Exhibi
10.2


 


EXECUTION
COPY


 


REDEMPTION AGREEMENT


 


among


 


ARTAL LUXEMBOURG S.A.


 


as the Seller


 


WEIGHTWATCHERS.COM, INC.


 


as the Company


 


and


 


WEIGHT WATCHERS INTERNATIONAL, INC.


 


as the Parent


 


Dated as of June 13, 2005


 





















 


REDEMPTION AGREEMENT


 


THIS REDEMPTION
AGREEMENT (this “Agreement”) is entered into as of June 13, 2005
between ARTAL LUXEMBOURG S.A., a Luxembourg corporation (“Seller”).
WEIGHTWATCHERS.COM, INC., a Delaware corporation (the “Company”) and
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia corporation (“Parent”).


 


RECITALS


 


WHEREAS, the
Company, SCW Merger Sub, Inc., a Delaware corporation (“Merger Sub”),
and Parent are parties to an Agreement and Plan of Merger, dated as of the date
hereof (as the same may be amended or supplemented, the “Merger Agreement”),
pertaining to the merger of the Merger Sub with and into the Company, with the
Company being the surviving entity thereunder (the “Merger”).


 


WHEREAS,
execution and delivery of this Agreement by the parties hereto is simultaneous
with the execution and delivery of and is a condition to Parent’s and Merger
Sub’s obligation to enter into the Merger Agreement.


 


WHEREAS,
following the effective time of the Merger, Seller shall own the Shares.


 


WHEREAS, the
Company desires to redeem and Seller desires to have redeemed the Shares at a
redemption price of $25.21 per Share, subject to the terms and conditions of
this Agreement.


 


NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
parties agree as follows:


 


ARTICLE 1

DEFINITIONS


 


Section 1.1                                      Certain
Defined Terms.  For purposes of this
Agreement.


 


“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 first Person. For the purposes of this definition, “control”
(including, with correlative meanings, the terms “controlling,” “controlled by”
and “under common control with”), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities, by contract or otherwise.


 


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


 


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“Business Day” means any day, other than Saturday, Sunday or a
U.S. federal holiday, and shall consist of the time period from 12:01 a.m.
through 12:00 midnight Eastern time.


 


“Company Common Stock” means the issued and outstanding shares
of common stock, par value $0.01 per share, of the Company.


 


“Covenanted Amount” means such number of shares of Common Stock,
without par value, of the Parent (“Parent Common Stock”) that have an aggregate
value of at least $100,000,000 on the Redemption Date, calculated using the
average closing prices for Parent Common Stock on the New York Stock Exchange,
or if not then traded on the New York Stock Exchange, on such exchange or in
such system as such stock is then traded, (as reported in the Wall Street
Journal) for the 30 trading days prior to the Redemption Date.


 


“Effective Time” means the time at which the Merger becomes
effective pursuant to the terms of the Merger Agreement.


 


“External Financing” shall have the meaning as set out in the
Schedule.


 


“Governmental Entity” means any foreign, national, federal,
state, provincial or local governmental, regulatory or administrative
authority, agency or commission.


 


“Laws” means any domestic or foreign laws, statutes, ordinances,
rules, regulations, codes or executive orders enacted, issued, adopted,
promulgated or applied by any Governmental Entity.


 


“Orders” means any orders, judgments, injunctions, awards,
decrees or writs handed down, adopted or imposed by any Governmental Entity.


 


“Parent Director” means any director designated by Parent in
accordance with Section 3.3.


 


“Person”
means any individual, corporation, limited or general partnership, limited
liability company, limited liability partnership, trust, association, joint
venture, Governmental Entity and other entity and group (which term shall
include a “group” as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934).


 


“Release
Date” means, if the Redemption Date falls during 2005, September 1,
2009, or, if the Redemption Date falls after 2005, September I, 2010.


 


“Seller
Director” means (i) any director designated by Seller in accordance
with the provisions of Section 3.3 and (ii) any director of the
Company who at the Effective Time is a director or officer of Seller or The
Invus Group, LLC.


 


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“Shares”
means the 12,091,811 shares of the Company Common Stock held by Seller
immediately following the Effective Time, or such other securities which are
derived from such shares of Company Common Stock, whether through merger,
tender offer, share-split, reclassification, consolidation or otherwise.


 


“Special
Committee” means the Special Committee of the Board of Directors of Parent,
as in effect on the date hereof, as such committee may be reconstituted with
the approval of the current members then on such committee.


 


“Subsidiary”
means, when used with respect to Parent or the Company, any other Person that
Parent or the Company, as applicable, directly or indirectly owns or has the
power to vote or control 50% or more of any class or series of capital stock of
such Person.


