Document:

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.

 

1

 

“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.

 

2

 

“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,

 

3

 

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.

 

4

 

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 

 

5

 

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 

 

6

 

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).

 

7

 

(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 

 

9

 

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 

 

10

 

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:Exhibit 10.3

 

EXECUTION COPY

 

PRINCIPAL STOCKHOLDERS
AGREEMENT, dated as of June 13, 2005 (this “Agreement”), among
WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia corporation (“Parent”), WEIGHTWATCHERS.COM,
INC., a Delaware corporation (the “Company”), and ARTAL LUXEMBOURG S.A.,
a Luxembourg corporation (“Artal”) (each of Artal and Parent are
referred to herein as a “Stockholder” and, together, the “Stockholders”).

 

WHEREAS, Parent, SCW
Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary of
Parent (“Merger Sub”), and the Company are entering into an Agreement
and Plan of Merger, dated as of the date hereof (as the same may be amended or
supplemented, the “Merger Agreement”);

 

WHEREAS, Artal and Parent
own the number of shares of Company Common Stock set forth opposite its name on
Schedule A hereto (such shares of Company Common Stock, collectively
referred to herein as the “Subject Shares” of such Stockholder);

 

WHEREAS, Artal, the
Company and Parent are entering into an agreement (the “Redemption Agreement”),
dated as of the date hereof, pursuant to which Artal, the Company and Parent
agree to, among other things, the repurchase by the Surviving Corporation (the “Redemption”)
of Artal’s Common Stock, par value $0.01 per share, of the Surviving
Corporation, on the terms and conditions set forth therein.

 

WHEREAS, as a condition
and inducement to their willingness to enter into the Merger Agreement and the
transactions contemplated thereby, Parent and Merger Sub have requested that Artal
enter into this Agreement and take certain actions set forth herein; and

 

WHEREAS, certain capitalized
terms used in this Agreement, but not defined herein, have the meanings set
forth in the Merger Agreement.

 

NOW, THEREFORE, in
consideration of the foregoing and the representations, warranties, covenants
and agreements contained in this Agreement, the parties hereto agree as
follows:

 

SECTION 1.  Representations and Warranties of Artal.
 Artal hereby represents and warrants to
Parent, as of the date hereof, as follows:

 

(a)                                  Organization;
Authority; Execution and Delivery; No Conflicts; Enforceability.  Artal (i) is a corporation duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its organization and (ii) has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement.  The execution, delivery and
performance of this Agreement by Artal have been duly authorized by all
necessary corporate or organizational action on the part of Artal and no other
corporate or organizational proceedings on the part of Artal are necessary to
authorize the execution, delivery and performance of this Agreement by Artal.  This Agreement has been duly executed and
delivered by Artal and, assuming due

 

 

execution and delivery of
this Agreement by Parent and the Company, constitutes the legal, valid and
binding obligation of Artal, enforceable against Artal in accordance with its
terms.  The execution and delivery of
this Agreement by Artal do not, and the performance by Artal of its obligations
hereunder, will not, conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time or both) under, or give rise
to a right of termination, cancellation or acceleration of any obligation, or
to the loss of a material benefit under, or result in the creation of any Lien
in or upon any of the properties or other assets of Artal under, (i) any
organizational documents of Artal, (ii) any Contract to which Artal is a
party or is bound or any of its properties or other assets is bound by or
subject to or otherwise under which Artal has rights or benefits, or (iii) any
Law applicable to Artal or its properties or other assets, other than, in the
case of clauses (ii) and (iii) above, any such conflicts,
violations, breaches, defaults, rights, losses or Liens that individually or in
the aggregate are not reasonably likely to impair in any material respect or
prevent or materially impede, interfere with, hinder or delay the ability of Artal
to perform its obligations hereunder.  No
consent, approval, order or authorization of, action by or in respect of, or
registration, declaration or filing with, any Governmental Entity is required
by or with respect to Artal in connection with its execution, delivery and
performance of this Agreement, except for such consents, approvals,
orders, authorizations, registrations, declarations and filings the failure of
which to obtained or made individually or in the aggregate are not reasonably
likely to impair in any material respect or prevent or materially impede,
interfere with, hinder or delay the ability of Artal to perform its obligations
hereunder, including the execution and delivery of the Stockholder Consent.

