EX-10.25



 





Exhibit 10.25




Execution Copy




MANAGEMENT SERVICES AGREEMENT




          This MANAGEMENT SERVICES AGREEMENT (this “Agreement”), dated as of March 16, 2007 (the
“Effective Date”), is made by and between GNC Acquisition Holdings Inc., a Delaware corporation
(the “Holdings”), and General Nutrition Centers, Inc., a Delaware corporation (“Centers”).




          WHEREAS, Centers desires to obtain from Holdings and Holdings desires to provide certain
management and financial services to Centers;




          WHEREAS, Holdings has provided services to Centers in connection with the transactions
contemplated by the Agreement and Plan of Merger, dated as of February 8, 2007, by and among
Holdings, GNC Acquisition Inc. and GNC Parent Corporation, as amended (the “Merger Agreement”);




          NOW THEREFORE, the parties hereto hereby agree as follows:





	1.	 	Retention. Subject to the terms and conditions hereof, Centers hereby retains
Holdings to provide, or to cause to be provided by a Person or Persons designated by Holdings
(“Holdings Designee”), certain agreed upon management and financial services to Centers and
its subsidiaries during the term of this Agreement (the “General Services”).
	 
	2.	 	Compensation.






	 	(a)	 	In consideration of the services provided in connection with the transactions
contemplated by the Merger Agreement, Centers shall pay to Holdings (or its designee) a
fee of $10,000,000 on the Effective Date.
	 
	 	(b)	 	In consideration of the General Services, Centers shall pay to Holdings an
annual fee of $1,500,000 (pro-rated for partial years) (the “Annual Fee”). The Annual
Fee shall be payable in cash in equal quarterly installments in advance, on the first
day of each quarter commencing on April 1, 2007 (unless such day is not a business day
in which event on the last preceding business day), without regard to the amount of
services actually provided; provided, that:




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(i) at the election of Holdings, the payment of all or any portion of the Annual
Fee may be deferred until a certain date, the happening of a certain event or
indefinitely;




(ii) the first quarterly installment shall also include the quarterly installment
prorated from the period commencing on the Effective Date through March 31, 2007;
and




(iii) if and to the extent the payment of all or any portion of the Annual Fee is
prohibited by the terms of any indebtedness or security of Centers or its
subsidiaries, such amount shall continue to accrue and shall be paid to Holdings
immediately upon such dates as payment is no longer so prohibited, together with
interest thereon at a rate of 8% per annum from the date such payment was due
through the date of payment.




	 	(c)	 	In consideration of any Major Transaction Services provided by, or on behalf
of, Holdings from time to time, Centers shall pay to Holdings (or its designee) fees
for services as agreed by Centers and Holdings, taking into consideration relevant
factors, including fees charged Holdings by third parties, the size and complexity of
the subject transaction, the time devoted to providing such services and the value of
the expertise and relationships within the business and financial community. The scope
of the Major Transaction Services shall be such as reasonably requested by Centers and
agreed to by Holdings from time to time.
	 
	 	(d)	 	In addition to the fees to be paid to Holdings as provided in Sections 2(a)
through 2(c) hereof, Centers shall pay to, or on behalf of, Holdings, promptly as
billed, all out-of-pocket expenses incurred by or on behalf of Holdings or any Holdings
Related Party (or incurred on such Person’s behalf by any other Persons) in connection
with (i) the transactions contemplated by the Merger Agreement or (ii) the services
provided hereunder. Such expenses shall include, among other things, fees and
disbursements of counsel, travel expenses, word processing charges, messenger and
duplicating services, facsimile expenses and other customary expenditures.
	 
	 	(e)	 	In addition to all other amounts due hereunder, Centers shall pay Holdings an
amount equal to the Grossed-Up Amount. “Grossed-Up Amount” means the sum of (i) Taxes
attributable to Excess Income and (ii) the aggregate Taxes payable by Holdings as a
result of the receipt of payments under this Section 2(e). “Excess Income” means the
excess of payments due under this Agreement (without regard to this Section 2(e)) over
applicable deductions, if any, for all payments made by Holdings to persons in
connection with the services contemplated hereunder. “Taxes” means all taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any governmental
authority, including net income or franchise taxes based on net income and any
alternative or add-on minimum taxes. For purposes of this Section 2(e), Holdings shall
be deemed to pay Taxes at the highest marginal income tax rate in effect at the time of
any calculation.