 


ARTICLE 2

REDEMPTION


 


Section 2.1                                      Redemption
of the Shares.  Upon the terms and
subject to the fulfillment, expiry or waiver of the conditions of this
Agreement as set forth in Section 2.4 below (the “Conditions”), on the
Redemption Date, Seller shall sell, assign, transfer and convey to the Company
and the Company shall purchase, acquire, and accept from Seller, all of Seller’s
right, title and interest in and to the Shares for the Redemption Price (such
redemption being, the “Redemption”).  The “Redemption Date” for the purposes
of this Agreement shall be (i) December 30, 2005 provided that all of
the Conditions have been satisfied as at such date; or if all of such
Conditions have not been satisfied, (ii) such later date which is two
Business Days following the satisfaction of the Conditions but in no case later
than December 29, 2006 unless any Condition in Section 2.4(a)(i) or
Section 2.4(a)(iii) remains unsatisfied in which case it be such
later date upon which such Condition is satisfied.


 


Section 2.2                                      Payment
of Redemption Price.  The aggregate
redemption price to be paid by the Company to Seller for the Shares is
$304,834,555.31 (three hundred and four million, eight hundred and thirty-four
thousand and five hundred and fifty-five dollars and thirty-one cents) in cash
(the “Redemption Price”). The Company shall deliver to Seller on the Redemption
Date the Redemption Price for the Shares by wire transfer of immediately
available funds to an account designated by Seller.


 


Section 2.3                                      Surrender
of Redeemed Shares.  Seller shall
deliver to the Company on the Redemption Date (i) the stock certificate
representing the Shares or a statement of lost stock certificate in the form
attached hereto as Exhibit A and (ii) a stock power in the
form attached hereto as Exhibit B for the transfer of the Shares to
the Company. On the Redemption Date, the Company shall record the transfer of
the Shares in its corporate records.


 


Section 2.4                                      Conditions
to Redemption; Notification.


 


(a)                                  Conditions.  The respective obligation of the Company and
Seller to effect the Redemption is subject to the satisfaction, expiry or
waiver of each of the following conditions:


 


(i)                                     No
Injunctions or Restraints.  No
Governmental Entity shall have enacted, issued, promulgated, enforced or
entered any Laws or Orders (whether temporary,


 


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preliminary or permanent) that
prohibits or materially restrains the Redemption contemplated hereby;


 


(ii)                                  Financing.
 The Company shall have obtained the
External Financing; provided, however, that
at 23:59 (Eastern time) on December 28, 2006 such condition shall
automatically expire and no longer be a condition hereunder; and


 


(iii)                               Merger.
 The Merger shall have become effective
pursuant to the terms of the Merger Agreement.


 


(b)                                 Notifications.
 The Company shall notify Seller in
writing within one Business Day of it obtaining approval from the credit
committee of the relevant bank that such bank will provide the External
Financing. Each of the Company and Seller shall notify the other in writing
within five Business Days in the event that it becomes aware of any
circumstances which could reasonably be expected to lead to the Condition set
forth in Section 2.4(a)(i) not being satisfied.  The failure to give a notification pursuant to
this Section 2.4(b) shall not affect the satisfaction of either of the,
Conditions set forth in Section 2.4(a).


 


ARTICLE 3

COVENANTS AND SELLER APPOINTMENT RIGHTS


 


Section 3.1                                      Company
Covenants.  The Company covenants to
Seller that:


 


(a)                                  Between
the Effective Time and the Redemption Date, unless Seller shall otherwise agree
in writing, the business of the Company and its Subsidiaries shall be conducted
only in the ordinary course of business in all material respects, and the
Company and its Subsidiaries shall use all their respective commercially
reasonable efforts to preserve intact in all material respects their business
organization. Between the Effective Time and the Redemption Date, without the
prior consent of Seller, the Company shall not take any of the actions
contemplated by Article 5 of the Merger Agreement.


 


(b)                                 Following
the Effective Time and prior to December 29, 2006, the Company shall use
all its commercially reasonable efforts to obtain the External Financing in the
amount needed (when added to available Company cash resources) to redeem all of
the Shares.


 


(c)                                  The
Company shall provide to Parent and the Seller information, from time to time,
and at such times as may be requested by the Special Committee (in the case of
the Parent) or the Seller (as appropriate), regarding the status of the efforts
to obtain the External Financing.


 


(d)                                 The
Company shall not amend any of the existing agreements between Parent and the
Company, or enter into any new agreements with Parent or with any Affiliate of
Parent (other than, in relation to any such new agreements, any agreement that
can be cancelled upon 30 days’ notice or that, alone or in conjunction with
related agreements, involves less than $100,000 in payments by the Company in
any 12 month period) without first receiving the approval of a majority of the
Seller Directors.


