1998 TERM CREDIT AGREEMENT


     1998 TERM  CREDIT  AGREEMENT  dated as of August  10,  1998  among  GENERAL
NUTRITION,  INCORPORATED,  a Pennsylvania corporation ("GNI"), GENERAL NUTRITION
CORPORATION,  a Pennsylvania  corporation ("GNC"),  GENERAL NUTRITION COMPANIES,
INC.,  a  Delaware  corporation  ("GNCI"),  the  banks and  other  lenders  (the
"Lenders")  listed on the  signature  pages  hereof,  BANQUE  NATIONALE DE PARIS
("BNP"), as administrative agent (together with any successor appointed pursuant
to Article  VII, the  "Administrative  Agent") and as  documentation  agent (the
"Documentation  Agent"),  for the  Lenders  hereunder,  and PNC  Bank,  National
Association  and ABN AMRO Bank N.V.,  as  syndication  agents (the  "Syndication
Agents" and, together with the Administrative Agent and the Documentation Agent,
the "Agents").

PRELIMINARY STATEMENTS:

     (1) The  Lenders (as  defined  below)  have agreed to make  Advances to the
Borrowers in order to allow the  Borrowers to finance  purchases of GNCI capital
stock as  permitted  in Section  2.13  hereof and to provide  funds for  general
corporate purposes permitted by this Agreement.

     (2) The Lenders have  indicated  their  willingness to lend such amounts on
the terms and conditions of this Agreement.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants and  agreements  contained  herein,  the parties  hereto hereby agree,
subject to the  satisfaction  of the  conditions set forth in  Section 3.01,  as
follows:


                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

     SECTION  1.01.  Certain  Defined  Terms.  As used in  this  Agreement,  the
following  terms shall have the following  meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

     "Advance" has the meaning specified in Section 2.01.

     "Affiliate"  means,  with  respect to any Person,  any other  Person  that,
directly or  indirectly,  controls,  is controlled by or is under common control
with such Person or is a director  or officer of such  Person.  For  purposes of
this  definition,   the  term  "control"  (including  the  terms  "controlling,"
"controlled  by"  and  "under  common  control  with")  of a  Person  means  the
possession,  direct or  indirect,  of the power to vote 5% or more of the Voting
Stock of such Person or to direct or cause the direction of the  management  and
policies of such  Person,  whether  through the  ownership of Voting  Stock,  by
contract or otherwise.

     "Adjusted  Maximum Leverage Ratio" means,  with respect to any period,  the
ratio of (a)  Consolidated  Total Adjusted Debt of GNCI and its  Subsidiaries at
the end of such period to (b)  Consolidated  EBITDA of GNCI and its Subsidiaries
for such  period  (the  computation  of such  ratio to  include,  in the case of
Indebtedness  created,  incurred or assumed in  connection  with any  Investment
permitted by Sections 5.02(e)(i), (iv), (v), (vi), (vii) and (ix), the EBITDA of
each such Person in which such Investment was made for the 12-month  period,  or
such shorter period as appropriate,  ended on or immediately prior to the end of
such period).

     "Administrative  Agent" has the meaning specified in the recital of parties
to this Agreement.

     "Administrative  Agent's  Account" means the account of the  Administrative
Agent maintained by the Administrative  Agent at the Federal Reserve Bank of New
York,  33 Liberty  Street,  New York,  New York 10048,  ABA No.  026007689,  for
further credit to Account No.  75042070103,  or such other account maintained by
the Administrative Agent and designated by the Administrative Agent in a written
notice to the Lenders and the Borrowers.

     "Agents"  has the  meaning  specified  in the  recital  of  parties to this
Agreement.

     "Applicable  Lending  Office"  means,  with  respect to each  Lender,  such
Lender's  Domestic  Lending  Office in the case of a Base Rate  Advance and such
Lender's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.

     "Applicable  Margin" means,  as of the Closing Date, a percentage per annum
determined by reference to the Performance  Level applicable on such date as set
forth below:

<TABLE>
<CAPTION>
              -------------------- --------------------------- ========================

                                   Applicable Margin for       Applicable Margin for
              Performance          Base Rate Advances          Eurodollar         Rate
              Level                                            Advances
              -------------------- --------------------------- ========================
              -------------------- --------------------------- ========================

<S>                                <C>                         <C>  
                       I           0.50%                       1.50%
              -------------------- --------------------------- ========================
              -------------------- --------------------------- ========================

                       II          0.50%                       1.75%
              -------------------- --------------------------- ========================
              -------------------- --------------------------- ========================

                       III         0.75%                       2.00%
              -------------------- --------------------------- ========================
</TABLE>
and,  (X) on each of November 10,  1998,  February  10,  1999,  May 10, 1999 and
August 10, 1999 the Applicable  Margin for each Performance  Level and each Type
of Advance shall increase by an additional 0.25%;  provided,  however,  that (Y)
(a) the Applicable  Margin shall be adjusted on each Business Day after the date
on which the Administrative  Agent receives the certificate  required by Section
3.02(b) and the financial  statements pursuant to Section 5.03(b) or (c), as the
case may be,  demonstrating that a new Performance Level is applicable;  (b) for
the  period  commencing  on  August  10,  1998  until any such  adjustment,  the
Applicable Margin shall be as set forth opposite Performance Level I; (c) in the
event that the Restriction Termination Date does not occur on or before 120 days
following the Closing Date, the Applicable Margin for each Performance Level and
each Type of Advance shall be 4.00% and the  provisions of the foregoing  clause
(X)  shall  not  apply  further  to  increase  the  Applicable  Margin  and  (d)
notwithstanding anything contained herein to the contrary (unless the provisions
of the foregoing clause (Y)(c) shall apply),  the Applicable  Margin shall be at
Performance Level III upon the occurrence and during the continuance of an Event
of Default.

     "Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an Eligible Assignee,  and accepted by the Administrative Agent,
in  accordance  with  Section  8.07 and in  substantially  the form of Exhibit C
hereto.

     "Base Rate" means a fluctuating interest rate per annum in effect from time
to time, which rate per annum shall at all times be equal to the higher of:

     (a) the rate of  interest  advised or  designated  by BNP in New York,  New
York, from time to time, as its prime rate (and such term shall not be construed
to be its best or most favorable rate); and

     (b) 1/2 of 1% per annum above the Federal Funds Rate.

     "Base Rate  Advance"  means an Advance  that bears  interest as provided in
Section 2.06(a)(i).

     "BNP"  has  the  meaning  specified  in the  recital  of  parties  to  this
Agreement.

     "Board of  Directors"  means,  with  respect  to any  Person,  the board of
directors of such Person or any duly authorized committee of such board.

     "Borrower"  means GNC or GNI, as  designated  in the  applicable  Notice of
Borrowing.

     "Borrowing"  means a borrowing  consisting of simultaneous  Advances of the
same Type made by the Lenders.

     "Business  Day" means a day of the year on which banks are not  required or
authorized to close in New York City and, if the applicable Business Day relates
to any Eurodollar Rate Advances,  on which dealings are carried on in the London
interbank market.

     "Capitalized  Leases"  has  the  meaning  specified  in  clause  (e) of the
definition of "Indebtedness".

     "Cash Equivalents"  means any of the following,  to the extent owned by the
Borrowers  and their  Subsidiaries  free and  clear of all  Liens  and  having a
maturity of not greater than 90 days from the date of acquisition  thereof:  (a)
readily  marketable direct obligations of the Government of the United States or
any agency or instrumentality thereof or obligations  unconditionally guaranteed
by the full  faith and  credit  of the  Government  of the  United  States;  (b)
certificates of deposit of or time deposits with any commercial bank that is (i)
a Lender or (ii) a member of the  Federal  Reserve  System  that  issues (or the
parent of which issues)  commercial paper rated as described in clause (c), that
is organized  under the laws of the United  States or any State thereof and that
has combined capital and surplus of at least $500,000,000;  (c) commercial paper
in an aggregate  amount of no more than $250,000 per issuer  outstanding  at any
time,  issued by any  corporation  organized  under the laws of any State of the
United  States,  rated at least  "Prime-1"  (or the then  equivalent  grade)  by
Moody's  Investors  Service,  Inc.  or "A-1" (or the then  equivalent  grade) by
Standard & Poor's Rating Group, a division of the McGraw Hill  Companies,  Inc.;
or (d) money market mutual funds registered under the Investment  Company Act of
1940, investing in obligations, or repurchase agreements secured by obligations,
of the type described in clause (a) or (b).

     "CERCLA" means the Comprehensive  Environmental Response,  Compensation and
Liability Act of 1980.

     "Claims" has the meaning  specified  in the  definition  of  "Environmental
Action".

     "Closing  Date"  means any date on or before  August 10,  1998 on which the
conditions  set forth in Article III  applicable  to the  effectiveness  of this
Agreement have been fulfilled or waived.

     "Commitment"  means, with respect to any Lender at any time, the amount set
forth  opposite  such  Lender's  name on  Schedule  I hereto  under the  caption
"Commitment"  or, if such Lender has entered  into one or more  Assignments  and
Acceptances,  the amount set forth for such Lender in the Register maintained by
the   Administrative   Agent  pursuant  to  Section  8.07(c)  as  such  Lender's
"Commitment", as such amount may be reduced at or prior to such time pursuant to
Section 2.03.

     "Confidential Information" means information that is furnished to any Agent
or any Lender by or on behalf of the Borrowers on a confidential basis, but does
not include any such information that is or becomes  generally  available to the
public  other  than as a result of a breach by such  Agent or any  Lender of its
obligations  hereunder  or that is or  becomes  available  to such Agent or such
Lender from a source other than the  Borrowers  that is not, to the best of such
Agent's or such  Lender's  knowledge,  acting in violation of a  confidentiality
agreement with the Borrowers.

     "Consolidated"  refers to the  consolidation of accounts in accordance with
GAAP.

     "Conversion",  "Convert"  and  "Converted"  each refers to a conversion  of
Advances of one Type into Advances of the other Type pursuant to Section 2.08 or
2.09.

     "Default" means any Event of Default or any event that would  constitute an
Event of Default but for the requirement  that notice be given or time elapse or
both.

     "Documentation  Agent" has the  meaning set forth in the recital of parties
to this Agreement.

     "Dollars" and "$" sign each means lawful money of the United States.

     "Domestic Lending Office" means, with respect to any Lender,  the office of
such Lender  specified as its  "Domestic  Lending  Office"  opposite its name on
Schedule I  hereto or in the  Assignment  and  Acceptance  pursuant  to which it
became a Lender,  or such other  office of such  Lender as such  Lender may from
time to time specify to the Borrowers and the Administrative Agent.

     "EBITA"  means,  for any period,  net income (or net loss) plus the sum of,
without  duplication,   (a) Interest   Expense,  (b)  income  tax  expense,  (c)
amortization expense,  including amortization with respect to deferred financing
fees, (d) losses  resulting from any sale of fixed assets,  (e) noncash  charges
relating to pensions,  stock options, stock appreciation rights and other equity
based incentive plans, (f) extraordinary or unusual losses or expenses,  in each
case, to the extent such amounts are deducted in calculating  net income or loss
and (g) dividends,  royalty payments or returns of capital actually  received in
cash from any non-wholly-owned  Subsidiary or Affiliate less the sum of, without
duplication,   (i)  gains  resulting  from  any  sale  of  fixed  assets,   (ii)
extraordinary  or unusual gains and (iii) noncash credits  relating to pensions,
stock options, stock appreciation rights and other equity based incentive plans,
in each case, to the extent such amounts are included in calculating  net income
or loss,  in each case  determined  in  accordance  with  GAAP for such  period;
provided,  however,  that for purposes of calculating  Consolidated  EBITA,  (x)
other than as set forth in clause (g) above, no portion of any  non-wholly-owned
Subsidiary's,  or any Affiliate's,  net income and any adjustments  thereto that
under GAAP would be otherwise included in calculating Consolidated EBITA for any
period,  shall be taken into account and (y) the net income and any  adjustments
thereto  of all  Foreign  Subsidiaries  of GNCI shall not be  recognized  to the
extent such amount exceeds 10% of Consolidated EBITA.

     "EBITDA" means,  for any period,  net income (or net loss) plus the sum of,
without  duplication,   (a) Interest   Expense,  (b)  income  tax  expense,  (c)
depreciation  expense,  (d) amortization  expense,  including  amortization with
respect to deferred  financing fees, (e) losses resulting from any sale of fixed
assets,  (f)  noncash  charges  relating  to  pensions,   stock  options,  stock
appreciation rights and other equity based incentive plans and (g) extraordinary
or unusual  losses or  expenses,  in each case,  to the extent such  amounts are
deducted  in  calculating   net  income  or  loss,  less  the  sum  of,  without
duplication,   (i)  gains  resulting  from  any  sale  of  fixed  assets,   (ii)
extraordinary  or unusual gains and (iii) noncash credits  relating to pensions,
stock options, stock appreciation rights and other equity based incentive plans,
in each case, to the extent such amounts are included in calculating  net income
or loss,  in each case  determined  in  accordance  with  GAAP for such  period;
provided,  however, that for purposes of calculating Consolidated EBITDA, (x) no
portion of any non-wholly-owned Subsidiary's, or any Affiliate's, net income and
any adjustments thereto that are attributable to interests not owned by GNCI and
its Subsidiaries and that under GAAP would be otherwise  included in calculating
Consolidated EBITDA for any period,  shall be taken into account and (y) the net
income and any adjustments  thereto of all Foreign  Subsidiaries of GNCI and any
other  Subsidiary or Affiliate of GNCI that is organized and with  substantially
all of its assets located outside of the United States,  shall not be recognized
to the extent such aggregate amount exceeds 10% of Consolidated EBITDA.

     "Eligible Assignee" means (a) a commercial bank organized under the laws of
the United  States,  or any State  thereof,  and having a combined  capital  and
surplus of at least  $500,000,000,  or any Affiliate thereof;  (b) a savings and
loan  association or savings bank organized under the laws of the United States,
or any State  thereof,  and having a combined  capital  and  surplus of at least
$500,000,000;  (c) a  commercial  bank  organized  under  the laws of any  other
country  that  is a  member  of  the  OECD  or  has  concluded  special  lending
arrangements  with the  International  Monetary Fund associated with its General
Arrangements  to Borrow,  or a political  subdivision  of any such country,  and
having a combined capital and surplus of at least $500,000,000,  so long as such
bank is acting through a branch or agency located in the United States;  (d) the
central bank of any country that is a member of the OECD; (e) a finance company,
insurance company or other financial institution or fund (whether a corporation,
partnership,  trust or other  entity) that is engaged in making,  purchasing  or
otherwise  investing in commercial  loans in the ordinary course of its business
and having a combined  capital  and  surplus  of at least  $500,000,000  or with
respect  to a  fund  with  total  assets  under  its  management  in  excess  of
$500,000,000; and (f) any other Person (other than an Affiliate of any Borrower)
approved by the Administrative Agent and the Borrowers,  such approval not to be
unreasonably withheld.

     "Environmental  Action"  means any  administrative,  regulatory or judicial
action,  suit,  demand,   demand  letter,  claim,  notice  of  noncompliance  or
violation,  investigation,   proceeding,  consent  order  or  consent  agreement
relating  in any  way  to any  Environmental  Law  or any  Environmental  Permit
(collectively,  "Claims")  including,  without limitation,  (a) any Claim by any
governmental  or  regulatory  authority  for  enforcement,   cleanup,   removal,
response, remedial or other actions or damages pursuant to any Environmental Law
and  (b)  any  Claim  by  any  third  party   seeking   damages,   contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous  Materials or arising  from alleged  injury or threat of injury to the
environment  or,  to the  extent  caused  by  pollution  or other  environmental
degradation, human health or safety.

     "Environmental Law" means any federal,  state or local law, statute,  rule,
regulation,  order, writ, judgment,  injunction,  decree, determination or award
relating to Hazardous Materials,  the environment,  or, to the extent related to
pollution or other environmental degradation, human health or safety, including,
without  limitation,  CERCLA,  the Resource  Conservation  and Recovery Act, the
Hazardous  Materials   Transportation  Act,  the  Clean  Water  Act,  the  Toxic
Substances  Control  Act, the Clean Air Act,  the Safe  Drinking  Water Act, the
Atomic Energy Act, the Federal  Insecticide,  Fungicide and  Rodenticide Act and
the Occupational Safety and Health Act.

     "Environmental Permit" means any permit,  approval,  identification number,
license or other authorization required under any Environmental Law.

     "ERISA"  means the Employee  Retirement  Income  Security  Act of 1974,  as
amended  from time to time,  and the  regulations  promulgated  and the  rulings
issued thereunder.

     "ERISA Affiliate" means, with respect to any Person,  any other Person that
for purposes of Title IV of ERISA is a member of such Person's controlled group,
or under common  control with such Person,  within the meaning of Section 414 of
the Internal Revenue Code.

     "ERISA Event" means, with respect to any Person:

     (a) the  occurrence  of a reportable  event,  within the meaning of Section
4043 of  ERISA,  with  respect  to any Plan of such  Person  or any of its ERISA
Affiliates  unless the 30-day notice  requirement with respect to such event has
been waived by the PBGC;

     (b) the provision by the administrator of any Plan of such Person or any of
its ERISA  Affiliates of a notice of intent to terminate such Plan,  pursuant to
Section  4041(a)(2) of ERISA  (including  any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA);

     (c) the  cessation of operations at a facility of such Person or any of its
ERISA Affiliates in the circumstances described in Section 4062(e) of ERISA;

     (d) the  withdrawal  by such Person or any of its ERISA  Affiliates  from a
Multiple  Employer  Plan  during  a plan  year for  which  it was a  substantial
employer, as defined in Section 4001(a)(2) of ERISA;

     (e) the  failure by such  Person or any of its ERISA  Affiliates  to make a
payment to a Plan required under Section 302(f)(1) of ERISA;

     (f) the  adoption  of an  amendment  to a Plan of such Person or any of its
ERISA Affiliates  requiring the provision of security to such Plan,  pursuant to
Section 307 of ERISA; or

     (g) the  institution by the PBGC of proceedings to terminate a Plan of such
Person or any of its ERISA Affiliates, pursuant to Section 4042 of ERISA, or the
occurrence  of any event or  condition  described  in Section 4042 of ERISA that
could constitute grounds for the termination of, or the appointment of a trustee
to administer, such Plan.

     "Eurodollar  Liabilities" has the meaning  specified in Regulation D of the
Board of  Governors  of the Federal  Reserve  System,  as in effect from time to
time.

     "Eurodollar  Lending Office" means, with respect to any Lender,  the office
of such Lender specified as its "Eurodollar Lending Office" opposite its name on
Schedule  I hereto or in the  Assignment  and  Acceptance  pursuant  to which it
became a Lender  (or,  if no such  office is  specified,  its  Domestic  Lending
Office),  or such other  office of such  Lender as such  Lender may from time to
time specify to GNC, GNI and the Administrative Agent.

     "Eurodollar  Rate" means for any Interest  Period for all  Eurodollar  Rate
Advances comprising part of the same Borrowing, an interest rate per annum equal
to the rate per annum  obtained  by dividing  (a) the average of the  respective
rates per annum posted by each of the principal  London offices of banks posting
rates as displayed on the Telerate screen,  page 3750, or such other page as may
replace  such page on such  service  for the  purpose of  displaying  the London
interbank offered rate of major banks for deposits in dollars,  at approximately
11:00 A.M. (London time) two Business Days before the first day of such Interest
Period for deposits in amounts and durations  comparable  to such  Borrowing and
such Interest  Period (and rounded  upward to the next whole multiple of 1/16 of
1%) by (b) a  percentage  equal  to  100%  minus  the  Eurodollar  Rate  Reserve
Percentage for such Interest  Period;  provided that for purposes of calculating
the Eurodollar  Rate with respect to any Interest  Period of one week during the
first thirty days following the Fourth  Restatement  Date,  the Reuters  screen,
page LIBO should be used in lieu of the Telerate screen, page 3750 in clause (a)
hereof.

     "Eurodollar  Rate Advance" means an Advance that bears interest as provided
in Section 2.06(a)(ii).

     "Eurodollar Rate Reserve Percentage" means, for any Interest Period for all
Eurodollar  Rate Advances  comprising  part of the same  Borrowing,  the reserve
percentage  applicable  two Business  Days before the first day of such Interest
Period under  regulations  issued from time to time by the Board of Governors of
the Federal  Reserve  System (or any  successor  thereto)  for  determining  the
maximum  reserve  requirement  (including,  without  limitation,  any emergency,
supplemental  or other marginal  reserve  requirement)  for a member bank of the
Federal  Reserve  System in New York City with respect to  liabilities or assets
consisting of or including Eurodollar  Liabilities (or with respect to any other
category  of  liabilities  that  includes  deposits  by  reference  to which the
interest rate on Eurodollar Rate Advances is determined)  having a term equal to
such Interest Period.

     "Events of Default" has the meaning specified in Section 6.01.

     "Facility"  means,  at any  time,  the  aggregate  amount  of the  Lenders'
Commitments at such time.

     "Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period (i) to the rate published by the Dow
Jones Markets  service on page five of its daily report as the "New York Offered
Rate" as of 10:00 A.M. (New York City time) for such day (or, if such day is not
a Business Day, for the immediately  preceding  Business Day) or (ii) if the Dow
Jones Markets service shall cease to publish or otherwise shall not publish such
rates for any day that is a Business  Day, to the weighted  average of the rates
on overnight  Federal  funds  transactions  with members of the Federal  Reserve
System arranged by Federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the  immediately  preceding  Business Day) by the
Federal  Reserve Bank of New York,  or, if such rate is not so published for any
day that is a Business Day, the average of the  quotations for such day for such
transactions  received  by the  Administrative  Agent from three  federal  funds
brokers of recognized standing selected by it.

     "Fiscal Quarter" means a fiscal quarter of GNCI and its Subsidiaries ending
on or about April 27, July 20, October 12 or February 3 of each year.

     "Fiscal  Year"  means the  period  commencing  the day  after the  Saturday
closest  to but not prior to the 31st day of January  in any  calendar  year and
ending on the Saturday  closest to but not  preceding the 31st day of January in
the next succeeding calendar year, and when referred to from time to time herein
by  reference  to a calendar  year,  shall be the Fiscal Year  beginning  in the
calendar year to which reference is made.

     "Fixed Charge Coverage Ratio" means, with respect to any period,  the ratio
for  GNCI  and  its  Subsidiaries  during  such  period  of (a)  the  sum of (x)
Consolidated  EBITA plus (y)  Consolidated  Store Operating Lease Expense to (b)
the sum of (i) Consolidated Interest Expense plus (ii) Consolidated income taxes
which were paid in cash plus (iii)  Consolidated  Store  Operating Lease Expense
plus (iv) scheduled amortization of Consolidated Funded Indebtedness.

     "Foreign Currency" means lawful currency other than Dollars which is freely
transferable and convertible into Dollars.

     "Foreign Subsidiary" means a wholly-owned (except for any shares of capital
stock  that  are  Qualifying  Shares)  Subsidiary  that is  organized,  and with
substantially all of its assets located, outside of the United States.

