Document:

Exhibit 4.2

 

STOCKHOLDERS AGREEMENT

 

By and Among

 

GNC HOLDINGS, INC.,

 

ARES CORPORATE OPPORTUNITIES FUND II, L.P.

 

AND

 

ONTARIO TEACHERS’ PENSION PLAN BOARD

 

 

Dated as of April 6, 2011

 

 

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
Page
    
	
 
    	
 
    	
 
    
	
ARTICLE I
    	
DEFINITIONS; RULES OF CONSTRUCTION
    	
1
    
	
SECTION 1.01.
    	
Definitions
    	
1
    
	
SECTION 1.02.
    	
Rules of Construction
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
REPRESENTATIONS AND WARRANTIES
    	
3
    
	
SECTION 2.01.
    	
Authority; Enforceability
    	
3
    
	
SECTION 2.02.
    	
Consent
    	
3
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
BOARD OF DIRECTORS
    	
3
    
	
SECTION 3.01.
    	
Size and Composition
    	
3
    
	
SECTION 3.02.
    	
Sponsor Designees
    	
4
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
SPONSOR VETO RIGHTS
    	
5
    
	
SECTION 4.01.
    	
Significant Actions
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
MISCELLANEOUS
    	
7
    
	
SECTION 5.01.
    	
Notices
    	
7
    
	
SECTION 5.02.
    	
Binding Effect; Benefits
    	
9
    
	
SECTION 5.03.
    	
Amendment
    	
9
    
	
SECTION 5.04.
    	
Assignability
    	
9
    
	
SECTION 5.05.
    	
Governing Law; Submission to Jurisdiction
    	
9
    
	
SECTION 5.06.
    	
Enforcement
    	
9
    
	
SECTION 5.07.
    	
Severability
    	
9
    
	
SECTION 5.08.
    	
Additional Securities Subject to Agreement
    	
9
    
	
SECTION 5.09.
    	
Section and Other Headings
    	
10
    
	
SECTION 5.10.
    	
Counterparts
    	
10
    
	
SECTION 5.11.
    	
Waiver of Jury Trial
    	
10
    
	
SECTION 5.12.
    	
Entire Agreement
    	
10
    

 

i

 

STOCKHOLDERS AGREEMENT

 

THIS STOCKHOLDERS AGREEMENT (this “Agreement”), dated as of April 6, 2011 (the “Effective Date”), is by and among GNC Holdings, Inc., a Delaware corporation (the “Company”), Ares Corporate Opportunities Fund II, L.P., a Delaware limited partnership (“Ares”), and Ontario Teachers’ Pension Plan Board, a corporation without share capital organized under the laws of the Province of Ontario (Canada) (“OTPP”) (each of Ares and OTPP, individually, a “Sponsor” and, together, the “Sponsors”).

 

ARTICLE I
 DEFINITIONS; RULES OF CONSTRUCTION

 

SECTION 1.01.      Definitions.  The following terms, as used herein, have the following meanings:

 

“Affiliate” of any specified Person means any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.  No Person shall be deemed to be an Affiliate of another Person solely by virtue of the fact that both Persons own shares of the Capital Stock of the Company.

 

“Agreement” has the meaning set forth in the preamble.

 

“Ares” has the meaning set forth in the preamble.

 

“Board” means the Board of Directors of the Company.

 

“Capital Stock” means, with respect to any Person, any and all shares, interests, participations, rights in or other equivalents (however designated) of such Person’s capital stock, and any rights, warrants or options exercisable or exchangeable for or convertible into such capital stock.

 

“CEO Director” has the meaning set forth in Section 3.01(b).

 

“Change of Control” means (a) the consummation of any transaction as a result of which any Person other than any Sponsor, or any Related Person of any such Sponsor, acquires directly or indirectly more than 50% of the Capital Stock of the Company, including, without limitation, through a merger or consolidation or purchase of the Capital Stock of the Company or (b) the sale, lease, conveyance, disposition, in one or a series of related transactions other than a merger or consolidation, of all or substantially all of the assets of the Company taken as a whole to any Person or group of Related Persons.

 

“Class A Common Stock” means the Class A Common Stock, par value $0.001 per share, of the Company.

 

 

“Class B Common Stock” means the Class B Common Stock, par value $0.001 per share, of the Company.

 

“Common Stock” means the Class A Common Stock and the Class B Common Stock.

 

“Company” has the meaning set forth in the preamble.

 

“Effective Date” has the meaning set forth in the preamble.

 

“Material Subsidiary” means each “Significant Subsidiary” of the Company, as defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act.

 

“OTPP” has the meaning set forth in the preamble.

 

“Person” means an individual, a corporation, a general or limited partnership, a limited liability company, a joint stock company, an association, a trust or any other entity or organization, including a government, a political subdivision or an agency or instrumentality thereof.

