Financial Statements. The Company filed a petition for appeal to the Pennsylvania Supreme Court on January 22, 2018. The Pennsylvania Supreme Court accepted the Company's petition for appeal and the Company filed its appellant’s brief on August 27, 2018. The Pennsylvania Supreme Court ruled in favor of Plaintiffs. The case has been remanded to the trial court for final resolution.

Oregon Attorney General. On October 22, 2015, the Attorney General for the State of Oregon sued the Company in Multnomah County Circuit Court for alleged violations of Oregon’s Unlawful Trade Practices Act, in connection with its sale in Oregon of certain third-party products. The Company is vigorously defending itself against these allegations. Along with its Amended Answer and Affirmative Defenses, the Company filed a counterclaim for declaratory relief, asking the court to make certain rulings in favor of the Company, and adding USPlabs, LLC and SK Laboratories as counterclaim defendants.  In March 2018, the Oregon Attorney General filed a motion for summary judgment relating to its first claim for relief, which the Company contested.  The Company filed a cross motion for summary judgment on the first claim for relief, which the Oregon Attorney General contested. Following oral argument in August 2018, the Court denied the State’s motion for summary judgment and granted in part and denied in part the Company’s motion for summary judgment. The parties are in the process of exchanging discovery. There is no trial date currently scheduled.

 As any losses that may arise from this matter are not probable or reasonably estimable at this time, no liability has been accrued in the accompanying Consolidated Financial Statements. Moreover, the Company does not anticipate that any such losses are likely to have a material impact on the Company, its business or results of operations. The Company is contractually entitled to indemnification and defense by its third-party vendors. Ultimately, however, the Company's ability to obtain full recovery in respect of any such claims against it is dependent upon the creditworthiness of its vendors and/or their insurance coverage and the absence of any significant defenses available to their insurers.

E-Commerce Pricing Matters.  In April 2016, Jenna Kaskorkis, et al. filed a complaint against General Nutrition Centers, Inc. followed by similar cases brought forth by Ashley Gennock in May 2016 and Kenneth Harrison in December 2016.  Plaintiffs allege that the Company's promotional pricing on its website was misleading and did not fairly represent promotions based on average retail prices over a trended period of time being consistent with prices advertised as promotional.  A tentative agreement was reached in the third quarter of 2017 on many of the key terms of a settlement. In December 2019, the Court approved the settlement agreement.

Government Regulation

        In November 2013, the Company received a subpoena from the U.S. Department of Justice ("DOJ") for information related to its investigation of a third party product vendor, USPlabs, LLC. The Company fully cooperated with the investigation of the vendor and the related products, all of which were discontinued in 2013. In December 2016, the Company reached agreement with the DOJ in connection with the Company's cooperation, which agreement acknowledges the Company relied on the representations and written guarantees of USPlabs and the Company's representation that it did not knowingly sell products not in compliance with the Federal Food, Drug and Cosmetic Act (the "FDCA"). Under the agreement, which included an immaterial payment to the federal government, the Company will take a number of actions to broaden industry-wide knowledge of prohibited ingredients and improve compliance by vendors of third party products. These actions are in keeping with the leadership role the Company has taken in setting industry quality and compliance standards, and the Company's commitment over the course of the agreement (60 months) to support a combination of its own and the industry's initiatives. Some of these actions include maintaining and continuously updating a list of restricted ingredients that will be prohibited from inclusion in any products that are sold by the Company.  Vendors selling products to the Company for the sale of such products by the Company will be required to warrant that the products sold do not contain any of these restricted ingredients.  In addition, the Company will develop and maintain a list of ingredients that the Company believes comply with the applicable provisions of the FDCA.       

Environmental Compliance

        As part of soil and groundwater remediation conducted at the Nutra manufacturing facility pursuant to an investigation conducted in partnership with the South Carolina Department of Health and Environmental Control (the "DHEC"), the Company completed additional investigations with the DHEC's approval, including the installation and operation of a pilot vapor extraction system under a portion of the facility in the second half of 2016, which was an immaterial cost to the Company. After an initial monitoring period, in October of 2017 the DHEC approved a work

plan for extended monitoring of such system and the contamination into 2021. While the Company contributed the net assets of the Nutra manufacturing and Anderson facilities to the Manufacturing JV in March of 2019 (refer to Note 9. “Equity Method Investments” for additional information), we retained certain liabilities, including historical environmental liabilities, related to the facilities. As such, the Company and the Manufacturing JV will continue to consult with the DHEC on the next steps in the work after their review of the results of the extended monitoring is complete. At this stage of the investigation, however, it is not possible to estimate the timing and extent of any additional remedial action that may be required, the ultimate cost of remediation, or the amount of our potential liability. Therefore, no liability has been recorded in the Company's Consolidated Financial Statements.

        In addition to the foregoing, the Company is subject to numerous federal, state, local and foreign environmental and health and safety laws and regulations governing its operations, including the handling, transportation and disposal of non-hazardous and hazardous substances and wastes, as well as emissions and discharges from its operations into the environment, including discharges to air, surface water and groundwater. Failure to comply with such laws and regulations could result in costs for remedial actions, penalties or the imposition of other liabilities, including certain historic liabilities retained by the Company pursuant to the terms of the Manufacturing JV. New laws, changes in existing laws or the interpretation thereof, or the development of new facts or changes in their processes could also cause the Company to incur additional capital and operating expenditures to maintain compliance with environmental laws and regulations and environmental permits. The Company is also subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous substances into the environment without regard to fault or knowledge about the condition or action causing the liability. Under certain of these laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or for properties to which substances or wastes that were sent in connection with current or former operations at its facilities.

        From time to time, the Company has incurred costs and obligations for correcting environmental and health and safety noncompliance matters and for remediation at or relating to certain of the Company's current or former properties or properties at which the Company's waste has been disposed. However, compliance with the provisions of national, state and local environmental laws and regulations has not had a material effect upon the Company's capital expenditures, earnings, financial position, liquidity or competitive position. The Company believes it has complied with, and is currently complying with, its environmental obligations pursuant to environmental and health and safety laws and regulations and that any liabilities for noncompliance will not have a material adverse effect on its business, financial performance or cash flows. However, it is difficult to predict future liabilities and obligations, which could be material.

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MEZZANINE EQUITY

6 Months Ended

Jun. 30, 2020

Temporary Equity Disclosure [Abstract]

MEZZANINE EQUITY

MEZZANINE EQUITY

        Holdings is authorized to issue up to 60.0 million shares of preferred stock, par value $0.001 per share. On February 13, 2018, the Company entered into a Securities Purchase Agreement (as amended from time to time, the “Securities Purchase Agreement”) by and between the Company and Harbin, pursuant to which the Company agreed to issue and sell to Harbin, and Harbin agreed to purchase from the Company, 299,950 shares of a newly created series of convertible preferred stock of the Company, designated the “Series A Convertible Preferred Stock” (the “Convertible Preferred Stock”), for a purchase price of $1,000 per share, or an aggregate of approximately $300 million. The Convertible Preferred Stock is convertible into 56.1 million shares of the Company's Common Stock at an initial conversion price of $5.35 per share, subject to customary anti-dilution adjustments. On November 7, 2018, The Company entered into an Amendment to the Securities Purchase Agreement with Harbin. Pursuant to the terms of the Securities Purchase Agreement, Harbin assigned its interest in the Securities Purchase Agreement to Harbin and funded the $300 million investment in three separate tranches. The shares of Convertible Preferred Stock were issued as follows: (i) 100,000 shares of Convertible Preferred Stock issued on November 8, 2018 for a total purchase price of $100 million (the initial issuance), (ii) 50,000 shares of Convertible Preferred Stock issued on January 2, 2019 for a total purchase price of $50 million (the "Second Issuance") and (iii) 149,950 shares of Convertible Preferred Stock issued on February 13, 2019 for a total purchase price of approximately $150 million (the “Third Issuance”).

        Holders of shares of Convertible Preferred Stock are entitled to receive cumulative preferential dividends, payable quarterly in arrears, at an annual rate of 6.5% of the stated value of $1,000 per share, subject to increase in connection with the payment of dividends in kind. Dividends are payable, at the Company's option, in cash from legally available funds or in kind by issuing additional shares of Convertible Preferred Stock with such stated value

equal to the amount of payment being made or by increasing the stated value of the outstanding Convertible Preferred Stock by the amount per share of the dividend or in a combination thereof.

        As of June 30, 2020, the Company had issued a total of 299,950 shares of Convertible Preferred Stock. The Convertible Preferred Stock was recorded as Mezzanine Equity, net of issuance cost, on the Consolidated Balance Sheets because the shares are redeemable at the option of the holder if a fundamental change occurs, which includes change in control or delisting, where the common stock ceases to be listed or quoted on a national securities exchange, (a "Fundamental Change"). The guaranteed Second Issuance and Third Issuance were considered forward contracts that represented an obligation to both parties until the shares were issued. The forward contracts were recorded at fair value on the Consolidated Balance Sheets as of December 31, 2018, with any changes in fair value recorded in earnings in the Consolidated Statements of Operations. The Company recorded a $16.8 million loss on forward contracts for the issuance of Convertible Preferred Stock during the first quarter of 2019. Upon issuance of the shares associated with the forward contracts, the carrying value of the forward contracts were recorded to Mezzanine Equity.

        As a result of the delisting of our common stock from the NYSE on June 30, 2020, a Fundamental Change occurred. Subsequent adjustment of the amount presented in temporary equity is unnecessary if it is not probable that the instrument will become redeemable.  With the triggering of the Fundamental Change, under the Convertible Preferred Stock Agreement, the holders could request redemption of their shares at the stated value plus any accumulated and unpaid dividends. However, an automatic stay has been granted to GNC that prohibits among other things, sales or transfers of equity securities. The commencement of the Chapter 11 Cases automatically stayed all of the proceedings and actions against the Debtors and specified that holders of Convertible Preferred Stock are not entitled to dividends during the course of bankruptcy and there is no current option to redeem the shares.

As of June 30, 2020, the Company has not accrued for dividends on the Convertible Preferred Stock; however, the Company has continued the accumulation of dividends through June 30, 2020.

As of June 30, 2020, the stated value of the Convertible Preferred Stock is $300.0 million (299,950 shares at $1,000 per share) and there are accumulated and unpaid dividends on such shares of $30.2 million. As of December 31, 2019, the stated value of the Convertible Preferred Stock was $300.0 million (299,950 shares at $1,000 per share) and there were accumulated and unpaid dividends on such share of $19.8 million.

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EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The following table represents the Company's basic and dilutive weighted-average shares:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
	(in thousands)
Basic weighted average shares	83,936	83,663	83,916	83,587
Effect of dilutive Convertible Preferred Stock	—	57,093	—	—
Effect of dilutive stock-based compensation awards	—	186	—	—
Diluted weighted average shares	83,936	140,942	83,916	83,587

The following awards and convertible stock were excluded from the computation of diluted EPS because the impact was antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
	(in thousands)
Antidilutive:
Stock-based awards	6,018	3,768	6,398	4,292
Convertible Preferred Stock	60,896	—	60,409	49,979
Total excluded from diluted EPS	66,914	3,768	66,807	54,271

The Company applied the if-converted method to calculate dilution on the Notes, which has resulted in all the 2.4 million underlying convertible shares in all periods being anti-dilutive.