     "Fourth Amended and Restated Credit  Agreement"  means the credit agreement
dated as of March 31, 1997, as amended,  supplemented or otherwise modified from
time to time, by and among GNI, GNC, GNCI, the banks and other lenders listed on
the signature pages thereof,  BNP, as administrative  agent and as documentation
agent, and PNC Bank, National Association and ABN AMRO Bank N.V., as syndication
agents.

     "Franchisee  Note" means a promissory note duly executed and delivered to a
Borrower or any  Subsidiary  by a Person that is a franchisee of a retail outlet
of such  Borrower or such  Subsidiary,  including any  amendment,  modification,
renewal or replacement of such promissory note.

     "Funded  Indebtedness" of any Person means Indebtedness of such Person that
by its terms  matures  more than one year after the date of  creation or matures
within one year from such date but is renewable or extendible,  at the option of
such  Person,  to a date more than one year  after  such date or arises  under a
revolving  credit or similar  agreement  that obligates the lender or lenders to
extend credit during a period of more than one year after such date,  including,
without  limitation,  all amounts of Funded Indebtedness of such Person required
to be paid or prepaid within one year after the date of determination.

     "GAAP" has the meaning specified in Section 1.03.

     "GNC" has the  meaning  set forth in the  recitals  of the  parties to this
Agreement.

     "GNCA" means GNC Amphora Company, a Delaware corporation.

     "GNC Borrower  Account" means the account of GNC maintained by GNC with BNP
at  its  office  at  499  Park  Avenue,  New  York,  New  York  10022,   Account
No. 20065800113,  or such other  account as is agreed  upon  between GNC and the
Administrative Agent.

     "GNCC" means GNC (Canada) Holding Company, a Delaware corporation.

     "GNCI" has the  meaning  set forth in the  recitals  of the parties to this
Agreement.

     "GNCL" means GNC Limited, a Delaware corporation.

     "GNCUK" means GNC (UK) Holding Company, a Delaware corporation.

     "GND" means General Nutrition Distribution Company, a Delaware corporation.

     "GNDLP" means General  Nutrition  Distribution  LP, a Pennsylvania  limited
partnership.

     "GNF" means GNC Franchising, Inc., a Pennsylvania corporation.

     "GNG"  means  General  Nutrition  Government  Services,  Inc.,  a  Delaware
corporation.

     "GN Investment" means GN Investment, Inc., a Delaware corporation.

     "GNI" has the  meaning  set forth in the  recitals  of the  parties to this
Agreement.

     "GNI Borrower  Account" means the account of GNI maintained by GNI with BNP
at its  office  at 499 Park  Avenue,  New  York,  New York  10022,  Account  No.
20065600196,  or such  other  account  as is  agreed  upon  between  GNI and the
Administrative Agent.

     "GNIC" means General Nutrition  Investment Company, a Delaware  corporation
and a wholly-owned subsidiary of GNI.

     "GNII" means General Nutrition  International,  Inc. a Delaware corporation
and a wholly-owned subsidiary of GNF.

     "GNCIH" means GNC International Holdings, Inc., a Delaware corporation.

     "GNP" means General Nutrition Products, Inc., a South Carolina corporation.

     "GNSC" means General Nutrition Sales Corporation.,  an Arizonia corporation
and a wholly-owned subsidiary of GNI.

     "Gustine" has the meaning set forth in Section 5.02(e)(x).

     "Hazardous Materials" means (a) petroleum or petroleum products, natural or
synthetic  gas,  asbestos  in any form  that is or could  become  friable,  urea
formaldehyde  foam  insulation and radon gas, (b) any  substances  defined as or
included  in the  definition  of  "hazardous  substances,"  "hazardous  wastes,"
"hazardous  materials,"  "extremely  hazardous  wastes,"  "restricted  hazardous
wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of  similar  import,  under  any  Environmental  Law and (c) any  other
substance exposure to which is regulated under any Environmental Law.

     "Health Care  Business"  means any business  which is involved in providing
products,   services  or  information  in  the  self-care  and  personal  health
enhancement markets.

     "Hedge  Agreements"  means  interest rate swap,  cap or collar  agreements,
interest rate future or option  contracts,  currency swap  agreements,  currency
future or option contracts and other similar agreements.

     "Indebtedness" of any Person means, without duplication:

     (a) all indebtedness of such Person for borrowed money;

     (b) all  Obligations  of such  Person for the  deferred  purchase  price of
property or services;

     (c) all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments;

     (d) all Obligations of such Person created or arising under any conditional
sale or other title  retention  agreement  with respect to property  acquired by
such Person  (even  though the rights and remedies of the seller or lender under
such  agreement in the event of default are limited to  repossession  or sale of
such property);

     (e) all Obligations of such Person as lessee under leases that have been or
should be, in accordance  with GAAP,  recorded as capital  leases  ("Capitalized
Leases");

     (f)  all  Obligations,  contingent  or  otherwise,  of  such  Person  under
acceptance, letter of credit or similar facilities;

     (g) all Obligations of such Person to purchase,  redeem, retire, defease or
otherwise  make  any  payment  in  respect  of any  capital  stock  (other  than
Obligations,  if any,  (i) arising from the  declaration  of dividends on common
stock or (ii) to pay stated  dividends on Preferred Stock) or other ownership or
profit interest in such Person or any other Person,  or any warrants,  rights or
options  to  acquire  such  capital  stock,  valued,  in the case of  Redeemable
Preferred  Stock,  at the greater of its  voluntary or  involuntary  liquidation
preference plus accrued and unpaid dividends;

     (h) all Obligations in respect of Hedge Agreements;

     (i) all Indebtedness of others referred to in clauses (a) through (h) above
guaranteed  directly or  indirectly  in any manner by such Person,  or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to pay
or purchase such  Indebtedness  or to advance or supply funds for the payment or
purchase of such  Indebtedness,  (ii) to  purchase,  sell or lease (as lessee or
lessor) property, or to purchase or sell services,  primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such  Indebtedness  against  loss,  (iii) to supply  funds to or in any other
manner  invest in the debtor  (including  any  agreement  to pay for property or
services  irrespective of whether such property is received or such services are
rendered) or (iv) otherwise to assure a creditor against loss; and

     (j) all  Indebtedness  referred to in clauses (a) through (h) above secured
by (or  for  which  the  holder  of such  Indebtedness  has an  existing  right,
contingent  or  otherwise,  to be secured by) any Lien on  property  (including,
without  limitation,  accounts and contract  rights) owned by such Person,  even
though  such  Person has not  assumed or become  liable for the  payment of such
Indebtedness.

     "Indemnified Party" has the meaning specified in Section 8.04(b).

     "INI"  means  Informed  Nutrition,   Inc.,  a  Florida  corporation  and  a
wholly-owned subsidiary of GNI..

     "Insufficiency" means, with respect to any Plan, the amount, if any, of its
unfunded benefit liabilities, as defined in Section 4001(a)(18) of ERISA.

     "Intercompany  Subordinated  Debt" means  Indebtedness from time to time of
GNI to GNCI subordinated pursuant to the Intercompany Subordination Agreement.

     "Intercompany  Subordination Agreement" means an agreement substantially in
the form of  Exhibit F hereto  made by GNCI in favor of BNP,  as  Administrative
Agent for the Lenders, as of the date hereof.

     "Interest  Expense"  means,  with  respect  to any  Person  for any  period
(without  duplication),  interest expense for such period on all Indebtedness of
such Person and its  Subsidiaries,  net of interest  income (other than interest
income from Franchisee Notes) for such period,  including,  without  limitation,
(a)  interest  in  respect  of   Indebtedness   resulting  from  Advances,   (b)
commissions,  discounts and other fees and charges  payable in  connection  with
letters of credit,  (c) the net payment paid in connection with Hedge Agreements
less any net  credits  received in  connection  with Hedge  Agreements,  (d) the
interest  component of payments under  Capitalized  Leases,  (e) amortization of
original  issue  discount  and (f) all  other  noncash  interest  but  excluding
amortization with respect to deferred financing fees.

     "Interest  Period" means, for all Eurodollar Rate Advances  comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advances or on the date of the Conversion of any Base Rate Advance into any such
Eurodollar  Rate Advance,  and ending on the last day of the period  selected by
the Borrowers pursuant to the provisions below, and thereafter,  each subsequent
period commencing on the last day of the immediately  preceding  Interest Period
and ending on the last day of the period  selected by the Borrowers  pursuant to
the provisions below. The duration of each such Interest Period shall be (except
as provided for below) one, two, three or six months, as the Borrowers may, upon
notice received by the Administrative  Agent not later than 12:00 P.M. (New York
City  time) on the third  Business  Day prior to the first day of such  Interest
Period, select; provided, however, that:

     (a) no  Borrower  may  select  any  Interest  Period  that  ends  after any
principal  repayment  installment  date  unless,  after  giving  effect  to such
selection,  the  aggregate  principal  amount  of  Base  Rate  Advances  and  of
Eurodollar Rate Advances  having  Interest  Periods that end on or prior to such
principal  repayment  installment  date shall be at least equal to the aggregate
principal amount of Advances due and payable on or prior to such date;

     (b)  Interest  Periods  commencing  on the same  date for  Eurodollar  Rate
Advances comprising part of the same Borrowing shall be of the same duration;

     (c) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business  Day,  the last day of such  Interest  Period shall be
extended to occur on the next succeeding Business Day; provided,  however, that,
if such extension  would cause the last day of such Interest  Period to occur in
the next following  calendar  month,  the last day of such Interest Period shall
occur on the immediately preceding Business Day;

     (d)  whenever the first day of any  Interest  Period  occurs on a day of an
initial  calendar month for which there is no numerically  corresponding  day in
the calendar  month that succeeds such initial  calendar  month by the number of
months  equal to the number of months in such  Interest  Period,  such  Interest
Period shall end on the last Business Day of such succeeding calendar month; and

     (e) during the first thirty days following the Fourth Restatement Date, the
Borrowers may, upon notice received by the  Administrative  Agent not later than
12:00 P.M. (New York City time) on the third Business Day prior to the first day
of the  Interest  Period,  select an  Interest  Period  of one  week;  provided,
however, that no Borrower may select an Interest Period with a one week duration
more than four times during such period.

     "Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from  time to time,  and the  regulations  promulgated  and the  rulings  issued
thereunder.

     "Investment"  in any Person means any loan or advance to such  Person,  any
purchase or other acquisition of any capital stock, warrants,  rights,  options,
obligations or other securities of such Person, any capital contribution to such
Person or any other investment in such Person,  including,  without  limitation,
any arrangement  pursuant to which the investor incurs Indebtedness of the types
referred  to in  clauses  (h) and (i) of the  definition  of  "Indebtedness"  in
respect of such Person.

     "Lenders"  means the Lenders listed on the signature  pages hereof and each
Eligible Assignee that shall become a party hereto pursuant to Section 8.07.

     "Lien" means any lien,  security interest or other charge or encumbrance of
any kind,  or any other type of  preferential  arrangement,  including,  without
limitation,  the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

     "Loan Documents" means (a) for purposes of this Agreement and the Notes and
any amendment or modification hereof or thereof and for all other purposes other
than for purposes of the Parent  Guaranty and the  Subsidiary  Guaranty (i) this
Agreement,  (ii) the Notes,  (iii) the Parent Guaranty,  and (iv) the Subsidiary
Guaranty,  (b) for purposes of the Parent Guaranty and the Subsidiary  Guaranty,
(i)  this  Agreement,  (ii) the  Notes,  (iii)  the  Parent  Guaranty,  (iv) the
Subsidiary Guaranty, and (v) each Hedge Agreement entered into with a Lender, in
each case as amended or otherwise modified from to time.

     "Loan Parties" means the Borrowers, GNCI and each Subsidiary Guarantor.

     "Margin  Stock" has the meanings  specified in Regulation U of the Board of
Governors of the Federal Reserve System.

     "Material  Adverse  Change"  means  any  material  adverse  change  in  the
business,   condition   (financial  or  otherwise),   operations,   performance,
properties  or prospects of the Loan Parties and their  Subsidiaries  taken as a
whole.

     "Material  Adverse  Effect"  means any material  adverse  effect on (a) the
business,   condition   (financial  or  otherwise),   operations,   performance,
properties  or prospects of the Loan Parties and their  Subsidiaries  taken as a
whole,  (b) the rights and  remedies  of any Agent or any Lender  under any Loan
Document or any Related Document or (c) the ability of any Loan Party to perform
its Obligations  under any Loan Document or any Related  Document to which it is
or is to be a party.

     "Material  Contract"  means (a) the Amended and  Restated  Agreement  dated
September  24,  1992 by and  between  Showa  Denko  America,  Inc.  and  General
Nutrition, Inc. and (b) the Guaranty Agreement dated as of September 24, 1992 by
and between Showa Denko K.K. and General Nutrition,  Inc., as in effect on March
31, 1997.

     "Maximum  Leverage Ratio" means,  with respect to any period,  the ratio of
(a) Consolidated  Total  Debt of GNCI  and its  Subsidiaries  at the end of such
period to  (b) Consolidated  EBITDA of GNCI and its Subsidiaries for such period
(the computation of such ratio to include, in the case of Indebtedness  created,
incurred or assumed in  connection  with any  Investment  permitted  by Sections
5.02(e)(i),  (iv), (v), (vi),  (vii) and (ix), the EBITDA of each such Person in
which such Investment was made for the 12-month  period,  or such shorter period
as appropriate, ended on or immediately prior to the end of such period).

     "Multiemployer  Plan" means,  with respect to any Person,  a  multiemployer
plan, as defined in Section  4001(a)(3) of ERISA, to which such Person or any of
its ERISA Affiliates is making or accruing an obligation to make  contributions,
or has within any of the preceding five plan years made or accrued an obligation
to make contributions.

     "Multiple  Employer  Plan"  means,  with  respect to any  Person,  a single
employer  plan,  as  defined  in  Section  4001(a)(15)  of  ERISA,  that  (a) is
maintained  for employees of such Person or any of its ERISA  Affiliates  and at
least one Person other than such Person and its ERISA  Affiliates  or (b) was so
maintained  and in respect of which such  Person or any of its ERISA  Affiliates
could  reasonably  be expected to have  liability  under Section 4064 or 4069 of
ERISA in the event such plan has been or were to be terminated.

     "NFC" means Nature Food Centres, Inc., a Maryland Corporation.

     "NFCI" means NFC, Inc., a Massachusetts corporation.

     "NFN" means Nature's Fresh Northwest, Inc., a Delaware corporation.

     "Net Cash Proceeds"  means,  with respect to any sale,  lease,  transfer or
other disposition of any asset or the incurrence or issuance of any Indebtedness
or capital stock,  any securities  convertible  into or exchangeable for capital
stock or any warrants, rights or options to acquire capital stock by any Person,
the aggregate  amount of cash received from time to time by or on behalf of such
Person in connection with such  transaction  after deducting  therefrom only (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (b) the amount
of taxes payable in connection with or as a result of such transaction,  (c) the
amount of any Indebtedness secured by a Lien on such asset that, by the terms of
such  transaction,  is required to be repaid upon such disposition and (d) other
reasonable and customary  costs and expenses  ordinarily  incurred and paid by a
seller,  lessor,  transferor or issuer,  as the case may be, in each case to the
extent,  but only to the extent,  that the amounts so deducted are substantially
simultaneously  paid to a  Person  that  is not an  Affiliate  and are  properly
attributable to such transaction or to the asset that is the subject thereof.

     "Note"  means a promissory  note of a Borrower  payable to the order of any
Lender, in substantially the form of Exhibit A hereto,  evidencing the aggregate
indebtedness  of such  Borrower to such Lender  resulting  from Advances made by
such Lender.

     "Notice of Borrowing" has the meaning specified in Section 2.02(a).

     "Obligation"  means,  with respect to any Person,  any  obligation  of such
Person of any kind, including,  without limitation, any liability of such Person
on any claim,  whether or not the right of any creditor to payment in respect of
such claim is reduced to judgment, liquidated,  unliquidated, fixed, contingent,
matured,  disputed,  undisputed,  legal,  equitable,  secured or unsecured,  and
whether or not such claim is  discharged,  stayed or  otherwise  affected by any
proceeding  referred to in Section  6.01(e).  Without limiting the generality of
the  foregoing,  the  Obligations  of the Loan Parties under the Loan  Documents
include (a) the obligation to pay principal,  interest, charges, expenses, fees,
attorneys' fees and disbursements,  indemnities and other amounts payable by any
Loan Party under any Loan  Document  and (b) the  obligation  to  reimburse  any
amount  in  respect  of  any of the  foregoing  that  any  Lender,  in its  sole
discretion, may elect to pay or advance on behalf of such Loan Party.

     "OECD" means the Organization for Economic Cooperation and Development.

     "Other Taxes" has the meaning specified in Section 2.11(b).

     "Parent Guaranty" has the meaning specified in Section 3.01(e)(viii).

     "PBGC" means the Pension Benefit Guaranty Corporation.

     "Performance  Level" means, as of any date of determination,  the level set
forth below as then  applicable,  as determined in accordance with the following
provisions of this definition:

     I Maximum Leverage Ratio is less than or equal to 3.00 : 1.00.

     II  Maximum  Leverage  Ratio is  greater  than 3.00 : 1.00 but less than or
equal to 3.25 : 1.00.

     III Maximum Leverage Ratio is greater than 3.25 : 1.00.

     "Permitted  Franchise Asset Sale" means the sale, in the ordinary course of
business,  by the  Borrowers  and their  Subsidiaries  pursuant  to a  franchise
agreement of equipment,  fixed assets and leasehold improvements,  inventory and
intangible assets to a franchisee of either Borrower or any of its Subsidiaries.

     "Permitted  Liens" means such of the following as to which no  enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:

     (a) Liens for taxes,  assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b);

     (b) Liens imposed by law,  such as  materialmen's,  mechanics',  carriers',
workmen's and repairmen's  Liens and other similar Liens arising in the ordinary
course of business securing obligations that (i) are not overdue for a period of
more than 30 days and (ii) either individually or when aggregated with all other
Permitted  Liens  outstanding  on any date of  determination,  do not  adversely
affect  the use or  value of a  material  amount  of the  Borrowers'  and  their
Subsidiaries' properties that are being refurbished and constructed;

     (c) pledges or deposits  under  workers'  compensation  laws,  unemployment
insurance laws or similar  legislation or good faith deposits in connection with
bids, tenders, contracts (other than for the payment of Indebtedness) or leases,
or deposits to secure public or statutory obligations;

     (d)  Liens  arising  out of  judgments  or  awards  under  appeal  or other
proceedings  for review to the extent such Liens do not  constitute  an Event of
Default; and

     (e)  easements,  rights  of way and  other  encumbrances  on  title to real
property  that  do  not  render  title  to  the  property   encumbered   thereby
unmarketable  or  materially  adversely  affect the use of such property for its
present purposes.

     "Person"  means  an  individual,  partnership,   corporation  (including  a
business  trust),  limited  liability  company,  joint  stock  company,   trust,
unincorporated  association,  joint venture or other entity,  or a government or
any political subdivision or agency thereof.

     "PIK Preferred Stock" means the Series A Preferred Stock of GNI.

     "Plan" means a Single Employer Plan or a Multiple Employer Plan.

     "Preferred  Stock" means,  with respect to any  corporation,  capital stock
issued by such corporation that is entitled to a preference or priority over any
other capital stock issued by such  corporation  upon any  distribution  of such
corporation's assets, whether by dividend or upon liquidation.

     "Qualifying Shares" means, with respect to any Subsidiary organized outside
of the United  States,  any  qualifying  ownership  shares or similar  ownership
interests required by the applicable law of any such foreign  jurisdiction to be
held by a resident of such foreign  jurisdiction  or by an officer,  employee or
director of such Subsidiary.

     "Redeemable"  means,  with respect to any capital  stock,  Indebtedness  or
other  right or  Obligation,  any such  capital  stock,  Indebtedness,  right or
Obligation  that  (a)  the  issuer  has  undertaken  to  redeem  at a  fixed  or
determinable date or dates, whether by operation of a sinking fund or otherwise,
or upon the  occurrence  of a  condition  not solely  within the  control of the
issuer or (b) is redeemable at the option of the holder.

     "Register" has the meaning specified in Section 8.07(c).

     "Related  Documents"  means the Tax Sharing  Agreement and the Intercompany
Subordination Agreement.

     "Required  Lenders"  means,  at any time,  Lenders  owed or  holding in the
aggregate at least 51% of the sum of the then aggregate  unpaid principal amount
of the Advances then outstanding.

     "Restriction  Termination  Date" means the earlier to occur of (a) the date
on which the Fourth Amended and Restated Credit  Agreement is repaid in full and
all commitments thereunder are terminated and (b) the lenders thereunder consent
to permitting the  restrictions set forth in Section 5.02(a) and 5.02(m) of this
Agreement and Sections 7(b) and (l) of the Parent Guaranty.

     "Rolling  Period"  means in  respect of any  Fiscal  Quarter,  such  Fiscal
Quarter and the three preceding Fiscal Quarters.

     "SEC" means the Securities and Exchange Commission.

     "Securities  Exchange  Act" means the  Securities  Exchange Act of 1934, as
amended.

     "Single Employer Plan" means, with respect to any Person, a single employer
plan, as defined in Section  4001(a)(15)  of ERISA,  that (a) is maintained  for
employees of such Person or any of its ERISA Affiliates and no Person other than
such Person and its ERISA  Affiliates or (b) was so maintained and in respect of
which such Person or any of its ERISA Affiliates could reasonably be expected to
have  liability  under  Section 4069 of ERISA in the event such plan has been or
were to be terminated.

     "Solvent" and  "Solvency"  mean,  with respect to any Person on any date of
determination,  that on such  date (a) the fair  value of the  property  of such
Person is  greater  than the total  amount of  liabilities,  including,  without
limitation,  contingent  liabilities,  of  such  Person,  (b) the  present  fair
saleable  value of the assets of such  Person is not less than the  amount  that
will be required to pay the  probable  liability  of such Person on its debts as
they become  absolute and matured,  (c) such Person does not intend to, and does
not believe  that it will,  incur  debts or  liabilities  beyond  such  Person's
ability to pay as such debts and  liabilities  mature and (d) such Person is not
engaged in business or in a transaction,  and is not about to engage in business
or  in  a  transaction,  for  which  such  Person's  property  would  constitute
unreasonably small capital.

     "Store  Operating  Lease  Expense"  means all operating  lease expenses and
rents in connection with retail stores of GNCI and its  Subsidiaries,  including
base rents and percentage rents.

     "Subsidiary"  of any  Person  means  any  corporation,  partnership,  joint
venture,  trust or estate of which (or in which) more than 50% of (a) the issued
and  outstanding  capital stock having ordinary voting power to elect a majority
of the Board of Directors of such  corporation  (irrespective  of whether at the
time capital  stock of any other class or classes of such  corporation  shall or
might  have  voting  power  upon the  occurrence  of any  contingency),  (b) the
interest in the capital or profits of such  partnership  or joint venture or (c)
the  beneficial  interest  in such  trust or estate is at the time  directly  or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other Subsidiaries.

     "Subsidiary  Guarantors" means GNC, GNP, GNIC, GNF, GNII, GNCIH, GNG, GNCL,
GNCC, GNCUK, GND, NFC, NFCI, NFN, GNDLP, GNSC, GN Investment,  GNCA, INI and any
other  Subsidiary  of either GNC or GNI that enters into a guaranty  pursuant to
Section 5.01(m).