 

“Related Person” means, with respect to any Person, (a) an Affiliate of such Person, (b) any investment manager, investment advisor or general partner of such Person, (c) any investment fund, investment account or investment entity whose investment manager, investment advisor or general partner is such Person or a Related Person of such Person, and (d) any equity investor, partner, member or manager of such Person; provided, that no Person shall be deemed an Affiliate of another Person solely by virtue of the fact that both Persons own shares of the Capital Stock of the Company.

 

“Securities Act” means the Securities Act of 1933.

 

“Significant Action” has the meaning set forth in Section 4.01.

 

“Sponsor” has the meaning set forth in the preamble.

 

“Sponsor Designees” has the meaning set forth in Section 3.02(a).

 

“Transfer” means the direct or indirect offer, sale, lease, donation, assignment (as collateral or otherwise), mortgage, pledge, grant, hypothecation, encumbrance, gift, bequest or transfer or disposition of any interest (legal or beneficial) in any security (including transfer by reorganization, merger, sale of substantially all of the assets or by operation of law).

 

SECTION 1.02.      Rules of Construction.  Any provision of this Agreement that refers to the words “include,” “includes” or “including” shall be deemed to be followed by the words “without limitation.”  References to “dollars” or “$” shall mean dollars in lawful currency of the United States of America.  References to numbered or letter articles, sections and subsections refer to articles, sections and subsections, respectively, of this Agreement unless expressly stated otherwise.  References to a Section or paragraph shall be to a Section or paragraph of this Agreement unless otherwise indicated.  The words “hereof,” “herein” and

 

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“hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.  The word “or” when used in this Agreement is not exclusive.  Any agreement, instrument, law or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument, or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein.  References to a Person are also to its permitted successors and assigns.  In the event that any claim is made by any Person relating to any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the request of a particular Person or its counsel.

 

ARTICLE II
 REPRESENTATIONS AND WARRANTIES

 

Each of the parties hereby severally represents and warrants to each of the other parties as follows:

 

SECTION 2.01.      Authority; Enforceability.  Such party (a) has the legal capacity or organizational power and authority to execute, deliver and perform its obligations under this Agreement and (b) is duly organized and validly existing and in good standing under the laws of its jurisdiction of organization.  This Agreement has been duly executed and delivered by such party and constitutes a legal, valid and binding obligation of such party, enforceable against it in accordance with the terms of this Agreement, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the rights of creditors generally and to the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or of equity).

 

SECTION 2.02.      Consent.  No consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by such party, other than those that have been made or obtained on or prior to the date hereof, in connection with (a) the execution or delivery of this Agreement or (b) the consummation of any of the transactions contemplated hereby.

 

ARTICLE III
 BOARD OF DIRECTORS

 

SECTION 3.01.      Size and Composition.  From and after the Effective Date, (1) each Sponsor, so long as it owns more than 5% of the then outstanding shares of Common Stock,  shall (i) vote or otherwise give such Sponsor’s consent in respect of all shares of Common Stock (whether now owned or hereafter acquired) owned by such Sponsor, and (ii) take all other appropriate action, and (2) the Company shall take all necessary and desirable actions (subject to any applicable securities exchange or equivalent listing requirements), including at each annual or special meeting of the stockholders of the Company called for the election of directors, and whenever the stockholders of the Company act by written consent with respect to the election of directors, to cause:

 

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(a)           the authorized number of directors on the Board to be nine or more;

 

(b)           the election to the Board of (i) the then Chief Executive Officer of the Company (the “CEO Director”) (subject to his or her election by the stockholders of the Company at the annual meeting of the stockholders) and (ii) any Sponsor Designees designated by the Sponsors in accordance with Section 3.02; and

 

(c)           the removal from the Board of any director elected in accordance with clause (b) above, with or without cause, (i) in the case of the CEO Director, upon the resignation or termination for any reason of such CEO Director as the Chief Executive Officer of the Company, and (ii) in the case of any Sponsor Designee, upon the written request of the Sponsor that designated such director (or, in the case of a jointly nominated Sponsor Designee, whether pursuant to Section 3.02(b)(i) or otherwise, upon the written request of each of the Sponsors).

 

SECTION 3.02.      Sponsor Designees.

 

(a)           The Sponsors shall have the right, but not the obligation, to nominate to the Board (such nominees, the “Sponsor Designees”) (subject to their election by the stockholders of the Company):

 

(i)            for so long as the Sponsors collectively own more than 50% of the then outstanding shares of Common Stock, (x) if the authorized number of directors is nine, eight directors, and, (y) if the authorized number of directors is ten or more, the greater of (A) nine and (B) the number of directors comprising a majority of the Board; and

 

(ii)           for so long as the Sponsors collectively own 50% or less of the then outstanding shares of Common Stock, that number of directors (rounded up to the nearest whole number or, if such rounding would cause the Sponsors to have the right to elect a majority of the Board, rounded to the nearest whole number) equal to the product of (x) the authorized number of directors on the Board times (y) a fraction, the numerator of which is the total number of shares of Common Stock collectively owned by the Sponsors, and the denominator of which is the total number of shares of Common Stock then outstanding;

 

provided, that in the event that any Sponsor ceases to own more than 5% of the then outstanding shares of Common Stock, (x) such Sponsor shall not have the right to nominate any Sponsor Designees; (y) the shares of outstanding Common Stock owned by such Sponsor shall be excluded from any numerator for purposes of calculating the amounts set forth in clauses (i) and (ii) of this Section 3.02(a); and (z) the right to nominate Sponsor Designees in accordance with this Section 3.02 shall only be available to the Sponsor that owns the applicable percentage of shares of Common Stock.