 


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Section 3.2                                      Parent
Covenants. Parent covenants to Seller that:


 


(a)                                  Prior
to December 29, 2006, Parent will not make, and shall cause its Affiliates
not to make, any capital contribution or loan, give any financial assistance or
otherwise lend its credit to or enhance the credit of (by guaranty or
otherwise) the Company (any such actions being, “Financial Assistance”) in
order to facilitate the Financing or fund the Redemption.


 


(b)                                 Parent
will cause the Company to comply with all of the Company’s covenants and other
obligations under this Agreement except to the extent that Article 5 of
the Merger Agreement may be amended by Parent (acting solely through the
Special Committee) and the other parties thereto, provided, however, that Parent shall be under no obligation
to provide any Financial Assistance to the Company.


 


(c)                                  Parent
will take no actions inconsistent with the obligations of the Company pursuant
to this Agreement, and will cause its Affiliates to take no such actions.


 


Section 3.3                                      Seller
Appointment Rights.


 


(a)                                  Following
the Effective Time and prior to the Redemption Date, Seller shall have the
right to designate and the Company and Parent shall cause the nomination of
such number of directors of the Company such that after such election (assuming
all such Seller designees are elected to the Board of Directors), the number of
Seller Directors will be equal to the number resulting from (i) 0.469
multiplied by (ii) the total number of members on the Board of Directors,
rounded down to the nearest whole number; provided, that in no event shall the number
of Seller Directors nominated pursuant to this provision constitute less than
one member of the Board of Directors. If a vacancy occurs or exists on the Board
of Directors at any time, including but not limited to a vacancy because of the
death, disability, retirement, resignation or removal of any director for cause
or otherwise, and the vacant position was held by a Seller Director, then
Seller shall have the sole right to designate an individual to fill such
vacancy, and, subject to the fiduciary duties of directors, the Board of
Directors shall elect such nominee to fill such vacancy. At any annual or
special meeting of the Company, Parent shall vote all of its shares of Company
Common Stock or any other voting securities of the Company (and, with respect
to actions taken by written consent, provide such consent) for the election of
directors in favor of the nominees designated by the Seller in accordance with
this Section 3.3(a).


 


(b)                                 If,
at any time, the total number of directors of the Company is increased or
decreased, the number of directors that Seller shall have the right to
designate pursuant to Section 3.3(a) above, shall as promptly as
practicable be increased or decreased so that the adjusted ratio of Seller
Directors to total directors is not less than 0.469:1 (the “Ratio”).  In such event, Seller, Parent and the Company
shall take such steps consistent with the provisions of Section 3.3(a) to
effectuate this increase or decrease of Seller Directors in relation to the
Ratio as rapidly as reasonably possible.


 


(c)                                  Following
the Effective Time and prior to the Redemption Date, Parent shall have the
right to designate and the Company and Parent shall cause the nomination of
such 


 


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number of directors of the
Company equal to the number resulting from (i) the total number of members
on the Board of Directors minus (ii) the Seller Directors. If a vacancy
occurs or exists on the Board of Directors at any time, including but not
limited to a vacancy because of the death, disability, retirement, resignation
or removal of any director for cause or otherwise, and the vacant position was
held by a Parent Director, then Parent shall have the sole right to designate
an individual to fill such vacancy, and, subject to the fiduciary duties of
directors, the Board of Directors shall elect such nominee to fill such
vacancy. At any annual or special meeting of the Company, Seller shall vote all
of its shares of Company Common Stock or any other voting securities of the
Company (and, with respect to actions taken by written consent, provide such
consent) for the election of directors in favor of the nominees designated by
the Parent in accordance with this Section 3.3(c).


 


(d)                                 At
the request of Seller, each of the Company and Parent shall use its best efforts
to cause the removal of any Seller Director and at the request of Parent, each
of the Company and Seller shall use its best efforts to cause the removal of
any Parent Director.


 


(e)                                  Subject
to the fiduciary duties of the directors, Seller Directors shall be nominated
to serve on each committee of the Board of Directors (other than any committee required
by Law) so that after such appointment(s), the ratio of Seller Directors who
are members of such committee to the total number of members of such committee
is not less than the Ratio; provided that in no event shall the number of
Seller Directors appointed to any such committee be less than one.


