Harbin Pharmaceutical Group Holding Co., Ltd. signed a non-binding term sheet to acquire substantially all assets from GNC Holdings, Inc. (NYSE:GNC) for $760 million on June 23, 2020. As of August 7, 2020 Harbin Pharmaceutical Group Holding Co., Ltd. entered into a stalking horse agreement to acquire substantially all assets from GNC Holdings, Inc. The purchase price is subject to adjustments. Harbin Pharmaceutical will purchase all or substantially all of the assets of GNC Holdings for $760 million, which amount shall be inclusive of the full amount of a new committed financing provided to GNC Holdings amounting to an aggregate principal amount of $400 million with Bank of China. Harbin Pharmaceutical Group will assume certain liabilities of the issuer and certain of its subsidiaries. As of July 20, 2020 the creditors committee requested an addition of three weeks to the sale timeline adding to a one-week extension as GNC Holdings, Inc. and Harbin Pharmaceutical Group Holding Co., Ltd. enter a purchase agreement by July 31, 2020. The motion also calls for an August 10, 2020 deadline to select a lead bidder. In addition, Harbin Pharmaceutical is prepared to offer a take-back instrument to be issued by GNC Holdings or a new company formed pursuant to a bid auction process, if applicable to Term Loan B lenders in an aggregate principal amount not to exceed $210 million. Harbin Pharmaceutical together with IVC, will provide will provide a senior secured super priority debtor-in-possession delayed-draw term loan facility in an aggregate principal amount not to exceed $75 million with a six-month maturity and draw of a revolver up to $75 million which amounts shall be subject to adjustment to take proper account of the agreed upon DIP budget. In addition, $475 million to the FILO lenders and Term Loan B lenders in amounts to be agreed, and which amounts shall not be subject to reduction under any circumstances. In the event of termination, GNC Holdings shall pay a termination fee of 3% plus costs. As of August 15, 2020, first agreement was amended under which the outside date was extended from October 15, 2020 to October 31, 2020 and the break-up fee payable by the GNC Holdings, Inc. under certain circumstances was reduced from $22.8 million to $15.2 million. On September 17, 2020, GNC and Harbin entered into the fourth amendment to stalking horse agreement, pursuant to which, among other things (a) the aggregate amount of junior notes payable to the debtors’ unsecured creditors was increased from $10 million to $20 million, $15 million of which will be issued as convertible junior notes and $5 million of which will be issued as non-convertible junior notes, (b) the additional conditions precedent to the issuance of such junior notes pursuant to the debtors’ plan of reorganization to the unsecured creditors were removed and (c) Harbin agreed to assume at least 1,400 of the debtors’ real property leases for retail stores at the closing. On October 7, 2020, the parties entered into the fifth amendment to stalking horse agreement, pursuant to which, among other things, the parties agreed (a) to modify certain provisions related to the timing and frequency of the distribution of the debtors’ remaining cash after the closing and after the debtors have completed the wind-down process in the Bankruptcy Court; (b) that royalty payments required to be made with respect to GNC’s trademarks by counterparties under rejected contracts, constitute purchased assets under the Stalking Horse Agreement; (c) to remove certain additional contracts and leases from the list of agreements to be assumed by Harbin; (d) that Harbin is prohibited from amending GNC’s executive pay policy for the first twelve (12) months after the closing in any manner that would adversely impact a transferred employee’s amount of severance or the events qualifying a transferred employee for severance; and (e) make additional modifications and clarifications with respect to the liabilities being assumed by Harbin, as further set forth in the fifth amendment. The transaction is subject to definitive documentation, approval from bankruptcy court and the Canadian court, approval from creditors, among others. The transaction also requires NDRC, MOC or other PRC approvals. The bankruptcy court approved the transaction on September 17, 2020. The transaction is expected to consummate in the fall of 2020. Rick Levy, Caroline Reckler, Michèle Penzer, George A. Davis, Richard A. Levy and Caroline A of Latham & Watkins LLP acted as legal advisors, while Rachel Chesley and Rachel Rosenblatt of FTI Consulting and Evercore acted as financial advisors for GNC Holdings. Bank of China Limited, Macau Branch acted as debt advisor for GNC. White & Case LLP, Junhe LLP, and Clifford Chance acted as legal advisors for Harbin Pharmaceutical. Michael R. Nestor, Kara Hammond Coyle and Andrew L. Magaziner of Young Conaway Stargatt & Taylor, LLP acted as legal advisors to GNC Holdings. Jeffrey Cohen, Nicole Fulfree, Michael A. Kaplan, Michael Savetsky, Bruce Buechler and Michael Etkin of Lowenstein Sandler LLP acted as legal advisor for the Official Committee of Unsecured Creditors. Harbin Pharmaceutical Group Holding Co., Ltd. completed the acquisition of substantially all assets from GNC Holdings, Inc. (NYSE:GNC) on October 7, 2020.