 

(b)           Each Sponsor shall be entitled to nominate one half of the aggregate number of Sponsor Designees; provided that:

 

(i)            subject to clauses (ii) and (iii) below, if the number of Sponsor Designees is odd, the Sponsors shall jointly nominate one Sponsor Designee, and each Sponsor shall be entitled to nominate one half of the remainder of such Sponsor Designees;

 

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(ii)           if any Sponsor ceases to own more than 5% of the then outstanding shares of Common Stock, such Sponsor shall not have the right to nominate any Sponsor Designees; and

 

(iii)          if any Sponsor owns more than 5%, but less than or equal to 10%, of the then outstanding shares of Common Stock, such Sponsor shall be entitled to nominate one Sponsor Designee, and the other Sponsor shall be entitled to nominate the remainder of the Sponsor Designees.

 

(c)           If any Sponsor has nominated fewer than the total number of Sponsor Designees such Sponsor is entitled to nominate pursuant to this Section 3.02, (i) the Sponsors may jointly nominate any or all of the Sponsor Designees such Sponsor has failed to nominate and (ii) such Sponsor shall have the right, at any time, to nominate such additional number of Sponsor Designees to which it is entitled (other than Sponsor Designees jointly nominated pursuant to clause (i) above), in which case the directors of the Company shall take all necessary action to (x) increase the size of the Board as required to enable such Sponsor to so nominate such additional Sponsor Designees and (y) designate such additional Sponsor Designees nominated by such Sponsor to fill such newly-created vacancy or vacancies, as applicable.

 

(d)           For purposes of this Section 3.02 and Article IV below, each Sponsor shall be deemed to own all shares of Common Stock owned by such Sponsor’s Affiliates.

 

ARTICLE IV
 SPONSOR VETO RIGHTS

 

SECTION 4.01.      Significant Actions.  For so long as the Sponsors collectively own more than one third of the then outstanding shares of Common Stock, neither the Company nor any of its subsidiaries shall take, or be permitted to take, any of the following actions (each, a “Significant Action”) without the written approval of at least one of the Sponsors; provided, that in the event that a Sponsor owns 10% or less of the then outstanding shares of Common Stock, (x) the shares of Common Stock owned by such Sponsor shall be excluded from the numerator for purposes of calculating the one third threshold and (y) such Significant Action shall be subject to the written approval of the other Sponsor:

 

(a)           a Change of Control or the merger or consolidation of the Company or any of its subsidiaries (other than any such transaction involving the merger or consolidation of the Company with any of its subsidiaries or any of the Company’s subsidiaries with any other of the Company’s subsidiaries or the sale, lease, transfer, conveyance or other disposition of all or substantially all of the assets of a subsidiary of the Company to the Company or any other subsidiary of the Company);

 

(b)           (i) entering into any joint venture, investment (other than an investment in, contract with or acquisition of any securities or assets of any of the Company’s wholly owned subsidiaries), recapitalization, reorganization or contract with any other Person (other than a wholly owned subsidiary), (ii) the acquisition of any securities or assets of another Person (other than a wholly owned subsidiary of the Company), in the case of any of the transactions set forth in clause (i) or (ii), whether in a single transaction or series of related transactions, with a fair

 

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market value, or for a purchase price, in excess of $75 million, or (iii) the exercise of any ownership rights in respect of any of the foregoing in this Section 4.01(b);

 

(c)           any Transfer of assets of the Company or its subsidiaries in any transaction or series of related transactions (other than any Transfer of assets of any wholly owned subsidiary of the Company to the Company or any of the Company’s other wholly owned subsidiaries), in each case other than (i) inventory sold in the ordinary course of business, or (ii) any Transfer of assets in a single transaction or series of related transactions with a fair market value of less than or equal to $75 million;

 

(d)           the issuance of any Capital Stock of the Company or of any subsidiary of the Company in excess of $50 million, other than (i) issuances to the Company or any of the Company’s wholly owned subsidiaries or (ii) issuances upon the exercise of stock options issued to an officer, director or employee of the Company pursuant to a management incentive plan, employment agreement or other arrangement approved by the Board or a duly authorized committee thereof;

 