 


ARTICLE 4

REPRESENTATIONS AND WARRANTIES


 


Section 4.1                                      Each
of Parent, the Company and Seller represents and warrants to each of the other
parties that:


 


(a)                                  it
(i) is a corporation duly organized, validly existing and in good standing
under the Laws of the jurisdiction in which it is incorporated, (ii) has
all requisite power and authority to carry on its business as now being
conducted; and (iii) has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby;


 


(b)                                 the
consummation of the Redemption and the other transactions contemplated hereby
and its compliance with the provisions of this Agreement (i) have been
duly authorized by all necessary corporate action and no other corporate
proceedings are necessary to authorize or approve this Agreement or to
consummate the Redemption or the other transactions contemplated hereby; and (ii) will
not conflict with, or result in any violation or breach of its certificate of
incorporation or bylaws (or equivalent constitutional document) or applicable
Laws;


 


(c)                                  this
Agreement has been duly executed and delivered by it, and, assuming the due
authorization, execution and delivery by each of the other parties hereto,
constitutes legal, valid and binding obligations of it, enforceable against it,
in accordance with the terms of 


 


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the Agreement (subject to
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other Laws affecting creditors’ rights generally from time to
time in effect); and


 


(d)                                 there
are no judicial or administrative actions, proceedings or investigations
pending or, to the best of its knowledge, threatened, which question the
validity of this Agreement or any action taken or to be taken in connection
herewith.


 


Section 4.2                                      Seller
represents and warrants to the Company that:


 


(a)                                  it
is the record and beneficial owner of the Shares; and


 


(b)                                 it
shall transfer the Shares to the Company hereunder free and clear of any mortgages,
liens, charges, claims, security interests, easements, pledges or other
encumbrances, except for any that may be created by the actions of the Company.


 


ARTICLE 5

TAX MATTERS


 


Section 5.1                                      Withholding.
 The Redemption Price shall be paid free
and clear of any and all U.S. federal, state, local or foreign income or
withholding taxes except as provided in this Section 5.1.


 


(a)                                  If
(i) Parent (acting through the Special Committee) or the Company determines
that withholding in excess of $1 is legally required based upon its reasonable
conclusion that the Seller’s ownership interest in the Company (directly,
indirectly and by attribution following the Redemption does not meet the
requirements set forth in the “substantially disproportionate redemption of
stock” safe harbor of Section 302(b)(2) of the Internal Revenue Code
of 1986, as amended (the “Code”) and (ii) Parent (acting through the
Special Committee) or the Company has notified the Seller in writing of such
determination at least 30 days prior to the Redemption Date (such notice a “Section 302
Notice”), then the Company shall withhold an amount that is calculated based on
its reasonable estimate of the Company’s current and accumulated earnings and profits
for the year in which the Redemption Date occurs, as determined in accordance
with Treasury Regulation Section 1.1441-3(c)(2)(ii). The Section 302
Notice shall set out (x) the determination that the Seller’s ownership interest
in the Company following the redemption does not meet the requirements set
forth in Section 302(b)(2), (y) a reasonable estimate of the amount of the
Company’s current and accumulated earnings and profits for the year in which
the Redemption Date occurs, as determined in accordance with Treasury
Regulation Section I.l441-3(c)(2)(ii) and (z) the amount of the
required withholding. Notwithstanding the forgoing, withholding shall not be
permitted (or, in the case of an opinion identified in clause (B) below,
withholding shall be reduced in accordance with such opinion) pursuant to this Section 5.l(a) if,
at least 10 days prior to the Redemption Date, the Seller has provided a
“Seller’s Opinion” that is reasonably acceptable to whichever of Parent (acting
through the Special Committee) or the Company has delivered the Section 302
Notice, concluding that (A) it is more likely than not that the Seller’s
ownership interest in the Company following the Redemption satisfies the
requirements set forth in the “substantially disproportionate redemption of
stock” safe harbor of Section 302(b)(2) of the Code; or (B) the
proposed withholding as set forth in the Section 302 Notice is otherwise
in excess of the amount required to be withheld in respect of the earnings and
profits of the Company determined pursuant to Treasury Regulation Section 1.1441-3(c)(2)(ii).


 


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(b)                                 If
(i) Parent (acting through the Special Committee) or the Company reasonably
determines that, based on a change in applicable law subsequent to the date
hereof, withholding is legally required in an amount in excess of the amount,
if any, determined under Section 5.1 (a), and (ii) Parent (acting
through the Special Committee) or the Company has notified the Seller in
writing of such determination at least 30 days prior to the Redemption Date (such
notice a “Change in Law Notice”), then the Company shall withhold such
additional amount. The Change in Law Notice shall set out the basis on which
the Company has reasonably determined that additional withholding is required.
Notwithstanding the forgoing, withholding shall not be permitted pursuant to
this Section 5.1(b) if, at least 10 days prior to the Redemption
Date, the Seller has provided a “Seller’s Opinion” that is reasonably acceptable
to whichever of Parent (acting through the Special Committee) or the Company
has delivered the Change in Law Notice, which opinion shall conclude that it is
more likely than not that such withholding is not required on the basis on
which the Company had determined that withholding is required as set out in the
Change in Law Notice.