     "Subsidiary  Guaranty" has the meaning  specified in Section  3.01(e)(viii)
and  shall  include  any  subsidiary  guaranty  entered  into by any Loan  Party
pursuant to Section 5.01(m).

     "Tax Sharing  Agreement"  means the Tax Sharing  Agreement  among GNCI, the
Borrowers and each of the Borrowers'  Subsidiaries executed prior to the initial
Borrowing hereunder, as in effect on the Closing Date.

     "Taxes" has the meaning specified in Section 2.11(a).

     "Termination  Date"  means  the  earlier  of July 1,  2002  and the date of
termination in whole of the Commitments pursuant to Section 2.04 or 6.01.

     "Total  Adjusted Debt" means, at any date of  determination,  the aggregate
amount of all outstanding and other undrawn commitments to provide  Indebtedness
to the Borrowers or its Foreign Subsidiaries pursuant to Sections  5.02(b)(i)(A)
and  5.02(b)(iv)(B),  respectively,  and  all  other  Indebtedness  of the  type
permitted  by  Section  5.02(b)   outstanding  at  such  time,  other  than  the
Indebtedness referred to in Sections 5.02(b)(i)(D),  5.02(b)(ii),  5.02(b)(iii),
5.02(b)(v)(A) and 5.02(b)(vii).

     "Total Debt" means, at any date of determination,  Indebtedness of the type
permitted  by  Section  5.02(b)   outstanding  at  such  time,  other  than  the
Indebtedness referred to in Sections 5.02(b)(i)(D),  5.02(b)(ii),  5.02(b)(iii),
5.02(b)(v)(A) and 5.02(b)(vii).

     "Type" refers to the distinction  between  Advances bearing interest at the
Base Rate and Advances bearing interest at the Eurodollar Rate.

     "Voting Stock" means capital stock issued by a  corporation,  or equivalent
interests  in any other  Person,  the  holders of which are  ordinarily,  in the
absence of  contingencies,  entitled to vote for the election of  directors  (or
persons performing  similar functions) of such Person,  even though the right so
to vote has been suspended by the happening of such a contingency.

     "Welfare  Plan"  means,  with  respect to any Person,  a welfare  plan,  as
defined in Section 3(1) of ERISA (other than a multiemployer plan, as defined in
Section 3(37) of ERISA), maintained for employees of such Person.

     "Withdrawal Liability" has the meaning specified in Part I of Subtitle E of
Title IV of ERISA.

     SECTION  1.02.  Computation  of  Time  Periods.  In this  Agreement  in the
computation of periods of time from a specified date to a later  specified date,
the word "from" means "from and  including"  and the words "to" and "until" both
mean "to but excluding".

     SECTION 1.03.  Accounting  Terms.  All  accounting  terms not  specifically
defined  herein  shall  be  construed  in  accordance  with  generally  accepted
accounting  principles in the United States consistent with those applied in the
preparation of the financial statements referred to in Section 4.01(f) ("GAAP").

     SECTION 1.04. Currency Equivalents Generally. The equivalent in any Foreign
Currency  of an amount in Dollars  shall be  determined  at the rate of exchange
quoted by BNP in New York City, at 9:00 A.M. (New York City time) on the date of
determination,  to prime banks in New York City for the spot purchase in the New
York  foreign  exchange  market of such  amount  of  Dollars  with such  Foreign
Currency.


                                   ARTICLE II

                        AMOUNTS AND TERMS OF THE ADVANCES

     SECTION 2.01. The Advances.  Each Lender severally agrees, on the terms and
conditions  hereinafter  set forth,  to make  advances (the  "Advances")  to the
Borrowers  from time to time on any  Business  Day during  the  period  from the
Closing Date until  September 10, 1998 in an amount for each such Advance not to
exceed such Lender's  unused  Commitment  on such  Business Day. Each  Borrowing
shall be in an  aggregate  amount  of  $3,000,000  or an  integral  multiple  of
$100,000  in excess  thereof and shall  consist of Advances  made by the Lenders
ratably  according  to their  Commitments.  Within the  limits of each  Lender's
unused  Commitment  in effect from time to time,  the Borrowers may borrow under
this Section 2.01 and prepay  pursuant to Section 2.05.  Amounts  borrowed under
this Section 2.01 and repaid or prepaid may not be reborrowed.

     SECTION 2.02.  Making the  Advances.  (a) Each  Borrowing  shall be made on
notice,  given not later  than (A) 12:00  noon (New York City time) on the first
Business  Day  prior  to the  date of the  proposed  Borrowing  in the case of a
Borrowing consisting of Base Rate Advances,  (B) 12:00 noon (New York City time)
on the third  Business  Day prior to the date of the  proposed  Borrowing in the
case of a Borrowing  consisting  of  Eurodollar  Rate  Advances by the  relevant
Borrower to the  Administrative  Agent,  which shall give to each Lender  prompt
notice thereof by telex, telecopier or cable. Each such notice of a Borrowing (a
"Notice of Borrowing") shall be by telex,  telecopier or cable, in substantially
the form of Exhibit B hereto,  specifying therein the requested (i) date of such
Borrowing (which shall be a Business Day), (ii) Type of Advances comprising such
Borrowing,  (iii)  aggregate  amount of such Borrowing and (iv) in the case of a
Borrowing  consisting of Eurodollar Rate Advances,  initial  Interest Period for
each such Advance.  In the case of a proposed Borrowing  comprised of Eurodollar
Rate Advances, the Administrative Agent shall promptly notify each Lender of the
applicable  interest rate under Section  2.06(a)(ii).  Each Lender shall, before
12:00 noon (New York City time) on the date of such  Borrowing,  make  available
for the account of its Applicable Lending Office to the Administrative  Agent at
the  Administrative  Agent's Account,  in same day funds, such Lender's pro rata
share of such Borrowing.  After the Administrative Agent's receipt of such funds
and upon fulfillment of the applicable  conditions set forth in Article III, the
Administrative  Agent will make such funds  available to the Borrower giving the
Notice of Borrowing by  crediting  the GNI Borrower  Account or the GNC Borrower
Account, as appropriate.

     (b)  Anything in  subsection  (a) to the contrary  notwithstanding,  (i) no
Borrower  may select  Eurodollar  Rate  Advances  (1) for the initial  Borrowing
hereunder,  (2) for any Borrowing if the aggregate  amount of such  Borrowing is
less than  $5,000,000 or (3) if the obligation of the Lenders to make Eurodollar
Rate  Advances  shall then be  suspended  pursuant to Section  2.09 and (ii) the
Eurodollar  Advances may not be  outstanding as part of more than three separate
Borrowings.

     (c) Each  Notice of  Borrowing  shall be  irrevocable  and  binding  on the
relevant  Borrower.  In the case of any  Borrowing  that the  related  Notice of
Borrowing  specifies  is  to be  comprised  of  Eurodollar  Rate  Advances,  the
Borrowers  jointly and severally  hereby agree to indemnify  each Lender against
any loss, cost or expense  incurred by such Lender as a result of any failure to
fulfill  on or  before  the date  specified  in such  Notice  of  Borrowing  the
applicable  conditions set forth in Article III, including,  without limitation,
any loss (including loss of anticipated  profits),  cost or expense  incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such  Lender  to fund  the  Advance  to be made by such  Lender  as part of such
Borrowing  when such Advance,  as a result of such failure,  is not made on such
date.

     (d) Unless the  Administrative  Agent  shall have  received  notice  from a
Lender  prior  to the  date of any  Borrowing  that  such  Lender  will not make
available to the  Administrative  Agent such  Lender's  ratable  portion of such
Borrowing,  the  Administrative  Agent may assume that such Lender has made such
portion available to the  Administrative  Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption,  make available to the relevant  Borrower
on such date a corresponding amount. If and to the extent that such Lender shall
not have so made such ratable  portion  available to the  Administrative  Agent,
such  Lender  and  the  Borrowers  severally  agree  to  repay  or  pay  to  the
Administrative  Agent forthwith on demand such  corresponding  amount and to pay
interest  thereon,  for each day from the date such amount is made  available to
the  relevant  Borrower  until  the date  such  amount  is repaid or paid to the
Administrative  Agent,  at (i) in the case of the  Borrowers,  the interest rate
applicable at such time under Section 2.06 to Advances comprising such Borrowing
and (ii) in the case of such  Lender,  the Federal  Funds  Rate.  If such Lender
shall pay to the Administrative Agent such corresponding  amount, such amount so
paid in respect of principal shall  constitute such Lender's  Advance as part of
such Borrowing for purposes of this Agreement.

     (e) The  failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its  obligation,  if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be  responsible  for the  failure of any other  Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.

     SECTION  2.03.  Repayment.  Each  Borrower  hereby  agrees  to repay to the
Administrative  Agent for the ratable  account of the Lenders on the Termination
Date the aggregate outstanding principal amount of the Advances borrowed by it.

     SECTION 2.04.  Optional  Reduction of the  Commitments.  The Borrowers may,
upon at least three Business Days' notice to the Administrative Agent, terminate
in whole or reduce ratably in part the unused portion of the  Commitments of the
Lenders  without  premium  or  penalty;  provided,  however,  that each  partial
reduction shall be in an aggregate amount of $5,000,000 or an integral  multiple
of $1,000,000 in excess thereof.

     SECTION 2.05.  Prepayments.  (a) Optional. Each Borrower may, upon at least
one Business Day's notice to the Administrative  Agent stating the proposed date
and the  aggregate  principal  amount of the  prepayment,  and if such notice is
given such Borrower agrees to, prepay, without premium or penalty, the aggregate
principal amount of the Advances comprising part of the same Borrowings in whole
or ratably in part on the aggregate principal amount prepaid; provided, however,
that (i) each partial  prepayment  shall be in an aggregate  principal amount of
$3,000,000  or an integral  multiple  of $100,000 in excess  thereof and (ii) no
such  prepayment  of a Eurodollar  Rate Advance  shall be made other than on the
last day of an Interest Period therefor.

     (b) Mandatory.  The Borrowers shall repay all Advances then  outstanding on
the 30th day following the date on which the Fourth Amended and Restated  Credit
Agreement is repaid in full and all commitments thereunder are terminated.

     SECTION 2.06. Interest.  (a) Scheduled Interest.  The Borrowers jointly and
severally agree to pay interest on the unpaid  principal  amount of each Advance
owing to each Lender from the date of such Advance until such  principal  amount
shall be paid in full at the following rates per annum:

     (i) Base Rate Advances.  During such periods as such Advance is a Base Rate
Advance,  a rate per annum equal at all times to the sum of (i) the Base Rate in
effect from time to time plus (ii) the Applicable  Margin in effect from time to
time,  payable  quarterly in arrears from the Closing Date on the last  Business
Day of each March, June, September and December during such periods,  commencing
on September 30, 1998, and on the Termination Date.

     (ii)  Eurodollar  Rate  Advances.  During such periods as such Advance is a
Eurodollar  Rate  Advance,  a rate per  annum  equal at all  times  during  each
Interest  Period for such Advance to the sum of (i) the Eurodollar Rate for such
Interest Period for such Advance plus (ii) the Applicable  Margin in effect from
time to time, payable in arrears on the last day of such Interest Period and, if
such Interest Period has a duration of more than three months,  on each day that
occurs during such Interest Period every three months from the first day of such
Interest Period.

     (b) Default  Interest.  Upon the occurrence and during the continuance of a
Default under Section  6.01(e) or of an Event of Default and upon the request of
the  Administrative  Agent or the Required  Lenders,  the Borrowers  jointly and
severally  agree to pay  interest  on (i) the  unpaid  principal  amount of each
Advance  owing to each  Lender,  payable in arrears on the dates  referred to in
clause (a)(i) or (a)(ii)  above and on demand,  at a rate per annum equal at all
times to 2% per  annum  above  the rate per  annum  required  to be paid on such
Advance  pursuant to clause  (a)(i) or (a)(ii)  above and (ii) the amount of any
interest,  fee or other amount payable hereunder that is not paid when due, from
the date such  amount  shall be due  until  such  amount  shall be paid in full,
payable in arrears on the date such amount  shall be paid in full and on demand,
at a rate per annum  equal at all times to 2% per annum above the rate per annum
required to be paid on Base Rate Advances pursuant to clause (a)(i) above.

     SECTION 2.07. Fees. (a) Commitment Fee. The Borrowers jointly and severally
hereby agree to pay to the Administrative Agent for the account of the Lenders a
commitment fee on each Lender's average daily unused Commitment from the Closing
Date in the case of each initial Lender and from the effective date specified in
the Assignment  and Acceptance  pursuant to which it became a Lender in the case
of each other Lender until September 10, 1998,  payable on September 30, 1998 at
a rate per annum equal to 0.25%.

     (b) Agents' Fees. The Borrowers  jointly and severally agree to pay to each
Agent for its own  account  such  fees as may from  time to time be agreed  upon
between the Borrowers and such Agent.

     SECTION 2.08. Conversion of Advances. (a) Optional. Any Borrower may on any
Business Day, upon notice given to the Administrative Agent not later than 12:00
noon  (New York City  time) on the third  Business  Day prior to the date of the
proposed  Conversion and subject to the provisions of Section 2.09,  Convert all
or any portion of the Advances owing by such Borrower of one Type comprising the
same  Borrowing  into Advances of the other Type;  provided,  however,  that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made on,
and  only on,  the  last day of an  Interest  Period  for such  Eurodollar  Rate
Advances,  any  Conversion of Base Rate Advances into  Eurodollar  Rate Advances
shall  be  in  an  amount  not  less  than  the  minimum  amount   specified  in
Section 2.02(b)  and no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b).  Each such notice of Conversion
shall,  within the restrictions  specified  above,  specify (i) the date of such
Conversion  (which shall be a Business  Day),  (ii) the Advances to be Converted
and (iii) if such Conversion is into  Eurodollar Rate Advances,  the duration of
the initial  Interest Period for such Advances.  Each notice of Conversion shall
be irrevocable and binding on the relevant Borrower.

     (b)  Mandatory.  (i) On the date on which the  aggregate  unpaid  principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically Convert into Base Rate Advances.

     (ii) If any  Borrower  shall fail to select the  duration  of any  Interest
Period for any  Eurodollar  Rate  Advances  in  accordance  with the  provisions
contained in Section 2.02,  the  Administrative  Agent will  forthwith so notify
such Borrower and the Lenders,  whereupon each such Eurodollar Rate Advance will
automatically,  on the last day of the then existing  Interest  Period  therefor
Convert into a Base Rate Advance.

     SECTION  2.09.  Increased  Costs,  Etc.  (a)  If,  due to  either  (i)  the
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation  after the date hereof or (ii) the  compliance  after the date hereof
with any  guideline  or  request  from any  central  bank or other  governmental
authority  (whether or not having the force of law), there shall be any increase
in the  cost  to any  Lender  of  agreeing  to  make or of  making,  funding  or
maintaining  Eurodollar Rate Advances,  then, upon demand by such Lender (with a
copy of such demand to the  Administrative  Agent),  the  Borrowers  jointly and
severally  hereby  agree to pay to the  Administrative  Agent for the account of
such Lender  additional  amounts  sufficient to compensate  such Lender for such
increased  cost;  provided,  however,  that  the  Borrowers  shall  jointly  and
severally be  obligated  to make such payment only if such Lender has given,  or
has caused the  Administrative  Agent to give,  notice to the  Borrowers  of the
facts or  circumstances  giving rise to such  increased  cost within ninety (90)
days after such Lender shall have itself received actual  knowledge  thereof.  A
certificate as to the amount of such increased cost,  submitted to the Borrowers
by such  Lender,  shall be  conclusive  and  binding  for all  purposes,  absent
manifest error.

     (b) If any Lender  determines that compliance with any law or regulation or
any guideline or request from any central bank or other  governmental  authority
(whether or not having the force of law)  affects or would  affect the amount of
capital  required or expected to be maintained by such Lender or any corporation
controlling  such Lender and that the amount of such capital is increased by the
existence of such Lender's commitment to lend hereunder and other commitments of
such type,  then,  upon demand by such Lender (with a copy of such demand to the
Administrative  Agent),  the Borrowers jointly and severally hereby agree to pay
to the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender,  additional  amounts  sufficient  to  compensate  such
Lender in the  light of such  circumstances,  to the  extent  that  such  Lender
reasonably  determines such increase in capital to be allocable to the existence
of such Lender's  commitment to lend  hereunder;  provided that such  additional
amounts shall not include  compensation for any additional  amounts arising from
circumstances  occurring more than 180 days prior to the date of such demand.  A
certificate as to such amounts, submitted to the Borrowers by such Lender, shall
be conclusive and binding for all purposes, absent manifest error.

     (c) If, with respect to any Eurodollar Rate Advances, Lenders owed at least
51%  of  the  then  aggregate   unpaid   principal  amount  thereof  notify  the
Administrative  Agent that the Eurodollar  Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders of making, funding
or maintaining  their  Eurodollar  Rate Advances for such Interest  Period,  the
Administrative  Agent shall  forthwith so notify the  Borrowers and the Lenders,
whereupon (i) each such Eurodollar Rate Advance will automatically,  on the last
day of the then  existing  Interest  Period  therefor,  Convert into a Base Rate
Advance and (ii) the  obligation of such Lenders to make, or to Convert Advances
into, Eurodollar Rate Advances shall be suspended until the Administrative Agent
shall  notify  the  Borrowers  that  such  Lenders  have   determined  that  the
circumstances causing such suspension no longer exist.

     (d)  Notwithstanding  any  other  provision  of  this  Agreement,   if  the
introduction  of or  any  change  in or in  the  interpretation  of  any  law or
regulation  shall make it unlawful,  or any central  bank or other  governmental
authority  shall  assert that it is unlawful,  for any Lender or its  Eurodollar
Lending  Office to perform its  obligations  hereunder to make  Eurodollar  Rate
Advances or to continue to fund or maintain  Eurodollar Rate Advances hereunder,
then,  on notice  thereof and demand  therefor  by such Lender to the  Borrowers
through  the  Administrative  Agent,  (i)  each  Eurodollar  Rate  Advance  will
automatically,  upon such demand,  Convert into a Base Rate Advance and (ii) the
obligation of the Lenders to make, or to Convert Advances into,  Eurodollar Rate
Advances  shall be  suspended  until the  Administrative  Agent shall notify the
Borrowers that such Lender has determined  that the  circumstances  causing such
suspension no longer exist.

     (e) Upon the occurrence and during the  continuance of any Event of Default
or a Default  under  Section  6.01(e),  (i) each  Eurodollar  Rate  Advance will
automatically  Convert into a Base Rate Advance and (ii) the  obligation  of the
Lenders to make, or to Convert Advances into,  Eurodollar Rate Advances shall be
suspended.

     SECTION 2.10. Payments and Computations.  (a) The Borrowers shall make each
payment  hereunder and under the Notes, not later than 12:00 noon (New York City
time) on the day when due in U.S.  dollars  to the  Administrative  Agent at the
Administrative  Agent's Account in same day funds. The Administrative Agent will
promptly thereafter cause like funds to be distributed (i) if such payment is in
respect of principal, interest, commitment fees or any other Obligation then due
and payable hereunder or under any of the Notes to more than one Lender, to such
Lenders for the account of their respective  Applicable  Lending Offices ratably
in accordance  with the amounts of such respective  Obligations  then payable to
such Lenders and (ii) if such payment is in respect of any  Obligation  then due
and payable  hereunder  or under any of the Notes to one Lender,  to such Lender
for the account of its Applicable  Lending Office, in each case to be applied in
accordance  with  the  terms  of  this  Agreement.  Upon  its  acceptance  of an
Assignment and Acceptance and recording of the information  contained therein in
the Register  pursuant to Section 8.07(c),  from and after the effective date of
such Assignment and Acceptance, the Administrative Agent shall make all payments
hereunder and under the Notes in respect of the interest assigned thereby to the
Lender  assignee  thereunder,  and the parties to such Assignment and Acceptance
shall make all  appropriate  adjustments  in such  payments for periods prior to
such effective date directly between themselves.

     (b) Each  Borrower  hereby  authorizes  each  Lender,  if and to the extent
payment owed to such Lender is not made when due  hereunder or under the Note or
Notes held by such  Lender,  to charge  from time to time  against any or all of
such Borrower's accounts with such Lender any amount so due.

     (c)  All   computations   of  interest  and  fees  shall  be  made  by  the
Administrative  Agent on the basis of a year of 360  days,  in each case for the
actual  number of days  (including  the first  day but  excluding  the last day)
occurring  in the period  for which such  interest  and fees are  payable.  Each
determination by the  Administrative  Agent of an interest rate or fee hereunder
shall be conclusive and binding for all purposes, absent manifest error.

     (d) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business  Day,  such payment shall be made on the next
succeeding  Business  Day,  and such  extension  of time  shall in such  case be
included in the  computation  of payment of interest or  commitment  fee, as the
case may be; provided,  however,  that, if such extension would cause payment of
interest on or  principal  of  Eurodollar  Rate  Advances to be made in the next
following  calendar  month,  such  payment  shall  be  made  on the  immediately
preceding Business Day.

     (e) Unless the  Administrative  Agent shall have  received  notice from any
Borrower  prior to the date on which any payment is due to any Lender  hereunder
or under the Notes that such  Borrower  will not make such payment in full,  the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative  Agent on such date and the  Administrative  Agent may, in
reliance upon such  assumption,  cause to be  distributed to each such Lender on
such due date an amount equal to the amount then due such Lender.  If and to the
extent  any  Borrower  shall  not  have  so  made  such  payment  in full to the
Administrative  Agent, each such Lender shall repay to the Administrative  Agent
forthwith  on demand  such  amount  distributed  to such  Lender  together  with
interest thereon,  for each day from the date such amount is distributed to such
Lender  until the date such  Lender  repays  such  amount to the  Administrative
Agent, at the Federal Funds Rate.

     SECTION 2.11. Taxes. (a) Any and all payments by the Borrowers hereunder or
under the Notes shall be made, in accordance  with Section 2.10,  free and clear
of and  without  deduction  for any and all  present  or future  taxes,  levies,
imposts, deductions,  charges or withholdings,  and all liabilities with respect
thereto,  excluding,  in the case of each Lender and the  Administrative  Agent,
overall net income taxes that are imposed by the United States on such Lender or
the  Administrative  Agent and overall net income taxes (or  franchise  taxes in
lieu thereof) that are imposed on such Lender or the Administrative Agent by the
state  or  foreign  jurisdiction  under  the laws of which  such  Lender  or the
Administrative  Agent,  as the  case  may  be,  is  organized  or any  political
subdivision  thereof and, in the case of each  Lender,  overall net income taxes
(or  franchise  taxes in lieu  thereof)  that are  imposed on such Lender by the
state or foreign  jurisdiction of such Lender's Applicable Lending Office or any
political  subdivision  thereof (all such nonexcluded  taxes,  levies,  imposts,
deductions,  charges, withholdings and liabilities being hereinafter referred to
as "Taxes").  If the Borrowers shall be required by law to deduct any Taxes from
or in respect of any sum  payable  hereunder  or under any Note to any Lender or
the  Administrative  Agent,  (i) the sum payable  shall be  increased  as may be
necessary  so that after making all required  deductions  (including  deductions
applicable to  additional  sums payable under this Section 2.11) such Lender and
the  Administrative  Agent,  as the case may be, receives an amount equal to the
sum it would have received had no such  deductions been made, (ii) the Borrowers
shall make such  deductions  and (iii) the  Borrowers  shall pay the full amount
deducted to the relevant taxation authority or other  governmental  authority in
accordance with applicable law.