(e)           the guarantee, assumption, incurrence or refinancing of indebtedness for borrowed money by the Company or any of its subsidiaries (including indebtedness of any other Person existing at the time such other Person merged with or into or became a subsidiary of, or substantially all of its business and assets were acquired by, the Company or such subsidiary, and indebtedness secured by a lien encumbering any asset acquired by the Company or any such subsidiary) or the pledge of, or granting of a security interest in, any of the assets of the Company or any of its subsidiaries in excess of $50 million in any 12-month period (other than trade indebtedness incurred in the ordinary course of business by the Company and its subsidiaries);

 

(f)            material changes to the scope or nature of the business or operations of the Company and its subsidiaries, including the entering into of any new line of business;

 

(g)           the approval of any annual budget for any fiscal year of the Company;

 

(h)           any change to senior management of the Company or any of its Material Subsidiaries, including employment of new members, termination of existing members of senior management and setting or amending the compensation arrangements of new or existing members of senior management;

 

(i)            entering into any direct or indirect transactions between the Company or any subsidiary of the Company, on the one hand, and (i) any of the stockholders of the Company or Affiliates or Related Persons of any of the stockholders of the Company (other than transactions in which a Sponsor or an Affiliate or Related Person of a Sponsor becomes a lender under a credit facility, indenture or other form of indebtedness with institutional lenders of the Company or any of its subsidiaries, including replacements or refinancings thereof), (ii) any Affiliate of the Company or any subsidiary of the Company or (iii) any officer, director or employee of the Company or any subsidiary of the Company (other than in the ordinary course of business as part of travel advances, relocation advances or salary), on the other hand

 

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(including the purchase, sale, lease or exchange of any property, or rendering of any service or modification or amendment of any existing agreement or arrangement);

 

(j)            the commencement of any liquidation, dissolution or voluntary bankruptcy, administration, recapitalization or reorganization of the Company or any of its subsidiaries in any form of transaction, making arrangements with creditors, or consenting to the entry of an order for relief in any involuntary case, or taking the conversion of an involuntary case to a voluntary case, or consenting to the appointment or taking possession by a receiver, trustee or other custodian for all or substantially all of its property, or otherwise seeking the protection of any applicable bankruptcy or insolvency law, other than any such actions with respect to a non-Material Subsidiary where, in the good faith judgment of the Board, the maintenance or preservation of such subsidiary is no longer desirable in the conduct of the business of the Company or any of its Material Subsidiaries; and

 

(k)           the entering into of any agreement to do any of the foregoing.

 

ARTICLE V
 MISCELLANEOUS

 

SECTION 5.01.      Notices.  Except as otherwise specified herein, all notices and other communications required or permitted hereunder shall be in writing and shall be mailed by registered or certified mail, return receipt requested, postage prepaid or otherwise delivered by hand, messenger, facsimile transmission or electronic mail and shall be given to such party at its address or facsimile number set forth on the signature pages hereof or such other address or facsimile number as such party may hereafter specify in writing in accordance with this Section 5.01; provided, that:

 

(a)           unless otherwise specified by Ares in a notice delivered by Ares in accordance with this Section 5.01, any notice required to be delivered to Ares shall be properly delivered if delivered to:

 

Ares Corporate Opportunities Fund II, L.P.
 c/o Ares Management II, L.P.
 2000 Avenue of the Stars, 12th Floor
 Los Angeles, CA 90067
 Fax:   (310) 201-4170
 Attention: David Kaplan

 

with a copy (which shall not constitute notice) to:

 

Proskauer Rose LLP
 2049 Century Park East, Suite 3200
 Los Angeles, CA 90067
 Fax: (310) 557-2193
 Attention: Michael A. Woronoff, Esq.

 

7

 

(b)           unless otherwise specified by OTPP in a notice delivered by OTPP in accordance with this Section 5.01, any notice required to be delivered to OTPP shall be properly delivered if delivered to:

 

Ontario Teachers’ Pension Plan Board
 5650 Yonge Street, 8th Floor
 Toronto, ON M2M 4H5
 Fax: 416-730-5082
 Attention: Andrew Claerhout
 Email: andrew_claerhout@otpp.com

 

with copies (which shall not constitute notice) to:

 

Ontario Teachers’ Pension Plan Board
 5650 Yonge Street, 8th Floor
 Toronto, ON M2M 4H5
 Fax: 416-730-3771
 Attention: Legal Department

 

and

 

O’Melveny & Myers LLP
 400 South Hope St.
 Los Angeles, CA 90071
 Fax: 213-430-6407
 Email: jlaco@omm.com
 Attention: John A. Laco, Esq.