 


(c)                                  For
purposes of Sections 5.1(a) and (b) above a “Seller’s Opinion”
shall mean a legal opinion of nationally recognized counsel (such counsel to be
reasonably acceptable to whichever of Parent (acting through the Special
Committee) or the Company delivered the Section 302 Notice or Change in
Law Notice, as applicable).


 


(d)                                 Any
withholding that is made pursuant to this Section 5.1 shall be made at the
rate required by statute, or such lower rate as is provided under an applicable
income tax treaty, provided that such lower treaty rate shall apply only if the
Seller provides the Company with an IRS Form W-8BEN or such other
documentation as is required to obtain the benefits of such treaty.


 


(e)                                  Any
amount withheld by the Company in accordance with this Section 5.1 shall
be remitted to the appropriate taxing authority, and such remittance shall be
treated for purposes of this Agreement as a payment of a portion of the Redemption
Price to the Seller.


 


Section 5.2                                      Indemnification.  The Seller agrees to indemnify and hold
Parent, the Company and its affiliates harmless from and against any amounts
incurred by the Company (including penalties, interest and reasonable costs and
expenses) resulting from, arising out of or relating in any way to the failure
by the Company to withhold any amount of taxes in respect of the Redemption
Price, for any reason and without regard to whether the Parent or Company
provided a Section 302 Notice or Change in Law Notice or the Seller
provided a Seller Opinion.


 


Section 5.3                                      Contests
and Cooperation.


 


(a)                                  Parent
or the Company shall promptly notify the Seller in writing of any written
notice of a proposed assessment or claim in an audit or administrative or
judicial proceeding involving the Company which, if determined adversely to the
taxpayer, would be grounds for indemnification under this Article V (a
“Withholding Tax Liability”); provided,
however, that the failure to give such notice will not affect the
Seller’s obligation to provide the


 


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indemnification specified in
this Article V except to the extent, if any, that, but for such failure,
all or a portion of the Withholding Tax Liability in question could have been
avoided.


 


(b)                                 In
the case of an audit or administrative or judicial proceeding that relates in
whole or in part to a Withholding Tax Liability, the Seller shall have the
right at its expense to participate in and control the conduct of the portion
of such audit or proceeding to the extent that such audit or proceeding relates
to a Withholding Tax Liability. The Company and Parent also may participate in
the portion of such audit or proceeding to the extent relating to the Withholding
Tax Liability and, if the Seller does not assume the defense of any such audit
or proceeding, the Company or Parent may defend the same in such manner as it
may deem appropriate, including, but not limited to, settling such audit or
proceeding after ten days’ prior written notice to the Seller setting forth the
terms and conditions of the settlement.


 


(c)                                  Each
of the Company, Parent and the Seller will provide each other with such
cooperation and information as either of them reasonably may request of the other
(i) in filing any tax return, amended tax return or claim for refund, (ii) in
the case where Seller owns directly a less than 50% interest in the Company, in
determining whether Seller’s ownership interest in the Company meets the
requirements set forth in the “substantially disproportionate redemption of
stock” safe harbor of Section 302(b)(2), (iii) in determining a
Withholding Tax Liability or a right to a refund of such taxes, (iv) in
participating in or conducting any audit or other proceeding in respect of a
Withholding Tax Liability or (v) in otherwise complying with the
provisions of this Article V.  Such
cooperation and information shall include providing copies (at the expense of
the Seller) of relevant tax returns or portions thereof, together with
accompanying schedules, related work papers and documents relating to rulings
or other determinations by tax authorities. The Company and Parent shall make
its employees available on a basis mutually convenient to both parties to
provide explanations of any documents or information provided hereunder.  Each of the Company, Parent and Seller shall
retain all tax returns, schedules and work papers, records and other documents
in its possession relating to the taxable period during which the Redemption occurred
until the later of (i) the expiration of the statute of limitations of the
taxable period of such return or (ii) six years following the due date for
such return.


 


(d)                                 Any
information obtained under this Section 5.3 shall be kept confidential
except as may be necessary in connection with the filing of tax returns or
claims for refund or in conducting an audit or other proceeding, or as
otherwise required by law.


 


Section 5.4                                      Payment.  Payment by the Seller of any amounts due
under this Article V in respect of a Withholding Tax Liability shall be
made within five Business Days following an agreement between the Seller and
the Company that an indemnity amount is payable or a “determination” as defined
in Section I313(a) of the Code.