 

(b)                                 Subject
Shares.  Artal is the record and beneficial
owner of the Subject Shares set forth opposite its name on Schedule A
hereto, free and clear of any Liens (other than Liens created pursuant to the
terms of this Agreement, the Merger Agreement, the Redemption Agreement or
arising under federal or state securities Laws).  As of the date hereof, Artal does not own, of
record or beneficially, any shares of capital stock of the Company other than
its Subject Shares set forth opposite its name on Schedule A hereto.  Artal has the sole right to direct the voting
of its Subject Shares, and none of such Subject Shares is subject to any voting
trust or other Contract with respect to the voting of such Subject Shares.

 

SECTION 2.  Representations and Warranties of Parent.

 

(a)                                  Parent
hereby represents and warrants to Artal, as of the date hereof, as follows:  Parent is a corporation duly organized,
validly existing and in good standing under the laws of the Commonwealth of
Virginia and has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement.  The execution, delivery and performance of
this Agreement by Parent have been duly authorized by all necessary corporate
action on the part of Parent (based on the unanimous recommendation of the
Special Committee) and no other corporate proceeding on the part of Parent is
necessary to authorize the execution, delivery and performance of this
Agreement by Parent.  This Agreement has
been duly executed and delivered by Parent and, assuming due execution and
delivery of this Agreement by the Artal and the Company, constitutes the legal,
valid and binding obligation of Parent, 

 

2

 

enforceable against
Parent in accordance with its terms.  The
execution and delivery of this Agreement by Parent do not, and the performance
by Parent of its obligations hereunder will not, conflict with, or result in
any violation or breach of, or default (with or without notice or lapse of time
or both) under, or give rise to a right of, termination, cancellation or
acceleration of any obligation, or to the loss of a material benefit under, or
result in the creation of any Lien in or upon any of the properties or other
assets of Parent under, (i) any organizational documents of Parent, (ii) any
Contract to which Parent is a party or is bound or any of its properties or
other assets is bound by or subject to or otherwise under which Parent has
rights or benefits or (iii) subject to the governmental filings and other matters
referred to in Section 4.3 of the Merger Agreement, any Law applicable to
Parent or its properties or other assets, other than, in the case of clauses (ii) and
(iii) above, any such conflicts, violations, breaches, defaults, rights,
losses or Liens that individually or in the aggregate are not reasonably likely
to impair in any material respect or prevent or materially impede, interfere
with, hinder or delay the ability of Parent to perform its obligations
hereunder.  Except as set forth in Section 4.3
of the Merger Agreement, no consent, approval, order or authorization of,
action by or in respect of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Parent in connection with
its execution, delivery and performance of this Agreement.

 

(b)                                 Subject
Shares.  Parent is the record and
beneficial owner of the Subject Shares set forth opposite its name on Schedule A
hereto, free and clear of any Liens (other than Liens created pursuant to the
terms of this Agreement or arising under federal or state securities
Laws).  As of the date hereof, Parent
does not own, of record or beneficially, any shares of capital stock of the
Company other than its Subject Shares set forth opposite its name on Schedule A
hereto and the shares of Company Common Stock subject to the Warrants.  Parent has the sole right to direct the
voting of its Subject Shares, and none of such Subject Shares is subject to any
voting trust or other Contract with respect to the voting of such Subject
Shares.

 

SECTION 3.
 Covenants of the Stockholders.

 

(a)                                  Each
Stockholder covenants and agrees that as promptly as practicable following the
execution and delivery of the Merger Agreement by the parties thereto, such
Stockholder shall:

 

(i)                                     consent
in writing to the approval and adoption of the Merger Agreement, the Merger, the
Redemption Agreement, the Redemption and the Charter Amendment and the other transactions
contemplated by the Merger Agreement and the Charter Amendment, without a
meeting, without prior notice and without a vote by executing a Stockholder
Consent in the form of Exhibit A hereto covering all such Stockholder’s
Subject Shares; and

 

(ii)                                  deliver
such Stockholder Consent to the Secretary of the Company.

 

3

 

(b)                                 At
any meeting of stockholders of the Company or at any adjournment thereof or in
any other circumstances upon which a vote, consent or other approval of
stockholders is sought, such Stockholder shall direct the voting of its Subject
Shares against (i) any merger agreement or merger (other than the Merger
Agreement and the Merger), consolidation, combination, share exchange, sale of
substantial assets, reorganization, recapitalization, joint venture
dissolution, liquidation or winding up of or by the Company or any other
business combination involving the Company, (ii) any Takeover Proposal, (iii) any
Public Offering, and (iv) any amendment or other change of the Company
Charter (other than the Charter Amendment) or the Company Bylaws or other
proposal or transaction involving the Company or any of its Subsidiaries, which
amendment or other proposal or transaction in any manner could reasonably be
expected to impede, frustrate, prevent or nullify any provision of this Agreement,
the Merger Agreement, the Charter Amendment, or the consummation of the Merger
or any other transactions contemplated hereby or thereby or change in any
manner the voting rights of any class of Company Common Stock.  Each Stockholder shall not commit or agree to
take any action inconsistent with the foregoing.

 

(c)                                  Other
than pursuant to the terms of this Agreement, the Merger Agreement, the
Redemption Agreement or the Charter Amendment, each Stockholder shall not,
directly or indirectly, (i) sell, transfer, pledge, assign or otherwise
dispose of (including by gift or by operation of law) (collectively, “Transfer”),
or enter into any Contract or other arrangement with respect to Transfer of, or
any profit sharing arrangement relating to, any Subject Shares to or with any Person,
except an affiliate of such Stockholder or the account or Person for whom such
Stockholder is acting on behalf of with respect to such Subject Shares;
provided that prior to such Transfer, or entering into such Contract or
arrangement, such affiliate, account or Person (or such Stockholder acting on
behalf of such affiliate or Person) shall become a party to this Agreement in
respect of such Subject Shares pursuant to a joinder agreement satisfactory to
Parent or (ii) enter into any voting arrangement, whether by proxy (or
written consent in lieu thereof), voting agreement or otherwise, with respect
to any Subject Shares and shall not commit or agree to take any of the
foregoing actions.  In furtherance of the
foregoing, each Stockholder agrees that any Transfer in violation of this
Agreement shall be void and of no force or effect.

 

(d)                                 Each
Stockholder shall use commercially reasonable efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and cooperate
with the other parties in doing, all things reasonably requested by Parent from
such Stockholder to consummate and make effective, in the most expeditious
manner practicable, the Merger and the other transactions contemplated hereby
and by the Merger Agreement as in effect on the date hereof.  Except as may be required by law, prior to the
Second Closing, neither Parent nor Artal shall issue any press release or
otherwise make any public statements about the Merger Agreement, the Merger or
any other transactions contemplated hereby or by the Merger Agreement without
the consent of Artal, which consent shall not be unreasonably withheld or
delayed, provided, however, that no consent shall be required for
Parent to make such public disclosure as its legal counsel deems necessary,
provided that Parent in such circumstances shall, to the extent practicable and
as soon as practicable, be obliged to first provide a copy of any 

 

4

 

anticipated announcement
to Artal and have due regard to any comments made thereon by Artal in good
faith.

 

(e)                                  Each
Stockholder hereby consents to and adopts and approves the actions taken by the
Board of Directors of the Company in adopting, approving and declaring
advisable this Agreement, the Merger Agreement, the Merger, the Charter
Amendment and the other transactions contemplated hereby or thereby.  Each Stockholder hereby waives and agrees not
to exercise or assert, any appraisal rights under Section 262 in
connection with the Merger.

 

SECTION 4.
 Non-Compete.

 

(a)                                  Artal
agrees, prior to the Effective Time, that: (i) Article IV of the
Corporate Agreement, dated as of November 5, 2001, between Parent and
Artal shall be amended (A) so that following the Closing the reference to
the “Company” in that Article will include WeightWatchers.com, Inc., and
(B) Section 4.3 of that Article will be amended to include any
Internet Diet Business (as defined below); (ii) the Parent’s Code of
Business Conduct and Ethics, adopted March 16, 2004, shall be amended to
make clear that, following the Closing, the term “Conflicting Business” (as
defined therein) shall include the business of WeightWatchers.com, Inc.;
and (iii) Artal shall not, and shall cause its respective officers,
directors, employees, representatives and agents to not, during the Non-Compete
Period (as defined below), engage in, own, manage, operate, provide financing
to, control or participate in the ownership, management, operation or control
of, or otherwise have an interest, directly or indirectly, in any other Person
in the conduct of the Internet Diet Business.

 

(b)                                 As
used herein, “Internet Diet Business” shall mean the use of the Electronic
Medium (as defined below) to conduct a business primarily related to diet, weight
loss and/or weight control programs, products, services, information, or
measurement, including, without limitation, the marketing, advertisement,
promotion, sale or distribution of products and services pertaining to weight
management, the development and publication via the Electronic Medium of any
content or forums pertaining to weight management, and the sale and delivery
via the Electronic Medium of subscription electronic products pertaining to
weight management, but not including, in each and every case mentioned above,
other “life style” and/or “exercise” businesses.

 

(c)                                  As
used herein, “Electronic Medium” shall mean the Internet and any other related
or similar forms of electronic or digital transmission, delivery, reception,
recordation or display arising from any network or other connection of
instruments or devices now known or hereafter invented capable of transmission,
delivery, reception, recordation and/or display (such instruments or devices to
include, without limitation, computers, laptops, cellular or PCS telephones,
pagers, PDAs, wireless transmitters or receivers, modems, radios, televisions,
satellite receivers, cable networks, smart cards, set-top boxes, broadband and
digital wireless devices).

 

5

 

(d)                                 As
used herein, “Non-Compete Period” shall mean the earlier of (i) five years
from the date of the First Closing, or (ii) six months after there are no
nominees of Artal on the Board of Directors of Parent.

 

SECTION 5.                                No
Solicitation; No Public Offering.  Artal,
for itself and its directors, officers, consultants, accountants, legal
counsel, investment bankers, agents and other representatives, agrees to be
bound by Section 5.4 of the Merger Agreement, which is hereby made
applicable to Artal.

 

SECTION 6.                                Stockholder
Capacity.  No Person executing this
Agreement who is or becomes during the term hereof a director or officer of the
Company makes any agreement or understanding herein in his or her capacity as
such director or officer of the Company.  Each Stockholder signs solely in its capacity
as the beneficial and record owner of such Stockholder’s Subject Shares.  Nothing herein shall limit or affect any
actions taken by any Stockholder (or Representatives acting on its behalf) in his
or her capacity as an officer or director of the Company.

 

SECTION 7.                                Special
Committee.  Artal hereby agrees and
acknowledges that any actions taken by the Special Committee from and after the
Effective Time with respect to this Agreement, the Merger Agreement, the
Redemption Agreement, and the transactions contemplated hereby and thereby,
shall be taken on the sole behalf of Parent and Parent’s stockholders, and the
members of the Special Committee shall have no fiduciary obligation or
liability to Artal, in its capacity as a stockholder of the Company, or any other
stockholder of the Company.

 

SECTION 8.                                Stop
Transfer.  The Company agrees with,
and covenants to, Parent that the Company shall not register the transfer of
any certificate representing any Stockholder’s Subject Shares in violation of
this Agreement.

 

SECTION 9.                                Termination.
 This Agreement shall terminate upon the
earlier of (i) the Second Closing and (ii) the termination of the
Merger Agreement in accordance with its terms; provided, however,
that any such termination shall not relieve any party of any liability of such
party arising as a result of the breach of this Agreement prior to such
termination.  Notwithstanding the
foregoing, in the event of a termination pursuant to clause (i), the provisions
of Section 4 shall survive this Agreement in accordance with terms of Section 4.

 

SECTION 10.                          Additional
Matters.  Artal shall, from time to
time, execute and deliver, or cause to be executed and delivered, such
additional or further consents, documents and other instruments as Parent may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement and the Merger Agreement.