 

(c)           unless otherwise specified by the Company in a notice delivered by the Company in accordance with this Section 5.01, any notice required to be delivered to the Company shall be properly delivered if delivered to:

 

GNC Holdings, Inc.
 300 Sixth Avenue
 Pittsburgh, PA 15222
 Fax: 412-338-8900
 Attention: Chief Legal Officer

 

with a copy (which shall not constitute notice) to:

 

Proskauer Rose LLP
 2049 Century Park East
 Suite 3200
 Los Angeles, CA 90067
 Fax: 310-557-2193
 Email: mworonoff@proskauer.com and pbond@proskauer.com
 Attention: Michael A. Woronoff, Esq. and Philippa M. Bond, Esq.

 

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SECTION 5.02.      Binding Effect; Benefits.  This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and permitted assigns.  Nothing in this Agreement, express or implied, is intended or shall be construed to give any Person other than the parties to this Agreement or their respective successors or permitted assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

 

SECTION 5.03.      Amendment.  This Agreement may not be amended, restated, modified or supplemented in any respect and the observance of any term of this Agreement may not be waived except by a written instrument executed by the Company and each Sponsor that owns more than 5% of the then outstanding shares of Common Stock; provided, that in the event any Sponsor ceases to own more than 5% of the then outstanding shares of Common Stock, no amendment, restatement, modification, supplement or waiver of this Agreement that uniquely and adversely affects such Sponsor shall be effective without the written consent of such Sponsor.

 

SECTION 5.04.      Assignability.  Neither this Agreement nor any right, remedy, obligation or liability arising hereunder or by reason hereof shall be assignable by any party hereto except as otherwise expressly stated hereunder.

 

SECTION 5.05.      Governing Law; Submission to Jurisdiction.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Delaware, without giving effect to its principles of conflict of laws.  The parties hereto irrevocably submit, in any legal action or proceeding relating to this Agreement, to the jurisdiction of the courts of the United States located in the State of New York or in any New York state court located in New York county and consent that any such action or proceeding may be brought in such courts and waive any objection that they may now or hereafter have to the venue of such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient forum.

 

SECTION 5.06.               Enforcement.  The parties agree that irreparable damage (for which monetary damages, even if available, would not be an adequate remedy) would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms on a timely basis or were otherwise breached.  It is accordingly agreed that the parties shall be entitled to an injunction, specific performance and other equitable relief to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in any court identified in Section 5.05 above without the need to post bond, this being in addition to any other remedy to which they are entitled at law or in equity.

 

SECTION 5.07.      Severability.  If any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

SECTION 5.08.      Additional Securities Subject to Agreement.  All shares of Common Stock of the Company that any Sponsor hereafter acquires by means of a stock split, stock dividend, distribution, exercise of options or warrants or otherwise (other than pursuant to a public offering), whether by merger, consolidation or otherwise (including shares of a

 

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surviving corporation into which the shares of Common Stock are exchanged in such transaction) will be subject to the provisions of this Agreement to the same extent as if held on the date of the this Agreement.

 

SECTION 5.09.      Section and Other Headings.  The section and other headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Agreement.

 

SECTION 5.10.      Counterparts.  This Agreement may be executed in any number of counterparts, each of which may be executed by less than all of the parties hereto, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

 

SECTION 5.11.      Waiver of Jury Trial.  Each party to this Agreement, for itself and its Related Persons, hereby irrevocably and unconditionally waives to the fullest extent permitted by applicable law 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 the actions of the parties hereto or their respective Related Persons pursuant to this Agreement or in the negotiation, administration, performance or enforcement of this Agreement.

 

SECTION 5.12.               Entire Agreement.  This Agreement supersedes all prior agreements, whether written or oral, between the parties with respect to its subject matter (including this Agreement) and constitutes a complete and exclusive statement of the terms of the agreement between the parties with respect to its subject matter.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the Company and each Sponsor have executed this Agreement as of the day and year first above written.

 

 

	
 
    	
GNC   HOLDINGS, INC.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Gerald J. Stubenhofer, Jr.
    
	
 
    	
 
    	
Name:
    	
Gerald   J. Stubenhofer, Jr.
    
	
 
    	
 
    	
Title:
    	
Senior   Vice President, Chief Legal
    
	
 
    	
 
    	
 
    	
Officer   and Secretary
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ARES   CORPORATE OPPORTUNITIES FUND II, L.P.
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:   
    	
ACOF   Operating Manager II, L.P., its manager
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Brian Klos
    
	
 
    	
 
    	
Name:
    	
Brian   Klos
    
	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
ONTARIO   TEACHERS’ PENSION PLAN BOARD
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Roman Duch
    
	
 
    	
 
    	
Name:
    	
Roman   Duch
    
	
 
    	
 
    	
Title:
    	
Authorized   Signatory
    
					

 

Signature Page to Stockholders AgreementExhibit 10.1

 

Loan Agreement

 

(Used for Short-term, Medium-term, and Long-term Loan)

 

This Loan Agreement (the “Agreement”) is made and entered into by SemiLEDs Optoelectronics Co. Ltd., represented by Chairman Trung Doan (hereinafter the “Borrower”) and the guarantor who shall act as a joint and several guarantor for the Borrower (hereinafter the “Guarantor”, and the Guarantor and the Borrower hereinafter collectively the “Obligors”) for application of the loan facility from E. Sun Bank (hereinafter the “Bank”). In addition to comply with the Credit Facility Agreement, the Joint Guarantee Agreement and other agreements entered into with the Bank, The Obligors agree to comply with the terms and condition as follows:

 

1.               The Borrower may apply loan to the Bank in accordance with the Agreement during the term from October 28, 2010 to October 28, 2011 (the “Term”). The loan line is set at NTD 87,500,000. The first take-down shall be made on or prior to February 28, 2011; otherwise the Agreement shall promptly expire.