 


Section 5.5                                      Negative
Covenant.  The Seller agrees that
prior to the Release Date, it shall not sell or otherwise transfer any shares
of the Parent Common Stock that it owns directly to the extent that as a result
of such sale it would own less than the number of shares that constitute the
Covenanted Amount as of the Redemption Date; provided,
however that at any time the Seller shall be free to replace, on one
or more occasions, upon written notice to the Company and the Parent, the
assets then subject to such covenant with different assets, or Seller 


 


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may substitute a different
indemnifying party in lieu of Seller (solely for the purposes of the covenant
in this Section 5.5), which substitute party has assets, that have a “fair
market value” at such time at least equal to that of the replaced assets; and provided, further, that Seller shall be
free to substitute the covenant given hereunder on one or more occasions
(whether or not the assets have previously been replaced), upon written notice
to the Company and the Parent, with (i) any one of a letter of credit with
a face amount of $100,000,000, cash in an amount of $100,000,000 or other
assets with a “fair market value” of $100,000,000 or (ii) a substitute
indemnifying party in lieu of Seller (solely for the purposes of the covenant
in this Section 5.5), which substitute party has provided for any one of
the foregoing in clause (i), and such security and/or such indemnifying party,
as the case may be, shall remain in effect (unless substituted as permitted by
this Section 5.5) until the Release Date. “Fair market value” shall be
determined in good faith by the Seller and, with respect to assets other than a
letter of credit, cash, marketable securities, or assets with a book value of
greater than or equal to the requisite minimum provided for above, if requested
by Parent (acting through the Special Committee), shall be supported by an
opinion of a nationally recognized investment banking firm reasonably
acceptable to Parent (acting through the Special Committee). Seller shall not
be deemed to be in breach of the foregoing for failure to give the notice
provided for above in a timely manner, unless and to the extent that Company or
the Parent has been materially prejudiced thereby.


 


ARTICLE 6

GENERAL PROVISIONS


 


Section 6.1                                      Entire
Agreement.  This Agreement (including
the Schedule and Exhibits to this Agreement), constitutes the entire
agreement relating to the Redemption and supersedes all other prior agreements,
understandings, representations and warranties, both written and oral, among
the parties to this Agreement with respect to the subject matter of this
Agreement. No representation, warranty, inducement, promise, understanding or
condition not set forth in this Agreement has been made or relied upon by any
of the parties to this Agreement relating to the Redemption.


 


Section 6.2                                      Interpretation.  The headings in this Agreement are for
reference only and shall not affect the meaning or interpretation of this
Agreement. Definitions shall apply equally to both the singular and plural
forms of the terms defined.  Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms.  All
references in this Agreement to Articles, Sections and Schedules shall refer to
Articles and Sections of, and Schedules to, this Agreement unless the context
shall require otherwise.  The words
“include,” “includes” and “including” shall not be limiting and shall be deemed
to be followed by the phrase “without limitation.”  Unless the context shall require otherwise,
any agreements, documents, instruments or Laws defined or referred to in this
Agreement shall be deemed to mean or refer to such agreements, documents,
instruments or Laws as from time to time amended, modified or supplemented,
including (a) in the case of agreements, documents or instruments, by
waiver or consent and (b) in the case of Laws, by succession of comparable
successor statutes.  All references in
this Agreement to any particular Law shall be deemed to refer also to any rules and
regulations promulgated under that Law. 
References to a Person also refer to its predecessors and permitted
successors and assigns.  The headings and
subheadings in this Agreement are included for convenience and identification
only and are in no way intended 


 


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to describe, interpret, define
or limit the scope, extent or intent of this Agreement or any provision hereof.


 


Section 6.3                                      Survival.
 The representations and warranties
contained in this Agreement shall survive the Redemption Date.


 


Section 6.4                                      No
Third-Party Beneficiaries.  Except as
expressly provided, this Agreement is not intended to confer any rights or
remedies upon any Person other than the parties to this Agreement.


 


Section 6.5                                      Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware (the jurisdiction of incorporation of the Company), without regard to
the laws that might otherwise govern under applicable principles of conflicts
of law.


 


Section 6.6                                      Submission
to Jurisdiction.  Each party hereto
irrevocably and unconditionally agrees that any legal action or proceeding with
respect to this Agreement or for recognition and enforcement of any judgment in
respect hereof brought by another party hereto or its successors or assigns
shall be brought in the Delaware Chancery Court to the fullest extent permitted
by applicable law and, to the extent not so permitted, in any federal or state
court sitting in the State of Delaware, and each of the parties hereto hereby (i) irrevocably
submits with regard to any such action or proceeding for itself and in respect
to its property, generally and unconditionally, to the exclusive personal
jurisdiction of the aforesaid courts in the event any dispute arises out of
this Agreement or any transaction contemplated hereby, (ii) agrees that it
will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (iii) agrees that it will
not bring any action relating to this Agreement or any transaction contemplated
hereby in any court other than the aforesaid courts.  Any service of process to be made in such
action or proceeding may be made by delivery of process in accordance with the
notice provisions contained in Section 6.8.