     (b) In addition,  the Borrowers  jointly and severally  hereby agree to pay
any present or future stamp or documentary taxes or any other excise or property
taxes,  charges or similar  levies that arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Notes (hereinafter  referred to as "Other
Taxes").

     (c) The  Borrowers  jointly  and  severally  indemnify  each Lender and the
Administrative  Agent for the full amount of Taxes or Other  Taxes,  and for the
full amount of taxes of any kind imposed by any  jurisdiction on amounts payable
under this Section 2.11, paid by such Lender or the Administrative Agent, as the
case may be, and any liability (including penalties,  additions to tax, interest
and expenses)  arising therefrom or with respect thereto.  This  indemnification
shall be made  within 30 days from the date  such  Lender or the  Administrative
Agent, as the case may be, makes written demand therefor.

     (d) Within 30 days after the date of any  payment of Taxes,  the  Borrowers
will furnish to the Administrative  Agent, at its address referred to in Section
8.02,  appropriate  evidence  of  payment  thereof.  If no Taxes are  payable in
respect of any payment  hereunder or under the Notes by the Borrowers through an
account or branch  outside the United  States or on behalf of the Borrowers by a
payor that is not a United States person,  the Borrowers  will furnish,  or will
cause such payor to furnish,  to the  Administrative  Agent, at such address,  a
certificate from the appropriate taxing authority or authorities,  or an opinion
of counsel acceptable to the  Administrative  Agent, in either case stating that
such  payment is exempt  from or not  subject  to Taxes.  For  purposes  of this
subsection (d) and subsection  (e), the terms "United States" and "United States
person"  shall  have the  meanings  specified  in Section  7701 of the  Internal
Revenue Code.

     (e) Each  Lender  organized  under the laws of a  jurisdiction  outside the
United  States  shall,  on or prior to the date of its execution and delivery of
this Agreement in the case of each Lender, and on the date of the Assignment and
Acceptance  pursuant  to which it  became  a  Lender  in the case of each  other
Lender,  and  from  time to time  thereafter  if  requested  in  writing  by the
Borrowers  or the  Administrative  Agent  (but only so long  thereafter  as such
Lender remains lawfully able to do so), provide the Administrative Agent and the
Borrowers with Internal  Revenue  Service form 1001 or 4224, as appropriate  (or
any successor form prescribed by the Internal Revenue Service),  certifying that
such Lender is exempt from or is  entitled  to a reduced  rate of United  States
withholding  tax on payments  under this  Agreement or the Notes,  or certifying
that the income  receivable by such Lender under this  Agreement or the Notes is
effectively  connected with the conduct of a trade or business of such Lender in
the United  States.  To the extent a Lender fails to provide to the Borrowers at
the time such Lender first becomes a party to this  Agreement  Internal  Revenue
Service  forms that  establish  a United  States  withholding  tax rate of zero,
withholding tax at the initially required rate shall be considered excluded from
Taxes unless and until such Lender provides the appropriate form certifying that
a lesser rate applies,  whereupon withholding tax at such lesser rate only shall
be considered  excluded  from Taxes for periods  governed by such form. If after
the date of an Assignment  and  Acceptance  pursuant to which a Lender  assignee
becomes a party to this  Agreement,  the  Borrowers  shall  become  obligated to
gross-up payments to or to indemnify the assignee pursuant to this Section 2.11,
such gross-up or indemnity  obligation to such assignee shall be no greater than
the corresponding obligation the Borrowers would have had absent such Assignment
and  Acceptance.  If any form or  document  referred to in this  subsection  (e)
requires the  disclosure of  information,  other than  information  necessary to
compute the tax payable and information  required on the date hereof by Internal
Revenue  Service form 1001 or 4224, that the Lender  reasonably  considers to be
confidential,  the Lender shall give notice  thereof to the  Borrowers and shall
not be  obligated  to  include  in  such  form  or  document  such  confidential
information.

     (f) For any period with respect to which a Lender has failed to provide the
Borrowers  with the  appropriate  form  described in subsection (e) above (other
than if such failure is due to a change in law occurring after the date on which
a form  originally  was required to be provided or if such form otherwise is not
required  under  subsection  (e) above),  such  Lender  shall not be entitled to
gross-up or  indemnification  under  subsection (a) or (c) above with respect to
Taxes  imposed by the United  States;  provided,  however,  that should a Lender
become  subject  to Taxes  because of its  failure  to  deliver a form  required
hereunder,  the Borrowers shall take such steps as such Lender shall  reasonably
request to assist such Lender to recover such Taxes.

     (g)  Without  prejudice  to the  survival  of any  other  agreement  of the
Borrowers  hereunder,  the agreements and obligations of the Borrowers contained
in this Section 2.11 shall survive the payment in full of principal and interest
hereunder and under the Notes.

     SECTION 2.12.  Sharing of Payments,  Etc. If any Lender shall obtain at any
time any payment (whether  voluntary,  involuntary,  through the exercise of any
right of setoff, or otherwise) on account of the Obligations of the Borrowers to
such Lender  hereunder  and under the Notes in excess of (a) its  ratable  share
(according  to the  proportion  of (i) the  amount of such  Obligations  due and
payable  to such  Lender  at  such  time to (ii)  the  aggregate  amount  of the
Obligations of the Borrowers due and payable to all Lenders  hereunder and under
the Notes at such  time) of  payments  on  account  of the  Obligations  due and
payable to all Lenders  hereunder  and under the Notes at such time  obtained by
all the Lenders at such time or (b) if no such  Obligations  are due and payable
at such time,  its ratable share  (according to the proportion of (A) the amount
of such  Obligations  of the  Borrowers  to such  Lender at such time to (B) the
aggregate  amount of the  Obligations of the Borrowers to all Lenders  hereunder
and under the Notes at such time) of payments on account of the  Obligations  of
the Borrowers to all Lenders hereunder and under the Notes at such time obtained
by all Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such  participations  in the Obligations of the Borrowers  hereunder and
under the Notes  owing to them as shall be  necessary  to cause such  purchasing
Lender to share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess  payment is thereafter  recovered from
such purchasing Lender,  such purchase from each other Lender shall be rescinded
and such other Lender shall repay to the purchasing Lender the purchase price to
the extent of such other Lender's  ratable share (according to the proportion of
(1) the purchase  price paid to such Lender to (2) the aggregate  purchase price
paid to all  Lenders) of such  recovery  together  with an amount  equal to such
Lender's  ratable share  (according to the  proportion of (x) the amount of such
other Lender's required  repayment to (y) the total amount so recovered from the
purchasing  Lender)  of any  interest  or other  amount  paid or  payable by the
purchasing  Lender in respect of the total amount so  recovered.  The  Borrowers
agree that any Lender so purchasing a participation from another Lender pursuant
to this Section 2.12 may, to the fullest extent  permitted by law,  exercise all
its  rights of payment  (including  the right of  setoff)  with  respect to such
participation  as  fully  as if such  Lender  were the  direct  creditor  of the
Borrowers in the amount of such participation.

     SECTION  2.13.  Use of  Proceeds.  The  proceeds of the  Advances  shall be
available  (and the Borrowers  agree that they shall use such proceeds) in order
to (i)  finance  purchases  of  GNCI  capital  stock  as  permitted  in  Section
5.02(f)(i)  hereof  and  (ii)  provide  funds  for  general  corporate  purposes
permitted by this Agreement.


                                   ARTICLE III

                              CONDITIONS OF LENDING

     SECTION 3.01.  Conditions  Precedent to Closing Date.  This Agreement shall
become  effective on and as of the date (the "Closing  Date"),  on which each of
the following conditions precedent shall have been satisfied:

     (a) No Material Adverse Change shall have occurred since January 31, 1998.

     (b)  There  shall  exist no  action,  suit,  investigation,  litigation  or
proceeding  affecting any Loan Party or any of their  properties,  including any
Environmental  Action,  pending  or to the  best  of the  Borrowers'  knowledge,
threatened  before any court,  governmental  agency or arbitrator that (i) could
reasonably be expected to have a Material  Adverse  Effect,  or (ii) purports to
affect the legality, validity or enforceability of this Agreement, any Note, any
other  Loan  Document,   any  Related   Document  or  the  consummation  of  the
transactions contemplated hereby.

     (c)  The  Borrowers  shall  have  paid  to  the  Administrative  Agent  all
reasonable accrued fees of the Agents and the Lenders (including the upfront fee
to be paid with respect to this  Agreement  and the accrued fees and expenses of
counsel to the Administrative Agent).

     (d) All  governmental  and third party consents and approvals  necessary in
connection with this Agreement shall have been obtained  (without the imposition
of any  conditions  other  than  those  that are  reasonably  acceptable  to the
Administrative  Agent) and shall remain in effect,  and all  applicable  waiting
periods  shall have  expired  without any action  being  taken by any  competent
authority  and no law or  regulation  shall  be  applicable,  in the  reasonable
judgment  of the  Administrative  Agent,  that  restrains,  prevents  or imposes
adverse conditions upon this Agreement or any related transactions.

     (e) The  Administrative  Agent shall have received on or before the Closing
Date the following, each dated the Closing Date (unless otherwise specified), in
form and substance  reasonably  satisfactory to the Administrative Agent (unless
otherwise  specified)  and (except for the Notes) in sufficient  copies for each
Lender:

     (i) The Notes to the order of the Lenders.

     (ii) Certified  copies of the resolutions of the Board of Directors of each
Borrower and of each other Loan Party approving this Agreement,  the Notes, each
other  Loan  Document  and each  Related  Document  to which it is or is to be a
party,  and of all documents  evidencing  other necessary  corporate  action and
governmental approvals, if any, with respect to this Agreement,  the Notes, each
other Loan Document and each Related Document.

     (iii) A copy of the charter of each  Borrower  and of each other Loan Party
and each amendment thereto,  certified (as of a date reasonably near the date of
the  initial  Borrowing)  by the  Secretary  of  State  of the  State  of  their
respective  states of  incorporation or organization as being a true and correct
copy thereof.

     (iv) A copy of a  certificate  of the  Secretary  of State of the  State of
their respective states of incorporation or organization,  dated reasonably near
the Closing Date, listing the charter or other organizational  documents of each
Borrower and of each other Loan Party and each amendment  thereto on file in his
office and certifying  that (A) such  amendments are the only  amendments to the
Borrowers' or such other Loan Party's charter or other organizational  documents
on file in his office, (B) each Borrower and each other Loan Party have paid all
franchise  taxes to the date of such  certificate and (C) each Borrower and each
other Loan Party are duly  incorporated  or organized and in good standing under
the  laws  of  the  State  of  their  respective   states  of  incorporation  or
organization.

     (v) A copy of a certificate  of the Secretary of State of the  Commonwealth
of Pennsylvania,  dated  reasonably near the Closing Date,  stating that GNCI is
duly  qualified and in good standing as a foreign  corporation in such State and
has  filed  all  annual  reports  required  to be  filed  to the  date  of  such
certificate.

     (vi) A  certificate  of each of the  Borrowers  and each other Loan  Party,
signed on behalf of each Borrower or such other Loan Party by its President or a
Vice President and its Secretary or any Assistant  Secretary,  dated the Closing
Date (the  statements  made in such  certificate  shall be true on and as of the
Closing Date), certifying as to (A) the absence of any amendments to the charter
or other  organizational  documents  of such  Borrower  or such other Loan Party
since the date of the  Secretary of State's  certificate  referred to in Section
3.01(e)(iv),  (B) the truth and accuracy of the bylaws of such  Borrower or such
other  Loan  Party as in effect on the  Closing  Date (a copy of which  shall be
attached to such  certificate),  (C) the due  incorporation  or organization and
good  standing  of such  Borrower or such other Loan Party as a  corporation  or
limited  partnership  organized  under the laws of the  State of its  respective
state of incorporation  or  organization,  and the absence of any proceeding for
the  dissolution or  liquidation of such Borrower or such other Loan Party,  (D)
the truth and accuracy of the  representations  and warranties  contained in the
Loan  Documents as though made on and as of the Closing Date and (E) the absence
of any event occurring and continuing,  or resulting from the initial Borrowing,
that constitutes a Default.

     (vii) A  certificate  of the  Secretary or an  Assistant  Secretary of each
Borrower and of each other Loan Party  certifying the names and true  signatures
of the officers of such Borrower and of such other Loan Party authorized to sign
this Agreement, the Notes, each other Loan Document and each Related Document to
which  it is or  is to be  parties  and  the  other  documents  to be  delivered
hereunder and thereunder.

     (viii) A  guaranty  in  substantially  the  form of  Exhibit  D hereto  (as
amended, supplemented or otherwise modified from time to time in accordance with
its terms, the "Parent Guaranty"),  duly executed by GNCI and GNI and a guaranty
in  substantially  the form of Exhibit E hereto  (as  amended,  supplemented  or
otherwise  modified  from  time  to time  in  accordance  with  its  terms,  the
"Subsidiary Guaranty"), duly executed by each Subsidiary Guarantor.

     (ix) Certified  copies of each of the Related  Documents,  duly executed by
the parties  thereto and in form and substance  reasonably  satisfactory  to the
Administrative  Agent,  together  with all  agreements,  instruments  and  other
documents delivered in connection therewith.
 
     (x) Such financial,  business and other information regarding the Borrowers
and each other  Loan Party as the  Administrative  Agent  shall have  reasonably
requested,  including,  without  limitation,  (A)  information  as  to  possible
contingent liabilities,  tax matters,  environmental matters,  obligations under
ERISA  and under  Plans,  Multiemployer  Plans,  Welfare  Plans  and  collective
bargaining  agreements,  (B) annual audited financial  statements for the Fiscal
Year ended January 31, 1998 of GNCI, (C) interim financial  statements dated the
end of the most recent Fiscal Quarter for which financial statements of GNCI are
available  and (D)  forecasts  prepared  by  management  of  GNCI,  in form  and
substance  satisfactory to the Administrative  Agent, of balance sheets,  income
statements and cash flow statements on an annual basis through Fiscal Year 2002.

     (xi)  Certificates  from the chief  financial  officer of GNCI, in form and
substance satisfactory to the Administrative Agent, attesting to the Solvency of
GNCI and its Subsidiaries,  taken as a whole, immediately after giving effect to
the transactions contemplated hereby.

     (xii) A  letter,  in form  and  substance  reasonably  satisfactory  to the
Administrative  Agent,  from GNCI and the  Borrowers  to Deloitte & Touche,  its
independent  certified  public  accountants,  advising such accountants that the
Administrative Agent and the Lenders have been authorized to exercise all rights
of GNCI and each  Borrower to require such  accountants  to disclose any and all
financial  statements  and any other  information of any kind that they may have
with respect to GNCI and each Borrower and its  Subsidiaries  and directing such
accountants to comply with any reasonable request of the Administrative Agent or
any Lender for such information.

     (xiii) A favorable opinion of Hutchins,  Wheeler & Dittmar,  A Professional
Corporation,  counsel  for  GNCI  and  each  Borrower,  in  form  and  substance
satisfactory to the  Administrative  Agent, and addressing such other matters as
any Lender through the Administrative Agent may reasonably request.

     (xiv)  A  favorable  opinion  of  in-house  counsel  of  the  Loan  Parties
addressing  issues under the laws of the Commonwealth of  Pennsylvania,  in form
and substance  satisfactory  to the  Administrative  Agent,  and addressing such
other  matters as any Lender  through the  Administrative  Agent may  reasonably
request.

     SECTION 3.02.  Conditions  Precedent to Each  Borrowing.  The obligation of
each Lender to make an Advance on the occasion of each Borrowing  (including the
initial Borrowing) shall be subject to the further conditions  precedent that on
the date of such Borrowing (a) the following  statements shall be true (and each
of the giving of the  applicable  Notice of Borrowing and the  acceptance by the
relevant  Borrower  of  the  proceeds  of  such  Borrowing  shall  constitute  a
representation  and warranty by such Borrower that on the date of such Borrowing
such statements are true):

     (i) the representations and warranties  contained in each Loan Document are
correct on and as of the date of such Borrowing,  before and after giving effect
to such Borrowing and to the  application of the proceeds  therefrom,  as though
made on and as of such date (other than any such  representations  or warranties
that,  by  their  terms,  are  made as of a date  other  than  the  date of such
Borrowing); and

     (ii) no event has  occurred  and is  continuing,  or would result from such
Borrowing or from the application of the proceeds therefrom,  that constitutes a
Default;

     (b) the  Administrative  Agent shall have received a certificate  from GNCI
setting forth,  on a pro forma basis,  the  computation of the Maximum  Leverage
Ratio as of the end of the  immediately  preceding  fiscal  quarter,  but giving
effect to the Total Debt  outstanding  on the date of such  Borrowing  and after
giving  effect to the Advances  requested  thereby;  and (c) the  Administrative
Agent shall have  received  such other  approvals,  opinions or documents as any
Lender through the Administrative Agent may reasonably request.

     SECTION  3.03.   Determinations   Under  Section  3.01.   For  purposes  of
determining  compliance  with the  conditions  specified in Section  3.01,  each
Lender  shall be deemed to have  consented  to,  approved  or  accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Administrative Agent responsible for the transactions contemplated by the
Loan Documents  shall have received notice from such Lender prior to the initial
Borrowing  specifying its objection  thereto and such Lender shall not have made
available to the  Administrative  Agent such  Lender's  ratable  portion of such
Borrowing.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

     SECTION  4.01.  Representations  and  Warranties  of  the  Borrowers.  Each
Borrower represents and warrants as follows:

     (a) Each Loan Party other than GNDLP (i) is a corporation  duly  organized,
validly  existing and in good standing under the laws of the jurisdiction of its
incorporation,  (ii)  is  duly  qualified  and in  good  standing  as a  foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the  conduct of its  business  requires  it to so qualify or be  licensed,
except where the failure to so qualify or be licensed  would not have a Material
Adverse Effect and (iii) has all requisite  corporate power and authority to own
or  lease  and  operate  its  properties  and to carry  on its  business  as now
conducted and as proposed to be conducted.  All of the outstanding capital stock
of GNCI has been validly  issued,  is fully paid and  nonassessable.  All of the
outstanding  capital  stock of GNI has been  validly  issued,  is fully paid and
nonassessable  and is owned (other than the PIK Preferred  Stock), by GNCI, free
and clear of all Liens.  All of the  outstanding  capital  stock of GNC has been
validly issued,  is fully paid and  nonassessable  and is owned by GNI, free and
clear of all Liens.  GNDLP (i) is a limited  partnership duly formed and validly
existing  under  the  laws of the  Commonwealth  of  Pennsylvania,  (ii) is duly
qualified as a limited  partnership in each other  jurisdiction in which it owns
or leases  property  or in which the conduct of its  business  requires it to so
qualify or be  licensed,  except  where the failure to so qualify or be licensed
would not have a Material  Adverse Effect and (iii) has all requisite  power and
authority  to own or  lease  and  operate  its  properties  and to  carry on its
business as now conducted and as proposed to be conducted.

     (b) Set forth on Schedule 4.01(b) hereto is a complete and accurate list as
of the Closing Date of all  Subsidiaries  of each Loan Party,  showing as of the
Closing Date (as applicable and as to each such  Subsidiary) the jurisdiction of
its incorporation or organization, the number of shares of each class of capital
stock  authorized  or  the  number  of  certificates  of  beneficial   ownership
authorized,  and the number outstanding,  on the Closing Date and the percentage
of the  outstanding  shares of each such  class or  certificates  of  beneficial
ownership  owned  (directly or  indirectly) by such Loan Party and the number of
shares covered by all  outstanding  options,  warrants,  rights of conversion or
purchase and similar rights at the Closing Date. All of the outstanding  capital
stock  or  outstanding   certificates  of  beneficial  ownership  of  each  such
Subsidiary  have  been  validly  issued,  is fully  paid and  nonassessable,  as
applicable,  and is owned by such Loan Party or one or more of its  Subsidiaries
free and clear of all Liens. Each such Subsidiary (i) is duly organized, validly
existing  and in  good  standing  under  the  laws  of the  jurisdiction  of its
organization,  (ii)  is  duly  qualified  and in good  standing  in  each  other
jurisdiction  in which it owns or leases property or in which the conduct of its
business  requires it to so qualify or be licensed,  except where the failure to
so qualify or be licensed would not have a Material Adverse Effect and (iii) has
all requisite power and authority to own or lease and operate its properties and
to carry on its business as now conducted and as proposed to be conducted.

     (c) The execution,  delivery and  performance by each Loan Party other than
GNDLP of this  Agreement,  the Notes,  each other Loan Document and each Related
Document  to  which  it is or is to be a  party,  and  the  consummation  of the
transactions contemplated hereby, are within such Loan Party's corporate powers,
have been duly  authorized by all  necessary  corporate  action,  and do not (i)
contravene such Loan Party's charter or bylaws, (ii) violate any law (including,
without limitation, the Securities Exchange Act and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including,  without limitation,  Regulations T, U and X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,  injunction,
decree,  determination or award, (iii) conflict with or result in the breach of,
or  constitute  a  default  under,  any  contract,  loan  agreement,  indenture,
mortgage,  deed of trust, lease or other instrument binding on or affecting such
Loan Party, any of its Subsidiaries or any of their properties or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
the  properties of such Loan Party or any of its  Subsidiaries.  The  execution,
delivery  and  performance  by  GNDLP of each  Loan  Document  and each  Related
Document  to  which  it is or is to be a  party,  and  the  consummation  of the
transactions contemplated hereby, are within the powers of GNDLP, have been duly
authorized  by all  necessary  action  and  consent,  and do not  (i) contravene
GNDLP's  organizational  documents,  (ii) violate  any law  (including,  without
limitation, the Securities Exchange Act and the Racketeer Influenced and Corrupt
Organizations  Chapter  of the  Organized  Crime  Control  Act of  1970),  rule,
regulation (including,  without limitation,  Regulations T, U and X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,  injunction,
decree,  determination or award, (iii) conflict with or result in the breach of,
or  constitute  a  default  under,  any  contract,  loan  agreement,  indenture,
mortgage,  deed of trust, lease or other instrument binding on or affecting such
Loan Party, any of its Subsidiaries or any of their properties or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any of
the properties of such Loan Party or any of its  Subsidiaries.  No Loan Party or
any of its  Subsidiaries  is in  violation  of any such law,  rule,  regulation,
order, writ, judgment,  injunction,  decree, determination or award or in breach
of any such contract, loan agreement,  indenture, mortgage, deed of trust, lease
or other  instrument,  the  violation  or breach of which  could have a Material
Adverse Effect.

     (d) No  authorization,  approval  or other  action  by, and no notice to or
filing with, any  governmental  authority or regulatory  body or any other third
party is required for (i) the due execution,  delivery,  recordation,  filing or
performance  by any Loan  Party of this  Agreement,  the Notes or any other Loan
Document or any Related  Document to which it is or is to be a party, or for the
consummation of the transactions  contemplated  hereby,  or (ii) the exercise by
any Agent or any Lender of its rights under the Loan Documents.