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	3.	 	Term. The term of this Agreement (the “Term”) shall commence on the Effective Date
and initially terminate on the ten-year anniversary of the Effective Date; provided,
that the Term shall be automatically extended by additional one-year periods on each
anniversary of the Effective Date, unless at least 30 days prior to such anniversary Holdings
and Centers mutually agree to terminate this Agreement. In addition, upon not less than 10
days prior written notice to Holdings, Centers shall have the right to terminate this
Agreement, at its option, concurrently with a Prepayment Event (as defined below) by paying to
Holdings an amount in cash equal to (A) the net present value of all Annual Fees that would
have been payable to Holdings hereunder from the date of such Prepayment Event through the end
of the Term (after giving effect to all extensions contemplated by this paragraph), and (B)
all other accrued amounts not previously paid to Holdings. Net present value shall be
calculated by the board of directors of Centers in good faith. Notwithstanding any other
provision hereof, (i) Centers’ obligation to pay amounts due pursuant to Section 2 hereof with
respect to periods prior to the termination hereof and (ii) the provisions of Sections 4
through 7 hereof shall survive any termination of this Agreement.
	 
	4.	 	Decisions/Authority of Management Advisor. Centers shall make all decisions with
regard to any matter upon which Holdings has rendered its advice and consultation, and there
shall be no liability to Holdings or any Holdings Related Party for any such advice accepted
or rejected by Centers pursuant to the provisions of this Agreement. For any services
provided hereunder, or under any other arrangement arising out of this Agreement, Holdings and
the Holdings Related Parties shall be acting solely as independent contractors and not as
agents of Centers and nothing in this Agreement shall be construed as creating a partnership,
joint venture or similar relationship of any kind between the parties hereto (or any of their
respective Related Persons). Holdings shall have no authority to enter into any agreement or
to make any representation, commitment or warranty binding upon Centers or to obtain or incur
any right, obligation or liability on behalf of Centers. Holdings shall have complete charge
of any of its personnel who render advice and consultation to Centers under this Agreement.
	 
	5.	 	Indemnification. Centers shall:






	 	(a)	 	indemnify Holdings and each Holdings Related Party to the fullest extent
permitted by law, from and against any and all losses, claims, damages and liabilities,
joint or several, directly or indirectly caused by, related to, based upon, or arising
out of the engagement of Holdings pursuant to this Agreement, or the rendering of any
other advice or performance of any other services by Holdings or any Holdings Related
Party for Centers or any of its subsidiaries; and
	 
	 	(b)	 	promptly reimburse Holdings and each Holdings Related Party for all costs and
expenses (including counsel fees and expenses and the costs and expenses of enforcing
this Section 5), as incurred, in connection with the investigation of, preparation for
or defense of any pending or threatened claim or any action or proceeding arising
therefrom, whether or not Holdings or any Holdings Related Party is a party and
whether or not such claim, action or proceeding is initiated or brought




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	 	 	 	by or on behalf
of Centers and whether or not such claim, action or proceeding results in any liability.






	 	 	Centers agrees that neither Holdings nor any Holdings Related Party shall have any liability
(whether direct or indirect, in contract or tort or otherwise) to Centers or any of its
affiliates, or any of the security holders or creditors of Centers or any of their
respective affiliates directly or indirectly caused by, related to, based upon, or arising
out of (i) the engagement of Holdings pursuant to this agreement, the performance of the
services to be performed hereunder, or the rendering of any other advice or performance of
any other services by Holdings or any Holdings Related Party or (ii) any Outside Activities
(as defined below). Centers shall indemnify Holdings and each Holdings Related Party, to
the fullest extent lawful, from and against any and all such liabilities to which Holdings
or any Holdings Related Party becomes subject.
	 
	6.	 	Definitions.
	 
	 	 	“Holdings Related Party” means each Related Person of Holdings or any Person designated by
Holdings to provide services hereunder, and each of the partners, directors, officers,
employees, agents and controlling persons of Holdings or any of its Related Persons.
	 
	 	 	“Major Transaction Services” means financial advisory and investment banking services
provided, or caused to be provided, to Centers in connection with significant financial
transactions that may be undertaken by Centers from time to time.
	 
	 	 	“Person” means any individual, corporation, partnership, trust, limited liability company,
association, or other entity.
	 
	 	 	“Prepayment Event” means: (i) the first bona fide underwritten public offering of common
stock of Holdings or Centers pursuant to an effective registration statement filed under the
1933 Act (excluding registration statements filed on Form S-8, any similar successor form or
another form used for a purpose similar to the intended use for such forms); (ii) a Change
of Control of Holdings (as such term is defined in the Certificate of Designations of the
Series A Cumulative Preferred Stock of Holdings); or (iii) the sale, lease, transfer,
conveyance or other disposition, in one or a series of related transactions, of all or
substantially all of the assets of Holdings and its subsidiaries taken as a whole (whether
by merger, asset sale, stock purchase or otherwise).
	 