        The computations for basic and diluted loss per common share are as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands, except per share data)
(Loss) earnings per common share - Basic
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Cumulative undeclared convertible preferred stock dividend	5,280		4,950		10,475		8,667
Net (loss) income attributable to common shareholders	(88,949)		11,108		(294,230)		(7,871)
Weighted average common shares outstanding - basic	83,936		83,663		83,916		83,587
(Loss) earnings per common share - basic	$	(1.06)	$	0.13	$	(3.51)	$	(0.09)
(Loss) earnings per common share - Diluted
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Cumulative undeclared convertible preferred stock dividends	5,280		—		10,475		8,667
Net (loss) earnings attributable to common shareholders	(88,949)		16,058		(294,230)		(7,871)
Weighted average common shares outstanding - diluted	83,936		140,942		83,916		83,587
(Loss) earnings per common share - diluted	$	(1.06)	$	0.11	$	(3.51)	$	(0.09)

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SEGMENTS

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

SEGMENTS

SEGMENTS

The Company aggregates its operating segments into three reportable segments, which include U.S. and Canada (until GNC Canada was deconsolidated on June 24, 2020), International and Manufacturing / Wholesale. Warehousing and distribution costs have been allocated to each reportable segment based on estimated utilization and benefit. The Company's chief operating decision maker (its chief executive officer) evaluates segment operating results based primarily on operating income. Operating income of each reportable segment excludes certain items that are managed at the consolidated level, such as corporate costs. The Manufacturing / Wholesale segment, prior to the formation of the Manufacturing JV, manufactured and sold product to the U.S. and Canada and International segments at cost with a markup, which was eliminated at consolidation.

In connection with the Chapter 11 Cases, the Company launched liquidation sales in June 2020 in approximately 500 U.S and Canada company-owned stores which are expected to close during the third quarter of 2020. As a result, during the three and six months ended June 30, 2020, GNC recorded $20.2 million impairment charges within U.S. and Canada and recorded $12.6 million inventory reserves within U.S. and Canada as the Company expects vendors may withhold payment to GNC for certain allowances/credits in order to satisfy certain allowed claims that we have classified within LSTC. During the six months ended June 30, 2020, due to the estimated adverse impacts from the COVID-19 pandemic, the Company recorded $177.7 million long-lived asset impairments and other store closing costs ($149.1 million within U.S. and Canada; $28.6 million within International), $22.8 million reserves related to inventory obsolescence and vendor allowances ($22.4 million within U.S. and Canada; $0.4 million within Manufacturing / Wholesale), and $8.7 million allowance for doubtful accounts ($7.9 million within U.S. and Canada; $0.8 million within International). Refer to Note 3. "Reorganization and Chapter 11 Proceedings" for more information on the Chapter 11 Cases and Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

The following table represents key financial information for each of the Company's reportable segments:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Revenue:
U.S. and Canada	$	300,206	$	476,060	$	724,387	$	965,216
International	28,933		39,448		62,478		80,371
Manufacturing / Wholesale:
Intersegment revenues	—		—		—		35,505
Third-party	—		—		—		15,783
Wholesale partner sales	14,399		18,489		29,254		37,390
Subtotal Manufacturing / Wholesale	14,399		18,489		29,254		88,678
Total reportable segment revenues	343,538		533,997		816,119		1,134,265
Elimination of intersegment revenues	—		—		—		(35,505)
Total revenue	$	343,538	$	533,997	$	816,119	$	1,098,760
Operating income:
U.S. and Canada	$	(19,675)	$	49,202	$	(150,875)	$	101,302
International	8,231		14,269		(9,151)		28,319
Manufacturing / Wholesale	6,730		12,118		13,661		27,462
Total reportable segment operating income	(4,714)		75,589		(146,365)		157,083
Corporate costs	(53,804)		(25,079)		(78,638)		(51,340)
Loss on net asset exchange for the formation of the joint ventures	—		(1,779)		(1,655)		(21,293)
Other	—		(13)		2,107		(250)
Unallocated corporate costs, loss on net asset exchange and other	(53,804)		(26,871)		(78,186)		(72,883)
Total operating (loss) income	(58,518)		48,718		(224,551)		84,200
Interest expense, net	22,057		24,964		69,502		57,920
Reorganization items, net	15,429		—		15,429		—
Gain on purchase of convertible debt	—		(3,214)		—		(3,214)
Loss on forward contracts for the issuance of convertible preferred stock	—		—		—		16,787
(Loss) income before income taxes	$	(96,004)	$	26,968	$	(309,482)	$	12,707

        Refer to Note 4. "Revenue" for more information on the Company's reportable segments.

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INCOME TAXES

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Coronavirus Aid, Relief, and Economic Security Act ("CARES" Act) signed into law on March 27, 2020 in response to the COVID-19 pandemic, provides additional avenues of financial relief and assistance to individuals and businesses, including tax relief. The CARES Act includes, among other items, provisions relating to payroll tax credits and deferrals, net operating loss carry back periods, alternative minimum tax credits, and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act also temporarily and retroactively increases the limitation on the deductibility of interest expense under Internal Revenue Code Section 163(j)(1) from 30% to 50% of adjusted taxable income for tax years beginning in 2019 and 2020. The Company is currently evaluating the impact of the provisions of the CARES Act.

The Company recognized $11.4 million of income tax benefit during the three months ended June 30, 2020 compared with $13.0 million of income tax expense in the prior year quarter. The Company's income tax benefit/expense is based on income, statutory tax rates and the available carryback of net operating losses. The Company’s year-to-date tax provision is calculated by applying the most recent annualized effective tax rate to year-to-date pre-tax ordinary income. The Company’s 2020 annual effective tax rate was impacted by a $40.8 million partial valuation allowance for attributes expected to be generated in 2020 that may not be realizable, the other-than-temporary impairment of the Manufacturing JV, and the benefit of the federal tax rate differential related to federal net operating losses generated during the current year that are expected to be carried back to prior years at a 35% rate. The 2019 effective tax rate was significantly impacted by a gain for tax purposes resulting from the transfer of the Nutra manufacturing net assets to the Manufacturing JV and the establishment of a partial valuation allowance for attributes generated in the 2019 year that may not be realizable. The tax impacts of unusual or infrequent items are recorded discretely in the interim period in which they occur.

During the fourth quarter of the year ended December 31, 2019, as further discussed in Note 1. "Nature of Business," management concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern. Management considered this in concluding that certain deferred tax assets were no longer more likely than not realizable. As a result, increases in valuation allowance of $40.8 million and $27.1 million on the Company’s deferred tax assets were recorded as of June 30, 2020 and December 31, 2019, respectively, which related principally to Federal deferred tax assets, state NOL carryforwards, and other state tax attributes. These increases were partially offset by valuation allowance decreases of $4.8 million as of June 30, 2020 and December 31, 2019. The Company’s deferred tax assets of $26.5 million as of June 30, 2020 are considered realizable, as the majority of the deferred tax assets are related to federal net operating losses generated in the current year that are expected to be carried back to prior years at a 35% federal income tax rate based on the new CARES Act legislation.

        At June 30, 2020 and December 31, 2019, the Company had $11.6 million and $10.7 million of unrecognized tax benefits, respectively, excluding interest and penalties, which if recognized, would affect the effective tax rate. The Company recognizes accrued interest and penalties related to unrecognized tax benefits in income tax expense. The Company accrued $2.8 million at June 30, 2020 and $2.1 million at December 31, 2019, for potential interest and penalties associated with uncertain tax positions. To the extent interest and penalties are not assessed with respect to the ultimate settlement of uncertain tax positions, amounts previously accrued will be reversed as a reduction to income tax expense.

        Holdings files a consolidated federal tax return and various consolidated and separate tax returns as prescribed by the tax laws of the state, local and international jurisdictions in which it and its subsidiaries operate. The statutes of limitation for the Company’s U.S. federal income tax returns are closed for years through 2013. The Company has various state and local jurisdiction tax years open to examination (the earliest open period is generally 2011).

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SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2020

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

COVID-19

The Company is closely monitoring the current and future potential impact of the COVID-19 pandemic on all aspects of our business and geographies, including how it will impact our customers, employees, suppliers, vendors, business partners and distribution channels. The Company incurred significant disruptions during the three and six months ended June 30, 2020 from COVID-19, and the Company's estimates on the future impact that COVID-19 will have on the Company's financial position and operating results is subject to numerous uncertainties.

These uncertainties include the severity of the virus, the duration of the outbreak, governmental, business or other actions (which could include limitations on our operations), impacts on the Company's supply chain, the effect on customer demand, store closures or changes to our operations. The health of the Company's workforce, and the ability to meet staffing needs in stores, distribution facilities, wholesale operations and other critical functions cannot be predicted and is vital to our operations. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown. As of August 5, 2020, the Company had less than 100, or 3%, of the U.S. and Canada company-owned and franchise retail stores closed due to the COVID-19 pandemic.

In addition, the Company cannot predict with certainty the impact that COVID-19 will have on its customers, vendors, suppliers and other business partners; however, any material effect on these parties could adversely impact the Company. The situation surrounding COVID-19 remains fluid, and the Company is actively managing its response in collaboration with customers, government officials, team members and business partners and assessing potential impacts to its financial position and operating results, as well as adverse developments in the business.

Stalking Horse Agreement

On August 7, 2020, the Debtors entered into a Stalking Horse Agreement (the “Stalking Horse Agreement”) with Harbin Buyer. Pursuant to the terms of the Stalking Horse Agreement, the Debtors have agreed to sell substantially all of their assets (the “Assets,” and such sale, the “Sale”) to Harbin Buyer, and Harbin Buyer has agreed to assume from the Debtors certain specified liabilities as further set forth in the Stalking Horse Agreement (the “Assumed Liabilities”). The Stalking Horse Agreement contemplates that the Company will form (a) a new Delaware limited liability company as a wholly owned subsidiary (“GNC Newco”) and (b) a new Nova Scotia unlimited liability company as a wholly owned subsidiary of GNC Newco (“GNC Canada Newco”). At the closing (the “Closing”) of the transactions contemplated by the Stalking Horse Agreement, (i) the Debtors will transfer all of the Assets and Assumed Liabilities to GNC Newco (other than those Assets and Assumed Liabilities in Canada, which will be transferred to GNC Canada Newco), (ii) GNC Newco will redeem and cancel all of the issued and outstanding equity capital of GNC Newco held by the Company or its affiliates, and (iii) GNC Newco will issue all of the equity capital of GNC Newco to Harbin Buyer or its designated affiliate, such that, following such issuance, Harbin Buyer or its designated affiliate (as applicable) will hold 100% of the issued and outstanding equity capital of GNC Newco.

The purchase price under the Stalking Horse Agreement will comprise (a) indebtedness under the Second Lien Credit Agreement (as defined in the Stalking Horse Agreement) in a principal amount equal to $210.0 million, subject to adjustment as provided therein, (b) the payment of an amount in cash equal to $550.0 million, subject to adjustment as provided therein, (c) the issuance of up to $10.0 million in convertible junior notes to the Debtors’ unsecured creditors, subject to the satisfaction of certain conditions and (d) the assumption of the Assumed Liabilities (together, the “Purchase Price”). In addition, under the Stalking Horse Agreement, Harbin Buyer is obligated to make a $57.0 million good faith deposit (the “Deposit”) to be held in a segregated escrow account, with the Deposit being released to the Company upon the earlier to occur of (i) the Closing, in which case the amount of the Deposit will be credited against the cash portion of the Purchase Price and (ii) a Buyer Default Termination (as defined in the Stalking Horse Agreement). If the Stalking Horse Agreement is terminated other than due to a Buyer Default Termination, the Deposit will be returned to Harbin Buyer.