 

2.               The take-down and the lending period should be made in accordance with (2) of the follows:

 

(1)          If the one time take-down is made during the Term set forth in Article 1 of the Agreement, the Borrower may not make another take-down. The lending period is totally        years and        months calculated from   /date to   /date.

 

(2)          The Borrower may make multiple take-downs during the Term set forth in Article 1 of the Agreement. However, the lending period of each take-down may not exceed fifteen (15) years. When the line of the take-down is used, it may not be revolved after each take-down has been paid off. The Borrower should provide the take-down application indicating the intended sum of the loan, and the loan will be released accordingly upon the Bank’s agreement. The lending period shall be indicated on the take-down application.

 

(3)          When the revolving take-down is made, the maximum lending period of each revolving take-down may not exceed         . The Borrower should provide the take-down application indicating the intended sum of the loan, and the loan will be released accordingly upon the Bank’s agreement. The lending period shall be indicated on the take-down application.

 

3.               The Borrower agrees that the loan is deemed received when the Bank released each loan fund into the bank account that the Borrower opens with the Bank, or the drawdown made by the Bank upon the instruction of the Borrower.

 

4.               The interests of the loan accrued shall be calculated in accordance with (4) below:

 

(1)          From the date of the loan, the interests accrued shall be calculated based on the markup base annual interest rate at        %, (the current annual interest rate is        %). This markup interest rate shall be adjusted in accordance with the Bank’s adjustment to its base annual interest rate.

 

 

(2)          From the date of the loan, the interests accrued shall be calculated based on the fixed deposit interest rate marking up annual interest rate of        %, (the current annual interest rate is        ). This markup interest rate shall be adjusted in accordance with the Bank’s adjustment to its fixed deposit interest rate.

 

(3)          From the date of the loan, the interests accrued shall be calculated based on the fixed annual interest rate of        %.

 

(4)          From the date of the loan, the interests accrued shall be calculated based on the annual interest rate indicated in the take-down application.

 

(5)          (blank)

 

5.               The illustration of pricing of the base interest rate and the fixed interest rate index

 

I. Base Interest Rate

 

(1) Pricing Basis: interest rate = last three financial arithmetic mean of the overnight call rate + a certain percentage, “the financial industry last three months the arithmetic average of the overnight rate,” being based on the financial sector of the arithmetic mean of the overnight rate announced by the “Inter-bank Call Center”,  “a certain percentage of” being set by reference to capital costs, operating costs, and interest rate risks and other factors of the Bank, which the Bank may review and adjust as the market changes.

 

(2) Rate sampling: based on the financial sector of the arithmetic mean of the overnight rate announced by the “Inter-bank Call Center’ for the three full months before the date of adjustment (rounded to take to the second decimal).

 

(3) Adjustment Frequency and Method:

 

o  (a) base interest rate regularly adjusted once every three months, adjustment date being annual 3 / 23, 6 / 23, 9 / 23, 12/23 (as adjusted on a holiday, a next business day serving as an adjustment date).

 

Adjustment Frequency Compiled Table

 

	
Adjustment time
    	
 
    	
3/23
    	
 
    	
6/23
    	
 
    	
9/23
    	
 
    	
12/23
    
	
Available period
    	
 
    	
3/23-6/22
    	
 
    	
6/23-9/22
    	
 
    	
9/23-12/22
    	
 
    	
12/23-3/22
    
	
Sampling Date
    	
 
    	
12/1-2/29
    	
 
    	
3/1-5/31
    	
 
    	
6/1-8/31
    	
 
    	
9/1-11/30
    

 

o  (b) base interest rate regularly adjusted once each month; the adjustment date is 23th every month (as adjusted on a holiday, a next business day serving as an adjustment date).

 

(4) In case of occurring significant force majeure factor (for example sampling organization having merged, being eliminated, or being unable to provide financial

 

 

sector overnight call rate etc.), the Bank shall change the pricing basis of the base interest rate.

 

II Fixed Deposit Interest Rate Index

 

(1) Pricing Basis: fixed deposit interest rate index is set in accordance with the average base of “one-year fixed-rate regular savings deposits” of the sample reference banks among the Bank of Taiwan, Zhanghua Bank, Hua Nan Bank, First Commercial Bank,  Taiwan Cooperative Bank, Land Bank, Mega International Commercial Bank, Cathay United Bank, Taiwan Small and Medium-sized Enterprise Bank and Chinese Trust Commercial Bank and other well-known reference samples selected banks ( which shall be based on the Bank website announcement when appropriating the fund).

 

(2) Adjustment Frequency and Method:

 

o  (a) fixed deposit rate index adjusted once every three months, adjustment date for each of the 2 / 21, 5 / 21, 8 / 21 and 11/21 (as adjusted on a holiday, a next business day serving as an adjustment date), sampling date for the adjustment from the 11th date to 17th date of the same month for average interest rate as a basis, the time being based on the announcement made by the Central Bank on that day. Index is subject to the second decimal point, rounding the third decimal point.

 

Adjustment Frequency Compiled Table

 

	
Adjustment time
    	
 
    	
2/21
    	
 
    	
5/21
    	
 
    	
8/21
    	
 
    	
11/21
    
	
Available period
    	
 
    	
2/21-5/20
    	
 
    	
5/21-8/20
    	
 
    	
8/21-11/20
    	
 
    	
11/21-2/20
    
	
Date collected
    	
 
    	
2/11-2/17
    	
 
    	
5/11-5/17
    	
 
    	
8/11-8/17
    	
 
    	
11/11-11/17
    

 

x (b) fixed deposit rate index adjusted once every month, adjustment date for each of the twentieth date (as adjusted on a holiday, a next business day serving as an adjustment date), sampling date for adjustment from the twenty first date of a month to the twentieth date of a next month for average interest rate as a basis, the time being based on the announcement made by the Central Bank on that day.  Index is subject to the second decimal point, rounding the third decimal point.

 

(3) If there is one of the following circumstances, the Obligors agree that the Bank may change the full set of sample reference banks of the fixed deposit rate index, and replace them with other domestic banks.

 

(a)  When the sample reference banks have merged, are merged, eliminated, closure, bankruptcy, reorganization or has one of the circumstances of having been ordered to suspend business, being regulatory, and being taken over, according to Article 62 of the Banking Act.

 

(b)  One of the sample reference banks stops a sale of one-year periodic deposit products with fixed rate.

 

 

III Announcement: the adjusted base rate and fixed deposit rate index will be published on the board of “ deposit/loan rate table “ of various business units of the Bank and the Bank website (www.esunbank.com.tw).

 

6.               Payment of the principal and interests should be made to the Bank in accordance with (3) of the follows:

 

(1)          Interests monthly paid, principal paid when due.

 

(2)          Interests monthly paid, principal paid by     monthly or     quarterly.

 

(3)          Principal and interests are monthly paid in compliance with the annuity method; when floating interest rate is applied, the Borrower agrees that the interests accrued be adjusted according to the floating interest rate.

 

(4)          During the grace period from the date of the loan to              /date, only the monthly payment of the interests accrued should be paid.  After the grace period expires, the principal and interests shall be paid monthly in compliance with the annuity method. When floating interest rate is applied, the Borrower agrees that the interests accrued be adjusted according to the floating interest rate.

 

(5)          (blank)

 

7.               When the Borrower defaults on paying off the principal, the Borrower shall pay the delay interest according to Article 4; When the Borrower defaults on paying off the principal or its interest within six months , the delay interest is ten percent, beyond six months, the penalty being twenty percent. The Obligors shall be jointly and severally responsible for the necessary expenses arising from respective claim of enforcement under the Agreement by the Bank.

 

8.               The Borrower hereby authorizes the Bank to automatically transfer the deposit from the account number 1126-940-001286 of the demand deposit as opened by the Borrower in the Bank to set off the loan and its related expenses (including principal, interest, liquidated damages, fees, insurance premiums, the enforcement of the claims and attorneys fees etc.), by using automated equipment or by the Bank from any of the persons entitled to sign deposit withdrawal certificate, without the bank book, withdrawal slip or check of the Borrower, which shall be processed in accordance with the regulations of the Bank, and before all the debts are paid off, the Borrower shall not settle the said deposit account and the Agreement shall serve as a proof of the authorization.

 

9.               The Guarantor shall be jointly and severally liable for the principal, interest, delay interest, penalty, damages and other subordinate claims which the Borrower is liable under the Agreement. The Guarantor shall not withdraw from its obligation as a guarantor. Failure to sign on the take-down application by the Guarantor may not be used as an excuse to refuse to perform as a guarantor.

 

10.         The performance place of this Agreement is located in Hscinchu bench of the Bank. Both parties agree that Taiwan Taipei District Court or Hsinchu District Court be the forum should the suit involves the Agreement is initiated.

 

 

To: E. Sun Bank

 

The Obligors hereby agree and sign the Agreement and declare their thorough understanding of the contents of the Agreement after reviewing for reasonable time.

 

The Borrower: SemiLEDs Optoelectronics Co., Ltd.

 

(Original Stamp):

 

Responsible Person: Trung Doan

 

Address: 3-4F, No. 11 Ke Jung Rd., Chu-Nan Site, Hsinchu Science Park, Chu-Nan 350, Miao-Li County, Taiwan, R.O.C.

 

 

	
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Date :   November 10, 2010
    	
 
    

 

 

Credit Facility No.: 001455

 

	
Stamp:
    	
 
    	
 
    	
Handled by:
    	
 
    	
 
    	
Cross Reference:
    	
 
    	
 
    

 

 

Promissory Note

 

Pay to the order of E.Sun Bank or its designator                 without conditions

 

1. The interest is paid monthly from the date of the promissory note, calculated byo base rateo monthly base ratex ARM per month adding 0.55% annual interest rate (the markup interest rate being no less than 1.65%) on oa fixed basisx a variable basis. If the interest rate is paid on a variable basis, the above-mentioned interest rate shall be adjusted in accordance witho base rateo monthly base ratex fixed deposit rate for one month. Where the Borrower defaults on paying off interest or principal within six months, the delay interest is ten percent, beyond six months, the penalty being twenty percent.

 

2. This promissory note is exempted from making a refusal certificate, and is exempted from the obligation of notice under Article 89 of Negotiable Instrument Act.

 

3. Place of payment: No 34, Minzu Road, Xinzhu City

 

Issuer: SemiLEDs Optoelectronics Co., Ltd.

 

Representative : Trung Doan

 

Address: 3-4F, No. 11 Ke Jung Rd., Chu-Nan Site, Hsinchu Science Park, Chu-Nan 350, Miao Li County, Taiwan, R.O.C.

 

Issuer:

 

Address:

 

Issuer:

 

Address:

 

Issuer:

 

Address:

 

 

Power of Attorney

 

The Borrowers jointly issue and deliver the Bank a promissory note in the amount of NTD 87,500,000, as collateral of its debts, as deemed necessary in accordance with a fact, authorize the Bank or an agent, an employee of the Bank to fill in the due date, the rate, the payment of place, and other items to effectively enforce the right of a promissory note, the Borrower may not withdraw or limit this authorization without a written consent of the Bank.

 

To: E Sun Bank

 

Borrower: SemiLEDs Optoelectronics Co., Ltd.

 

Address: 3-4F, No. 11 Ke Jung Rd., Chu-Nan Site, Hsinchu Science Park, Chu-Nan 350, Miao Li County, Taiwan, R.O.C.

 

Representative: Trung Doan

 

Borrower:

 

Borrower:

 

Borrower: 

 

 

Addendum to the Loan Agreement

 

The Obligors (the Borrower and the Guarantor) hereinafter apply a loan of NT$87,500,000 from the Bank dated November 10, 2010 and entered in to the x Loan; o Bill; o Take-down application agreement with the Bank. The Bank agrees to addend, amend modify the terms of the Agreement according to (3) of the follows:

 

(1)   The original term of the loan, from             /date has been amended to from           /date to           /date.

 

(2)   The original interest rate which is based on o base interest rate, or o fixed deposit interest rate marking up    % of annual interest rate calculated by floating interest rate of the Bank, is now amended and is based ono base interest rate, or o fixed deposit interest rate marking up    % of annual interest rate calculated by floating interest rate of the Bank. Currently the annual interest rate is      %, and the remainder shall be complied with the original terms of the Agreement.

 

(3) Other amendment: For the first year, the interests accrued are calculated by the fixed deposit interest rate for one month and the markup annual interest rate of 0.40% calculated by floating interest rate of the Bank.  For the second year, the interests accrued are calculated by the fixed deposit interest rate for one month and the markup annual interest rate of 0.45% calculated by floating interest rate of the Bank.  Starting from the third year, the interests accrued are calculated by the fixed deposit interest rate for one month and the markup annual interest rate of 0.55% calculated by floating interest rate of the Bank.

 

Except the forgoing amendments, the remainder of the Agreement shall remain in effect.

 

To: E. Sun Bank

 

The Borrower: SemiLEDs Optoelectronics Co., Ltd.

(Original Stamp):

 

Responsible Person: Trung Doan

 

Address: 3-4F, No. 11 Ke Jung Rd., Chu-Nan Site, Hsinchu Science Park, Chu-Nan 350, Miao-Li County, Taiwan, R.O.C.

 

Guarantor:

 

(Original Stamp):

 

Address:

 

 

Guarantor:

 

(Original Stamp):

 

Address:

 

 

Guarantor:

 

(Original Stamp):

 

 

Address:

 

 

Guarantor:

 

(Original Stamp):

 

Address:

 

Date: November 30. 2010

 

Credit Facility No.: 001455

 

Stamp:                                         Handled by:                                         Cross Reference:

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