	 	 	“Related Person” means, with respect to any Person (a) any affiliate of such Person, (b) any
investment fund, investment account or investment Person whose investment manager,
investment advisor or general partner, is such Person or any affiliate of such Person or any
member, partner, director, officer or employee of such Person or any affiliate of such
Person, (c) any member or partner of any Person specified in clause (a) or (b) above, and
(d) any agent, director, officer or employee of any Person specified in clause (a), (b) or
(c) above; provided, that: (i) a Person shall not be an affiliate of Holdings
solely by virtue of the fact that such Person is an officer or director of Centers;




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	 	 	and (ii) no Person shall be deemed an affiliate of another Person solely by virtue of the
fact that both Persons own shares of the capital stock of Centers.
	 
	7.	 	Miscellaneous.






	 	(a)	 	Assignment. None of the parties hereto shall assign this Agreement or
the rights and obligations hereunder, in whole or in part, without the prior written
consent of the other party; provided, that Holdings may assign this Agreement
or its rights and obligations hereunder to a Holdings Related Party without obtaining
such consent. Subject to the foregoing, this Agreement will be binding upon and inure
solely for the benefit of the parties hereto and their respective successors and
assigns and no other person shall acquire or have any right hereunder or by virtue
hereof.
	 
	 	(b)	 	Nature of Obligations. The obligations of Holdings hereunder shall be
several and not joint with any other Person.
	 
	 	(c)	 	Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York, as permitted by Section
5-1401 of the General Obligations Law of the State of New York.
	 
	 	(d)	 	Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions set
forth herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their best efforts to find
and employ an alternative means to achieve the same or substantially the same result as
that contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without including
any of such which may be hereafter declared invalid, illegal, void or unenforceable.
	 
	 	(e)	 	Entire Agreement. This Agreement contains the entire agreement between
the parties with respect to the subject matter of this Agreement and supersedes all
written or verbal representations, warranties, commitments and other understandings
with respect to the subject matter of this Agreement prior to the date of this
Agreement.
	 
	 	(f)	 	Further Assurances. Each party hereto agrees to use all reasonable
efforts to obtain all consents and approvals, and to do all other things, necessary for
the transactions contemplated by this Agreement. The parties agree to take such
further action and to deliver or cause to be delivered any additional agreements or
instruments as any of them may reasonably request for the purpose of carrying out this
Agreement and the agreements and transactions contemplated hereby.
	 
	 	(g)	 	Attorneys’ Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted as a
defense, the




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	 	 	 	prevailing party, as determined by the court, shall be entitled to recover reasonable
attorneys’ fees in addition to any other available remedy.
	 
	 	(h)	 	Headings. The headings in this Agreement are for convenience and
reference only and shall not limit or otherwise affect the meaning hereof.
	 
	 	(i)	 	Outside Activities. Centers hereby acknowledges and agrees that one or
more Holdings Related Party have had, and from time to time may have, outside
activities or interests that conflict or may conflict with the best interests of
Centers (collectively, “Outside Activities”), including investment opportunities or
investments in, ownership of, or participation in entities that are or could be
complementary to, or competitive with, Centers. Centers hereby consents to all such
Outside Activities.
	 
	 	(j)	 	Amendment and Waiver. This Agreement may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof may be
given, provided, that the same are in writing and signed by each of the parties
hereto; provided, further, that no amendment, modification or
supplement shall be made, or waiver or consent shall be given without the prior written
consent of each Fund (as such term is defined in the Merger Agreement).
	 
	 	(k)	 	Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
	 
	 	(l)	 	Construction. The construction of this Agreement shall not take into
consideration the party who drafted or whose representative drafted any portion of this
Agreement, and no canon of construction shall be applied that resolves ambiguities
against the drafter of a document.
	 
	 	(m)	 	Interpretation. When a reference is made in this Agreement to a
Section or paragraph, such reference shall be to a Section or paragraph of this
Agreement unless otherwise indicated. Whenever the words “include,”
“includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation”. The words
“hereof,” “herein” and “hereunder” and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. The word “or” when used in this
Agreement is not exclusive. The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. Any agreement, instrument, law or
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument, or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and references to all attachments




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	 	 	 	thereto and instruments
incorporated therein.
References to a Person are also to its permitted successors and assigns.





[SIGNATURE PAGE FOLLOWS]




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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized officers on the date first appearing above.



	 	 	 	 	 
	 	GNC ACQUISITION HOLDINGS INC.

 	 
	 	By:  /s/ David Kaplan	 	 
	 	 	Name:  	David Kaplan 	 
	 	 	Title:  	Co-President 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  /s/ Josef Prosperi	 	 
	 	 	Name:  	Josef Prosperi 	 
	 	 	Title:  	Co-President 	 


 



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	 	GENERAL NUTRITION CENTERS, INC.

 	 
	 	By:  /s/ Mark Weintrub	 	 
	 	 	Name:  	Mark Weintrub 	 
	 	 	Title:  	Senior Vice President,


Chief Legal Officer and Secretary