The Stalking Horse Agreement, which is subject to Court approval, is intended to constitute a “stalking horse bid” for the Assets in accordance with the Debtors’ motion to modify the bidding procedures order (the “Bidding Procedures Order”), which was approved by a final order of the Court on Court on July 22, 2020, to extend the deadline by which the Debtors are authorized to enter into a Stalking Horse Agreement to August 7, 2020 (the “Stalking Horse Extension Motion”). The Stalking Horse Agreement includes certain bid protections for Harbin Buyer payable in accordance with the terms thereof, including a break-up fee equal to $22.8 million and an expense reimbursement of up to $3.0 million of reasonable and documented out of pocket fees (the “Bid Protections”). A hearing to consider the Stalking Horse Extension Motion, and the entry of a final order approving the modified Bidding Procedures Order, is scheduled to be held before the Bankruptcy Court on August 19, 2020 at 1.00 p.m. ET.

The Bidding Procedures Order established certain bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers to purchase all or substantially all of the Assets (any such offer, a “Competing Transaction”). The Bid Protections are payable upon certain termination events set forth in

the Stalking Horse Agreement, including the consummation of a Competing Transaction (subject to certain exceptions).

The Bidding Procedures Order set the deadline (the “Bid Deadline”) to submit bids for the Debtors’ assets as September 11, 2020. Upon the receipt of at least one qualified offer from other bidders proposing a Competing Transaction by the Bid Deadline, the Debtors will hold an auction with respect to the Assets on or about September 15, 2020.

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BASIS OF PRESENTATION (Policies)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

BASIS OF PRESENTATION  

        The accompanying unaudited Consolidated Financial Statements, which have been prepared in accordance with the applicable rules of the SEC, include all adjustments that management considers necessary to fairly state the Company's results of operations, financial position and cash flows. The December 31, 2019 Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by GAAP. These interim Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and Notes included in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the SEC on March 25, 2020 (the "2019 10-K"). Interim results are not necessarily indicative of the results that may be expected for the remainder of the year ending December 31, 2020.

The preparation of the financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases these estimates on assumptions that it believes to be reasonable under the circumstances, including considerations for the impact from the outbreak of the COVID-19 pandemic on the Company's business due to various global macroeconomic, operational and supply chain risks as a result of COVID-19. Actual results could differ from the original estimates, requiring adjustments to these balances in future periods. Furthermore, while operating as debtors-in-possession ("DIP") under Chapter 11, the Debtors may sell or otherwise dispose of or liquidate assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business and subject to restrictions of the DIP financing and applicable orders of the Bankruptcy Court, for amounts other than those reflected in the accompanying unaudited Consolidated Financial Statements. Any such actions occurring during the Chapter 11 Cases confirmed by the Bankruptcy Court could materially impact the amounts and classifications of assets and liabilities reported in the unaudited Consolidated Financial Statements.

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2018, the FASB issued Accounting Standards Update ("ASU") 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-used software. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Accordingly, the Company has adopted this ASU in the first quarter of 2020, which did not have a material impact on its Consolidated Financial Statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments, which introduces a new model to measure all expected credit losses for financial instruments held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. This standard is effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company has adopted this ASU in the first quarter of 2020, which did not have a material impact on its Consolidated Financial Statements.

The majority of the Company's domestic store and e-commerce revenues are received as cash at the point of sales. The majority of the Company's franchise and wholesale revenues are billed with varying terms for payment. An allowance for credit losses is established based on the aging of the accounts receivable balances, financial condition of our franchisees and other third-party customers, historical write-off experience and current and future economic and market conditions.

The allowance for credit losses related to accounts receivable, and changes for the three and six months then ended June 30, 2020 are as follows:

(in thousands)	Balance at December 31, 2019		Charged to costs and expenses		Deduction		Balance at March 31, 2020		Charged to costs and expenses		Deduction		Balance at June 30, 2020
Vendor allowance(1)	$	14,033	$	5,439	$	(6,707)	$	12,765	$	2,698	$	—	$	15,463
Trade accounts receivable allowance (2)	8,615		9,224		(3,214)		14,625		3,164		(526)		17,263

(1) Changes to vendor allowance reserves are recorded as cost of sales on the Consolidated Statement of Operations.

(2) Changes to trade accounts receivable allowance are recorded as selling, general and administrative on the Consolidated Statement of Operations.

The Company records credit losses for vendor allowance reserves and trade accounts receivable for balances estimated to be uncollectible considering the aging of receivable balances and financial condition of our vendors and franchisees. Due to the estimated adverse impacts from COVID-19, the Company recognized an $8.7 million allowance for credit losses for its franchisees and other third-party customers and $4.6 million vendor allowance reserves during the first quarter of 2020. Refer to Note 16. "Subsequent Events" for more information on the uncertainty that exists regarding the impacts of COVID-19.

Recently Issued Accounting Pronouncements

        In December 2019, the FASB issued ASU 2019-12, Income Taxes: Simplifying the Accounting for Income Taxes, which simplifies accounting for income taxes by eliminating certain exceptions to ASC 740 related to the general approach for intraperiod tax allocation, methodology for calculating income taxes in an interim period and recognition of deferred taxes when there are investment ownership changes. The new guidance also simplifies aspects of accounting for franchise taxes and interim period effects of enacted changes in tax laws or rates. The new guidance provides clarification on accounting for transactions that result in a step-up in the tax basis of goodwill and allocation of consolidated income tax expense to separate financial statements of entities not subject to income tax. This ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years, and early adoption is permitted. The Company is evaluating the impact this standard will have on its Consolidated Financial Statements and related disclosures.

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BASIS OF PRESENTATION (Tables)

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Accounts Receivable, Allowance for Credit Loss

The allowance for credit losses related to accounts receivable, and changes for the three and six months then ended June 30, 2020 are as follows:

(in thousands)	Balance at December 31, 2019		Charged to costs and expenses		Deduction		Balance at March 31, 2020		Charged to costs and expenses		Deduction		Balance at June 30, 2020
Vendor allowance(1)	$	14,033	$	5,439	$	(6,707)	$	12,765	$	2,698	$	—	$	15,463
Trade accounts receivable allowance (2)	8,615		9,224		(3,214)		14,625		3,164		(526)		17,263

(1) Changes to vendor allowance reserves are recorded as cost of sales on the Consolidated Statement of Operations.

(2) Changes to trade accounts receivable allowance are recorded as selling, general and administrative on the Consolidated Statement of Operations.

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REORGANIZATION AND CHAPTER 11 PROCEEDINGS (Tables)

6 Months Ended

Jun. 30, 2020

Reorganizations [Abstract]

Schedule of Reorganization Items in Consolidated Statement of Operations

Reorganization items, net represent amounts incurred after the Petition Date as a direct result of the Bankruptcy and are consisted of the following for the three and six months ended June 30, 2020:

	Three months ended June 30, 2020		Six months ended June 30, 2020
	(in thousands)
Debtor-in-possession financing costs	$	7,300	$	7,300
Professional fees	2,043		2,043
Prepetition debt issuance costs and debt discount	1,039		1,039
Loss on deconsolidation of GNC Canada	5,047		5,047
Total reorganization items, net	$	15,429	$	15,429

	Six months ended June 30,
	2020		2019
Cash paid during the period for:
Reorganization items, net	$	7,532	$	—

Schedule of Liabilities Subject to Compromise

Liabilities subject to compromise consisted of the following:

	June 30, 2020
	(in thousands)
Accounts payable	$	61,128
Accrued interest	3,744
Lease liabilities	329,790
Other liabilities	188,971
Tranche B-2 Term Loan	410,834
Notes	159,097
Total Liabilities subject to compromise	$	1,153,564

Summary of Net Assets of the Non-Debtors

C as of and for the period ended June 30, 2020

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REVENUE (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

U.S. and Canada Revenue

The following is a summary of revenue disaggregated by major source in the U.S. and Canada segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
U.S. company-owned product sales: (1)	(in thousands)
Protein	$	51,509	$	77,160	$	125,317	$	157,345
Performance supplements	42,694		73,083		110,685		147,824
Weight management	16,122		29,607		36,639		60,373
Vitamins	36,866		44,936		85,828		91,944
Herbs / Greens	10,699		15,536		24,504		31,391
Wellness	26,185		46,370		65,267		93,515
Health / Beauty	29,869		46,535		69,354		92,888
Food / Drink	11,370		26,259		30,569		54,483
General merchandise	3,218		5,519		8,089		12,318
Total U.S. company-owned product sales	228,532		365,005		556,252		742,081
Wholesale sales to franchisees	36,444		59,869		87,500		118,126
Royalties and franchise fees	6,907		8,175		14,234		16,647
Sublease income	9,738		10,498		19,980		21,474
Cooperative advertising and other franchise support fees	2,605		4,754		7,013		9,821
Other (2)	15,980		27,759		39,408		57,067
Total U.S. and Canada revenue	$	300,206	$	476,060	$	724,387	$	965,216

(1)Includes e-commerce sales.

(2)Includes revenue primarily related to operations in Canada through deconsolidation date of June 24, 2020, and the loyalty programs, myGNC Rewards and PRO Access.

International Revenues

        The following is a summary of revenue disaggregated by major source in the International reportable segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Wholesale sales to franchisees	$	15,637	$	27,019	$	35,820	$	52,456
Royalties and franchise fees	4,001		6,332		10,509		12,319
Other (1)	9,295		6,097		16,149		15,596
Total International revenue	$	28,933	$	39,448	$	62,478	$	80,371

(1)Includes revenue related to China operations prior to the transfer of the China business to the HK JV and China JV, which was effective February 13, 2019, wholesale sales to the HK JV and China JV, and revenue from company-owned locations in Ireland.

Manufacturing / Wholesale Revenue

The following is a summary of revenue disaggregated by major source in the Manufacturing / Wholesale reportable segment:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Third-party contract manufacturing(1)	$	—	$	—	$	—	$	15,783
Intersegment sales(1)	—		—		—		35,505
Wholesale partner sales	14,399		18,489		29,254		37,390
Total Manufacturing / Wholesale revenue	$	14,399	$	18,489	$	29,254	$	88,678

(1)As a result of the transfer of the Nutra manufacturing business to the newly formed Manufacturing JV effective March 1, 2019, no third-party contract manufacturing and intersegment sales were recognized thereafter.

Revenue by Geography

        The following is a summary of revenue by geography:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
Total revenues by geographic areas(1):	(in thousands)
United States	$	334,411	$	510,762	$	787,284	$	1,048,805
Foreign	9,127		23,235		28,835		49,955
Total revenues	$	343,538	$	533,997	$	816,119	$	1,098,760

(1) Geographic areas are defined based on legal entity jurisdiction.

Contract with Customer

The following table presents changes in the Company’s contract liabilities:

	Six months ended June 30, 2020
	Balance at Beginning of Period		Recognition of revenue included in beginning balance		Contract liability, net of revenue, recognized during the period		Balance at End of Period
	(in thousands)
Deferred franchise and license fees	$	28,293	$	(4,934)	$	2,168	$	25,527
PRO Access and loyalty program points (1)	22,896		(16,909)		12,194		18,181
Gift card liability (1)	3,110		(1,502)		274		1,882

	Six months ended June 30, 2019
	Balance at Beginning of Period		Recognition of revenue included in beginning balance		Contract liability, net of revenue, recognized during the period		Balance at End of Period
	(in thousands)
Deferred franchise and license fees	$	33,464	$	(5,533)	$	2,247	$	30,178
PRO Access and loyalty program points (1)	24,836		(18,093)		19,207		25,950
Gift card liability (1)	3,416		(1,793)		343		1,966

(1) Net of estimated breakage

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INVENTORY (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Net Realizable Value of Inventory

The net realizable value of inventory consisted of the following:

	June 30, 2020		December 31, 2019
	(in thousands)
Finished product ready for sale	$	275,170	$	387,655
Inventory	$	275,170	$	387,655

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Property, Plant, and Equipment (Tables)

6 Months Ended

Jun. 30, 2020

Property, Plant and Equipment [Abstract]

Impairment Charges and Other Store Closing Costs

The following is a summary of impairment charges and other store closing costs:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Right-of-use asset	$	18,199	$	—	$	39,422	$	—
Property and equipment	2,002		—		13,227		—
Other store closing costs	—		—		7,897		—
Total impairment and other store closing costs	$	20,201	$	—	$	60,546	$	—

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GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the Company's goodwill activity by reportable segment:

	U.S. and Canada		International		Manufacturing / Wholesale			Total
	(in thousands)
Goodwill at December 31, 2019
Gross	$	389,895	$	43,330	$	141,299		$	574,524
Accumulated impairments	(380,644)		—		(114,771)			(495,415)
Goodwill	9,251		43,330		26,528			79,109
2020 Activity:
Impairment	—		(5,451)		—			(5,451)
Translation effect of exchange rates	—		(106)		—			(106)
Total 2020 activity	—		(5,557)		—		—	(5,557)
Balance at June 30, 2020
Gross	389,895		43,224		141,299			574,418
Accumulated impairments	(380,644)		(5,451)		(114,771)			(500,866)
Goodwill	$	9,251	$	37,773	$	26,528		$	73,552

Schedule of Definite-Lived Intangible Assets

The following table reflects the gross carrying amount and accumulated amortization for each major definite-lived intangible assets:

		June 30, 2020						December 31, 2019
	Weighted-Average Life	Cost		Accumulated Amortization/Impairment		Carrying Amount		Cost		Accumulated Amortization/Impairment		Carrying Amount
		(in thousands)
Brand name	Indefinite	$	720,000	$	(531,000)	$	189,000	$	720,000	$	(419,280)	$	300,720
Retail agreements	30.3	31,000		(14,145)		16,855		31,000		(13,619)		17,381
Franchise agreements	25	70,000		(37,217)		32,783		70,000		(35,817)		34,183
Manufacturing agreements	25	40,000		(21,267)		18,733		40,000		(20,467)		19,533
Other intangibles	7	640		(581)		59		639		(529)		110
Franchise rights	3	7,566		(7,503)		63		7,566		(7,475)		91
Total		$	869,206	$	(611,713)	$	257,493	$	869,205	$	(497,187)	$	372,018

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DEBT / INTEREST EXPENSE (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Schedule of Long-term Debt

Debt consisted of the following: 

	June 30, 2020		December 31, 2019
	(in thousands)
DIP Financing:
DIP Financing - New Money DIP	$	30,000	$	—
DIP Financing - DIP FILO	275,000		—
Total DIP Financing	305,000		—
Liabilities subject to compromise:
Tranche B-2 Term Loan	410,834		—
Notes	159,097		—
Total liabilities subject to compromise	569,931		—
Long-term debt, including the current portion:
Tranche B-2 Term Loan (net of $7.0 million discount)	—		441,500
FILO Term Loan (net of $8.2 million discount)	—		266,814
Notes (net of $3.9 million conversion feature and $0.5 million discount)	—		154,675
Debt issuance costs	—		(424)
Total long-term debt, including the current portion	—		862,565
Total debt	$	874,931	$	862,565

Components of Convertible Debt

As of June 30, 2020, the Company maintains $159.1 million in principal amount of its 1.5% convertible Notes outstanding. The Notes, classified within LSTC at June 30, 2020 and debt at December 31, 2019, consist of the following components:

	June 30, 2020		December 31, 2019
	(in thousands)
Liability component
Principal	$	159,097	$	159,097
Conversion feature	—		(3,898)
Discount related to debt issuance costs	—		(524)
Net carrying amount	$	159,097	$	154,675

Schedule of Derivative Financial Instruments

The fair values of the derivative financial instruments included in the Consolidated Balance Sheets consisted of the following:

	Fair Value at
Balance Sheet Classification	June 30, 2020		December 31, 2019
	(in thousands)
Other current liabilities	$	—	$	5,013
Other long-term liabilities	—		1,927
Total liabilities	$	—	$	6,940

Schedule of Interest Expense

Interest expense consisted of the following:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
DIP Financing	$	58	$	—	$	58	$	—
Tranche B-1 Term Loan coupon	—		—		—		928
Tranche B-2 Term Loan coupon	10,310		12,954		22,649		29,422
FILO Term Loan coupon	6,861		6,826		13,687		13,578
Revolving Credit Facility	534		96		683		219
Amortization of discount and debt issuance costs	3,499		2,522		18,554		8,565
Subtotal	21,262		22,398		55,631		52,712
Notes:
Coupon	551		729		1,147		1,436
Amortization of conversion feature	1,442		1,611		2,984		3,312
Amortization of discount and debt issuance costs	200		242		417		486
Total Notes	2,193		2,582		4,548		5,234
Loss on interest rate swap	(1,356)		—		9,454		—
Other	(42)		(16)		(131)		(26)
Interest expense, net	$	22,057	$	24,964	$	69,502	$	57,920

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EQUITY METHOD INVESTMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Equity Method Investments and Joint Ventures [Abstract]

Summary of Equity Method Investments

The following table provides a reconciliation of equity method investments on the Company’s Consolidated Balance Sheets:

	June 30, 2020		December 31, 2019
	(in thousands)
Manufacturing JV	$	56,684	$	75,434
Manufacturing JV capital contribution	10,714		10,714
HK JV and China JV	10,206		10,342
Income from equity method investments	5,567		5,296
Distributions received from equity method investments	(5,254)		(3,856)
Manufacturing JV other-than-temporary impairment	(35,840)		—
Total equity method investments	$	42,077	$	97,930

Schedule of Related Party Transactions

The Company's related party transactions with the Manufacturing, HK and China joint ventures are as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Manufacturing JV finished goods purchases	$	39,783	$	51,632	$	76,220	$	72,392
HK JV revenue, primarily wholesale and royalties	6,537		2,087		10,349		4,274

	June 30, 2020		December 31, 2019
	(in thousands)
Manufacturing JV accounts payable1	$	18,714	$	11,720
HK JV accounts receivable	10,094		8,946

¹ On Petition Date, all prepetition Manufacturing JV accounts payable has been classified in LSTC.

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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Actual and Estimated Fair Values of the Financial Instruments

The carrying value and estimated fair value of the Term Loan Facility, net of discount, Notes (net of the equity component classified in stockholders' equity and discount) and the interest rate swaps were as follows:

	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Liabilities not subject to compromise:
Tranche B-2 Term Loan	$	—	$	—	$	441,500	$	414,321
FILO Term Loan	—		—		266,814		265,851
Notes	—		—		154,675		148,488
DIP Financing - New Money DIP	30,000		30,000		—		—
DIP Financing - DIP FILO	275,000		275,000		—		—
Interest rate swaps	—		—		6,940		6,940
Liabilities subject to compromise:
Tranche B-2 Term Loan	$	410,834	$	292,033	$	—	$	—
Notes	159,097		795		—		—

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EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares

The following table represents the Company's basic and dilutive weighted-average shares:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
	(in thousands)
Basic weighted average shares	83,936	83,663	83,916	83,587
Effect of dilutive Convertible Preferred Stock	—	57,093	—	—
Effect of dilutive stock-based compensation awards	—	186	—	—
Diluted weighted average shares	83,936	140,942	83,916	83,587

Schedule of Awards and Convertible Stock not Included in Computation of Diluted EPS

The following awards and convertible stock were excluded from the computation of diluted EPS because the impact was antidilutive:

	Three months ended June 30,		Six months ended June 30,
	2020	2019	2020	2019
	(in thousands)
Antidilutive:
Stock-based awards	6,018	3,768	6,398	4,292
Convertible Preferred Stock	60,896	—	60,409	49,979
Total excluded from diluted EPS	66,914	3,768	66,807	54,271

Computations for Basic and Diluted Earnings per Common Share

The computations for basic and diluted loss per common share are as follows:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands, except per share data)
(Loss) earnings per common share - Basic
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Cumulative undeclared convertible preferred stock dividend	5,280		4,950		10,475		8,667
Net (loss) income attributable to common shareholders	(88,949)		11,108		(294,230)		(7,871)
Weighted average common shares outstanding - basic	83,936		83,663		83,916		83,587
(Loss) earnings per common share - basic	$	(1.06)	$	0.13	$	(3.51)	$	(0.09)
(Loss) earnings per common share - Diluted
Net (loss) income	$	(83,669)	$	16,058	$	(283,755)	$	796
Cumulative undeclared convertible preferred stock dividends	5,280		—		10,475		8,667
Net (loss) earnings attributable to common shareholders	(88,949)		16,058		(294,230)		(7,871)
Weighted average common shares outstanding - diluted	83,936		140,942		83,916		83,587
(Loss) earnings per common share - diluted	$	(1.06)	$	0.11	$	(3.51)	$	(0.09)

XML

SEGMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Segment Reporting [Abstract]

Schedule of Key Financial Information of the Segments

The following table represents key financial information for each of the Company's reportable segments:

	Three months ended June 30,				Six months ended June 30,
	2020		2019		2020		2019
	(in thousands)
Revenue:
U.S. and Canada	$	300,206	$	476,060	$	724,387	$	965,216
International	28,933		39,448		62,478		80,371
Manufacturing / Wholesale:
Intersegment revenues	—		—		—		35,505
Third-party	—		—		—		15,783
Wholesale partner sales	14,399		18,489		29,254		37,390
Subtotal Manufacturing / Wholesale	14,399		18,489		29,254		88,678
Total reportable segment revenues	343,538		533,997		816,119		1,134,265
Elimination of intersegment revenues	—		—		—		(35,505)
Total revenue	$	343,538	$	533,997	$	816,119	$	1,098,760
Operating income:
U.S. and Canada	$	(19,675)	$	49,202	$	(150,875)	$	101,302
International	8,231		14,269		(9,151)		28,319
Manufacturing / Wholesale	6,730		12,118		13,661		27,462
Total reportable segment operating income	(4,714)		75,589		(146,365)		157,083
Corporate costs	(53,804)		(25,079)		(78,638)		(51,340)
Loss on net asset exchange for the formation of the joint ventures	—		(1,779)		(1,655)		(21,293)
Other	—		(13)		2,107		(250)
Unallocated corporate costs, loss on net asset exchange and other	(53,804)		(26,871)		(78,186)		(72,883)
Total operating (loss) income	(58,518)		48,718		(224,551)		84,200
Interest expense, net	22,057		24,964		69,502		57,920
Reorganization items, net	15,429		—		15,429		—
Gain on purchase of convertible debt	—		(3,214)		—		(3,214)
Loss on forward contracts for the issuance of convertible preferred stock	—		—		—		16,787
(Loss) income before income taxes	$	(96,004)	$	26,968	$	(309,482)	$	12,707

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NATURE OF BUSINESS (Details)		1 Months Ended	4 Months Ended	6 Months Ended
	Jun. 30, 2020 country store	Apr. 30, 2020 store	Jun. 30, 2020 country store	Jun. 30, 2020 country segment store
Segment Reporting Information [Line Items]
Number of reportable segments | segment				3
Number of international countries in which franchise stores are located | country	50		50	50
U.S. and Canada | Temporary Store Closure | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Number of stores closed	100	1,400	100	100
Percentage of stores closed	4.00%	40.00%	40.00%
U.S. and Canada | Permanent Store Closure | Geographic Concentration Risk
Segment Reporting Information [Line Items]
Number of stores closed		551

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BASIS OF PRESENTATION (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2020
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Restricted cash related to funds in escrow	$ 15,700		$ 15,700
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance		$ 22,648	22,648
Charged to costs and expenses			8,700
Ending balance	32,726		32,726
Vendor allowance
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	12,765	14,033	14,033
Charged to costs and expenses	2,698	5,439
Deduction	0	(6,707)
Ending balance	15,463	12,765	15,463
Trade account receivable allowance
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	14,625	8,615	8,615
Charged to costs and expenses	3,164	9,224
Deduction	(526)	(3,214)
Ending balance	$ 17,263	14,625	$ 17,263
COVID-19 Pandemic
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Charged to costs and expenses		8,700
COVID-19 Pandemic | Vendor allowance
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Charged to costs and expenses		$ 4,600

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REORGANIZATION AND CHAPTER 11 PROCEEDINGS - Narrative (Details)				3 Months Ended	6 Months Ended
	Aug. 07, 2020 USD ($) numberOfClaimants claims	Jul. 20, 2020 USD ($) numberOfLeases	Jun. 23, 2020 USD ($)	Jun. 30, 2020 USD ($) entity	Jun. 30, 2020 USD ($) entity	Dec. 31, 2019 USD ($)	Feb. 28, 2018 USD ($)
Debt Instrument
Unpaid rent and other occupancy payments				$ 47,000,000	$ 47,000,000
Pre-petition professional fees				34,200,000	34,200,000
DIP principal amount				305,000,000	305,000,000	$ 0
Debtor-in-possession financing costs				7,300,000	7,300,000
New common shares awarded (as a percent)			10.00%
Debtor reorganization choice to receive warrant terms (in years)			3 years
Debtor reorganization pro forma equity (as a percent)			5.00%
Pro rate share amount elect to receive			$ 250,000
Total liabilities subject to compromise				569,931,000	$ 569,931,000	0
Contractual interest expense				$ 800,000
Number of wholly-owned entities considered non-debtors | entity				17	17
Cash and cash equivalents				$ 80,740,000	$ 80,740,000	117,046,000
Brand name (Note 7)				189,000,000	189,000,000	300,720,000
Equity method investments (Note 9)				42,077,000	42,077,000	$ 97,930,000
Subsequent Event
Debt Instrument
Number of unexpired leases rejected | numberOfLeases		551
Number claims filed | claims	763
Amount of claims filed	$ 62,700,000
Number of claimants claimed the file | numberOfClaimants	633
GNC Canada
Debt Instrument
Gain (Loss) on reorganization item				5,000,000.0	5,000,000.0
Re-measurement of our net investment to estimated fair value				13,600,000
Reclassification foreign currency transaction				5,600,000
Debtors
Debt Instrument
Cash and cash equivalents				5,100,000	5,100,000
Brand name (Note 7)				24,800,000	24,800,000
Equity method investments (Note 9)				42,100,000	42,100,000
DIP FILO Credit Agreement | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity							$ 275,000,000
Borrowers additional					30,000,000
Additional borrowing base					17,500,000
Credit Agreement
Debt Instrument
Debtor-in-possession financing costs					$ 130,000,000
FILO Exit Facility
Debt Instrument
Debt instrument term					4 years
Exit FLFO Facility
Debt Instrument
Debt instrument term			4 years
KERP | Maximum | Subsequent Event
Debt Instrument
Maximum award pool		$ 3,100,000
Notes Payable to Banks | New Money DIP
Debt Instrument
DIP financing new cash				100,000,000	$ 100,000,000
Notes Payable to Banks | DIP Term Loan Facility | Revolving Credit Facility
Debt Instrument
DIP principal amount				30,000,000.0	30,000,000.0
Borrowings held in escrow				15,700,000	15,700,000
Notes Payable to Banks | Credit Agreement
Debt Instrument
DIP financing new cash				70,000,000	70,000,000
DIP principal amount				$ 100,000,000	100,000,000
Borrowers additional					$ 30,000,000
Additional fees and expenses, backstop premium (as a percent)				6.00%	6.00%
Additional fees and expenses, upfront fee (as a percent)				4.00%	4.00%
Additional fees and expenses, exit fee (as a percent)				3.00%	3.00%
Notes Payable to Banks | Exit FLSO Facility
Debt Instrument
Debt instrument term			4 years 3 months
Additional amount outstanding			$ 50,000,000
DIP interest rate option to Borrower			9.00%
DIP additional borrowing interest paid-in-kind			3.00%
FILO Term Loan
Debt Instrument
DIP aggregate outstanding principal amount (as a percent)			87.00%
Tranche B-2 | Notes Payable to Banks | Prepettion Term Loan
Debt Instrument
Maximum borrowing capacity				$ 100,000,000	$ 100,000,000
Tranche B-2 | Term Loan
Debt Instrument
DIP aggregate outstanding principal amount (as a percent)			92.00%
Consideration for liquidity conversion amount			$ 100,000,000
Common stock settlement (as a percent)			100.00%
LIBOR | DIP FILO Credit Agreement | Revolving Credit Facility
Debt Instrument
DIP interest rate (as a percent)				9.00%	9.00%
LIBOR | DIP FILO Credit Agreement | Revolving Credit Facility | Minimum
Debt Instrument
DIP interest rate (as a percent)				1.00%	1.00%
LIBOR | FILO Exit Facility | Maximum
Debt Instrument
DIP interest rate (as a percent)				9.00%	9.00%
LIBOR | FILO Exit Facility | Minimum
Debt Instrument
DIP interest rate (as a percent)				7.00%	7.00%
LIBOR | Exit FLFO Facility
Debt Instrument
DIP interest rate (as a percent)			10.00%
LIBOR | Exit FLFO Facility | Minimum
Debt Instrument
DIP interest rate (as a percent)			1.00%
LIBOR | Notes Payable to Banks | New Money DIP
Debt Instrument
DIP interest rate (as a percent)				13.00%	13.00%
LIBOR | Notes Payable to Banks | New Money DIP | Minimum
Debt Instrument
DIP interest rate (as a percent)				1.00%	1.00%
LIBOR | Notes Payable to Banks | Credit Agreement
Debt Instrument
DIP interest rate (as a percent)				13.00%	13.00%
LIBOR | Notes Payable to Banks | Credit Agreement | Minimum
Debt Instrument
DIP interest rate (as a percent)				1.00%	1.00%
LIBOR | Notes Payable to Banks | Exit FLSO Facility
Debt Instrument
DIP interest rate (as a percent)			11.50%
LIBOR | Notes Payable to Banks | Exit FLSO Facility | Minimum
Debt Instrument
DIP interest rate (as a percent)			1.00%

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REORGANIZATION AND CHAPTER 11 PROCEEDINGS - Reorganization Items in Consolidated Statement of Operations (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Reorganizations [Abstract]
Debtor-in-possession financing costs	$ 7,300		$ 7,300
Professional fees	2,043		2,043
Prepetition debt issuance costs and debt discount	1,039		1,039
Loss on deconsolidation of GNC Canada	5,047		5,047
Reorganization items, net	15,429	$ 0	15,429	$ 0
Cash paid for reorganization items, net	$ 7,532	$ 0	$ 7,532	$ 0

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REORGANIZATION AND CHAPTER 11 PROCEEDINGS - Liabilities Subject to Compromise (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument
Accounts payable	$ 61,128
Accrued interest	3,744
Lease liabilities	329,790
Other liabilities	188,971
Long-term debt	569,931	$ 0
Liabilities subject to compromise	1,153,564	0
Notes | Notes
Debt Instrument
Long-term debt	159,097	0
Tranche B-2 | Term Loan | Tranche B-2 Term Loan
Debt Instrument
Long-term debt	$ 410,834	$ 0

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REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Net revenue	$ 343,538	$ 533,997	$ 816,119	$ 1,098,760
United States
Disaggregation of Revenue [Line Items]
Net revenue	334,411	510,762	787,284	1,048,805
Foreign
Disaggregation of Revenue [Line Items]
Net revenue	9,127	23,235	28,835	49,955
Manufacturing / Wholesale | Wholesale partner sales
Disaggregation of Revenue [Line Items]
Net revenue	14,399	18,489	29,254	37,390
Operating Segment
Disaggregation of Revenue [Line Items]
Net revenue	343,538	533,997	816,119	1,134,265
Operating Segment | U.S. and Canada
Disaggregation of Revenue [Line Items]
Net revenue	300,206	476,060	724,387	965,216
Operating Segment | U.S. and Canada | Product Sales
Disaggregation of Revenue [Line Items]
Net revenue	228,532	365,005	556,252	742,081
Operating Segment | U.S. and Canada | Protein
Disaggregation of Revenue [Line Items]
Net revenue	51,509	77,160	125,317	157,345
Operating Segment | U.S. and Canada | Performance supplements
Disaggregation of Revenue [Line Items]
Net revenue	42,694	73,083	110,685	147,824
Operating Segment | U.S. and Canada | Weight management
Disaggregation of Revenue [Line Items]
Net revenue	16,122	29,607	36,639	60,373
Operating Segment | U.S. and Canada | Vitamins
Disaggregation of Revenue [Line Items]
Net revenue	36,866	44,936	85,828	91,944
Operating Segment | U.S. and Canada | Herbs / Greens
Disaggregation of Revenue [Line Items]
Net revenue	10,699	15,536	24,504	31,391
Operating Segment | U.S. and Canada | Wellness
Disaggregation of Revenue [Line Items]
Net revenue	26,185	46,370	65,267	93,515
Operating Segment | U.S. and Canada | Health / Beauty
Disaggregation of Revenue [Line Items]
Net revenue	29,869	46,535	69,354	92,888
Operating Segment | U.S. and Canada | Food / Drink
Disaggregation of Revenue [Line Items]
Net revenue	11,370	26,259	30,569	54,483
Operating Segment | U.S. and Canada | General merchandise
Disaggregation of Revenue [Line Items]
Net revenue	3,218	5,519	8,089	12,318
Operating Segment | U.S. and Canada | Wholesale sales to franchisees
Disaggregation of Revenue [Line Items]
Net revenue	36,444	59,869	87,500	118,126
Operating Segment | U.S. and Canada | Royalties and franchise fees
Disaggregation of Revenue [Line Items]
Net revenue	6,907	8,175	14,234	16,647
Operating Segment | U.S. and Canada | Sublease income
Disaggregation of Revenue [Line Items]
Net revenue	9,738	10,498	19,980	21,474
Operating Segment | U.S. and Canada | Cooperative advertising and other franchise support fees
Disaggregation of Revenue [Line Items]
Net revenue	2,605	4,754	7,013	9,821
Operating Segment | U.S. and Canada | Other
Disaggregation of Revenue [Line Items]
Net revenue	15,980	27,759	39,408	57,067
Operating Segment | International
Disaggregation of Revenue [Line Items]
Net revenue	28,933	39,448	62,478	80,371
Operating Segment | International | Wholesale sales to franchisees
Disaggregation of Revenue [Line Items]
Net revenue	15,637	27,019	35,820	52,456
Operating Segment | International | Royalties and franchise fees
Disaggregation of Revenue [Line Items]
Net revenue	4,001	6,332	10,509	12,319
Operating Segment | International | Other
Disaggregation of Revenue [Line Items]
Net revenue	9,295	6,097	16,149	15,596
Operating Segment | Manufacturing / Wholesale
Disaggregation of Revenue [Line Items]
Net revenue	14,399	18,489	29,254	88,678
Operating Segment | Manufacturing / Wholesale | Third-party
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	15,783
Intersegment Eliminations
Disaggregation of Revenue [Line Items]
Net revenue	0	0	0	(35,505)
Intersegment Eliminations | Manufacturing / Wholesale
Disaggregation of Revenue [Line Items]
Net revenue	$ 0	$ 0	$ 0	$ 35,505

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REVENUE - Contract with Customer (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Deferred franchise and license fees
Contract liabilities:
Balance at Beginning of Period	$ 28,293	$ 33,464
Recognition of revenue included in beginning balance	(4,934)	(5,533)
Contract liability, net of revenue, recognized during the period	2,168	2,247
Balance at End of Period	25,527	30,178
PRO Access and loyalty program points
Contract liabilities:
Balance at Beginning of Period	22,896	24,836
Recognition of revenue included in beginning balance	(16,909)	(18,093)
Contract liability, net of revenue, recognized during the period	12,194	19,207
Balance at End of Period	18,181	25,950
Gift card liability
Contract liabilities:
Balance at Beginning of Period	3,110	3,416
Recognition of revenue included in beginning balance	(1,502)	(1,793)
Contract liability, net of revenue, recognized during the period	274	343
Balance at End of Period	$ 1,882	$ 1,966

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REVENUE - Performance Obligations (Details) $ in Millions	Jun. 30, 2020 USD ($)
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 25.5
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Remaining performance obligation	$ 5.7
Remaining performance obligation, period of recognition	12 months

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INVENTORY - Net Realizable Value of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished product ready for sale	$ 275,170	$ 387,655
Inventory	$ 275,170	$ 387,655

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INVENTORY - Narrative (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended		4 Months Ended
	Jun. 30, 2020	Apr. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2020
Inventory [Line Items]
Inventory reserve recorded				$ 18.2
Reserves for inventory obsolescence and vendor allowance			$ 12.6
U.S. and Canada | Temporary Store Closure | Geographic Concentration Risk
Inventory [Line Items]
Concentration risk percentage	4.00%	40.00%			40.00%
U.S. and Canada
Inventory [Line Items]
Inventory reserve recorded				17.8
Manufacturing / Wholesale
Inventory [Line Items]
Inventory reserve recorded				$ 0.4

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PROPERTY, PLANT AND EQUIPMENT, NET (Details) $ in Thousands		1 Months Ended	3 Months Ended			4 Months Ended	6 Months Ended
	Jun. 30, 2020 store	Apr. 30, 2020	Jun. 30, 2020 USD ($) store	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 store	Jun. 30, 2020 USD ($) store	Jun. 30, 2019 USD ($)
Property, Plant and Equipment [Line Items]
Right-of-use asset			$ 18,199		$ 0		$ 39,422	$ 0
Property and equipment			2,002		0		13,227	0
Other store closing costs			0		0		7,897	0
Total impairment and other store closing costs			20,201		0		60,546	0
Long-lived asset impairments and other store closing costs			20,201		$ 0		$ 177,715	$ 0
Gain on sale of property				$ 2,100
Company-Owned and Franchise Stores
Property, Plant and Equipment [Line Items]
Right-of-use asset			18,200	21,200
Property and equipment			2,000	11,200
Other store closing costs				7,900
Long-lived asset impairments and other store closing costs			$ 20,200	$ 40,300
U.S. and Canada
Property, Plant and Equipment [Line Items]
Number of stores with liquidation sales | store	500		500			500	500
U.S. and Canada | Temporary Store Closure | Geographic Concentration Risk
Property, Plant and Equipment [Line Items]
Concentration risk percentage	4.00%	40.00%				40.00%

XML

GOODWILL AND INTANGIBLE ASSETS - Narrative (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($)
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets	$ 0	$ 111,700,000
Goodwill impairment	$ 0		$ 5,451,000
Intangible Assets | Minimum | Royalty Rate
Finite-Lived Intangible Assets [Line Items]
Measurement input	0		0
Intangible Assets | Minimum | Discount Rate
Finite-Lived Intangible Assets [Line Items]
Measurement input	0.20		0.20
Intangible Assets | Maximum | Royalty Rate
Finite-Lived Intangible Assets [Line Items]
Measurement input	0.03		0.03
Intangible Assets | Maximum | Discount Rate
Finite-Lived Intangible Assets [Line Items]
Measurement input	0.22		0.22
Goodwill | Income Approach
Finite-Lived Intangible Assets [Line Items]
Measurement input		0.50
Goodwill | Market Approach
Finite-Lived Intangible Assets [Line Items]
Measurement input		0.50
Goodwill | Minimum | Discount Rate
Finite-Lived Intangible Assets [Line Items]
Measurement input	0.20		0.20
Goodwill | Maximum | Discount Rate
Finite-Lived Intangible Assets [Line Items]
Measurement input	0.22		0.22
U.S. and Canada
Finite-Lived Intangible Assets [Line Items]
Impairment of intangible assets		$ 88,600,000
International
Finite-Lived Intangible Assets [Line Items]
Goodwill impairment			$ 5,451,000

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GOODWILL AND INTANGIBLE ASSETS - Goodwill (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Goodwill [Roll Forward]
Gross, beginning balance		$ 574,524,000
Accumulated impairments, beginning balance		(495,415,000)
Goodwill, beginning balance		79,109,000
Impairment	$ 0	(5,451,000)
Translation effect of exchange rates		(106,000)
Total 2020 activity		(5,557,000)
Gross, ending balance	574,418,000	574,418,000
Accumulated impairments, ending balance	(500,866,000)	(500,866,000)
Goodwill, ending balance	73,552,000	73,552,000
U.S. and Canada
Goodwill [Roll Forward]
Gross, beginning balance		389,895,000
Accumulated impairments, beginning balance		(380,644,000)
Goodwill, beginning balance		9,251,000
Impairment		0
Translation effect of exchange rates		0
Total 2020 activity		0
Gross, ending balance	389,895,000	389,895,000
Accumulated impairments, ending balance	(380,644,000)	(380,644,000)
Goodwill, ending balance	9,251,000	9,251,000
International
Goodwill [Roll Forward]
Gross, beginning balance		43,330,000
Accumulated impairments, beginning balance		0
Goodwill, beginning balance		43,330,000
Impairment		(5,451,000)
Translation effect of exchange rates		(106,000)
Total 2020 activity		(5,557,000)
Gross, ending balance	43,224,000	43,224,000
Accumulated impairments, ending balance	(5,451,000)	(5,451,000)
Goodwill, ending balance	37,773,000	37,773,000
Manufacturing / Wholesale
Goodwill [Roll Forward]
Gross, beginning balance		141,299,000
Accumulated impairments, beginning balance		(114,771,000)
Goodwill, beginning balance		26,528,000
Impairment		0
Translation effect of exchange rates		0
Total 2020 activity		0
Gross, ending balance	141,299,000	141,299,000
Accumulated impairments, ending balance	(114,771,000)	(114,771,000)
Goodwill, ending balance	$ 26,528,000	$ 26,528,000

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GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]
Cost	$ 720,000	$ 720,000
Accumulated Amortization/Impairment	(531,000)	(419,280)
Total indefinite lived intangible assets, carrying amount	189,000	300,720
Accumulated Amortization/Impairment	(611,713)	(497,187)
Total definite lived intangible assets, carrying amount	68,493	71,298
Cost	869,206	869,205
Total intangible assets, carrying amount	$ 257,493	372,018
Retail agreements
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Life	30 years 3 months 18 days
Cost	$ 31,000	31,000
Accumulated Amortization/Impairment	(14,145)	(13,619)
Total definite lived intangible assets, carrying amount	$ 16,855	17,381
Franchise agreements
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Life	25 years
Cost	$ 70,000	70,000
Accumulated Amortization/Impairment	(37,217)	(35,817)
Total definite lived intangible assets, carrying amount	$ 32,783	34,183
Manufacturing agreements
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Life	25 years
Cost	$ 40,000	40,000
Accumulated Amortization/Impairment	(21,267)	(20,467)
Total definite lived intangible assets, carrying amount	$ 18,733	19,533
Other intangibles
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Life	7 years
Cost	$ 640	639
Accumulated Amortization/Impairment	(581)	(529)
Total definite lived intangible assets, carrying amount	$ 59	110
Franchise rights
Finite-Lived Intangible Assets [Line Items]
Weighted-Average Life	3 years
Cost	$ 7,566	7,566
Accumulated Amortization/Impairment	(7,503)	(7,475)
Total definite lived intangible assets, carrying amount	$ 63	$ 91

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DEBT / INTEREST EXPENSE - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Debt Instrument
Total DIP Financing	$ 305,000	$ 0
Total liabilities subject to compromise	569,931	0
Debt issuance costs	0	(424)
Total long-term debt, including the current portion	0	862,565
Total debt	874,931	862,565
DIP Financing - New Money DIP
Debt Instrument
Total DIP Financing	30,000	0
DIP Financing - DIP FILO
Debt Instrument
Total DIP Financing	275,000	0
FILO Term Loan | Term Loan | FILO Term Loan
Debt Instrument
Long-term debt, gross	0	266,814
Debt discount		8,200
Convertible Senior Notes | Notes
Debt Instrument
Total liabilities subject to compromise	159,097	0
Long-term debt, gross	0	154,675
Debt discount	0	524
Unamortized conversion feature	0	3,898
Tranche B-2 Term Loan coupon | Term Loan Facility | Tranche B-2 Term Loan
Debt Instrument
Total liabilities subject to compromise	410,834	0
Long-term debt, gross	$ 0	441,500
Debt discount		$ 7,000

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DEBT / INTEREST EXPENSE - Narrative (Details) - USD ($)	1 Months Ended			3 Months Ended			6 Months Ended
	Apr. 30, 2020	Apr. 30, 2019	Nov. 30, 2018	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Mar. 31, 2019	Feb. 28, 2019	Feb. 28, 2018	Aug. 10, 2015
FILO Term Loan | Revolving Credit Facility
Debt Instrument
Maximum borrowing capacity				$ 100,000,000.0			$ 100,000,000.0			$ 81,000,000.0	$ 100,000,000.0
Line of credit outstanding				30,000,000.0	$ 30,000,000.0		30,000,000.0
Line of credit facility, remaining borrowing capacity				19,900,000			19,900,000
Reduction to borrowing ability				26,600,000			$ 26,600,000
Fee on outstanding balance							1.50%
Commitment fee on undrawn portion of revolving credit facility							0.375%
Potential increase of unused capacity fee							0.50%
FILO Term Loan | Revolving Credit Facility | Minimum
Debt Instrument
Potential increase on fee on outstanding balance							0.25%
FILO Term Loan | Revolving Credit Facility | Maximum
Debt Instrument
Potential increase on fee on outstanding balance							0.50%
FILO Term Loan | Revolving Credit Facility | LIBOR
Debt Instrument
Basis spread on variable rate							1.50%
FILO Term Loan | Revolving Credit Facility | LIBOR | Minimum
Debt Instrument
Potential increase (decrease) on basis spread of variable rate							0.25%
FILO Term Loan | Revolving Credit Facility | LIBOR | Maximum
Debt Instrument
Potential increase (decrease) on basis spread of variable rate							0.50%
FILO Term Loan | Revolving Credit Facility | Prime
Debt Instrument
Basis spread on variable rate							0.50%
FILO Term Loan | Revolving Credit Facility | Prime | Minimum
Debt Instrument
Potential increase (decrease) on basis spread of variable rate							0.25%
FILO Term Loan | Revolving Credit Facility | Prime | Maximum
Debt Instrument
Potential increase (decrease) on basis spread of variable rate							0.50%
FILO Term Loan | Letter Of Credit
Debt Instrument
Line of credit outstanding				4,500,000			$ 4,500,000
Tranche B-2 Term Loan | Term Loan Facility
Debt Instrument
Minimum for notes repayment, refinanced, converted, discharged, or prepaid, For maturity date extension trigger							50,000,000.0
FILO Term Loan | FILO Term Loan | Term Loan
Debt Instrument
Maximum borrowing capacity				$ 275,000,000.0			$ 275,000,000.0
Effective interest rate				8.00%			8.00%		8.80%
FILO Term Loan | FILO Term Loan | Term Loan | LIBOR
Debt Instrument
Basis spread on variable rate							7.00%
FILO Term Loan | FILO Term Loan | Term Loan | LIBOR | Minimum
Debt Instrument
Basis spread on variable rate							6.50%
FILO Term Loan | FILO Term Loan | Term Loan | Prime
Debt Instrument
Basis spread on variable rate							6.00%
FILO Term Loan | FILO Term Loan | Term Loan | Prime | Minimum
Debt Instrument
Basis spread on variable rate							5.50%
Revolving Credit Facility | Term Loan
Debt Instrument
Line of credit facility, remaining borrowing capacity				$ 12,500,000			$ 12,500,000
Effective interest rate				12.50%			12.50%
Maximum net first lien leverage ratio				4.25			4.25
Minimum fixed charge coverage ratio				1.00			1.00
Revolving Credit Facility | Term Loan Facility
Debt Instrument
Effective interest rate				4.00%			4.00%
Amended And Restated Term Loan Agreement
Debt Instrument
Borrowings outstanding												$ 410,800,000
ABL Credit Agreement
Debt Instrument
Borrowings outstanding												$ 335,000,000
Notes | Term Loan Facility
Debt Instrument
Minimum for notes repayment, refinanced, converted, discharged, or prepaid, For maturity date extension trigger							$ 50,000,000
Notes | Convertible Senior Notes
Debt Instrument
Borrowings outstanding				$ 159,097,000			159,097,000		$ 154,675,000
Principal				$ 159,097,000			$ 159,097,000		$ 159,097,000				$ 157,600,000
Interest rate				1.50%			1.50%						1.50%
Amortization of discount and debt issuance costs				$ 200,000		$ 242,000	$ 417,000	$ 486,000
Tranche B-2 Term Loan, FILO Term Loan And Revolving Credit Facility
Debt Instrument
Amortization of discount and debt issuance costs					$ 12,400,000
Tranche B-2 Term Loan coupon
Debt Instrument
Payments on term loan facility							37,628,000	$ 123,774,000
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility
Debt Instrument
Annual principal payment				$ 43,000,000			$ 43,000,000
Payments on term loan facility			$ 100,000,000
Effective interest rate				10.10%			10.10%		10.60%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | Initial Rate
Debt Instrument
Mandatory prepayment, percent of excess cash flows							75.00%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | Reduced Rate
Debt Instrument
Mandatory prepayment, percent of excess cash flows							50.00%
Payments for excess cash flows	$ 25,900,000	$ 9,800,000
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | LIBOR
Debt Instrument
Basis spread on variable rate							8.75%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | LIBOR | Minimum
Debt Instrument
Basis spread on variable rate							8.25%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | LIBOR | Maximum
Debt Instrument
Basis spread on variable rate							9.25%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | Prime
Debt Instrument
Basis spread on variable rate							7.75%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | Prime | Minimum
Debt Instrument
Basis spread on variable rate							7.25%
Tranche B-2 Term Loan coupon | Tranche B-2 Term Loan | Term Loan Facility | Prime | Maximum
Debt Instrument
Basis spread on variable rate							8.25%

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DEBT / INTEREST EXPENSE - Components of Convertible Debt (Details) - Convertible Senior Notes - Notes - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Aug. 10, 2015
Debt Instrument
Interest rate	1.50%		1.50%
Liability component
Principal	$ 159,097	$ 159,097	$ 157,600
Conversion feature	0	(3,898)
Discount related to debt issuance costs	0	(524)
Net carrying amount	$ 159,097	$ 154,675

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DEBT / INTEREST EXPENSE - Interest Rate Swaps (Details)		3 Months Ended			6 Months Ended
	Jun. 29, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2020 USD ($)	Jun. 13, 2018 USD ($) interest_rate_swap
Debt Instrument
Loss on interest rate swap		$ (1,356,000)	$ 9,454,000	$ 0		$ 0
Amount agreed to settle dip financing	$ 9,800,000
Interest rate swap settlement	9,000,000.0				$ 8,990,000	0
Interest expense recognized on interest rate swap	$ 800,000				10,810,000	0
Notes | Term Loan
Debt Instrument
Minimum for notes repayment, refinanced, converted, discharged, or prepaid, For maturity date extension trigger					50,000,000
Interest rate swaps
Debt Instrument
Number of interest rate swaps | interest_rate_swap								2
Loss on interest rate swap			$ 10,800,000
Interest Rate Swap One
Debt Instrument
Derivative, notional amount								$ 275,000,000
Derivative floor interest rate								0.00%
Interest Rate Swap Two
Debt Instrument
Derivative, notional amount		$ 125,000,000		$ 175,000,000	$ 125,000,000	$ 175,000,000		$ 225,000,000
Derivative floor interest rate								0.75%
Interest Rate Swap Two | Forecast
Debt Instrument
Derivative, notional amount							$ 75,000,000

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DEBT / INTEREST EXPENSE - Schedule of Derivative Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Debt Disclosure [Abstract]
Other current liabilities	$ 0	$ 5,013
Other long-term liabilities	0	1,927
Total liabilities	$ 0	$ 6,940

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DEBT / INTEREST EXPENSE - Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Debt Instrument
Loss on interest rate swap	$ (1,356)	$ 9,454	$ 0		$ 0
Other	(42)		(16)	$ (131)	(26)
Interest expense, net	22,057		24,964	69,502	57,920
DIP Financing
Debt Instrument
Interest expense (excluding amortization)	58		0	58	0
Senior Credit Facility
Debt Instrument
Amortization of discount and debt issuance costs	3,499		2,522	18,554	8,565
Interest expense	21,262		22,398	55,631	52,712
Senior Credit Facility | Revolving Credit Facility
Debt Instrument
Interest expense (excluding amortization)	534		96	683	219
Senior Credit Facility | FILO Term Loan | Term Loan
Debt Instrument
Interest expense (excluding amortization)	6,861		6,826	13,687	13,578
Senior Credit Facility | Tranche B-1 Term Loan coupon | Term Loan Facility
Debt Instrument
Interest expense (excluding amortization)	0		0	0	928
Senior Credit Facility | Tranche B-2 Term Loan coupon | Term Loan Facility
Debt Instrument
Interest expense (excluding amortization)	10,310		12,954	22,649	29,422
Notes | Convertible Senior Notes
Debt Instrument
Interest expense (excluding amortization)	551		729	1,147	1,436
Amortization of conversion feature	1,442		1,611	2,984	3,312
Amortization of discount and debt issuance costs	200		242	417	486
Interest expense	$ 2,193		$ 2,582	$ 4,548	$ 5,234

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EQUITY METHOD INVESTMENTS - Summary of Equity Method Investments (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2020	Jun. 30, 2020	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
Income from equity method investments		$ 5,567	$ 5,296
Distributions received from equity method investments		(5,254)	(3,856)
Manufacturing JV other-than-temporary impairment		(35,840)	0
Total equity method investments		42,077	97,930
Manufacturing JV
Schedule of Equity Method Investments [Line Items]
Equity method investment, underlying equity in net assets		56,684	75,434
Income from equity method investments	$ 35,800
Manufacturing JV other-than-temporary impairment	$ (35,800)
Manufacturing JV capital contribution
Schedule of Equity Method Investments [Line Items]
Equity method investment, underlying equity in net assets		10,714	10,714
HK JV and China JV
Schedule of Equity Method Investments [Line Items]
Equity method investment, underlying equity in net assets		$ 10,206	$ 10,342

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EQUITY METHOD INVESTMENTS - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended			6 Months Ended	12 Months Ended
	Mar. 31, 2019	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Dec. 31, 2019	Feb. 28, 2019
Schedule of Equity Method Investments [Line Items]
Other than temporary impairment					$ 35,840	$ 0
Carrying amount as result of impairment					$ 5,567	$ 5,296
China Business | Disposal group, dispsed of by sale
Schedule of Equity Method Investments [Line Items]
Deconsolidation of GNC Canada				$ 5,800
Nutra Manufacturing Business | Disposal group, dispsed of by sale
Schedule of Equity Method Investments [Line Items]
Deconsolidation of GNC Canada				(27,100)
JV Framework
Schedule of Equity Method Investments [Line Items]
Cash contributed				2,400
Manufacturing JV
Schedule of Equity Method Investments [Line Items]
Equity method investment ownership		32.00%
Proceeds for investment in newly formed joint venture	$ 99,200	$ 15,600	$ 101,000
Anticipated proceeds expected to be received	$ 75,000			$ 75,000
Anticipated proceeds expected to be received, period for recognition	4 years
Expected ownership percentage after all transactions	100.00%			100.00%
Annual proceeds for investment in new joint venture, amount per year	$ 18,800			$ 18,800
Purchase price adjustment		1,700
Loss on net asset exchange, pre-tax		3,100
Purchase price		18,800
Other than temporary impairment		35,800
Carrying amount as result of impairment		$ 35,800
International Vitamin Corporation
Schedule of Equity Method Investments [Line Items]
Equity method investment ownership	43.00%			43.00%
Purchase price adjustment			$ 1,800
Manufacturing JV capital contribution
Schedule of Equity Method Investments [Line Items]
Capital contribution	$ 10,700
GNC Hong Kong Limited | JV Framework
Schedule of Equity Method Investments [Line Items]
Equity method investment ownership	35.00%			35.00%			35.00%

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EQUITY METHOD INVESTMENTS - Related Party transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]
HK JV revenue, primarily wholesale and royalties	$ 343,538	$ 533,997	$ 816,119	$ 1,098,760
Manufacturing JV
Schedule of Equity Method Investments [Line Items]
Manufacturing JV finished goods purchases	39,783	51,632	76,220	72,392
Manufacturing JV accounts payable	18,714		18,714		$ 11,720
HK JV and China JV
Schedule of Equity Method Investments [Line Items]
HK JV revenue, primarily wholesale and royalties	6,537	$ 2,087	10,349	$ 4,274
HK JV accounts receivable	$ 10,094		$ 10,094		$ 8,946

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FAIR VALUE MEASUREMENTS AND FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Actual and estimated fair values of the financial instruments
Derivative liability	$ 0	$ 6,940
Level 2 | Carrying Amount | Interest rate swaps
Actual and estimated fair values of the financial instruments
Derivative liability	0	6,940
Level 2 | Carrying Amount | FILO Term Loan | FILO Term Loan
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	0	266,814
Long-term debt liabilities subject to compromise	159,097	0
Level 2 | Carrying Amount | Notes | Notes
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	0	154,675
Level 2 | Carrying Amount | DIP Financing - New Money DIP
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	30,000	0
Level 2 | Carrying Amount | DIP Financing - DIP FILO
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	275,000	0
Level 2 | Carrying Amount | Tranche B-2 | Tranche B-2 Term Loan | Term Loan Facility
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	0	441,500
Long-term debt liabilities subject to compromise	410,834	0
Level 2 | Fair Value | Interest rate swaps
Actual and estimated fair values of the financial instruments
Derivative liability	0	6,940
Level 2 | Fair Value | FILO Term Loan | FILO Term Loan
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	0	265,851
Long-term debt liabilities subject to compromise	795	0
Level 2 | Fair Value | Notes | Notes
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	0	148,488
Level 2 | Fair Value | DIP Financing - New Money DIP
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	30,000	0
Level 2 | Fair Value | DIP Financing - DIP FILO
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	275,000	0
Level 2 | Fair Value | Tranche B-2 | Tranche B-2 Term Loan | Term Loan Facility
Actual and estimated fair values of the financial instruments
Long-term debt liabilities not subject to compromise	0	414,321
Long-term debt liabilities subject to compromise	$ 292,033	$ 0

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CONTINGENCIES (Details)		1 Months Ended	6 Months Ended
	Feb. 29, 2012 action	Dec. 31, 2016	Jun. 30, 2020 USD ($) lawsuit
Product Liability
Commitments and contingencies
Deductible/retention per claim			$ 4,000,000.0
Aggregate cap on retained loss			$ 10,000,000.0
DMAA Claims | Product Liability
Commitments and contingencies
Number of pending lawsuits in which company is named | lawsuit			27
Elizabeth Naranjo, California Wage and Break Claims
Commitments and contingencies
Number of claims filed | action	8
Violations of Oregon Unlawful Trade Practices Act
Commitments and contingencies
Loss contingency accrual			$ 0
Subpoena from Department of Justice Related to USP Labs
Commitments and contingencies
Term of settlement agreement		60 months

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MEZZANINE EQUITY (Details) $ / shares in Units, $ in Thousands						3 Months Ended			6 Months Ended		12 Months Ended
	Feb. 13, 2019 USD ($) shares	Jan. 02, 2019 USD ($) shares	Nov. 08, 2018 USD ($) shares	Nov. 07, 2018 USD ($) tranche	Feb. 13, 2018 USD ($) $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($) $ / shares shares
Temporary Equity [Line Items]
Preferred stock, shares authorized (in shares) | shares						60,000,000.0			60,000,000.0
Preferred stock, par value (in dollars per share) | $ / shares						$ 0.001			$ 0.001
Loss on forward contracts for the issuance of convertible preferred stock | $						$ 0	$ 0	$ 16,800	$ 0	$ 16,787
Accumulated and unpaid dividends | $						$ 30,200			$ 30,200		$ 19,800
SPA Amendment, Initial Issuance
Temporary Equity [Line Items]
Convertible preferred stock issued (in shares) | shares			100,000
Consideration received | $			$ 100,000
SPA Amendment, First Subsequent Issuance
Temporary Equity [Line Items]
Convertible preferred stock issued (in shares) | shares		50,000
Consideration received | $		$ 50,000
SPA Amendment, Second Subsequent Issuance
Temporary Equity [Line Items]
Convertible preferred stock issued (in shares) | shares	149,950
Consideration received | $	$ 150,000
Redeemable Convertible Preferred Stock
Temporary Equity [Line Items]
Preferred stock, par value (in dollars per share) | $ / shares						$ 1,000			$ 1,000		$ 1,000
Convertible preferred stock, shares issued (in shares) | shares						299,950			299,950		299,950
Convertible preferred stock stated value | $									$ 300,000		$ 300,000
Redeemable Convertible Preferred Stock | SPA Amendment, Private Placement
Temporary Equity [Line Items]
Convertible preferred stock issued (in shares) | shares					299,950
Price per share (in dollars per share) | $ / shares					$ 1,000
Consideration received | $				$ 300,000	$ 300,000
Shares converted (in shares) | shares					56,100,000
Initial conversion price (in dollars per share) | $ / shares					$ 5.35
Number of tranches | tranche				3
Series A Preferred Stock
Temporary Equity [Line Items]
Preferred stock, par value (in dollars per share) | $ / shares						$ 1,000			$ 1,000
Dividend rate									6.50%

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EARNINGS PER SHARE - Schedule of Weighted Average Number of Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Basic weighted-average shares (in shares)	83,936	83,663	83,916	83,587
Effect of dilutive Convertible Preferred Stock (in shares)	0	57,093	0	0
Effect of dilutive stock-based compensation awards (in shares)	0	186	0	0
Diluted weighted-average shares (in shares)	83,936	140,942	83,916	83,587

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EARNINGS PER SHARE - Antidilutive and Contingently Issuable Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive awards excluded from diluted EPS (in shares)	66,914	3,768	66,807	54,271
Stock-based awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive awards excluded from diluted EPS (in shares)	6,018	3,768	6,398	4,292
Convertible Preferred Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Antidilutive awards excluded from diluted EPS (in shares)	60,896	0	60,409	49,979

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EARNINGS PER SHARE - Narrative (Details) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Convertible Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Underlying convertible shares	2.4	2.4	2.4	2.4

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EARNINGS PER SHARE - Computations for Basic and Diluted Earnings per Common Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Net (loss) income	$ (83,669)	$ 16,058	$ (283,755)	$ 796
Cumulative undeclared convertible preferred stock dividend	5,280	4,950	10,475	8,667
Net (loss) income attributable to common shareholders	$ (88,949)	$ 11,108	$ (294,230)	$ (7,871)
Weighted average common shares outstanding - basic (in shares)	83,936	83,663	83,916	83,587
(Loss) earnings per common share - basic (in dollars per share)	$ (1.06)	$ 0.13	$ (3.51)	$ (0.09)
Cumulative undeclared convertible preferred stock dividends	$ 5,280	$ 0	$ 10,475	$ 8,667
Net (loss) earnings attributable to common shareholders	$ (88,949)	$ 16,058	$ (294,230)	$ (7,871)
Weighted average common shares outstanding - diluted (in shares)	83,936	140,942	83,916	83,587
(Loss) earnings per common share - diluted (in dollars per share)	$ (1.06)	$ 0.11	$ (3.51)	$ (0.09)

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SEGMENTS (Details) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020 USD ($) store	Mar. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Jun. 30, 2020 USD ($) segment store	Jun. 30, 2019 USD ($)
Segment Reporting Information [Line Items]
Number of reportable segments | segment					3
Long-lived asset impairments and other store closing costs	$ 20,201		$ 0		$ 177,715	$ 0
Reserves for inventory obsolescence and vendor allowance	12,600
Expiring inventory and vendor receivable reserves					22,800
Charged to costs and expenses					8,700
Revenue:
Net revenue	343,538		533,997		816,119	1,098,760
Operating income:
Operating income	(58,518)		48,718		(224,551)	84,200
Loss on net asset exchange for the formation of the joint ventures	0		1,779		1,655	21,293
Interest expense, net	22,057		24,964		69,502	57,920
Reorganization items, net	15,429		0		15,429	0
Gain on purchase of convertible debt	0		(3,214)		0	(3,214)
Loss on forward contracts for the issuance of convertible preferred stock	0		0	$ 16,800	0	16,787
Income (Loss) from Continuing Operations before Income Taxes, Noncontrolling Interest	(96,004)		26,968		(309,482)	12,707
Operating Segment
Revenue:
Net revenue	343,538		533,997		816,119	1,134,265
Operating income:
Operating income	(4,714)		75,589		(146,365)	157,083
Intersegment Eliminations
Revenue:
Net revenue	0		0		0	(35,505)
Corporate
Operating income:
Operating income	(53,804)		(26,871)		(78,186)	(72,883)
Corporate costs	(53,804)		(25,079)		(78,638)	(51,340)
Loss on net asset exchange for the formation of the joint ventures	0		(1,779)		(1,655)	(21,293)
Other	0		(13)		$ 2,107	(250)
Company-Owned and Franchise Stores
Segment Reporting Information [Line Items]
Long-lived asset impairments and other store closing costs	$ 20,200	$ 40,300
U.S. and Canada
Segment Reporting Information [Line Items]
Number of stores with liquidation sales | store	500				500
Long-lived asset impairments and other store closing costs					$ 149,100
Expiring inventory and vendor receivable reserves					22,400
Charged to costs and expenses					7,900
U.S. and Canada | Operating Segment
Revenue:
Net revenue	$ 300,206		476,060		724,387	965,216
Operating income:
Operating income	(19,675)		49,202		(150,875)	101,302
International
Segment Reporting Information [Line Items]
Long-lived asset impairments and other store closing costs					28,600
Charged to costs and expenses					800
International | Operating Segment
Revenue:
Net revenue	28,933		39,448		62,478	80,371
Operating income:
Operating income	8,231		14,269		(9,151)	28,319
Manufacturing / Wholesale
Segment Reporting Information [Line Items]
Expiring inventory and vendor receivable reserves					400
Manufacturing / Wholesale | Wholesale partner sales
Revenue:
Net revenue	14,399		18,489		29,254	37,390
Manufacturing / Wholesale | Operating Segment
Revenue:
Net revenue	14,399		18,489		29,254	88,678
Operating income:
Operating income	6,730		12,118		13,661	27,462
Manufacturing / Wholesale | Operating Segment | Third-party
Revenue:
Net revenue	0		0		0	15,783
Manufacturing / Wholesale | Intersegment Eliminations
Revenue:
Net revenue	$ 0		$ 0		$ 0	$ 35,505

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INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Valuation Allowance [Line Items]
Income tax expense (benefit)	$ (11,386)	$ 13,030	$ (64,421)	$ 14,986
Partial valuation allowance that may not be realizable			40,800
Valuation allowance increase (decrease)			(4,800)		$ (4,800)
Deferred tax assets (Note 15)	26,542		26,542		0
Discrete tax benefit	11,600		11,600		10,700
Interest and penalties accrued related to unrecognized tax benefits	$ 2,800		2,800		2,100
Federal Deferred Tax Assets, State NOL Carryforwards and Other State Tax Attributes
Valuation Allowance [Line Items]
Valuation allowance increase (decrease)			$ 40,800		$ 27,100

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SUBSEQUENT EVENTS (Details) $ in Millions				1 Months Ended	4 Months Ended
	Aug. 07, 2020 USD ($)	Aug. 05, 2020 segment	Jun. 30, 2020 store	Apr. 30, 2020 store	Jun. 30, 2020 store
Subsequent Event
Subsequent Event [Line Items]
Indebtedness	$ 210.0
Cash payment	550.0
Issuance of convertible junior notes	10.0
Good faith deposit	57.0
Break-up fee	22.8
Expense reimbursement	$ 3.0
Subsequent Event | Harbin
Subsequent Event [Line Items]
Ownership percentage	100.00%
U.S. and Canada | Temporary Store Closure | Geographic Concentration Risk
Subsequent Event [Line Items]
Number of stores closed | store			100	1,400	100
Concentration risk percentage			4.00%	40.00%	40.00%
U.S. and Canada | Temporary Store Closure | Geographic Concentration Risk | Subsequent Event
Subsequent Event [Line Items]
Number of stores closed | segment		100
Concentration risk percentage		3.00%

XML

Label	Element	Value
Accounting Standards Update [Extensible List]	us-gaap_AccountingStandardsUpdateExtensibleList	us-gaap:AccountingStandardsUpdate201602Member