 

SECTION 11.                          General
Provisions.

 

(a)                                  Amendments.
 This Agreement may not be amended except
by an instrument in writing signed by each of the parties hereto (in the case
of Parent, solely by action of the Special Committee), provided that the
approval or consent of the

 

6

 

Company shall not be
required for any such amendment except to the extent such amendment imposes
additional obligations on the Company.

 

(b)                                 Notice.
 All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to Parent or to the
Company in accordance with Section 9.7 of the Merger Agreement and to Artal
in accordance with Section 6.8 of the Redemption Agreement (or at such
other address for a party as shall be specified by like notice).

 

(c)                                  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 Exhibits shall refer to Articles and Sections of, and Exhibits 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.

 

(d)                                 Counterparts.
 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.

 

(e)                                  Entire
Agreement; No Third-Party Beneficiaries.  This Agreement, the Redemption Agreement, the
Confidentiality Agreement, the Merger Agreement and the Company Disclosure
Letter (i) constitute the entire agreement and supersede all prior
agreements, understandings and negotiations, both written and oral, among the
parties with respect to the subject matter of this Agreement, and (ii) except
for the provisions of Article II of the Merger Agreement and Section 5.6
of the Merger Agreement, are not intended to confer upon any Person other than
the parties hereto (and their respective successors and assigns) or thereto
(and their respective successor and assigns) any rights or remedies hereunder.

 

(f)                                    Governing
Law.  This Agreement shall be
governed by, and construed in accordance with, the laws of the State of Virginia,
without regard to the laws that might otherwise govern under applicable
principles of conflicts of law, except to the extent that the laws of the State
of Delaware mandatorily apply.

 

7

 

(g)                                 Assignment.
 Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of Law or otherwise, by Parent without the prior
written consent of Artal or by Artal without the prior written consent of
Parent or by the Company without the prior written consent of Parent or Artal.  Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.

 

(h)                                 Jurisdiction.
 The parties to this Agreement (a) irrevocably
submit to the personal jurisdiction of the United States District Court for the
Eastern District of Virginia or, if federal court jurisdiction is not
available, to the state courts in Virginia and (b) waive any claim of
improper venue or any claim that such court is an inconvenient forum.  The parties to this Agreement agree that
mailing of process or other papers in connection with any such action or
proceeding in the manner provided in Section 9.7 of the Merger Agreement
or in such other manner as may be permitted by applicable Laws, shall be valid
and sufficient service thereof.

 

(i)                                     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 10(i).

 

(j)                                     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 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
and to enforce specifically the terms and provisions of this Agreement in the
United States District Court for the Eastern District of Virginia or, if
federal court jurisdiction is not available, to the state courts in Virginia or
any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.

 

(k)                                  Remedies.  Except as otherwise provided in this
Agreement, any and all remedies expressly conferred upon a party to this
Agreement 

 

8

 

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.

 

(l)                                     Severability.
 If any term or other provision of this
Agreement is 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.  Upon such 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 to the fullest extent
permitted by applicable Law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.

 

[Signature Page Follows]

 

9

 

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

 

	
   

  	
  WEIGHT WATCHERS

  
	
   

  	
  INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda Huett

  
	
   

  	
   

  	
  Name:

  	
  Linda Huett

  
	
   

  	
   

  	
  Title:

  	
  President and Chief
  Executive

  
	
   

  	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  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:

  	
  President and Chief
  Executive

  
	
   

  	
   

  	
   

  	
  Officer

  
								

 

[Signature page to Principal Stockholders Agreement]

 

 

Schedule A

 

	
  Name and
  address 

  of Stockholder

  	
   

  	
  Number of
  shares 

  of Company Common Stock owned

  	
   

  	
  % of the
  outstanding shares 

  of capital stock of the 

  Company

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTAL LUXEMBOURG S.A.

  	
   

  	
  12,091,811

  	
   

  	
  72.81%

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WEIGHT WATCHERS INTERNATIONAL, INC.

  	
   

  	
  3,388,622

  	
   

  	
  20.41%

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