 


Section 6.7                                      WAIVER
OF JURY TRIAL.  EACH PARTY
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE,
EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY
TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF
ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH
PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES
THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 6.7.


 


11





















 


Section 6.8                                      Notices.
 Any notice, request, instruction or
other communication under this Agreement shall be in writing and delivered by
hand or overnight courier service or by facsimile:


 


If to Seller, to:


 


Artal Luxembourg S.A


105, Grand-Rue


L-1661 Luxembourg


Luxembourg


Facsimile: 011 352 22 42 59 22


Attention: Francoise de Wael


 


with a copies to:


 


The Invus Group, LLC


135 East 57th Street, 30th Floor


New York, NY 10022


Facsimile: (212)371 - 1829

Attention: Raymond Debbane


 


and


 


Gibson, Dunn & Crutcher LLP


200 Park Avenue


47th Floor


New York, New York 10166-0193


Facsimile: (212)351-5316


Attention: Steven Shoemate, Esq.


 


If to the Company, to:


 


WeightWatchers.com, Inc.


888 Seventh Avenue, 7th Floor


New York, NY 10106


Facsimile: 212-315-0709


Attention: Jeffrey Fiarman


 


with a copy, prior to the Effective Time, to:


 


Gibson, Dunn & Crutcher LLP


200 Park Avenue


47th Floor


New York, New York 10166-0193


Facsimile: (212)351-5316


Attention: Steven Shoemate, Esq.


 


12





















 


with a copy, after the Effective Time, to:


 


Paul, Weiss, Rifkind, Wharton &
Garrison LLP


1285 Avenue of the Americas


New York, New York 10019-6064


Facsimile: (212)757-3990


Attention: Judith R. Thoyer, Esq.


 


If to Parent, to:


 


Weight Watchers International, Inc.


175 Crossway Park West


Woodbury, NY 11797-2055


Facsimile: (516)390-1795


Attention: Robert Hollweg, Vice President,
General 


Counsel and Secretary


 


with a copy to:


 


Paul, Weiss, Rifkind, Wharton &
Garrison LLP


1285 Avenue of the Americas


New York, New York 10019-6064


Facsimile: (212)757-3990


Attention: Judith R. Thoyer, Esq.


 


or to such other Persons, addresses or
facsimile numbers as may be designated in writing by the Person entitled to
receive such communication as provided above. 
Each such communication shall be effective (a) if delivered by
hand, when such delivery is made at the address specified in this Section 6.8,
(b) if delivered by overnight courier service, the next business day after
such communication is sent to the address specified in this Section 6.8,
or (c) if delivered by facsimile, when such facsimile is transmitted to
the facsimile number specified in this Section 6.8 and appropriate
confirmation is received.


 


Section 6.9                                      Rules of
Construction.  The parties to this
Agreement have been represented by counsel during the negotiation and execution
of this Agreement and waive the application of any Laws or rule of
construction providing that ambiguities in any agreement or other document
shall be construed against the party drafting such agreement or other document.


 


Section 6.10                                Assignment.  This Agreement shall not be assignable by
operation of law or otherwise.


 


Section 6.11                                Remedies.  Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a party to this
Agreement shall be cumulative with, and not exclusive of, any other remedy
contained in this Agreement, at law or in equity.  The exercise by a party to this Agreement of
any one remedy shall not preclude the exercise by it of any other remedy.


 


Section 6.12                                Specific
Performance.  The parties to this
Agreement agree that irreparable damage would occur in the event that any of
the provisions of this Agreement were 


 


13





















 


not performed in accordance
with their specific terms or were otherwise breached.  It is accordingly agreed that the parties to
this Agreement shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement, in addition to any other remedy to which they are
entitled at law or in equity.


 


Section 6.13                                Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of all of the parties and, to the extent
permitted by this Agreement, their successors, executors, administrators,
heirs, legal representatives and assigns.


 


Section 6.14                                Severability.
 If any term or other provision of this
Agreement is held to be invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions is not affected in any manner materially
adverse to any party.  Upon a
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.


 


Section 6.15                                Counterparts:
Effectiveness.  This Agreement may be
executed in any number of counterparts, all of which shall be one and the same
agreement. This Agreement shall become effective when each party to this
Agreement shall have received counterparts signed by all of the other parties.


 


[The
remainder of this page is intentionally left blank.]