     (e) This  Agreement  has  been,  and each of the  Notes,  each  other  Loan
Document and each Related Document when delivered hereunder will have been, duly
executed and delivered by each Loan Party  thereto.  This Agreement is, and each
of the Notes,  each other Loan Document and each Related Document when delivered
hereunder  will be, the legal,  valid and binding  obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its terms.

     (f) The audited  Consolidated balance sheet of GNCI and its Subsidiaries as
at January 31, 1998, and the related  statements of income and cash flow of GNCI
and its Subsidiaries  for the Fiscal Year then ended,  accompanied by an opinion
of  Deloitte  &  Touche,  independent  public  accountants,  and  the  unaudited
Consolidated  balance sheet of GNCI and its  Subsidiaries  as at its most recent
ended Fiscal Quarter, and the related statements of income and cash flow of GNCI
and its  Subsidiaries for the period covering January 31, 1998 to the end of its
most recently ended Fiscal Quarter for which financial statements are available,
copies of which have been furnished to each Lender, fairly present,  subject, in
the case of such balance sheet as at its most recent ended Fiscal  Quarter,  and
such statement of income and cash flow for the period covering  January 31, 1998
to the  end of its  most  recently  ended  Fiscal  Quarter,  to  year-end  audit
adjustments and to the absence of footnote  disclosure,  the financial condition
of GNCI and its  Subsidiaries as at such dates and the  Consolidated  results of
the operations of GNCI and its Subsidiaries for the periods ended on such dates,
all in accordance with generally  accepted  accounting  principles  applied on a
consistent basis and on a basis consistent with the current practice of GNCI and
its Subsidiaries; and since January 31, 1998, there has been no Material Adverse
Change.

     (g) The Consolidated  forecasted balance sheets, income statements and cash
flow statements of GNCI and its  Subsidiaries  delivered to the Lenders pursuant
to  Section  3.01(e)(x)  were  prepared  in  good  faith  on  the  basis  of the
assumptions stated therein,  which assumptions were believed to be reasonable in
the light of conditions existing at the time of delivery of such forecasts,  and
represented,  at the time of  delivery,  GNCI's  current  estimate of its future
financial performance, it being recognized that such forecasts do not constitute
a warranty as to the future  performance of GNCI and its  Subsidiaries  and that
actual results may vary from forecasted results.

     (h) No information,  exhibit or report (including,  without limitation, any
financial  information,  but excluding  any forecasts  referred to in clause (g)
above) furnished by or on behalf of any Loan Party to any Agent or any Lender in
connection  with the  negotiation of the Loan Documents or pursuant to the terms
of the Loan  Documents  contained  any untrue  statement of a material  fact or,
taken as a  whole,  omitted  to  state a  material  fact  necessary  to make the
statements made therein not misleading, in each case, as of the Closing Date.

     (i) There is no  action,  suit,  investigation,  litigation  or  proceeding
affecting any Loan Party, any of their  Subsidiaries or any of their properties,
including any  Environmental  Action,  pending or, to the best of the Borrowers'
knowledge,  threatened before any court,  governmental agency or arbitrator that
(i)  would be  reasonably  likely  to have a  Material  Adverse  Effect  or (ii)
purports to affect the legality,  validity or  enforceability of this Agreement,
any Note, any other Loan Document or any Related Document or the consummation of
the transactions contemplated hereby.

     (j) Following  application  of the proceeds of each Advance,  not more than
25% of the value of the assets (either of each Borrower only or of each Borrower
and its  Subsidiaries  on a  Consolidated  basis)  subject to the  provisions of
Section 5.02(a) or 5.02(d) or subject to any restriction  contained in any other
agreement or instrument between such Borrower and any Lender or any Affiliate of
any Lender relating to Indebtedness and within the scope of Section 6.01(d) will
be Margin Stock.

     (k) Set forth on Schedule  4.01(k) is a complete and  accurate  list of all
Plans,  Multiemployer  Plans and Welfare  Plans with respect to any employees of
any Loan Party or any of their  Subsidiaries.  Neither any Loan Party nor any of
its ERISA  Affiliates  maintains or has any obligation to contribute to any Plan
or Multiemployer Plan.

     (l) No ERISA  Event has  occurred or is  reasonably  expected to occur with
respect to any Plan of any Loan Party or any of its ERISA Affiliates.

     (m) Schedule B (Actuarial  Information)  to the most recent  annual  report
(Form 5500 Series)  required to be filed with the Internal  Revenue  Service for
each  Plan  has  been  filed  and a  copy  thereof  has  been  furnished  to the
Administrative  Agent.  Each  such  Schedule B  is  substantially  complete  and
accurate and fairly presents the funding status of such Plan, and since the date
of such  Schedule B there has been no material  adverse  change in such  funding
status.

     (n) Neither any Loan Party nor any of its ERISA  Affiliates has incurred or
is reasonably  expected to incur any Withdrawal  Liability to any  Multiemployer
Plan exceeding $500,000 or requiring payments exceeding $250,000 per annum.

     (o)  Neither  any  Loan  Party  nor any of its  ERISA  Affiliates  has been
notified by the sponsor of a Multiemployer  Plan of any Loan Party or any of its
ERISA Affiliates that such  Multiemployer  Plan is in reorganization or has been
terminated,  within the meaning of Title IV of ERISA, and no such  Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated,  within
the meaning of Title IV of ERISA.

     (p) The aggregate annualized cost (including,  without limitation, the cost
of insurance premiums),  if any, with respect to post-retirement  benefits under
Welfare Plans for which the Loan Parties and their  Subsidiaries are liable does
not exceed $250,000.

     (q) Neither the business nor the properties of any Loan Party or any of its
Subsidiaries are affected by any fire, explosion,  accident,  strike, lockout or
other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of
the public enemy or other  casualty  (whether or not covered by insurance)  that
would be reasonably likely to have a Material Adverse Effect.

     (r) Except as set forth on Schedule 4.01(r),  the operations and properties
of each Loan Party and each of its Subsidiaries  comply in all material respects
with all  Environmental  Laws;  all  material  Environmental  Permits  have been
obtained and are in effect for the  operations and properties of each Loan Party
and its Subsidiaries;  each Loan Party and its Subsidiaries are in compliance in
all material respects with all such Environmental  Permits; and no circumstances
exist that could (i) form the basis of an Environmental  Action against any Loan
Party  or any of its  Subsidiaries  or any of  their  properties  that  would be
reasonably  likely to have a  Material  Adverse  Effect  or (ii)  cause any such
property to be subject to any material restrictions on ownership, occupancy, use
or transferability under any Environmental Law.

     (s) Except as set forth on Schedule 4.01(s),  none of the properties of any
Loan Party or any of its  Subsidiaries is listed or to the knowledge of any Loan
Party  proposed for listing on the National  Priorities  List under CERCLA or on
the Comprehensive Environmental Response, Compensation and Liability Information
System maintained by the Environmental  Protection Agency or any analogous state
list of sites  requiring  investigation  or cleanup,  or is adjacent to any such
property;  and no  underground  storage  tanks,  as such term is  defined  in 42
U.S.C. 6991,  are  located  on any  property  of any  Loan  Party or any of its
Subsidiaries or, to the best of its knowledge, on any adjoining property.

     (t) Except as set forth on Schedule 4.01(t), neither any Loan Party nor any
of its  Subsidiaries has transported or arranged for the  transportation  of any
Hazardous  Materials to any  location  that is listed or proposed for listing on
the National Priorities List under CERCLA or on the Comprehensive  Environmental
Response,  Compensation  and  Liability  Information  System  maintained  by the
Environmental Protection Agency or any analogous state list; Hazardous Materials
have not been generated,  used, treated,  handled,  stored or disposed of on, or
released or transported to or from, any property of any Loan Party or any of its
Subsidiaries or, to the best of its knowledge, any adjoining property, except in
material compliance with all Environmental Laws and Environmental  Permits;  and
all other  wastes  generated  at any such  properties  have been  disposed of in
compliance with all Environmental Laws and Environmental Permits.

     (u) Each Loan Party and each of its Subsidiaries have filed, have caused to
be filed or have been  included in all tax returns  (federal,  state,  local and
foreign)  required to be filed or, in the case of income  taxes,  required to be
filed and where the failure to do so would cause the  imposition of a penalty or
interest, and in each case have paid all taxes shown thereon to be due, together
with applicable interest and penalties.

     (v) Neither any Loan Party nor any of its  Subsidiaries  is an  "investment
company," an "affiliated person" of an "investment  company", or a "promoter" or
"principal  underwriter" for an "investment  company," as such terms are defined
in the  Investment  Company Act of 1940,  as amended.  Neither the making of any
Advances nor the application of the proceeds  therefrom or repayment  thereof by
the Borrowers,  nor the  consummation of the transactions  contemplated  hereby,
will violate any  provision of such Act or any rule,  regulation or order of the
SEC thereunder.

     (w) Each Loan  Party is Solvent  after  giving  effect to the  transactions
contemplated hereby.

     (x) Each  Material  Contract  (i) has been duly  authorized,  executed  and
delivered by each Loan Party party  thereto  and, to the best of the  Borrowers'
knowledge,  by all other  parties  thereto,  is in full  force and effect and is
binding upon and  enforceable  against all Loan Parties party thereto and to the
best of the Borrowers'  knowledge,  all other parties thereto in accordance with
its terms, (ii) has not been otherwise amended or modified in such a manner that
could be  reasonably  expected to  materially  adversely  affect the interest or
rights of the Agents or the Lenders and (iii) there  exists no default under any
Material Contract by any Loan Party or, to the best of the Borrowers' knowledge,
any  other  party  thereto  that  could be  reasonably  expected  to  materially
adversely  affect the  interest  or rights of the  Agents or the  Lenders in any
manner.

     (y) Each Loan  Party  has  reviewed  the  areas  within  its  business  and
operations which could be adversely  affected by, and has developed or is in the
process of developing a program to address on a timely basis, "Year 2000 Issues"
(i.e., the risk that computer applications used by such Loan Party may be unable
to recognize or perform  properly date  sensitive  functions  involving  certain
dates  prior to, and any date  after,  December  31,  1999)  and,  based on such
review, such Loan Party reasonably believes that the "Year 2000 Issues" (and the
cost of remedying the same) will not have a Material Adverse Effect.


                                    ARTICLE V

                           COVENANTS OF THE BORROWERS

     SECTION 5.01.  Affirmative  Covenants.  So long as any Advance shall remain
unpaid,  any Letter of Credit shall be  outstanding or any Lender shall have any
Commitment hereunder, each Borrower will:

     (a) Compliance with Laws, Etc.  Comply,  and cause each of its Subsidiaries
to comply,  in all  material  respects,  with all  applicable  laws  (including,
without limitation,  Environmental  Laws),  rules,  regulations and orders, such
compliance  to  include,  without  limitation,  compliance  with  ERISA  and the
Racketeer  Influenced and Corrupt  Organizations  Chapter of the Organized Crime
Control Act of 1970.

     (b)  Payment  of Taxes,  Etc.  Pay and  discharge,  and  cause  each of its
Subsidiaries to pay and discharge,  before the same shall become delinquent, (i)
all taxes,  assessments  and  governmental  charges or levies imposed upon it or
upon its  property  and (ii) all lawful  claims  that,  if unpaid,  might by law
become a Lien  upon its  property,  which in any case  exceed  in the  aggregate
$750,000;  provided,  however,  that  neither  the  Borrowers  nor any of  their
respective  Subsidiaries  shall be  required to pay or  discharge  any such tax,
assessment,  charge,  levy or claim that is being contested in good faith and by
proper proceedings, diligently pursued, and as to which appropriate reserves are
being  maintained,  unless  and  until  any Lien  resulting  therefrom  securing
Indebtedness in excess of $750,000 in the aggregate attaches to its property and
becomes enforceable against its other creditors.

     (c)  Compliance  with  Environmental  Laws.  Comply,  and cause each of its
Subsidiaries  and all lessees and other  Persons  occupying  its  properties  to
comply, in all material respects,  with all Environmental Laws and Environmental
Permits  applicable  to its  operations  and  properties;  obtain  and renew all
Environmental Permits necessary for its operations and properties;  and conduct,
and  cause  each of its  Subsidiaries  to  conduct,  any  investigation,  study,
sampling and testing,  and  undertake  any cleanup,  removal,  remedial or other
action necessary to remove and clean up all Hazardous  Materials from any of its
properties,  in accordance  with the  requirements  of all  Environmental  Laws;
provided,  however,  that neither Borrower nor any of its Subsidiaries  shall be
required to undertake any such cleanup, removal, remedial or other action to the
extent  that its  obligation  to do so is being  contested  in good faith and by
proper proceedings, diligently pursued, and as to which appropriate reserves are
being maintained with respect to such circumstances.

     (d) Maintenance of Insurance.  Maintain, and cause each of its Subsidiaries
to maintain,  insurance with  responsible and reputable  insurance  companies or
associations  in such amounts and covering  such risks as is usually  carried by
companies  engaged in similar  businesses and owning  similar  properties in the
same general areas in which such Borrower or such Subsidiary operates.

     (e) Preservation of Corporate or Partnership  Existence,  Etc. Preserve and
maintain,  and cause each of its  Subsidiaries  to  preserve  and  maintain,  as
applicable,  its  corporate  or  partnership  existence,   rights  (charter  and
statutory) and franchises; provided, however, that the Subsidiaries of each such
Borrower may  consummate  any merger or  consolidation  permitted  under Section
5.02(c).

     (f) Visitation  Rights.  At any reasonable  time and from time to time upon
reasonable notice to a Borrower,  permit the Administrative  Agent or any of the
Lenders, or any agents or representatives thereof, to examine and make copies of
and abstracts from the records and books of account of, and visit the properties
of, such  Borrower  and any of its  Subsidiaries,  and to discuss  the  affairs,
finances and accounts of such Borrower and any of its  Subsidiaries  with any of
their  officers,  directors  or trustees  and with their  independent  certified
public  accountants;  provided that such Borrower and any such Subsidiary  shall
have the right to have a  representative  of such  Borrower and such  Subsidiary
present during any discussions with their independent public accountants.

     (g) Keeping of Books.  Keep,  and cause each of its  Subsidiaries  to keep,
proper books of record and account,  in which full and correct  entries shall be
made of all financial  transactions and the assets and business of such Borrower
and each such Subsidiary in accordance with GAAP.

     (h) Maintenance of Properties,  Etc. Maintain and preserve,  and cause each
of its  Subsidiaries  to maintain and preserve,  all of its properties  that are
used or  useful  in the  conduct  of its  business  in good  working  order  and
condition, ordinary wear and tear excepted.

     (i) Compliance  with Terms of  Leaseholds.  Make all payments and otherwise
perform in all  material  respects all  obligations  in respect of all leases of
real  property,  in each case  except to the extent  that the  failure to so act
could not reasonably be expected to have a Material Adverse Effect.

     (j)  Performance  of Related  Documents.  (i)  Perform  and  observe in all
material  respects all the terms and  provisions of each Related  Document to be
performed or observed by it,  maintain each such Related  Document in full force
and effect and enforce in all material  respects  each such Related  Document in
accordance with its terms, in each case except to the extent that the failure to
so act could not  reasonably  be expected  to  materially  adversely  affect the
interest or rights of the Administrative  Agent or the Lenders in any manner and
take  all  such  action  to  such  end as may be from  time  to time  reasonably
requested by the  Administrative  Agent and (ii) upon the reasonable  request of
the Administrative Agent, make to each other party to each such Related Document
such  demands and  requests  for  information  and reports or for action as such
Borrower is entitled to make under such Related Document,  and cause each of its
Subsidiaries to do so.

     (k)  Performance  of  Material  Contracts.  (i)  Perform and observe in all
material  respects all the terms and provisions of each Material  Contract to be
performed or observed by it, maintain each such Material  Contract in full force
and effect and enforce in all material  respects each such Material  Contract in
accordance with its terms, in each case except to the extent that the failure to
so act could not  reasonably  be expected  to  materially  adversely  affect the
interest or rights of the Administrative  Agent or the Lenders in any manner and
take  all  such  action  to  such  end as may be from  time  to time  reasonably
requested by the  Administrative  Agent and (ii) upon the reasonable  request of
the  Administrative  Agent,  make to each  other  party  to each  such  Material
Contract such demands and requests for  information and reports or for action as
such Borrower is entitled to make under such Material  Contract,  and cause each
of its Subsidiaries to do so.

     (l)  Transactions  with  Affiliates.   Conduct,   and  cause  each  of  its
Subsidiaries to conduct,  all  transactions  otherwise  permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to such Borrower or such  Subsidiary than it would obtain in a
comparable  arm's-length  transaction with a Person not an Affiliate;  provided,
however, that the Borrowers and their respective  Subsidiaries may make payments
required under the Tax Sharing Agreement and the foregoing limitations shall not
apply to transactions between or among Loan Parties.

     (m) Additional  Loan Parties.  Cause any  Subsidiary  (other than a Foreign
Subsidiary)  of either GNC or GNI that has,  either as at the end of any Rolling
Period or, in connection with any Investments  permitted by Section  5.02(e)(i),
after giving effect to such Investment on a pro forma basis as at the end of the
immediately  prior  Rolling  Period,  EBITDA  equal to or greater than 5% of the
Consolidated EBITDA of GNCI and its Subsidiaries,  to execute and deliver to the
Administrative Agent as promptly as practicable (A) a guaranty  substantially in
the form of Exhibit E  hereto,  and (B) such other  documents,  certificates  or
instruments in connection  with this Agreement as the  Administrative  Agent may
reasonably request, in each case in form and substance  reasonably  satisfactory
to the  Administrative  Agent,  and to take all such other  actions  that may be
necessary  or that the  Administrative  Agent may deem  reasonably  desirable to
enable the Administrative  Agent to exercise and enforce its rights and remedies
thereunder;  provided,  however,  that with respect to any Person that becomes a
Subsidiary  (other than a Foreign  Subsidiary) in connection with a tender offer
which is followed by a back-end  merger  pursuant to a signed merger  agreement,
the Borrowers shall cause such Subsidiary to comply with this Section 5.01(m) on
the date that the back-end merger becomes effective.

     SECTION  5.02.  Negative  Covenants.  So long as any Advance  shall  remain
unpaid,  any Letter of Credit shall be  outstanding or any Lender shall have any
Commitment hereunder, neither Borrower will:

     (a) Liens,  Etc. On and after the  Restriction  Termination  Date,  create,
incur,  assume or suffer to exist, or permit any of its  Subsidiaries to create,
incur,  assume or suffer to  exist,  any Lien on or with  respect  to any of its
properties of any character  (including,  without limitation,  accounts) whether
now  owned  or  hereafter  acquired,  or  sign or  file,  or  permit  any of its
Subsidiaries  to  sign  or  file,  under  the  Uniform  Commercial  Code  of any
jurisdiction,  a  financing  statement  that names such  Borrower  or any of its
Subsidiaries as debtor,  or sign, or permit any of its Subsidiaries to sign, any
security  agreement  authorizing  any  secured  party  thereunder  to file  such
financing statement, or assign, or permit any of its Subsidiaries to assign, any
accounts  or  other  right  to  receive  income,  excluding,  however,  from the
operation of the foregoing restrictions the following:

     (i) Permitted Liens;

     (ii) purchase  money Liens upon or in one or more items of personal or real
property  acquired or held by such  Borrower or any of its  Subsidiaries  in the
ordinary  course of business to secure the purchase price of such property or to
secure Indebtedness incurred solely for the purpose of financing the acquisition
of any such property to be subject to such Liens,  or Liens existing on any such
property at the time of acquisition, or extensions,  renewals or replacements of
any of the foregoing for the same or a lesser amount; provided, however, that no
such Lien shall  extend to or cover any property  other than the property  being
acquired, and no such extension, renewal or replacement shall extend to or cover
any  property not  theretofore  subject to the Lien being  extended,  renewed or
replaced; and provided further that any such Indebtedness shall not otherwise be
prohibited by the terms of the Loan Documents;

     (iii) Liens arising under Capitalized Leases;

     (iv)  Liens  on  property  of a  Foreign  Subsidiary,  which  Liens  secure
Indebtedness permitted by Section 5.02(b)(iv)(A);

     (v)  Liens  on the  Borrowers'  Franchisee  Notes  to  secure  Indebtedness
permitted by Section  5.02(b)(i)(C)  or in  connection  with sales  permitted by
Section 5.02(d)(iii); and

     (vi) Liens securing Indebtedness permitted by Section 5.02(b)(vi).

     (b) Indebtedness.  Create,  incur, assume or suffer to exist, or permit any
of  its  Subsidiaries  to  create,   incur,  assume  or  suffer  to  exist,  any
Indebtedness other than:

     (i) in the case of the Borrowers,

     (A) unsecured  Indebtedness,  if before and immediately after giving effect
to the creation, incurrence or assumption of such Indebtedness:

     (x) GNCI is in compliance, before and after giving effect to the incurrence
of such  Indebtedness,  on a pro forma basis, with the Adjusted Maximum Leverage
Ratio set forth in Section 5.04(b);

     (y) the total  amount of  Indebtedness  incurred  pursuant to this  Section
5.02(b)(i)(A),  Section  5.02(b)(iv)(B)  and Section 7(c) of the Parent Guaranty
shall not exceed 110% of an amount equal to  $200,000,000  less  Advances at any
one time outstanding (including, without limitation, the aggregate amount of all
outstanding  and other undrawn  commitments to provide  Indebtedness to GNCI and
its Subsidiaries pursuant to this Section 5.02(b)(i)(A),  Section 5.02(b)(iv)(B)
hereof and Section 7(c) of the Parent Guaranty); and

     (z) no Default  shall have  occurred and be  continuing at the time of such
incurrence of Indebtedness;

     provided that prior to the  creation,  incurrence or assumption of any such
Indebtedness,  the Administrative Agent shall have received a certificate of the
chief  financial  officer of GNCI  showing,  in  sufficient  detail as to permit
computation  thereof,  compliance with the Adjusted  Maximum  Leverage Ratio set
forth in Section  5.04(b)  as at the end of the  immediately  preceding  Rolling
Period and compliance with the limitation on  Indebtedness  set forth in Section
5.02(b)(i)(A)(y);  and  provided  further that any such  Indebtedness  shall (1)
contain covenants that are no more restrictive than those covenants set forth in
this  Agreement  and the other  Loan  Documents  and (2) not have any  regularly
scheduled amortization payments due on or before September 30, 2002;

     (B) Indebtedness in respect of Hedge  Agreements  designed to hedge against
fluctuations in interest rates or foreign exchange rates and not for speculative
purposes;

     (C)  Indebtedness to effect a securitization  of the Borrowers'  Franchisee
Notes,  provided that as at the time of the incurrence of such Indebtedness,  no
Default shall have occurred or be continuing;

     (D)  Indebtedness in satisfaction or substitution for premiums on insurance
policies  maintained  by the Borrowers  and their  Subsidiaries  in the ordinary
course of business of the Borrowers and their Subsidiaries;

     (ii) in the case of GNI,

     (A) Indebtedness in respect of the PIK Preferred Stock; and

     (B) Intercompany Subordinated Debt from time to time, and

     (iii)  in  the  case  of any of its  Subsidiaries  referred  to in  Section
5.02(e)(i) or (ix) or any other Subsidiaries referred to in Sections 5.02(e)(iv)
or (v) or any Affiliate referred to in Section 5.02(e)(vi), in each case, to the
extent permitted by those Sections,  Indebtedness  owed to such Borrower or to a
wholly-owned United States Subsidiary of such Borrower;

     (iv) in the case of Foreign Subsidiaries, any:

     (A)  Indebtedness  without  recourse  to  GNCI,  any  Borrower,  any  other
Subsidiary of any Borrower or any Affiliate thereof;

     (B) any other unsecured Indebtedness if before and immediately after giving
effect to the creation, incurrence or assumption thereof:

     (x) GNCI is in compliance, before and after giving effect to the incurrence
of such  Indebtedness,  on a pro forma basis, with the Adjusted Maximum Leverage
Ratio set forth in Section 5.04(b);

     (y)  the  total  amount  of  Indebtedness   incurred  pursuant  to  Section
5.02(b)(i)(A),  this  Section  5.02(b)(iv)(B)  and  Section  7(c) of the  Parent
Guaranty  shall not exceed  110% of an amount  equal to  $200,000,000  (or other
equivalent  thereof in any Foreign  Currency,  determined  as of the date of the
incurrence  of such  Indebtedness)  less  Advances  at any one time  outstanding
(including,  without  limitation,  the aggregate  amount of all  outstanding and
other undrawn  commitments to provide  Indebtedness to GNCI and its Subsidiaries
pursuant to Section  5.02(b)(i)(A),  Section  5.02(b)(iv)(B)  hereof and Section
7(c) of the Parent Guaranty);

     (z) no Default  shall have  occurred and be  continuing at the time of such
incurrence of Indebtedness;

     provided that prior to the  creation,  incurrence or assumption of any such
Indebtedness,  the Administrative Agent shall have received a certificate of the
chief  financial  officer of GNCI  showing,  in  sufficient  detail as to permit
computation  thereof,  compliance with the Adjusted  Maximum  Leverage Ratio set
forth in Section  5.04(b)  as at the end of the  immediately  preceding  Rolling
Period and compliance with the limitation on  Indebtedness  set forth in Section
5.02(b)(iv)(B)(y);

     (v) in the case of the Borrowers and any of their Subsidiaries,

     (A) unsecured  Indebtedness incurred in the ordinary course of business for
the deferred  purchase price of property or services,  maturing  within one year
from the date created;

     (B)  Indebtedness  secured by Liens  permitted by  Section 5.02(a)(ii)  and
5.02(a)(iii) not to exceed in the aggregate $55,000,000 at any time outstanding;

     (C)  Indebtedness  under the Fourth Amended and Restated  Credit  Agreement
dated as of March 31, 1997, as amended from time to time,  among GNI and GNC, as
borrowers,  GNCI and the  Restatement  Lenders and Agents named  therein,  in an
aggregate amount not to exceed $700,000,000 at any one time outstanding; and

     (D) Indebtedness under the Loan Documents;

     (vi)  in  the  case  of  the  Borrowers,  any  wholly-owned  United  States
Subsidiary of the  Borrowers or Gustine,  in each case, to purchase and renovate
the building located at 300 Sixth Avenue, Pittsburgh, Pennsylvania, Indebtedness
in a principal  amount,  together with any  Investments  permitted under Section
5.02(e)(x),  not to  exceed  in  the  aggregate  $33,000,000  at  any  one  time
outstanding; and

     (vii)  indorsement of negotiable  instruments  for deposit or collection or
similar transactions in the ordinary course of business.

     (c) Mergers, Etc. Merge with or into or consolidate with or into any Person
or permit any Person to merge with or into it, or  transfer or dispose of all or
substantially  all of its property and assets, or permit any of its Subsidiaries
to do any of the  foregoing,  except  that (i) any  wholly-owned  United  States
Subsidiary of such Borrower may merge with or into or consolidate  with or into,
or transfer  all or  substantially  all of its property and assets to, any other
wholly-owned  United  States  Subsidiary  of such  Borrower  or  such  Borrower,
(ii) GNI may merge with or into or consolidate  with or into, or transfer all or
substantially  all of its property and assets to GNCI and  (iii) any  Loan Party
may merge with or into a  wholly-owned  United  States  Subsidiary  of such Loan
Party that (A) is  incorporated  under the laws of the State of Delaware and (B)
has no material  assets or  liabilities,  for the sole  purpose of changing  the
state of  incorporation  of such Loan Party if the surviving  corporation  shall
expressly  assume the  liabilities of such Loan Party under the Loan  Documents;
provided,  however, that, in each case, immediately after giving effect thereto,
no event shall occur and be continuing that constitutes a Default.

     (d) Sales, Etc. of Assets.  Sell, lease,  transfer or otherwise dispose of,
or permit any of its Subsidiaries to sell, lease,  transfer or otherwise dispose
of, any assets, except:

     (i)  sales  of  inventory   and   equipment  by  the  Borrowers  and  their
Subsidiaries in the ordinary course of its business;

     (ii)  dispositions  of property and assets by  wholly-owned  United  States
Subsidiaries in a transaction permitted by Section 5.02(c);

     (iii) sales of Franchisee Notes;

     (iv) other  dispositions  of property and assets by the Borrowers and their
Subsidiaries  for cash and fair value that do not exceed an aggregate  amount of
$22,000,000  in any single  transaction  or series of related  transactions  or,
since March 31, 1997, $82,500,000 in the aggregate;

     (v) Permitted Franchise Asset Sales;

     (vi)   transfers  of  property  and  assets  by  the  Borrowers  and  their
Subsidiaries  to any other United States Loan Party (other than GNCI);  provided
that as at the time of such  transfers,  no Default  shall have  occurred  or be
continuing;

     (vii)  transfers of property and assets by any  Subsidiary of the Borrowers
that is organized,  and with substantially all of its assets located, outside of
the United States to any Foreign Subsidiary;

     (viii) the sale or lease of the Borrowers' headquarters building located at
300 Sixth Avenue, Pittsburgh, Pennsylvania.

     (e)  Investments  in Other  Persons.  Make or hold,  or  permit  any of its
Subsidiaries to make or hold, any Investment in any Person other than:

     (i)  Investments  by the  Borrowers  and their  wholly-owned  United States
Subsidiaries in their wholly-owned United States  Subsidiaries,  so long as such
Investments  are made in the Health Care Business and in  incidental  businesses
acquired in connection therewith;

     (ii)  Investments  by the  Borrowers  and  their  Subsidiaries  in (A) Cash
Equivalents and (B) Hedge Agreements;

     (iii)  Investments  by the Borrowers and their  Subsidiaries  in Franchisee
Notes;

     (iv)  Investments  by the  Borrowers and their  wholly-owned  United States
Subsidiaries  in  Foreign  Subsidiaries  in an  aggregate  amount  not to exceed
$330,000,000 (or the equivalent  thereof in any Foreign Currency,  determined as
of the date such Investment is made)  outstanding at any one time (including the
aggregate   amount  of  all  outstanding   and  other  undrawn   commitments  of
Indebtedness of such Foreign Subsidiaries permitted by Sections 5.02(b)(iii) and
5.02(b)(iv)(B)),  so long as  such  Investments  are  made  in the  Health  Care
Business and in incidental businesses acquired in connection therewith;

     (v)  Investments by the Borrowers in  non-wholly-owned  Subsidiaries  in an
aggregate amount not to exceed  $110,000,000  (or the equivalent  thereof in any
Foreign Currency, determined as of the date such Investment is made) outstanding
at any one time (including the aggregate amount of all outstanding  Indebtedness
of such non-wholly-owned Subsidiary permitted by Section 5.02(b)(iii)),  so long
as such  Investments  are made in the Health  Care  Business  and in  incidental
businesses acquired in connection therewith;

     (vi)  Investments by the Borrowers in Affiliates in an aggregate amount not
to exceed  $55,000,000  (or the  equivalent  thereof  in any  Foreign  Currency,
determined as of the date such  Investment is made)  outstanding at any one time
(including  the  aggregate  amount  of  all  outstanding  Indebtedness  of  such
Affiliate  permitted by Section  5.02(b)(iii)),  so long as such Investments are
made in the Health  Care  Business  and in  incidental  businesses  acquired  in
connection  therewith;  provided,  that if, at any time,  the  Borrowers  make a
single or a series of  related  Investments  in any  Affiliate  in an  aggregate
amount equal to or greater than  $33,000,000  (or the equivalent  thereof in any
Foreign  Currency,  determined  as of the date such  Investment  is made),  such
Investment  shall be for the  acquisition of at least 20% of the Voting Stock of
such Affiliate;

     (vii) other  Investments  in an aggregate  amount  invested and at any time
outstanding not to exceed  $5,500,000 (or the equivalent  thereof in any Foreign
Currency,  determined as of the date such  Investment is made),  so long as such
Investments  are made in the Health Care Business and in  incidental  businesses
acquired in connection therewith;

     (viii)  Investments as of March 31, 1997 in Gymee's,  Inc.,  Nutri-Science,
Inc. and WLC Acquisition Corp.;

     (ix)   Investments   by  the   Borrowers  in  any  Person  that  becomes  a
non-wholly-owned  United States  Subsidiary  in  connection  with a tender offer
involving a back-end merger pursuant to a signed merger agreement, provided that
(A) pursuant to such tender offer,  the Borrowers  shall have purchased at least
90% of such Person's  Voting Stock,  (B) such merger shall have been approved by
such Person's board of directors and (C) such Person shall become a wholly-owned
United States Subsidiary within six months following the initial Investment; and

     (x)  Investments by the Borrowers (A) as a limited partner in Gustine Sixth
Avenue  Associates Ltd.  ("Gustine") and (B) in loans to such  partnership in an
aggregate principal amount of such Investments  described in clauses (A) and (B)
above not in excess of  $30,000,000  in each case to purchase  and  renovate the
building located at 300 Sixth Avenue, Pittsburgh, Pennsylvania;

     provided that, in each case,  before and immediately after giving effect to
any Investment  otherwise  permitted by Sections  5.02(e)(i),  (iv),  (v), (vi),
(vii), (ix) and (x), no Default shall have occurred and be continuing; and

     (xi)  Investments  by the  Borrowers  and  their  Subsidiaries  in loans or
advances to employees in the ordinary  course of business of the  Borrowers  and
their  Subsidiaries  in an  aggregate  amount not to exceed  $5,500,000  (or the
equivalent  thereof  in any  Foreign  Currency,  determined  as of the date such
Investment is made) at any time outstanding;

     provided,  however,  that  in  each  case no  Investment  made in a  single
transaction or series of related  transactions shall exceed $110,000,000 (or the
equivalent  thereof  in any  Foreign  Currency,  determined  as of the date such
Investment is made).

     (f) Dividends, Etc. Declare or pay any dividends, purchase, redeem, retire,
defease or otherwise acquire for value any of its capital stock or any warrants,
rights or options to acquire such capital stock,  now or hereafter  outstanding,
return any capital to its stockholders as such, make any distribution of assets,
capital  stock,  warrants,  rights,  options,  obligations  or securities to its
stockholders as such, or issue or sell any capital stock or any warrants, rights
or options to acquire such capital stock,  or permit any of its  Subsidiaries to
purchase,  redeem,  retire,  defease or otherwise  acquire for value any capital
stock of such  Borrower  or any  warrants,  rights or options  to  acquire  such
capital  stock  or to  issue  or sell  any  capital  stock  or  certificates  of
beneficial  ownership,  as  applicable,  or any  warrants,  rights or options to
acquire  such  capital  stock,  except  the  Borrowers  and  their  wholly-owned
Subsidiaries may:

     (i) in the case of GNI,  declare and pay  dividends  in cash to GNCI to (1)
discharge  the  obligations  of GNI and its  Subsidiaries  under the Tax Sharing
Agreement,  (2) pay  administrative  costs in the ordinary course of business of
GNCI, (3) provide GNCI with funds to repurchase its outstanding capital stock or
pay dividends to its  shareholders  in an aggregate  amount since March 31, 1997
not to  exceed  $250,000,000,  plus an  amount  equal  to 50% of the  cumulative
Consolidated net income of GNCI and its Subsidiaries  from February 1, 1998 plus
amounts  used by GNCI  prior to April 30,  1998 to  repurchase  its  outstanding
capital stock or to pay dividends to its shareholders;

     (ii) purchase, redeem or defease the PIK Preferred Stock;

     (iii) in the case of GNI, issue or sell any capital stock to GNCI;

     (iv) in the case of any  Subsidiary,  declare and pay cash dividends to the
Borrowers or to a wholly-owned United States Subsidiary of GNI; and

     (v) declare and pay  dividends  to GNCI to provide  GNCI with funds to meet
its interest obligations under the unsecured  Indebtedness,  if any, incurred by
GNCI pursuant to Section 7(c) of the Parent Guaranty.

     provided that in each case, immediately before and immediately after giving
effect thereto, no Default shall have occurred and be continuing.

     (g) Change in Nature of Business. Engage, or permit any of its Subsidiaries
to engage,  in a  business  other than the Health  Care  Business,  except  such
business as may be acquired by the Loan Parties in connection with an Investment
permitted by Section  5.02(e)(i),  (iv),  (v),  (vi),  (vii) or (ix) as shall be
incidental to any such Investment.

     (h) Charter  Amendments.  Amend, or permit any of its Subsidiaries to amend
(i) its   certificate  of  incorporation  or  certificate  of  partnership,   as
applicable, or (ii) its bylaws if such amendment could reasonably be expected to
adversely  affect  the  interest  or rights of the  Administrative  Agent or the
Lenders in any manner.

     (i) Accounting  Changes.  Make or permit, or permit any of its Subsidiaries
to make or permit,  any change in  accounting  policies or  reporting  practices
(including,  without  limitation,  any  change in its  Fiscal  Year),  except as
required or permitted by generally accepted  accounting  principles,  securities
laws or the rules of any stock  exchange upon which GNCI's  capital stock may be
listed;  provided that, if GNCI or any of its Subsidiaries makes any such change
in accounting  policies or reporting  requirements,  the Borrowers shall provide
reconciliation  reports  to the  Administrative  Agent,  in form  and  substance
satisfactory  to the  Administrative  Agent and if such change  would impact the
calculation of the financial  covenants contained in Section 5.04, the Borrowers
shall  provide to the  Lenders a revised  calculation  of each of the  financial
covenants  impacted by such change for each Fiscal Quarter from the date of such
change.

     (j)  Prepayments,  Etc.  of  Indebtedness.  (i) Prepay,  redeem,  purchase,
defease or otherwise  satisfy  prior to the  scheduled  maturity  thereof in any
manner,  or make any payment in  violation  of any  subordination  terms of, any
Indebtedness,  other than (1) the prepayment of the Advances in accordance  with
the terms of this Agreement,  (2) the prepayment of any Indebtedness  payable to
any Borrower or to a  wholly-owned  United States  Subsidiary of such  Borrower,
(3) the prepayment of any Indebtedness  permitted by  Section 5.02(b)(iv)(A)  or
5.02(b)(v)(B), or (4) the prepayment of any amounts under the Fourth Amended and
Restated Credit Agreement,  (ii) amend,  modify or change in any manner any term
or condition of any PIK Preferred Stock or any Indebtedness permitted by Section
5.02(b)(i)(A),  or permit any of its Subsidiaries to do any of the foregoing, in
each case in any manner materially  adverse to the  Administrative  Agent or the
Lenders;  provided  that  if the  Maximum  Leverage  Ratio  as at the end of the
immediately preceding Rolling Period is less than 1.00 : 1.00, the Borrowers and
their Subsidiaries shall be permitted to prepay,  redeem,  purchase,  defease or
otherwise satisfy prior to the scheduled maturity thereof any other Indebtedness
permitted  by Section  5.02(b) in an amount  since  March 31, 1997 not to exceed
$27,500,000.

     (k) Amendment,  Etc. of Related Documents.  Cancel or terminate any Related
Document or consent to or accept any cancellation or termination thereof, amend,
modify or change in any  material  respect any term or  condition of any Related
Document  or  give  any  consent,   waiver  or  approval  thereunder  (it  being
acknowledged  by such  Borrower that the financial and payment terms of any such
Related Document are material terms and conditions  thereof),  waive any default
under or any breach of any term or condition of any Related  Document,  agree in
any  manner  to any  other  amendment,  modification  or  change  of any term or
condition of any Related  Document or take any other action in  connection  with
any Related  Document,  in each case that could reasonably be expected to impair
the value of the interest or rights of such  Borrower  thereunder  or that could
reasonably  be  expected  to impair the  interest or rights of the Agents or the
Lenders  in any  manner,  or  permit  any of its  Subsidiaries  to do any of the
foregoing;  provided  that the Tax  Sharing  Agreement  may be amended to add as
parties thereto any wholly-owned Subsidiaries of the Borrowers on terms that are
substantially identical to the terms applicable to the Borrowers.

     (l) Amendment, Etc. of Material Contracts. Cancel or terminate any Material
Contract or consent to or accept any cancellation or termination thereof, amend,
modify or otherwise  change in any material respect any term or condition of any
Material Contract or give any consent, waiver or approval thereunder,  waive any
default  under or any breach of any term or condition of any Material  Contract,
agree in any manner to any other  amendment,  modification or change of any term
or  condition of any  Material  Contract or take any other action in  connection
with any Material  Contract,  in each case that could  reasonably be expected to
materially  impair  the  value  of the  interest  or  rights  of  such  Borrower
thereunder  or that could  reasonably  be  expected  to have a Material  Adverse
Effect, or permit any of its Subsidiaries to do any of the foregoing.

     (m) Negative Pledge. From and after the Restriction Termination Date, enter
into or suffer to exist,  or permit  any of its  Subsidiaries  to enter  into or
suffer to exist,  any  agreement  prohibiting  or  conditioning  the creation or
assumption of any Lien upon any of its property or assets other than in favor of
the  Administrative  Agent and the Lenders or in  connection  with  Indebtedness
permitted by Section  5.02(b)(iv)(A)  to the extent such Lien extends  solely to
the property or assets of the Foreign Subsidiary incurring such Indebtedness.

     (n)  Partnerships.  Become a general  partner  in any  general  or  limited
partnership, or permit any of its Subsidiaries to do so.

     (o) Release of Subsidiary Guarantors. Release any Subsidiary Guarantor from
any of its  Obligations,  except  in  connection  with a sale of the  assets  or
capital  stock of such  Subsidiary  Guarantor in a transaction  permitted  under
Section 5.02(d).

     SECTION 5.03.  Reporting  Requirements  to Lenders.  So long as any Advance
shall remain  unpaid,  any Letter of Credit shall be  outstanding  or any Lender
shall have any Commitment  hereunder,  GNCI (except as noted below) will furnish
to the Lenders:

     (a)  Default  Notice.  As soon as  possible  and in any  event  within  two
Business Days after any Loan Party has knowledge of the  occurrence of a Default
continuing  on the date of such  statement,  a statement of the chief  financial
officer of GNI setting  forth the nature of such Default and the action that the
Borrowers have taken and proposes to take with respect thereto.

     (b) Quarterly  Financials.  As soon as available and in any event within 45
days after the end of each of the first  three  Fiscal  Quarters  of each Fiscal
Year of GNCI, Consolidated balance sheets of GNCI and its Subsidiaries as of the
end of such Fiscal Quarter and Consolidated  statements of income, cash flow of,
and changes in stockholders'  equity of GNCI and its Subsidiaries for the period
commencing at the end of the previous  Fiscal Quarter and ending with the end of
such Fiscal Quarter,  setting forth in each case in comparative form the year to
date figures for such Fiscal Quarter,  the  corresponding  Fiscal Quarter in the
preceding Fiscal Year and the year to date figures for the corresponding  Fiscal
Quarter  in the  preceding  Fiscal  Year,  all in  reasonable  detail  and  duly
certified  (subject to year-end audit adjustments and to the absence of footnote
disclosure)  by the chief  financial  officer of GNCI as having been prepared in
accordance  with GAAP,  together with (i) a certificate  of the chief  financial
officer of GNI stating that no Default has occurred and is  continuing  or, if a
Default has occurred and is continuing, a statement as to the nature thereof and
the action that GNI has taken and proposes to take with respect thereto,  (ii) a
schedule in form  satisfactory to the  Administrative  Agent of the computations
used by GNCI in determining compliance as of the end of such Fiscal Quarter with
the covenants contained in Sections 5.02 and 5.04 (other than 5.04(b)) and (iii)
a management and financial report,  including a schedule of Funded Indebtedness,
a  report  of same  store  sales  for  such  Fiscal  Quarter,  and a  management
discussion of results from operations for such Fiscal Quarter.

     (c) Annual Financials. As soon as available and in any event within 90 days
after the end of each Fiscal Year of GNCI, a copy of the annual audit report for
such Fiscal Year of GNCI and its Subsidiaries,  including  therein  Consolidated
balance  sheets of GNCI and its  Subsidiaries  as of the end of such Fiscal Year
and Consolidated  statements of income,  cash flow, and changes in stockholders'
equity  of GNCI  and  its  Subsidiaries  for  such  Fiscal  Year,  in each  case
accompanied  by an opinion  reasonably  acceptable  to the  Required  Lenders of
Deloitte & Touche or other independent public accountants of recognized standing
reasonably  acceptable to the Required Lenders,  together with (i) a certificate
of the chief  financial  officer of GNI stating that no Default has occurred and
is continuing or, if a Default has occurred and is continuing, a statement as to
the nature  thereof and the action that GNI has taken and  proposes to take with
respect  thereto,  (ii) a schedule  in form and  substance  satisfactory  to the
Administrative Agent of the computations used by GNCI in determining,  as of the
end of such Fiscal Year,  compliance  with the  covenants  contained in Sections
5.02 and 5.04 (other than 5.04(b)) and (iii) a management and financial  report,
including  a schedule of Funded  Indebtedness,  a report of same store sales for
such Fiscal Year,  and a management  discussion of results from  operations  for
such Fiscal Year.

     (d)  Accountants'  Reports.  Promptly upon receipt  thereof,  copies of all
reports submitted to GNCI or any of its Subsidiaries by Deloitte & Touche or any
other  independent  public  accountants  of  GNCI  or  any  such  Subsidiary  in
connection with each annual, interim or special audit of its financial statement
made by  such  accountants,  including  the  comment  letter  submitted  by such
accountants  to  management of GNCI or any such  Subsidiary  in connection  with
their annual audit.

     (e) ERISA Events.  Promptly and in any event within ten days after any Loan
Party or any of its ERISA  Affiliates knows or has reason to know that any ERISA
Event  with  respect  to any  Loan  Party  or any of its  ERISA  Affiliates  has
occurred,  a statement of the chief  financial  officer of GNCI  describing such
ERISA Event and the action, if any, that such Loan Party or such ERISA Affiliate
has taken and proposes to take with respect thereto.

     (f) Plan Annual Reports. Promptly and in any event within 30 days after the
filing  thereof with the Internal  Revenue  Service,  copies of each  Schedule B
(Actuarial  Information) to the annual report (form 5500 Series) with respect to
each Plan of each Loan Party or any of its ERISA Affiliates.

     (g)  Multiemployer  Plan Notices.  Promptly and in any event within 10 days
after receipt thereof by any Loan Party or any of its ERISA  Affiliates from the
sponsor  of a  Multiemployer  Plan  of any  Loan  Party  or  any  of  its  ERISA
Affiliates,  copies of each notice  concerning  (i) the imposition of Withdrawal
Liability  by  any  such   Multiemployer   Plan,  (ii)  the   reorganization  or
termination,  within the meaning of Title IV of ERISA, of any such Multiemployer
Plan or (iii) the amount of liability incurred, or that may be incurred, by such
Loan Party or any of its ERISA Affiliates in connection with any event described
in clause (i) or (ii) above.

     (h)  Litigation.  Promptly after the  commencement  thereof,  notice of all
actions, suits, investigations (including, without limitation, any investigation
from any regulatory agency and any reports  resulting from such  investigation),
litigation  and  proceedings  before  any  court  or  governmental   department,
commission,  board,  bureau,  agency or  instrumentality,  domestic  or foreign,
affecting  any Loan Party or any of its  Subsidiaries  of the type  described in
Section 4.01(i).

     (i)  Securities  Reports.  Promptly  after the  sending or filing  thereof,
copies of all proxy statements,  financial  statements and reports that any Loan
Party or any of its Subsidiaries  sends to its  stockholders,  and copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its  Subsidiaries  files  with the SEC or any  governmental
authority  that may be  substituted  therefor,  or with any national  securities
exchange.

     (j)  Revenue  Agent  Reports.  Within  30 days  after  receipt,  copies  or
summaries of all Revenue Agent Reports  (Internal  Revenue Service form 886), or
other written proposals of the Internal Revenue Service, that propose, determine
or  otherwise  set forth  increases to the federal  income tax  liability of the
affiliated  group  (within the  meaning of Section  1504(a)(1)  of the  Internal
Revenue Code) of which such Borrower is a member aggregating $3,000,000 or more.

     (k) Agreement Notices. Upon request by the Administrative Agent, such other
information  and  reports  regarding  the  Related  Documents  and the  Material
Contracts as the Administrative Agent may reasonably request.

     (l) Environmental Conditions. Promptly after the occurrence thereof, notice
of any  condition or  occurrence on any property of any Loan Party or any of its
Subsidiaries  that results in a material  noncompliance by any Loan Party or any
of its Subsidiaries with any Environmental Law or Environmental  Permit or could
(i) form the basis of an  Environmental  Action against any Loan Party or any of
its  Subsidiaries  or such property that could  reasonably be expected to have a
Material  Adverse  Effect or (ii) cause any such  property  to be subject to any
restrictions  on  ownership,   occupancy,   use  or  transferability  under  any
Environmental Law.

     (m) Plan  Terminations.  Promptly and in any event within two Business Days
after receipt thereof by any Loan Party or any of its ERISA  Affiliates,  copies
of each notice from the PBGC stating its  intention to terminate any Plan of any
Loan  Party or any of its ERISA  Affiliates  or to have a trustee  appointed  to
administer any such Plan.

     (n) Environmental  Reports.  Promptly after the receipt thereof,  copies of
all reports  furnished to GNCI or any of its  Subsidiaries  (including,  without
limitation,  environmental  site assessment  reports)  prepared by environmental
consulting  firms in respect of any properties owned or leased by GNCI or any of
its Subsidiaries.

     (o) Other Information. Such other information with respect to the business,
condition  (financial  or  otherwise),  operations,  performance,  properties or
prospects of any Loan Party or any of its Subsidiaries as any Lender through the
Administrative Agent may from time to time reasonably request.

     SECTION  5.04.  Financial  Covenants.  So long as any Advance  shall remain
unpaid,  any  Letter of Credit  is  outstanding  or any  Lender  shall  have any
Commitment hereunder, GNCI will:

     (a) Maximum Leverage Ratio. Maintain on a Consolidated basis for itself and
its  Subsidiaries  a Maximum  Leverage Ratio for each Rolling Period of not more
than the amount set forth below for each Fiscal Year set forth below:

                                                     Maximum
                               Fiscal Year           Leverage Ratio

                           Fiscal Year 1998          3.75 : 1.00
                           Fiscal Year 1999          3.50 : 1.00
                           Fiscal Year 2000          3.00 : 1.00
                           Fiscal Year 2001          2.50 : 1.00
                           Fiscal Year 2002          2.50 : 1.00

     (b) Adjusted Maximum Leverage Ratio.  Maintain on a Consolidated  basis for
itself and its  Subsidiaries an Adjusted Maximum Leverage Ratio for each Rolling
Period of not more than the  amount  set forth  below for each  Fiscal  Year set
forth below:

                                                    Adjusted Maximum
                               Fiscal Year           Leverage Ratio    

                           Fiscal Year 1998          3.75 : 1.00
                           Fiscal Year 1999          3.50 : 1.00
                           Fiscal Year 2000          3.00 : 1.00
                           Fiscal Year 2001          2.50 : 1.00
                           Fiscal Year 2002          2.50 : 1.00

     (c) Fixed  Charge  Coverage  Ratio.  Maintain on a  Consolidated  basis for
itself and its  Subsidiaries  a Fixed  Charge  Coverage  Ratio for each  Rolling
Period of not less than the  amount  set forth  below for each  Fiscal  Year set
forth below:

                                                    Fixed Charge
                               Fiscal Year          Coverage Ratio

                           Fiscal Year 1998          1.25 : 1.00
                           Fiscal Year 1999          1.25 : 1.00
                           Fiscal Year 2000          1.35 : 1.00
                           Fiscal Year 2001          1.35 : 1.00
                           Fiscal Year 2002          1.35 : 1.00

     (d) Minimum Net Worth.  Maintain at all times on a  Consolidated  basis for
itself and its  Subsidiaries  an excess of total  assets less total  liabilities
less (w) 25% of the total amount of Net Cash Proceeds  received by GNCI from any
sale or  issuance  of any capital  stock or any  warrants,  rights or options to
acquire capital stock other than Net Cash Proceeds  received by GNCI since April
30, 1998 from the exercise of management  stock options  and/or from the sale of
common stock to  management  directors or employees  pursuant to stock  purchase
plans of GNCI or its Affiliates  plus (x) an amount up to  $250,000,000 of funds
used by GNCI since April 30, 1998 to repurchase its outstanding capital stock or
to pay  dividends to its  shareholders  plus amounts used by GNCI prior to April
30, 1998 to repurchase its outstanding  capital stock or to pay dividends to its
shareholders  plus (y) the total  amount of  non-cash  charges  relating  to (i)
pensions,  (ii) stock options,  (iii) stock appreciation  rights, and (iv) other
equity-based  incentive plans, plus or minus (z) foreign currency  translations,
of not less than the  amount  set forth  below  for each  Fiscal  Year set forth
below:

                                                       Minimum
                               Fiscal Year            Net Worth

                           Fiscal Year 1998          $270,000,000
                           Fiscal Year 1999          $336,000,000
                           Fiscal Year 2000          $405,000,000
                           Fiscal Year 2001          $477,000,000
                           Fiscal Year 2002          $477,000,000

     SECTION 5.05.  Restriction  Termination  Date.  Effective on the earlier to
occur of the event  described  in clause (a) of the  definition  of  Restriction
Termination  Date and the date on which the lenders under the Fourth Amended and
Restated  Credit  Agreement  consent to the  modifications  contemplated by this
Section 5.05 and Section 7(n) of the Parent Guaranty, Sections 5.01(b), 5.02(a),
5.02(b)(v)(B)  and (vi),  5.02(e)(iv),  (v), (vi),  (vii) and (xi),  5.02(m) and
Section  5.04 of this  Article V will be amended  to  conform to the  comparable
provisions of the Fourth Amended and Restated  Credit  Agreement as in effect on
the Closing Date.


                                   ARTICLE VI

                                EVENTS OF DEFAULT

     SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:

     (a) (i) any Borrower  shall fail to pay any principal of any Advance,  when
the same  becomes  due and  payable  or (ii) any Loan  Party  shall fail to make
interest or any other payment under any Loan Document  within five Business Days
after the same becomes due and payable; or

     (b) any  representation or warranty made, or deemed to be made, by any Loan
Party or any of its officers under or in connection with any Loan Document shall
prove to have been incorrect in any material respect when made (or deemed made);
or

     (c) (i) any of GNC,  GNI or GNCI shall fail to perform or observe any term,
covenant or agreement  contained in Section  5.01(b),  5.01(e),  5.01(i) (to the
extent that such covenant  relates to the chief executive  office or chief place
of business of such  Borrower),  5.01(j),  5.02,  5.03  (except  with respect to
5.03(b) and (c)) or 5.04,  (ii) either GNC, GNI or GNCI shall fail to perform or
observe any term,  covenant or  agreement  contained in 5.03(b) and (c) and such
failure shall continue for 10 days,  (iii) GNCI shall fail to perform or observe
any  term,  covenant  or  agreement  contained  in  Section  7(a) of the  Parent
Guaranty,  or (iv) any Loan Party shall fail to perform any other term, covenant
or  agreement  contained  in any Loan  Document on its part to be  performed  or
observed and such  failure  shall remain  unremedied  for 20 days after  written
notice  thereof  shall have been given to the  Borrowers  by the  Administrative
Agent or any Lender; or

     (d)  any  Loan  Party  or any of its  Subsidiaries  shall  fail  to pay any
principal of,  premium or interest on or any other amount  payable in respect of
any  Indebtedness  that  is  outstanding  in a  principal  amount  of  at  least
$5,000,000 in the aggregate (but excluding  Indebtedness  outstanding hereunder)
of such Loan Party or such Subsidiary, as the case may be, when the same becomes
due  and  payable   (whether  by  scheduled   maturity,   required   prepayment,
acceleration,  demand or otherwise); or any other event shall occur or condition
shall exist under any agreement or instrument relating to any such Indebtedness,
if the  effect of such event or  condition  is to  accelerate,  or to permit the
acceleration of, the maturity of such  Indebtedness or otherwise to cause, or to
permit the holder thereof to cause,  such  Indebtedness  to mature;  or any such
Indebtedness  shall be  declared to be due and payable or required to be prepaid
or  redeemed  (other  than  by a  regularly  scheduled  required  prepayment  or
redemption),  purchased or defeased, or an offer to prepay, redeem,  purchase or
defease such  Indebtedness  shall be required to be made,  in each case prior to
the stated maturity thereof; or

     (e) any Loan Party or any of its  Subsidiaries  shall generally not pay its
debts as such debts  become due, or shall admit in writing its  inability to pay
its debts  generally,  or shall  make a general  assignment  for the  benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its  Subsidiaries  seeking to adjudicate  it a bankrupt or insolvent,  or
seeking  liquidation,  winding  up,  reorganization,   arrangement,  adjustment,
protection,  relief, or composition of it or its debts under any law relating to
bankruptcy,  insolvency or reorganization  or relief of debtors,  or seeking the
entry of an order for relief or the appointment of a receiver, trustee, or other
similar  official for it or for any substantial part of its property and, in the
case of any such  proceeding  instituted  against it (but not  instituted by it)
that is being diligently  contested by it in good faith,  either such proceeding
shall  remain  undismissed  or  unstayed  for a period  of 30 days or any of the
actions sought in such proceeding (including,  without limitation,  the entry of
an  order  for  relief  against,  or the  appointment  of a  receiver,  trustee,
custodian  or other  similar  official  for, it or any  substantial  part of its
property) shall occur; or any Loan Party or any of its  Subsidiaries  shall take
any  corporate  action to  authorize  any of the actions set forth above in this
Section 6.01(e); or

     (f) any judgment or order for the payment of money in excess of  $5,000,000
shall be rendered  against any Loan Party or any of its  Subsidiaries and either
(i) enforcement  proceedings shall have been commenced by any creditor upon such
judgment  or order or (ii)  there  shall be any  period of 10  consecutive  days
during which a stay of  enforcement  of such  judgment or order,  by reason of a
pending appeal or otherwise, shall not be in effect; or

     (g) any  nonmonetary  judgment or order shall be rendered  against any Loan
Party or any of its  Subsidiaries  that is reasonably  likely to have a Material
Adverse  Effect,  and there  shall be any period of 10  consecutive  days during
which a stay of  enforcement  of such judgment or order,  by reason of a pending
appeal or otherwise, shall not be in effect; or

     (h) any provision of any Loan Document after delivery  thereof  pursuant to
Section  3.01  shall  for  any  reason  cease  to be  valid  and  binding  on or
enforceable  against  any Loan Party  party to it that  results in a  materially
adverse  effect on the rights and  remedies of the Agents or any Lender,  or any
such Loan Party shall so state in writing; or

     (i)  (i) Any  Person or two or more  Persons  acting in concert  shall have
acquired  beneficial   ownership  (within  the  meaning  of  Rule 13d-3  of  the
Securities and Exchange  Commission under the Securities  Exchange Act of 1934),
directly or indirectly, of Voting Stock of GNCI (or other securities convertible
into such Voting Stock) representing 20% or more of the combined voting power of
all Voting  Stock of GNCI;  or  (ii) during  any period of up to 24  consecutive
months,  commencing  before or after the Closing  Date,  individuals  who at the
beginning of such 24-month  period were directors of GNCI (together with any new
directors  whose  election or  appointment  by the board of directors of GNCI or
whose nomination for election by the shareholders of GNCI was approved by a vote
of 66?% of the directors of GNCI then still in office who were either  directors
at the beginning of such period or whose election or nomination for election was
previously  so approved)  shall cease for any reason to constitute a majority of
the board of directors of GNCI then in office; or

     (j) any ERISA Event shall have  occurred with respect to a Plan of any Loan
Party or any of its ERISA  Affiliates and the sum  (determined as of the date of
occurrence  of such  ERISA  Event)  of the  Insufficiency  of such  Plan and the
Insufficiency  of any and all other  Plans of the Loan  Parties  and their ERISA
Affiliates  with  respect to which an ERISA Event shall have  occurred  and then
exist (or the liability of the Loan Parties and their ERISA  Affiliates  related
to such ERISA Event) exceeds $1,000,000; or

     (k) any Loan Party or any of its ERISA  Affiliates shall have been notified
by the  sponsor  of a  Multiemployer  Plan of any Loan Party or any of its ERISA
Affiliates that it has incurred Withdrawal  Liability to such Multiemployer Plan
in an amount that, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Loan Parties and their ERISA Affiliates as Withdrawal
Liability  (determined as of the date of such notification),  exceeds $1,000,000
or requires payments exceeding $500,000 per annum; or

     (l) any Loan Party or any of its ERISA  Affiliates shall have been notified
by the  sponsor  of a  Multiemployer  Plan of any Loan Party or any of its ERISA
Affiliates  that  such  Multiemployer  Plan  is in  reorganization  or is  being
terminated,  within the meaning of  Title IV  of ERISA,  and as a result of such
reorganization  or termination the aggregate  annual  contributions  of the Loan
Parties and their ERISA Affiliates to all  Multiemployer  Plans that are then in
reorganization  or being  terminated  have  been or will be  increased  over the
amounts  contributed  to such  Multiemployer  Plans  for the plan  years of such
Multiemployer   Plans  immediately   preceding  the  plan  year  in  which  such
reorganization or termination occurs by an amount exceeding $1,000,000;

     then,  and in any such  event,  the  Administrative  Agent (i) shall at the
request,  or may with the  consent,  of the Required  Lenders,  by notice to the
Borrowers,  declare  the  obligation  of  each  Lender  to make  Advances  to be
terminated,  whereupon the same shall forthwith terminate, and (ii) shall at the
request,  or may with the  consent,  of the Required  Lenders,  by notice to the
Borrowers, declare the Notes, all interest thereon and all other amounts payable
under  this  Agreement  and the other Loan  Documents  to be  forthwith  due and
payable,  whereupon  the Notes,  all such  interest and all such  amounts  shall
become and be forthwith due and payable, without presentment, demand, protest or
further  notice of any kind,  all of which are hereby  expressly  waived by each
Borrower;  provided,  however, that in the event of an actual or deemed entry of
an order for relief with respect to any Loan Party under the Federal  Bankruptcy
Code, (x) the obligation of each Lender to make Advances shall  automatically be
terminated  and (y) the Notes,  all such  interest  and all such  amounts  shall
automatically  become  and be due  and  payable,  without  presentment,  demand,
protest or any notice of any kind, all of which are hereby  expressly  waived by
each Borrower.


                                   ARTICLE VII

                                   THE AGENTS

     SECTION 7.01.  Authorization  and Action.  Each Lender hereby  appoints and
authorizes the  Administrative  Agent to take such action as agent on its behalf
and to exercise such powers and  discretion  under this  Agreement and the other
Loan Documents as are delegated to the Administrative  Agent by the terms hereof
and  thereof,  together  with  such  powers  and  discretion  as are  reasonably
incidental  thereto.  As to any matters not  expressly  provided for by the Loan
Documents  (including,  without  limitation,  enforcement  or  collection of the
Notes),  the  Administrative  Agent  shall  not  be  required  to  exercise  any
discretion  or take any action,  but shall be required to act or to refrain from
acting (and shall be fully  protected  in so acting or  refraining  from acting)
upon the instructions of the Required Lenders,  and such  instructions  shall be
binding upon all Lenders and all holders of Notes;  provided,  however, that the
Administrative  Agent shall not be required to take any action that  exposes the
Administrative Agent to personal liability or that is contrary to this Agreement
or applicable law. The Administrative Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrowers pursuant to the terms of this
Agreement.

     SECTION 7.02.  Agent's Reliance,  Etc. Neither any of the Agents nor any of
their  directors,  officers,  agents or employees shall be liable for any action
taken or omitted to be taken by it or them under or in connection  with the Loan
Documents,  except for its or their own gross negligence or willful  misconduct.
Without limiting the generality of the foregoing,  the Administrative Agent: (a)
may treat the payee of any Note as the holder  thereof until the  Administrative
Agent  receives and accepts an  Assignment  and  Acceptance  entered into by the
Lender that is the payee of such Note, as assignor, and an Eligible Assignee, as
assignee,  as  provided in Section  8.07;  (b) may  consult  with legal  counsel
(including counsel for any Loan Party), independent public accountants and other
experts  selected by it and shall not be liable for any action  taken or omitted
to be taken in good faith by it in  accordance  with the advice of such counsel,
accountants or experts;  (c) makes no warranty or  representation  to any Lender
and shall not be  responsible  to any Lender for any  statements,  warranties or
representations made in or in connection with the Loan Documents;  (d) shall not
have any duty to ascertain or to inquire as to the  performance or observance of
any of the terms,  covenants or  conditions  of any Loan Document on the part of
any Loan Party or to inspect the property  (including  the books and records) of
any  Loan  Party;  (e)  shall  not be  responsible  to any  Lender  for  the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan  Document or any other  instrument  or document  furnished  pursuant
hereto; (f) shall incur no liability under or in respect of any Loan Document by
acting upon any notice,  consent,  certificate  or other  instrument  or writing
(which  may be by  telegram,  telecopy,  cable or  telex)  believed  by it to be
genuine and signed or sent by the proper  party or parties;  and (g) shall incur
no  liability  as  a  result  of  any  determination  whether  the  transactions
contemplated by the Loan Documents  constitute a "highly leveraged  transaction"
within  the  meaning of the  interpretations  issued by the  Comptroller  of the
Currency,  the Federal Deposit Insurance  Corporation and the Board of Governors
of the Federal Reserve System.

     SECTION 7.03. Agents and Affiliates.  With respect to its Commitments,  the
Advances  made by it and the Note or Notes  issued to it,  each Agent shall have
the same rights and powers under the Loan  Documents as any other Lender and may
exercise  the  same as  though  it were not an Agent  and the term  "Lender"  or
"Lenders" shall, unless otherwise expressly indicated, include each Agent in its
individual  capacity.  Each Agent and its affiliates  may accept  deposits from,
lend money to, act as trustee under  indentures  of, accept  investment  banking
engagements  from and generally  engage in any kind of business  with,  any Loan
Party,  any of its  Subsidiaries  and any Person who may do business with or own
securities  of any Loan Party or any such  Subsidiary,  all as if it were not an
Agent, and without any duty to account therefor to the Lenders.

     SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently  and without reliance upon any Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed  appropriate,  made its own credit analysis and
decision to enter into this  Agreement.  Each Lender also  acknowledges  that it
will,  independently and without reliance upon any Agent or any other Lender and
based on such  documents and  information  as it shall deem  appropriate  at the
time,  continue to make its own credit  decisions in taking or not taking action
under this Agreement.

     SECTION 7.05.  Indemnification.  Each Lender  severally agrees to indemnify
the Agents (to the extent not promptly  reimbursed  by the  Borrowers)  from and
against such  Lender's  ratable share of any and all  liabilities,  obligations,
losses,  damages,  penalties,  actions,  judgments,  suits,  costs,  expenses or
disbursements of any kind or nature  whatsoever that may be imposed on, incurred
by, or asserted  against the Agents in any way relating to or arising out of the
Loan Documents or any action taken or omitted to be taken by the  Administrative
Agent  under the Loan  Documents;  provided,  however,  that no Lender  shall be
liable  for any  portion  of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agents' gross negligence or willful  misconduct.  Without limitation of
the foregoing, each Lender agrees to reimburse the Administrative Agent promptly
upon  demand  for its  ratable  share of any costs and  expenses  payable by the
Borrowers under Section 8.04, to the extent that the Administrative Agent is not
promptly  reimbursed for such costs and expenses by the Borrowers.  For purposes
of this Section 7.05, the Lenders' respective ratable shares of any amount shall
be determined,  at any time,  according to the aggregate principal amount of the
Advances  outstanding  at such time and  owing to the  respective  Lenders.  The
failure of any Lender to reimburse the Administrative Agent promptly upon demand
for its  ratable  share of any amount  required to be paid by the Lenders to the
Administrative  Agent as provided  herein  shall not relieve any other Lender of
its obligation  hereunder to reimburse the Administrative  Agent for its ratable
share of such amount,  but no Lender shall be responsible for the failure of any
other  Lender to  reimburse  the  Administrative  Agent for such other  Lender's
ratable share of such amount.

     SECTION 7.06. Successor Administrative Agents. The Administrative Agent may
resign at any time by giving  written  notice  thereof  to the  Lenders  and the
Borrowers. Upon any such resignation,  the Required Lenders shall have the right
to  appoint a  successor  Administrative  Agent;  provided  that such  appointed
successor Administrative Agent is a Lender. If no successor Administrative Agent
shall have been so appointed by the Required  Lenders,  and shall have  accepted
such  appointment,  within 30 days  after the  retiring  Administrative  Agent's
giving of notice of resignation,  then the retiring Administrative Agent may, on
behalf of the Lenders,  appoint a successor Administrative Agent, which shall be
(i) a  commercial  bank or (ii) a finance  company,  insurance  company or other
financial  institution  that is  engaged  in  making,  purchasing  or  otherwise
investing  in  commercial  loans in the  ordinary  course of its business and is
capable of performing the duties of the  Administrative  Agent hereunder.  After
any retiring  Administrative  Agent's  resignation  hereunder as  Administrative
Agent,  the  provisions of this Article VII shall inure to its benefit as to any
actions  taken or  omitted to be taken by it while it was  Administrative  Agent
under this Agreement.  Upon the acceptance of any appointment as  Administrative
Agent   hereunder  by  a  successor   Administrative   Agent,   such   successor
Administrative  Agent  shall  succeed to and become  vested with all the rights,
powers, discretion,  privileges and duties of the retiring Administrative Agent,
and the retiring  Administrative  Agent shall be discharged  from its duties and
obligations under the Loan Documents.  Upon the acceptance of any appointment as
Administrative  Agent  hereunder  by  a  successor  Administrative  Agent,  such
successor  Administrative  Agent shall succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Administrative
Agent,  other than with respect to funds  transfers and other similar aspects of
the administration of Borrowings and payments by the Borrowers in respect of the
Facility,  and the retiring  Administrative  Agent shall be discharged  from its
duties and obligations under this Agreement, other than as aforesaid.

     SECTION  7.07.  The Agents.  Neither the  Documentation  Agent,  nor either
Syndication Agent, in its capacity as such Agent,  assumes any responsibility or
obligation  hereunder for servicing,  syndication,  enforcement or collection of
the Indebtedness  resulting from the Advances, nor any duties as agent hereunder
for the Lenders.


                                  ARTICLE VIII

                                  MISCELLANEOUS

     SECTION 8.01.  Amendments,  Etc. No amendment or waiver of any provision of
this  Agreement  or the Notes,  nor consent to any  departure  by the  Borrowers
therefrom,  shall in any event be effective  unless the same shall be in writing
and signed by the  Required  Lenders,  and then such waiver or consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given; provided, however, that (a) no amendment, waiver or consent shall, unless
in writing and signed by all the Lenders,  do any of the  following at any time:
(i)  change  the  percentage  of  the  Commitments  or of the  aggregate  unpaid
principal  amount of the Notes,  or the number of Lenders that shall be required
for the  Lenders  or any of them to take any  action  hereunder  or  change  the
percentage  contained in the  definition of Required  Lenders or (ii) amend this
Section 8.01 or  Section 5.02(m),  or release any guaranty of GNCI,  GNI or GNC,
and (b) no amendment,  waiver or consent shall,  unless in writing and signed by
the  Required  Lenders and each Lender that is affected  thereby,  do any of the
following: (i) increase the Commitments of such Lender or subject such Lender to
any additional  obligations,  (ii) reduce  the principal of, or interest on, the
Note or Notes held by such Lender or any fees or other amounts payable hereunder
to such Lender, or (iii) postpone any date fixed for any commitment reduction or
any  payment of  principal  of, or  interest  on, the Note or Notes held by such
Lender or any fees or other amounts payable  hereunder to such Lender;  provided
further that no amendment, waiver or consent shall, unless in writing and signed
by the  Administrative  Agent in addition to the Lenders  required above to take
such action,  affect the rights or duties of the Administrative Agent under this
Agreement or any Note.

     SECTION 8.02. Notices,  Etc. All notices and other communications  provided
for hereunder shall be in writing  (including  telegraphic,  telecopy,  telex or
cable communication) and mailed,  telegraphed,  telecopied,  telexed,  cabled or
delivered, if to GNI, at its address at 300 Sixth Avenue,  Pittsburgh, PA 15222,
Attention:  Chief  Financial  Officer,  if to GNC,  at its  address at 300 Sixth
Avenue, Pittsburgh, PA 15222, Attention: Chief Financial Officer, with a copy to
Hutchins,  Wheeler & Dittmar, A Professional Corporation,  at its address at 101
Federal Street, Boston, MA 02110,  Attention:  Steven M. Peck; if to any Lender,
at its Domestic Lending Office specified opposite its name on Schedule I hereto;
if to any  other  Lender,  at  its  Domestic  Lending  Office  specified  in the
Assignment  and Acceptance  pursuant to which it became a Lender;  and if to the
Administrative  Agent,  at its address at 499 Park  Avenue,  New York,  New York
10022,  Attention:  Structured Finance Group,  telecopier number (212) 418-8269;
or, as to each party, at such other address as shall be designated by such party
in a written  notice to the other parties.  All such notices and  communications
shall,  when mailed,  telegraphed,  telecopied,  telexed or cabled, be effective
when deposited in the mails, delivered to the telegraph company,  transmitted by
telecopier,  confirmed by telex  answerback  or delivered to the cable  company,
respectively, except that notices and communications to the Administrative Agent
pursuant to Article II, III or VII shall not be effective  until received by the
Administrative Agent.

     SECTION 8.03. No Waiver;  Remedies. No failure on the part of any Lender or
any Agent to exercise, and no delay in exercising,  any right hereunder or under
any Note  shall  operate  as a waiver  thereof;  nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

     SECTION  8.04.  Costs and  Expenses.  (a) GNC and GNI jointly and severally
hereby  agree  to pay on  demand  (i) all  reasonable  out-of-pocket  costs  and
expenses  of the  Administrative  Agent  in  connection  with  the  preparation,
execution,  delivery,  administration,  modification  and  amendment of the Loan
Documents (including,  without limitation,  (A) all due diligence,  syndication,
transportation,  computer, duplication, appraisal, audit, insurance, consultant,
search,  filing and recording fees and expenses and (B) the reasonable  fees and
expenses of counsel for the  Administrative  Agent with  respect  thereto,  with
respect   to   advising   the   Administrative   Agent  as  to  its  rights  and
responsibilities,  or the  perfection,  protection or  preservation of rights or
interests,  under the Loan Documents, with respect to negotiations with any Loan
Party  or with  other  creditors  of any Loan  Party or any of its  Subsidiaries
arising out of any Default or any events or circumstances  that may give rise to
a Default and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy,  insolvency or other similar proceeding  involving
creditors'  rights  generally and any proceeding  ancillary  thereto),  (ii) all
reasonable  costs and expenses of the Agents and the Lenders in connection  with
the  enforcement  of  the  Loan  Documents,  whether  in  any  action,  suit  or
litigation,  any bankruptcy,  insolvency or other similar  proceeding  affecting
creditors' rights generally or otherwise  (including,  without  limitation,  the
reasonable  fees and expenses of counsel for the  Administrative  Agent and each
Lender with respect  thereto) and (iii) all reasonable costs and expenses of the
Administrative Agent in connection with the preparation,  execution and delivery
of the Loan Documents.

     (b) The Borrowers  jointly and severally hereby agree to indemnify and hold
harmless  the Agents  and each  Lender  and each of their  Affiliates  and their
officers,  directors,  employees,  agents and advisors  (each,  an  "Indemnified
Party")  from and against any and all claims that may be asserted  against,  and
any and all damages,  losses,  liabilities and reasonable  expenses  (including,
without  limitation,  reasonable  fees  and  expenses  of  counsel)  that may be
incurred by or awarded against,  any Indemnified Party, in each case arising out
of or in connection  with or by reason of, or in connection with the preparation
for a defense of, any  investigation,  litigation or proceeding  arising out of,
related to or in connection  with (i) the  transactions  contemplated  hereby or
(ii) the actual or alleged  presence of  Hazardous  Materials on any property of
any Loan Party or any of its Subsidiaries or any  Environmental  Action relating
in any way to any Loan Party or any of its Subsidiaries, in each case whether or
not such  investigation,  litigation or proceeding is brought by any Loan Party,
its  directors,  shareholders  or  creditors  or an  Indemnified  Party  or  any
Indemnified  Party  is  otherwise  a  party  thereto  and  whether  or  not  the
transactions  contemplated  hereby are  consummated,  except to the extent  such
claim,  damage,  loss,  liability or expense is found in a final,  nonappealable
judgment  by a court  of  competent  jurisdiction  to have  resulted  from  such
Indemnified  Party's gross negligence or willful  misconduct.  No termination of
this Agreement  shall affect the  obligations of the Borrowers to indemnify each
Indemnified  Party  under the  conditions  and to the  extent  set forth in this
Section 8.04(b).

     (c) If any payment of principal of, or Conversion of, any  Eurodollar  Rate
Advance is made by any of the  Borrowers to or for the account of a Lender other
than on the last day of the Interest  Period for such Advance,  as a result of a
payment or  conversion  pursuant  to  Section  2.08(b)(i),  2.09(d) or  2.09(e),
acceleration  of the  maturity of the Notes  pursuant to Section 6.01 or for any
other reason,  the Borrowers  jointly and severally hereby agree to, upon demand
by such Lender (with a copy of such demand to the Administrative  Agent), pay to
the Administrative  Agent for the account of such Lender any amounts required to
compensate such Lender for any additional losses,  costs or expenses that it may
reasonably incur as a result of such payment, including, without limitation, any
loss (including loss of anticipated profits), cost or expense incurred by reason
of the  liquidation or  reemployment  of deposits or other funds acquired by any
Lender to fund or maintain such Advance.  A certificate as to the amount of such
required  compensation,  submitted to the  Borrowers  by such  Lender,  shall be
conclusive and binding for all purposes, absent manifest error.

     (d) If any Loan Party  fails to pay when due any costs,  expenses  or other
amounts payable by it under any Loan Document,  including,  without  limitation,
fees and expenses of counsel and indemnities,  such amount may be paid on behalf
of such  Loan  Party  by the  Administrative  Agent or any  Lender,  in its sole
discretion.

     SECTION  8.05.  Right of  Setoff.  Upon (a) the  occurrence  and during the
continuance  of any Event of Default  and (b) the  making of the  request or the
granting  of  the  consent   specified  by  Section   6.01  to   authorize   the
Administrative  Agent to  declare  the Notes  due and  payable  pursuant  to the
provisions  of Section  6.01,  each Lender and each of its  Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and  otherwise  apply any and all deposits  (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time  owing by such  Lender or such  Affiliate  to or for the  credit or the
account of the Borrowers against any and all of the Obligations of the Borrowers
now or hereafter  existing  under this  Agreement  and the Note or Notes held by
such Lender,  and irrespective of whether such Lender shall have made any demand
under this Agreement or such Note or Notes and although such  obligations may be
unmatured.  Each Lender agrees  promptly to notify the Borrowers  after any such
setoff and application;  provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of each
Lender and its  Affiliates  under this  Section  8.05 are in  addition  to other
rights and remedies (including, without limitation, other rights of setoff) that
such Lender and its  Affiliates  may have.  Each such setoff shall be subject to
Section 2.12.

     SECTION 8.06. Binding Effect. This Agreement shall become effective when it
shall  have  been  executed  by each GNC and GNI,  and the  Agents  and when the
Administrative  Agent  shall have been  notified by each Lender that such Lender
has executed it and thereafter shall be binding upon and inure to the benefit of
the Borrowers,  the Agents, and each Lender and their respective  successors and
assigns,  except  that no  Borrower  shall  have the right to assign  its rights
hereunder  or any  interest  herein  without  the prior  written  consent of the
Lenders.

     SECTION 8.07. Assignments and Participations. (a) Each Lender may assign to
one or  more  banks  or  other  entities  all or a  portion  of its  rights  and
obligations  under  this  Agreement  (including,  without  limitation,  all or a
portion of its Commitment or Commitments,  the Advances owing to it and the Note
or Notes  held by it);  provided,  however,  that (i)  except  in the case of an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Commitment of the assigning Lender being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such  assignment)  shall in no event be less than  $5,000,000 (or, in
the event that the  assignment  is to a Person that,  immediately  prior to such
assignment, was a Lender, $1,000,000),  unless a lesser amount shall be approved
by the Administrative Agent and the Borrowers in their reasonable judgment,  and
shall be an  integral  multiple  of  $1,000,000,  (ii)  except in the case of an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the  Commitment of the assigning  Lender being  retained  after giving
effect to any such  assignment  (determined as of the date of the Assignment and
Acceptance  with  respect  to such  assignment)  shall in no event be less  than
$5,000,000, (iii) each such assignment shall be to an Eligible Assignee and (iv)
the  parties  to  each  such  assignment   shall  execute  and  deliver  to  the
Administrative  Agent,  for its  acceptance  and recording in the  Register,  an
Assignment and  Acceptance,  together with any Note or Notes subject  (except in
the case of an Affiliate of a Lender) to such  assignment  and a processing  and
recordation  fee of  $3,000.  Upon  such  execution,  delivery,  acceptance  and
recording,  from and after the effective date  specified in such  Assignment and
Acceptance,  (x) the  assignee  thereunder  shall be a party  hereto and, to the
extent that rights and  obligations  hereunder have been assigned to it pursuant
to such Assignment and  Acceptance,  have the rights and obligations of a Lender
hereunder  and (y) the Lender  assignor  thereunder  shall,  to the extent  that
rights and  obligations  hereunder  have been  assigned  by it  pursuant to such
Assignment  and  Acceptance,  relinquish  its rights and be  released  from such
obligations  under  this  Agreement  (and,  in the  case  of an  Assignment  and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and  obligations  under this  Agreement,  such Lender  shall cease to be a party
hereto).

     (b) By executing and  delivering an Assignment and  Acceptance,  the Lender
assignor  thereunder and the assignee  thereunder confirm to and agree with each
other and the other  parties  hereto as  follows:  (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty  and  assumes  no  responsibility   with  respect  to  any  statements,
warranties or  representations  made in or in connection  with this Agreement or
the execution, legality, validity, enforceability,  genuineness,  sufficiency or
value of this Agreement or any other instrument or document  furnished  pursuant
hereto;  (ii) such  assigning  Lender  makes no  representation  or warranty and
assumes  no  responsibility  with  respect  to the  financial  condition  of the
Borrowers  or the  performance  or  observance  by the  Borrowers  of any of its
obligations  under this Agreement or any other instrument or document  furnished
pursuant  hereto;  (iii) such  assignee  confirms that it has received a copy of
this Agreement,  together with copies of the financial statements referred to in
Section  4.01  and  such  other  documents  and  information  as it  has  deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and Acceptance;  (iv) such assignee will,  independently  and without
reliance upon any Agent,  such assigning Lender or any other Lender and based on
such  documents  and  information  as it shall  deem  appropriate  at the  time,
continue to make its own credit  decisions in taking or not taking  action under
this Agreement; (v) such assignee confirms that it is an Eligible Assignee or an
Affiliate  of the  assignor;  (vi) such  assignee  appoints and  authorizes  the
Administrative  Agent to take such action as agent on its behalf and to exercise
such  powers  and  discretion  under  this  Agreement  as are  delegated  to the
Administrative  Agent  by the  terms  hereof,  together  with  such  powers  and
discretion as are reasonably  incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all of the obligations  that
by the terms of this Agreement are required to be performed by it as a Lender.

     (c) The  Administrative  Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance  delivered to and accepted
by it and a  register  for the  recordation  of the names and  addresses  of the
Lenders and the  Commitment  of, and principal  amount of the Advances owing to,
each Lender  from time to time (the  "Register").  The  entries in the  Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrowers,  each  Agent and the  Lenders  may treat  each  Person  whose name is
recorded  in the  Register  as a  Lender  hereunder  for  all  purposes  of this
Agreement.  The Register  shall be available for  inspection by the Borrowers or
any Lender at any reasonable  time and from time to time upon  reasonable  prior
notice.

     (d) Upon  its  receipt  of an  Assignment  and  Acceptance  executed  by an
assigning  Lender and an assignee,  together  with any Note or Notes  subject to
such  assignment,  the  Administrative  Agent  shall,  if  such  Assignment  and
Acceptance  has been  completed  and is in  substantially  the form of Exhibit C
hereto,  (i) accept such Assignment and Acceptance,  (ii) record the information
contained  therein in the Register and (iii) give prompt  notice  thereof to the
Borrowers.  Within  five  Business  Days after its receipt of such  notice,  the
Borrowers, at their own expense, shall execute and deliver to the Administrative
Agent in exchange for the  surrendered  Note or Notes a new Note or Notes to the
order of such Eligible Assignee in an amount equal to the Commitment  assumed by
it pursuant to such Assignment and Acceptance  and, if the assigning  Lender has
retained  a  Commitment  hereunder,  a new  Note or  Notes  to the  order of the
assigning Lender in an amount equal to the Commitment  retained by it hereunder.
Such new Note or Notes shall be in an  aggregate  principal  amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective  date of such  Assignment  and  Acceptance  and shall  otherwise be in
substantially the form of Exhibit A hereto.

     (e) Each  Lender may sell  participations  in or to all or a portion of its
rights and obligations under this Agreement (including,  without limitation, all
or a portion of its Commitment or Commitments,  the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) such Lender's obligations
under  this  Agreement  (including,   without  limitation,   its  Commitment  or
Commitments)  shall  remain  unchanged,  (ii) such Lender  shall  remain  solely
responsible to the other parties hereto for the performance of such obligations,
(iii)  such  Lender  shall  remain  the holder of any such Note or Notes for all
purposes of this Agreement, (iv) the Borrowers, the Agents and the other Lenders
shall  continue to deal solely and directly with such Lender in connection  with
such Lender's rights and obligations under this Agreement and (v) no participant
under any such  participation  shall have any right to approve any  amendment or
waiver of any  provision of this  Agreement  or any Note,  or any consent to any
departure by any Borrower  therefrom,  except to the extent that such amendment,
waiver or consent  would (A) reduce the  principal of, or interest on, the Notes
or any fees or other  amounts  payable  hereunder,  in each  case to the  extent
subject to such  participation or (B) postpone any date fixed for any payment of
principal  of, or interest  on, the Notes or any fees or other  amounts  payable
hereunder,  in each case to the  extent  subject to such  participation.  If the
Administrative  Agent or such Lender shall  request the written  consent of such
participant to any of the actions set forth in this paragraph (e), and shall not
receive  either the  consent  thereto or denial  thereof in writing  within five
Business Days of making such request,  such participant  shall be deemed to have
given its consent.

     (f) Any Lender may, in connection with any assignment or  participation  or
proposed assignment or participation  pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating  to the  Borrowers  furnished  to such  Lender  by or on  behalf of the
Borrowers;  provided,  however, that, prior to any such disclosure, the assignee
or participant or proposed  assignee or participant  shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.

     (g)  Notwithstanding  any other provision set forth in this Agreement,  any
Lender may at any time  create a security  interest in all or any portion of its
rights under this Agreement (including,  without limitation,  the Advances owing
to it and the Note or Notes held by it) in favor of any Federal  Reserve Bank in
accordance  with  Regulation A of the Board of Governors of the Federal  Reserve
System.

     (h) The  Borrowers  and each  Lender  agree  that,  at the  request  of the
Administrative Agent, the Borrowers or such Lender will reexecute this Agreement
to reflect  the  assignments  that have been  effected in  accordance  with this
Section 8.07.

     SECTION 8.08. Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.

     SECTION 8.09. Execution in Counterparts.  This Agreement may be executed in
any  number  of  counterparts  and  by  different  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.
Delivery of an executed  counterpart  of a signature  page to this  Agreement by
telecopier shall be effective as delivery of a manually executed  counterpart of
this Agreement.

     SECTION  8.10.  Confidentiality.  Neither  any Agent nor any  Lender  shall
disclose  any  Confidential  Information  to any Person  without  the consent in
writing of the  Borrowers,  other  than  (a) to  the  Agents'  or such  Lender's
Affiliates and their officers, directors,  employees, agents and advisors and to
actual or prospective  Eligible  Assignees and participants,  and then only on a
confidential  basis,  (b) as required by any law, rule or regulation or judicial
process  provided  that unless  contrary to applicable  law or court order,  the
Agents and each Lender shall use  reasonable  efforts prior to the disclosure of
Confidential  Information  to notify the  Borrowers of each  request  under this
clause (b) made by a  government  authority  (other than in  connection  with an
examination  of the Agents or such  Lender) or  pursuant  to legal  process  and
(c) as  requested  or required  by any state,  federal or foreign  authority  or
examiner regulating banks or banking.

     SECTION  8.11.  Jurisdiction,  Etc. (a) Each of the parties  hereto  hereby
irrevocably and  unconditionally  submits,  for itself and its property,  to the
nonexclusive  jurisdiction  of any New York  State court or federal court of the
United States of America  sitting in New York City, and any appellate court from
any  thereof,  in any action or  proceeding  arising  out of or relating to this
Agreement or the Notes, or for  recognition or enforcement of any judgment,  and
each of the parties hereto hereby  irrevocably and  unconditionally  agrees that
all  claims  in  respect  of any such  action  or  proceeding  may be heard  and
determined in any such New York State court or, to the extent  permitted by law,
in such federal court. Each Borrower hereby further irrevocably  consents to the
service of process in any action or  proceeding  in such  courts by the  mailing
thereof by any parties hereto by registered or certified mail,  postage prepaid,
to such Borrower at its address specified  pursuant to Section 8.02. Each of the
parties  hereto  agrees that a final  judgment in any such action or  proceeding
shall be conclusive  and may be enforced in other  jurisdictions  by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to serve legal process in any
other manner  permitted by law or to bring any action or proceeding  relating to
this Agreement or the Notes in the courts of any jurisdiction.

     (b) Each of the parties hereto irrevocably and  unconditionally  waives, to
the fullest  extent it may legally and  effectively do so, any objection that it
may now or  hereafter  have to the  laying  of  venue  of any  suit,  action  or
proceeding  arising  out of or relating  to this  Agreement  or the Notes in any
New York State or federal court.  Each of the parties hereto hereby  irrevocably
waives,  to the fullest extent  permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.

     SECTION 8.12. Waiver of Jury Trial.  Each of the Borrowers,  the Agents and
the Lenders hereby  irrevocably waives all right to trial by jury in any action,
proceeding  or  counterclaim  (whether  based on  contract,  tort or  otherwise)
arising  out of or relating to any of the Loan  Documents,  the  Advances or the
actions  of  any  Agent  or  any  Lender  in  the  negotiation,  administration,
performance or enforcement thereof.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

                        GENERAL NUTRITION, INCORPORATED,
                                   as Borrower


                                       By
                                     Title:



                         GENERAL NUTRITION CORPORATION,
                                   as Borrower


                                       By
                                     Title:



                        GENERAL NUTRITION COMPANIES, INC.


                                       By
                                     Title:



                               BANQUE NATIONALE DE
                                     PARIS,
                  as Administrative Agent, Documentation Agent
                                   and Lender


                                       By
                                     Title:


                                       By
                                     Title:



                         PNC BANK, NATIONAL ASSOCIATION,
                         as Syndication Agent and Lender


                                       By
                                     Title:



                               ABN AMRO BANK N.V.,
                         as Syndication Agent and Lender


                                       By
                                     Title:


                                       By
                                     Title:
                         COPY AS EXECUTED TOGETHER WITH
                       EXHIBITS D, E, AND F AS SEPARATELY
                         EXECUTED AND OPINIONS DELIVERED
                                PURSUANT THERETO

                                U.S. $100,000,000

                           1998 TERM CREDIT AGREEMENT

                           Dated as of August 10, 1998

                                      Among

                       GENERAL NUTRITION, INCORPORATED and
                         GENERAL NUTRITION CORPORATION,

                                  as Borrowers,

                                       and

                        GENERAL NUTRITION COMPANIES, INC.

                                       and

                            THE LENDERS NAMED HEREIN,

                                   as Lenders,

                                       and

                           BANQUE NATIONALE DE PARIS,

               as Administrative Agent and as Documentation Agent

                                       and

              PNC BANK, NATIONAL ASSOCIATION and ABN AMRO BANK N.V.

                              as Syndication Agents