 


14





















 


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


 


	
   

  	
  ARTAL LUXEMBOURG S.A.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Francoise de Wael

  
	
   

  	
   

  	
  Name:

  	
  Francoise de Wael

  
	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WEIGHTWATCHERS.COM, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David P. Kirchhoff

  
	
   

  	
   

  	
  Name:

  	
  David P. Kirchhoff

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  and President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WATCHERS INTERNATIONAL INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda Huett

  
	
   

  	
   

  	
  Name:

  	
  Linda Huett

  
	
   

  	
   

  	
  Title:

  	
  President and Chief

  Executive Officer

  
					



 


Signature page
to Redemption Agreement


 





















 


Schedule

External Financing


 


For the
purposes of this Agreement, the term “External Financing” shall mean a
letter of commitment approved by the relevant third party bank’s credit
committee which commits it to provide funding to the Company (with no recourse
against Parent) on the following basis and subject to customary banking
conditions being met:


 


	
  1.                                       Amount

  	
  Such amount equal to the Redemption Price
  less the amount of any cash available to the Company from its own resources.

  
	
   

  	
   

  
	
  2.                                       Maximum
  Borrowing Rate

  	
  The weighted blended interest rate for the
  External Financing shall not be greater than 450 basis points over Parent’s
  Borrowing Rate (as defined below) at the time of the commitment for the
  External Financing.

  
	
   

  	
   

  
	
  3.                                       Prepayment
  Terms or Interest Rate Changes

  	
  The External Financing (i) shall
  provide that it is prepayable, with a prepayment penalty of no greater than
  1% on a weighted average basis, with respect to prepayments made on or after December 29,
  2006, or (ii) shall otherwise provide for an interest rate reduction on
  or after such date if appropriate.

  



 


4.                                       “Parent’s
Borrowing Rate” shall mean the lower of (a) the Alternate Base Rate plus
the ApplicableMargin for a Revolving Loan and (b) the LIBO Rate (Reserve
Adjusted) plus the Applicable Marginfor a Revolving Loan, without regard to
amounts outstanding pursuant to the Credit Agreement. Allcapitalized terms in
the definition of Parent’s Borrowing Rate shall be as defined in the
FifthAmended and Restated Credit Agreement, as amended, among Weight Watchers
International,Various Financial Institutions, Credit Suisse First Boston and
the Bank of Nova Scotia, dated as ofJanuary 21, 2004 (the “Credit
Agreement”).


 





















 


Exhibit A
to 

Redemption Agreement


 


Statement
of Lost Stock Certificate


 


The
undersigned (“Stockholder”) hereby states as follows:


 


1.                                     The
Stockholder is the owner of 12,091,811 shares (the “Shares”) of Common Stock,
par value $.01 per share, of WEIGHTWATCHERS.COM, INC., a Delaware corporation
(the “Company”).


 


2.                                     The
stock certificate representing the Shares (the “Stock Certificate”) has been
lost or destroyed.


 


3.                                     The
Stockholder is the sole legal, beneficial and unconditional owner of the
Shares, entitled to full and exclusive possession of the Stock Certificate
representing the Shares at the time of loss or destruction.


 


4.                                     The
Stockholder has not sold, endorsed, assigned, transferred, hypothecated,
pledged or otherwise transferred or disposed of the Stock Certificate
representing the Shares and, is entitled to the full and exclusive possession
and benefit of said Stock Certificate representing the Shares; no Person or
entity other than the Stockholder has any right, title, claim, equity, or
interest in, to or with respect to the Stock Certificate representing the Shares
or any proceeds of the Stock Certificate representing the Shares.


 


5.                                     The
Stockholder hereby agrees that the Stockholder shall indemnify and hold the
Company, its successors and assigns harmless from and against any and all
demands, claims, actions or causes of action, liabilities, losses or damages of
any nature whatsoever, that may at any time be made by reason of the fact that
the Stock Certificate may be in, or may hereafter come into, the possession of
any Person or entity as a result of the failure of any representation or
statement made by the Stockholder in this Statement.


 


6.                                  In
the event that the original Stock Certificate representing the Shares is subsequently
found by the Stockholder, or again comes into the possession of the
Stockholder, the Stockholder will immediately deliver such original Stock
Certificate representing the Shares to the Company or its successors or assigns
for cancellation.


 


IN WITNESS WHEREOF, this Statement is executed as of this          day
of [ ], 200   .


 


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 





















 


Exhibit B to 


Redemption Agreement


 


Stock
Power


 


FOR VALUE
RECEIVED, the undersigned hereby assigns, sells and transfers unto
WEIGHTWATCHERS.COM, INC., a Delaware corporation (the “Company”‘). 12,091,811 shares
of the Common Stock of the Company standing in the name of the undersigned on
the books of the Company and represented by Certificate [                        ]


 


Dated: [       ]


 


 


	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: