Document:

Exhibit
10.22

 

SECURITYHOLDERS AGREEMENT

 

AGREEMENT (this “Agreement”), dated as of August 22, 2003, by and among INTERACTIVE HEALTH, INC., a Delaware
corporation (the “Company”), J. H. WHITNEY MEZZANINE FUND, L.P., a Delaware
limited partnership (“WMF”), WHITNEY PRIVATE DEBT
FUND, L.P., a Delaware limited partnership (“WPDF”), and GREENLEAF CAPITAL,
L.P., a Delaware limited partnership (“GreenLeaf” and together
with WMF and WPDF, collectively, the “Warrant Purchasers”),
WHITNEY V, L.P., a Delaware limited partnership (“Whitney V” and
collectively with the Warrant Purchasers, the “Whitney Funds”), and the
individuals identified as “Management Purchasers” in the signature pages hereto
(the “Management
Purchasers” and collectively with the Whitney Funds, the “Stockholders” and
each individually, a “Stockholder”).

 

W  I  T  N
E  S  S  E  T  H :

 

WHEREAS, pursuant to the terms of the Securities Purchase
Agreement (the “Purchase Agreement”), dated as of the date hereof, by and
among the Company, Interactive Health LLC (the “Operating Company”),
WMF, WPDF, Whitney V and the Management Purchasers, (i) Whitney V will purchase
from the Company 4,880,000  shares (the “Whitney V Shares”) of
Series A Convertible Preferred
Stock, $.001 par value per
share, of the Company (the “Series A Preferred Stock”), (ii)
each of the Management Purchasers will purchase from the Company the number of
shares (the “Management
Shares”and together with the Whitney V Shares, the “Preferred Shares”)
of Series A Preferred Stock set forth after the signature of each
Management Purchaser thereto, (iii) WMF will purchase a warrant (the “WMF
Warrant”) to purchase an aggregate of 513,616  shares of
common stock, par value $.001 per
share, of the Company (the “Common Stock”), (iv) WPDF will
purchase a warrant (the “WPDF Warrant”) to
purchase an aggregate of 202,743  shares of Common Stock, and (iv)
GreenLeaf will purchase a warrant (the “GreanLeaf Warrant” and
together with the WMF Warrant and WPDF Warrant, the “Warrants”)
to purchase an aggregate of 27,032  shares of Common Stock; and

 

WHEREAS, the Stockholders believe that it is in the best
interest of the Company and the Stockholders that provision be made for the
continuity and stability of the business and policies of the Company, and,
accordingly, desire to make certain arrangements among themselves with respect
to the election of directors of the Company and with respect to certain other
matters.

 

NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and obligations hereinafter set forth, the parties hereto hereby
agree as follows:

 

SECTION 1. Definitions.  As used herein, the following terms shall
have the following respective meanings, and all capitalized terms used herein
which are not otherwise defined shall have the meaning assigned thereto in the
Purchase Agreement:

 

(a)          “Accredited Investor”  shall have the meaning ascribed thereto
in Regulation D promulgated under the Securities Act.

 

 

(b)         “Affiliate”
shall mean (i) in the case of an entity, any Person who or which, directly or
indirectly, through one or more intermediaries, controls or is controlled by,
or is under common control with, any specified Person or (ii) in the case of an
individual, such individual’s spouse, children, grandchildren or parents or a
trust primarily for the benefit of any of the foregoing; provided, however,
that for purposes of Section 6(b) the term “Affiliate” shall specifically
exclude any so-called “portfolio companies” of Whitney other than the Company
and its Subsidiaries.

 

(c)          “Bona Fide Purchaser” shall
mean any Person (other than a Selling Stockholder’s Affiliates) who or which
has delivered a good faith written offer to purchase all or any portion of such
Stockholder’s Shares.

 

(d)         “Book Value” shall mean, with
respect to a Share, the amount, not less than zero, which such Share would
receive (taking into account any and all liquidation preferences of such Share
and any other shares of capital stock of the Company then outstanding) upon a
liquidation, or other distribution of assets, of the Company in which the
amount to be distributed equals the net worth of the Company, as reflected on
the Company’s audited balance sheet for the Company’s most recently completed
fiscal year.

 

(e)          “Certificate
of Incorporation”
shall mean the Certificate of Incorporation of the Company, as amended, as in
effect as of the date hereof.

 

(f)            “Common
Stock” shall have
the meaning ascribed to such term in the first Whereas clause, together with
any class or series of common stock of the Company authorized after the date
hereof, or any other class or series of stock resulting from successive changes
or reclassifications of any class or series of common stock of the Company.

 

(g)         “Closing Price” shall mean for
any day, with respect to each Share in question, (a) the last reported sale
price regular way or, in case no such sale takes place on such day, the average
of the closing bid and asked prices regular way, in either case as reported on
the principal national securities exchange on which such Shares are listed or
admitted for trading or (b) if the Shares are not listed or admitted for
trading on any national securities exchange, the last reported sale price or,
in case no such sale takes place on such day, the average of the highest
reported bid and the lowest reported asked quotation for the Shares, in either
case as reported on the NASDAQ or a similar service if NASDAQ is no longer
reporting such information.

 

(h)         “Confidential Information” shall
mean confidential and proprietary information, including, but not limited to,
information or plans regarding the Company’s and its Affiliates’ customer
relationships, personnel, or sales, marketing, and financial operations and
methods; trade secrets; formulas; devices; secret inventions; processes; and
other compilations of information, records, and specifications.

 

(i)             “Competitive Position” shall
mean serving in a senior management capacity, as an employee, consultant,
advisor or otherwise, for any Person that engages in the business of
manufacturing and distributing electronic and health care products anywhere in
North America.

 

(j)             “Cost”
of a Share shall mean the dollar amount paid by a Stockholder for such
Share.

 

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(k)          “Current Market Price” shall
mean, with respect to a Share on any date, (i) the average of the daily Closing
Prices per Share for the 10 consecutive trading days commencing 15 trading days
before such date or (ii) if on any such date the Shares are not listed or
admitted for trading on any national securities exchange or quoted by NASDAQ or
a similar service, then as determined in good faith by the Board of Directors
of the Company.

 

(l)             “Dispose” or “Disposition” (and any derivatives thereof) shall mean (i) a voluntary or
involuntary sale, assignment, mortgage, grant, pledge, hypothecation, exchange,
transfer, conveyance or other disposition of a Stockholder’s Shares and (ii)
any agreement, contract or commitment to do any of the foregoing.

 

(m)       “Encumbrance” or “Encumber”
shall mean or refer to any lien, claim, charge, pledge, mortgage, encumbrance,
security interest, preferential arrangement, restriction on voting or
alienation of any kind, adverse interest, or the interest of a third party
under any conditional sale agreement, capital lease or other title retention
agreement.

 

(n)         “Equity
Equivalents” shall
mean any and all shares, interests, participations or other equivalents
(however designated) of capital stock and any rights to acquire the foregoing,
including, without limitation, any rights to acquire securities exercisable
for, convertible into or exchangeable for the foregoing.  Unless the context otherwise requires all
references to “Equity Equivalents” in this Agreement shall refer to Equity
Equivalents of the Company.

 

(o)         “GreenLeaf Warrant” shall have the meaning ascribed to
such term in the first Whereas clause.

 

(p)         “Initial
Public Offering”
shall mean the underwritten public offering by the Company of its Common Stock
pursuant to a registration statement (other than a registration statement relating
solely to an employee benefit plan or transaction covered by Rule 145 of the
Securities Act) that has been filed under the Securities Act and declared
effective by the Commission in which the Company receives at least $25,000,000  of Net Cash Proceeds,
with a per share price equal to at least the Series A Liquidation
Preference per share, as defined in the Certificate of Amendment (subject to
appropriate adjustments for any dividends, subdivisions, combinations or
reclassifications of the Common Stock); provided, however, that
(x) for this purpose any offering under Rule 144A under the Securities Act or
any similar rule or regulation promulgated under the Securities Act shall not
be deemed to be an Initial Public Offering, and (y) for purposes of Section 2A
hereof, Initial Public Offering shall mean any initial public offering, without
consideration to the amount of Net Cash Proceeds which are received by the
Company.

 

(q)         “Institutional Investors” shall
mean WMF, WPDF, GreenLeaf, Whitney V and their respective successors and
assigns.

 

(r)            “Management Shares”
shall have the meaning ascribed to such term in the first Whereas clause,
together with all shares of capital stock issued as dividends thereon or
otherwise in respect thereof.

 

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(s)          “Permitted
Transferees” shall
mean in the case of (i) any Whitney Fund, the Affiliates, managing directors
and principals, partners and retired partners, managing directors and
principals of such Whitney Fund or Whitney, the estates and family members of
any such Persons and of their spouses, and any trusts for the benefit of any of
the foregoing Persons, (ii) in the case of the other Stockholders who are not
trusts, the estates and family members of such Stockholder, and any trusts for
the benefit of the foregoing Persons, and (iii) in the case of the other
Stockholders who are trusts, the beneficiaries of such trusts and the estates
and family members of such trust beneficiaries, and any other trusts for the
benefit of such beneficiaries; provided, however, that in each
case such Person shall agree in writing with the parties hereto to be deemed a
Stockholder hereunder and to be bound by and to comply with all applicable
provisions of this Agreement.

 

(t)            “Person” shall mean any individual,
partnership, corporation, limited liability company, joint venture, trust,
firm, association, unincorporated organization or other entity.

 

(u)         “Preferred Shares” shall have the meaning ascribed to
such term in the first Whereas clause, together with all shares of capital
stock issued as dividends thereon or otherwise in respect thereof.

 

(v)         “Securities
Act” shall mean
the Securities Act of 1933, as amended, or any similar Federal statute, and the
rules and regulations thereunder, all as the same shall be in effect at the
time.

 

(w)       “Shares” shall mean, with respect to any
Stockholder, (i) the shares of capital stock of the Company, including, without
limitation, Common Stock and Series A Preferred Stock, held at any time by such
Stockholder, (ii) any option, warrant or other right held at any time by any
Stockholder, convertible, exercisable or exchangeable for shares of capital
stock of the Company, and (iii) any security, including, without limitation,
Series A Preferred Stock, held at any time by such Stockholder, convertible,
exercisable or exchangeable for capital stock of the Company.

 

(x)           “Stockholder” shall mean (i) each Person so
identified in the preamble hereto, (ii) any other Person who agrees, with
the consent of the Whitney Funds and the Company, in writing to be bound by and
to comply with all applicable provisions of this Agreement and (iii) all
Permitted Transferees of any Person identified in clauses (i) or (ii).

 

(y)         “Subsidiaries” shall mean, with respect to any
Person, a corporation or other entity of which 50% or more of the voting power
of the voting equity securities or equity interest is owned, directly or
indirectly, by such Person.  Unless
otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in
this Agreement shall refer to a Subsidiary or Subsidiaries of the Company or to
Subsidiaries thereof.

 

(z)           “Threshold Amount” shall mean
Equity Equivalents held by Institutional Investors representing at least a
majority of the Equity Equivalents then held by all Institutional Investors.

 

(aa)                            “Warrants” shall have the meaning ascribed to
such term in the first Whereas clause.

 

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(bb)                          “Whitney”
shall mean Whitney & Co, LLC.

 

(cc)                            “Whitney
Fund” shall have the meaning ascribed to such term in the first
Whereas clause.

 

(dd)                          “Whitney
V Shares” shall have the meaning ascribed to such term in the first
Whereas clause, together with all shares of capital stock issued as dividends
thereon.

 

(ee)                            “WMF
Warrant” shall have the meaning ascribed to such term in the first
Whereas clause.

 

(ff)                                “WPDF
Warrant” shall
have the meaning ascribed to such term in the first Whereas clause.

 

SECTION 2. Preemptive
Rights.

 

(a)          If at any time the Company wishes to issue any Equity
Equivalents to any Person or Persons, the Company shall promptly deliver a
notice of its intention to sell (the “Company’s
Notice of Intention to Sell”)
to each Management Purchaser and each Institutional Investor, in each case who
is an Accredited Investor (collectively, the “Eligible Stockholders”)
setting forth a description of the Equity Equivalents to be sold, the proposed
purchase price thereof and terms of sale. 
Upon receipt of the Company’s Notice of Intention to Sell, each Eligible
Stockholder shall have the right to elect to purchase, at the price and on the
terms stated in the Company’s Notice of Intention to Sell, a number of the
Equity Equivalents equal to the product of (i) a fraction, the numerator of
which is such Eligible Stockholder’s aggregate ownership of Equity Equivalents
(calculated on a fully-diluted basis) and the denominator of which is the
number of such Equity Equivalents (calculated on a fully-diluted basis) held by
all Eligible Stockholders, multiplied by (ii) the number of Equity Equivalents
(calculated on a fully-diluted basis) to be issued. Such election is to be made
by the Eligible Stockholders by written notice to the Company within 21 days
after receipt by the Eligible Stockholders of the Company’s Notice of Intention
to Sell (the “Acceptance Period for Equity Equivalents”).  Each Eligible Stockholder shall also have the
option, exercisable by so specifying in such written notice, to purchase on a pro
rata basis similar to that described above, any remaining Equity Equivalents
not purchased by other Eligible Stockholders, in which case the Eligible
Stockholders exercising such further option shall be deemed to have elected to
purchase such remaining Equity Equivalents on such pro  rata
basis, up to the aggregate number of Equity Equivalents which such Eligible
Stockholder shall have specified until either (A) no Eligible Stockholder shall
have elected to purchase any further amount of the Equity Equivalents which are
the subject of the Company’s Notice of Intention to Sell or (B) all the Equity
Equivalents which are the subject of the Company’s Notice of Intention to Sell
shall have been subscribed for by the Eligible Stockholder(s). The Company
shall promptly notify each electing Eligible Stockholder in writing of each notice
of election received from other Eligible Stockholders pursuant to this
Section 2(a).

 

(b)         If effective acceptances shall not be received
pursuant to Section 2(a) above in respect of all the Equity Equivalents
which are the subject of the Company’s Notice of Intention to Sell, then the
Company may, at its election, during a period of 120 days following the

 

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expiration of the Acceptance Period for Equity
Equivalents, sell and issue the remaining Equity Equivalents to another Person
at a price and upon terms not more favorable to such Person than those stated
in the Company’s Notice of Intention to Sell; provided, however, that
failure by an Eligible Stockholder to exercise his, her or its option to
purchase with respect to one offering, sale and issuance of Equity Equivalents
shall not affect his, her or its option to purchase Equity Equivalents in any
subsequent offering, sale and purchase. In the event the Company has not sold
the Equity Equivalents, or entered into an agreement to sell the Equity
Equivalents, within such 120 day period, the Company shall not thereafter issue
or sell any Equity Equivalents without first offering such securities to each
Eligible Stockholder in the manner provided in Section 2(a) hereof.

 

(c)          If an Eligible Stockholder gives the Company notice,
pursuant to the provisions of this Section 2, that such Eligible
Stockholder desires to purchase any of the Equity Equivalents, payment therefor
shall be by check or wire transfer, against delivery of the securities at the
executive offices of the Company within 15 Business Days after giving the
Company such notice, or, if later, the closing date for the sale of such Equity
Equivalents.  In the event that any such
proposed issuance is for a consideration other than cash, such Eligible
Stockholder will be entitled to pay cash for each share or other unit, in lieu
of such other consideration, in the amount determined in good faith by the
Board of Directors of the Company  (the “Board”)
to constitute the fair value of such consideration other than cash to be paid
per share or other unit.

 

(d)         The preemptive rights contained in this
Section 2 shall not apply to (i) Common Stock issued (A) as a stock
dividend to holders of Common Stock or upon any subdivision or combination of
shares of Common Stock, (B) pursuant to an Initial Public Offering, (C) upon
the conversion of any equity security or debt security of the Company issued on
or prior to the date hereof, or (D) the exercise of any option, warrant,
including, but not limited to, the Warrants, or other right to subscribe for,
purchase or otherwise acquire either Common Stock or any equity security or
debt security convertible into Common Stock, issued on or prior to the date
hereof, and (ii) (A) the issuance by the Company of up to 1,013,716  shares of Common
Stock reserved or to be reserved for issuance upon the exercise of stock
options (“Options”), granted or to be granted
exclusively to employees, officers, directors or consultants of the Company or
its Subsidiaries and/or Affiliates pursuant to the Company’s employee stock
option plan(s) now in existence or, with the consent of the Whitney Funds, to
be established in the future or (B) the grant of the stock options referred to
in clause (ii)(A) of this Section 2(d).

 

(e)          Notwithstanding any provision in this Agreement to
the contrary, unless the Whitney Funds otherwise agree, the Company shall not
issue or sell any Equity Equivalents, other than the Options and any shares of Common Stock issued upon the
exercise of the Options, to any Person who at the time of such issuance
or sale is not a party to this Agreement unless such Person agrees in writing
to be bound by all of the provisions of this Agreement as if such Person were a
Management Purchaser.

 

SECTION 2A.  Right
to Subscribe in connection with an Initial Public Offering.

 

6

 

(a)                                  Subject
to the terms hereof, in the event of an Initial Public Offering, the Company
shall offer to sell to the Institutional Investors an aggregate of five percent
(5%) of the firm shares of Equity Equivalents being offered by the Company in
the Initial Public Offering (the “Directed Share Program”).  The Institutional Investors shall be entitled
to purchase their IPO Ratable Portion (as defined below) of the Equity
Equivalents in the Directed Share Program on the same terms and conditions, and
at the same offering terms as are offered to the public in connection with the
Initial Public Offering.  “IPO Ratable
Portion” shall mean, as to each Institutional Investor, an amount equal to the
product of (i) the amount of Equity Equivalents in the Directed Share Program,
multiplied by (ii) a fraction, the numerator of which is equal to the aggregate
amount of shares of Common Stock held by the Institutional Investor in question
(assuming full conversion and exercise of all convertible, exchangeable, or
exercisable Equity Equivalents (which are convertible into or exchangeable or
exercisable for shares of Common Stock) held by such Institutional Investor),
and the denominator of which is equal to the aggregate amount of shares of
Common Stock held by all of the Institutional Investors (assuming full
conversion, exchange and exercise of all convertible, exchangeable or exercisable
Equity Equivalents (which are convertible into or exercisable for shares of
Common Stock) held by all Institutional Investors).

 

(b)         The Company shall give written notice of the proposed
issuance of such Equity Equivalents in the Initial Public Offering to each
Institutional Investor at least 20 business days prior to such Initial Public
Offering.  Such notice shall contain the
terms and conditions of the issuance of such Equity Equivalents.  Each Institutional Investor may elect to
exercise all or any lesser portion of its rights under this Section 2A to
purchase such Equity Equivalents by providing the Company with written notice
within 10 business days from its receipt of the Company’s notice.  Upon the expiration of such 10 business day
period, the Company shall, in writing, promptly inform each Institutional
Investor that elects to purchase its entire IPO Ratable Portion (each, a “Fully Electing Institutional Investor”)
of any other Institutional Investor’s failure to do likewise.  Each Fully Electing Institutional Investor
shall have a right of over allotment such that, if any other Institutional
Investor fails to purchase its entire IPO Ratable Portion, all Fully Electing
Institutional Investors may, before the date which is 2 business days prior to
the Initial Public Offering, exercise an additional right to purchase, on a pro
rata basis based upon their relative IPO Ratable Portions, the Equity
Equivalents not previously purchased by those Institutional Investors who did
not elect to purchase their entire IPO Ratable Portions.  Each Institutional Investor shall be entitled
to apportion the allocation of Equity Equivalents it is entitled to purchase
pursuant to this Section 2A among its partners, managing directors and
affiliates, provided that such Institutional Investor notifies the Company of
such allocation.  The provisions of this
Section 2A may be amended, modified or eliminated in order to comply with
applicable laws or if the lead underwriter deems such amendment, modification
or elimination necessary in its reasonable judgment in order to ensure the
success of the Initial Public Offering. 
If the lead underwriter so deems, it shall provide the Company and the
Institutional Investors with a written explanation as to why in its reasonable
judgment such an amendment, modification or elimination is necessary, and such
written explanation must be received by the Company and the Institutional
Investors at least 3 business days before the Initial Public Offering.

 

SECTION 3. Transfer of
Shares.  No Stockholder
(other than an Institutional Investor) shall effect a Disposition of any of
his, her or its Shares, except to a Permitted Transferee or as

 

7

 

otherwise provided in this Agreement.  Any purported Disposition in violation of
this Agreement shall be null and void ab  initio, and the Company
shall not recognize any such Disposition or accord to any such purported
transferee any rights as a Stockholder.

 

SECTION 4. Right of First
Refusal; Right of Co-Sale.

 

(a)          If any Stockholder shall desire at any time to
effect the Disposition of any of his, her or its Shares (the “Offered
Shares”)  and shall receive a purchase offer therefor
or the terms of a potential purchase offer therefor from a Bona Fide Purchaser
(such offers being hereinafter referred to as a “Purchase Offer”), then such selling Stockholder (“Selling Stockholder”) shall
promptly notify the Company, each Institutional Investor and each Management
Purchaser who is not a Selling Stockholder, in each case who is an Accredited
Investor (each an “Offeree Stockholder”) of the terms and conditions of such
Purchase Offer; provided, however, that this Section 4 shall
not apply to any Disposition by a Stockholder to such Stockholder’s Permitted
Transferees or by any Institutional Investor or its Permitted Transferees to
any Person.

 

(b)         Upon receipt of such notice of the Purchase Offer,
each Offeree Stockholder shall have the right to elect to purchase, at the
price and on the terms stated in such notice, a number of the Offered Shares
subject to the Purchase Offer equal to the product obtained by multiplying (i)
the aggregate number of Offered Shares covered by the Purchase Offer by (ii) a
fraction the numerator of which is the number of Shares (calculated on a fully
diluted basis) at the time owned by such Offeree Stockholder and the
denominator of which is the aggregate number of Shares (calculated on a fully
diluted basis) owned by all Offeree Stockholders. Such election is to be made
by written notice (“Notice of
Election”) to the Selling Stockholder, to each other Offeree
Stockholder and to the Company within 60 days after receipt by such Offeree
Stockholder of the notice of a Purchase Offer (the “Acceptance Period”).  Each Offeree Stockholder who elects to
exercise his, her or its rights under this Section 4 (“Electing
Offeree Stockholder”) shall also have the option, exercisable by so
specifying in the Notice of Election, to purchase on a pro  rata
basis similar to that described above any remaining Offered Shares covered by
the Purchase Offer not purchased by other Offeree Stockholders, in which case
the Offeree Stockholders exercising such further option shall be deemed to have
elected to purchase such remaining Offered Shares on such pro  rata
basis, up to the aggregate number of Shares which such Electing Offeree
Stockholder shall have specified.

 

(c)          If effective acceptances shall not have been
received pursuant to Section 4(b) above in respect of all of the Offered
Shares subject to the Purchase Offer, then the Selling Stockholder may, at his,
her or its election, either (i) sell to the Electing Offeree Stockholders
pursuant to their elections and sell any remaining Offered Shares subject to
the Purchase Offer to the Bona Fide Purchaser, or (ii) rescind the notice of
the Purchase Offer, which rescission shall be effected by notice in writing
delivered to each Electing Offeree Stockholder that shall have elected to
purchase and to the Company within 10 days after expiration of the Acceptance
Period, and keep all, but not less than all, of the Offered Shares subject to
the Purchase Offer. In the event that the Selling Stockholder elects to sell
any Offered Shares pursuant to the Purchase Offer, pursuant to clause (i) of
this Section 4(c), the Bona Fide Purchaser and the Electing Offeree
Stockholders must purchase such Offered Shares no more than 60 days after the
end of the Acceptance Period strictly in accordance with the terms and
conditions of the Purchase Offer;

 

8

 

provided, however, that, in the
event that the Selling Stockholder shall so elect to sell Offered Shares to the
Bona Fide Purchaser, the prospective Bona Fide Purchaser, as a condition
precedent to the purchase of the Offered Shares, or any part thereof, shall
subscribe to this Agreement and agree to be bound by all of the terms and
conditions hereof.  In the event that the
Selling Stockholder shall so elect to sell Offered Shares subject to the
Purchase Offer to the Bona Fide Purchaser and Electing Offeree Stockholders
pursuant to clause (i) of this Section 4(c), the Selling Stockholder shall
so notify in writing each Offeree Stockholder who is not an Electing Offeree
Stockholder (the “Outside Sale Notice”) and no such sale shall be
made unless and until each such Offeree Stockholder (the “Eligible
Co-Sale Stockholder”) shall have been afforded the right (the “Co-Sale
Right”), exercisable upon written notice to the Company and the Selling
Stockholder within 30 days after receipt of the Outside Sale Notice, to
participate  in the sale of Shares at the
same time and on the same terms and conditions under which the Selling
Stockholder will sell the Selling Stockholder’s Offered Shares. Each such
Eligible Co-Sale Stockholder may sell all or any part of that number of Shares
held by such Eligible Co-Sale Stockholder equal to the product obtained by
multiplying (x) the aggregate number of Offered Shares (calculated on a fully
diluted basis) covered by the Purchase Offer by (y) a fraction the numerator of
which is the number of Shares (calculated on a fully diluted basis) at the time
owned by such Eligible Co-Sale Stockholder and the denominator of which is the
aggregate number of Shares (calculated on a fully diluted basis) owned by all
Eligible Co-Sale Stockholders exercising their Co-Sale Right plus the number of
Shares (calculated on a fully diluted basis) then owned by the Selling
Stockholder.   To the extent that
Eligible Co-Sale Stockholders participate in the subject sale of Offered Shares
hereunder, the Selling Stockholder shall be required to reduce the number of
its Shares included in the Offered Shares.

 

(d)         If the Company so requests, each Eligible Co-Sale
Stockholder receiving an Outside Sale Notice in accordance with
Section 4(c) and exercising his, her or its Co-Sale Right shall deliver to
the Company, as agent for such Eligible Co-Sale Stockholder, for transfer to
the Bona Fide Purchaser one or more certificates, properly endorsed for
transfer, which represent the number of Shares of which such Eligible Co-Sale
Stockholder elects to Dispose pursuant to this Section 4.  No Disposition of such Shares shall be made
on terms and conditions, including the form of consideration, different from
those contained in the Purchase Offer unless the Selling Stockholder re-offers
the Offered Shares subject to the Purchase Offer to the Offeree Stockholders in
accordance with this Section 4.

 

(e)          The stock certificate or certificates delivered by
the Eligible Co-Sale Stockholders to the Company pursuant to Section 4(d)
shall be transferred by the Company to the Bona Fide Purchaser in consummation
of the Disposition of the Shares pursuant to the terms and conditions specified
in Section 4(a) and the Company shall promptly thereafter remit to each
Eligible Co-Sale Stockholder that portion of the Disposition proceeds to which
such Eligible Co-Sale Stockholder is entitled by reason of his, her or its
participation in such Disposition.

 

(f)            In the event that a Selling Stockholder shall not
have Disposed of all of his, her or its Offered Shares subject to a Purchase
Offer within 120 days after the date of the notice given pursuant to
Section 4(a), such Selling Stockholder shall not thereafter Dispose of any
Shares pursuant to the Purchase Offer or otherwise without first reoffering
such Shares to each Institutional Investor in the manner set forth in
Section 4 hereof.

 

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(g)         Notwithstanding anything contained in this
Section 4 or any notice given hereunder, the provisions of this
Section 4 shall be suspended immediately upon the occurrence of any event
within the scope of Section 5.

 

SECTION 5. Right of
Bring-Along.

 

(a)          If the Threshold Amount of the Institutional
Investors (the “Selling Institutional Investors”) propose to
Dispose of all (but not less than all) of the Shares owned by them to a Bona
Fide Purchaser, other than any transfers by such Institutional Investors to
such Institutional Investors’ respective Permitted Transferees, then,
notwithstanding anything in this Agreement to the contrary, the Selling
Institutional Investors may require the other Stockholders (the “Non-Selling
Holders”) to Dispose of their Shares (the “Bring-Along Right”)
to such Bona Fide Purchaser for the same consideration such Non-Selling Holders
would have received if the Company had been sold and liquidated in accordance
with the provisions of the Certificate of Incorporation and otherwise on the
same terms and conditions upon which the Selling Institutional Investors effect
the Disposition of their Shares.

 

(b)         In the event that the Selling Institutional Investors
desire to exercise their rights pursuant to Section 5(a), the Selling
Institutional Investors shall deliver to the Company and the Non-Selling
Holders written notice (a “Sale Notice”) setting forth the
consideration per share to be paid by such Bona Fide Purchaser and the other
terms and conditions of such Disposition. 
Within 10 days following the date of such notice, each of the other
Stockholders shall deliver to the Selling Institutional Investors (i) a stock
certificate or certificates evidencing such Non-Selling Holder’s Shares,
together with an appropriate assignment separate from certificate duly executed
in a proper form to effect the Disposition of such Shares from the Non-Selling
Holders to the Bona Fide Purchaser on the books and records of the Company, and
(ii) a limited power-of-attorney authorizing one of the Selling Institutional
Investors (selected by the holders of a majority of the Equity Equivalents held
by all Selling Institutional Investors) to effect the Disposition of such
Shares pursuant to the terms of such Bona Fide Purchaser’s offer as such terms
may be modified by the Selling Institutional Investors, provided, that
all of the Non-Selling Holder’s Shares are disposed of for the same
consideration per share (subject to appropriate adjustment to reflect any
differences in the rights and preferences of Shares of different classes or
series)  and otherwise on the same terms and conditions upon which the
Selling Institutional Investors effect the Disposition of their Shares.  In the event that any Non-Selling Holder
shall fail to deliver such stock certificate(s), assignment separate from the
certificate and limited power-of-attorney to the Selling Institutional Investors,
the Company shall cause a notation to be made on its books and records to
reflect that the Shares of such Non-Selling Holder are bound by the provisions
of this Section 5 and that the Disposition of such Shares may be effected
without such Non-Selling Holder’s consent or surrender of his, her or its
Shares.

 

In
addition to the limited power-of-attorney referred to in the immediately
preceding paragraph, each Non-Selling Holder hereby constitutes and appoints
any holder of a majority in interest of
Equity Equivalents then owned by the Institutional Investors (“Designee”),
with full power of substitution and resubstitution, as the true and lawful
attorney-in-fact for such Non-Selling Holder and in such Non-Selling Holder’s
name, place and stead and for such Non-Selling Holder’s use and benefit, to
sign, execute, certify, acknowledge, swear to,

 

10

 

file, deliver and record any and all agreements,
certificates, instruments and other documents which the Designee may deem
necessary, desirable, or appropriate for the purposes of effecting the
Bring-Along Right.  Each Non-Selling
Holder authorizes each such attorney-in-fact to take any action necessary or
advisable in connection with the foregoing, hereby giving each attorney-in-fact
full power and authority to do and perform each and every act or thing
whatsoever required or advisable to be done in connection with the foregoing as
fully as such Non-Selling Holder might or could do so personally, and hereby ratifying
and confirming all that any such attorney-in-fact shall lawfully do or cause to
be done by virtue thereof or hereof. 
This power of attorney is a special power of attorney coupled with an
interest and is irrevocable, may be exercised by any such attorney-in-fact by
listing the Non-Selling Holder executing any agreement, certificate,
instrument, or other document with the single signature of any such
attorney-in-fact acting as attorney-in-fact for such Non-Selling Holders, shall
survive the death, disability, legal incapacity, bankruptcy, insolvency,
dissolution, or cessation of existence of a Non-Selling Holder and shall
survive the delivery of an assignment by a Non-Selling Holder of all or any
portion of such Non-Selling Holder’s Shares.

 

In
addition, in the event the Selling Institutional Investors exercise their
rights under Section 5(a), the Non-Selling Holders shall be required to
make to a Bona Fide Purchaser such unqualified representations and warranties
with respect to their Shares as are set forth in Section 5(e) hereof and
representations and warranties with respect to all other matters as are
reasonably requested by the Bona Fide Purchaser, provided that the
Non-Selling Holders will only be required to provide such representations and
warranties on the same basis and subject to the same qualifications as the
Selling Institutional Investors and will only be required to indemnify the Bona
Fide Purchaser against breaches of such representations and warranties up to an
aggregate dollar amount not to exceed his, her or its respective consideration
received other than with respect to representations and warranties regarding
ownership of stock and authority to consummate the transaction in question.

 

(c)          Promptly (but in no event later than the day of
receipt) after the consummation of the Disposition of Shares pursuant to this
Section 5, the Selling Institutional Investors shall (i) deliver notice
thereof to the Non-Selling Holders, (ii) remit to the Non-Selling Holders the
total sales consideration received in respect of their respective Shares
Disposed of pursuant hereto, and (iii) furnish such other evidence of the
completion and time of completion of such Disposition and the terms thereof as
may be reasonably requested in writing by the Non-Selling Holders.

 

(d)         If, within 90 days after the Selling Institutional
Investors’ delivery of the Sale Notice required pursuant to Section 5(b),
the Selling Institutional Investors have not completed the Disposition of their
Shares and that of the Non-Selling Holders in accordance herewith, the Selling
Institutional Investors shall return to the Non-Selling Holders (i) the stock
certificates and assignments of certificates with respect to the Non-Selling
Holders’ Shares that the Non-Selling Holder delivered pursuant to this
Section 5 and (ii) the related limited power-of-attorney delivered
pursuant to this Section 5.  Upon
the Non-Selling Holder’s receipt of such materials, all the restrictions on
Disposition contained in this Agreement with respect to the Shares owned by the
Stockholders shall again be in effect.

 

11

 

(e)          All sales of Shares to be made pursuant to this
Section 5 shall be subject to the following terms:

 

(i)                                     the
disposing stockholder shall deliver to the Bona Fide Purchaser the certificates
evidencing the Shares being sold, free and clear of Encumbrances, together with
duly executed stock transfer powers in favor of the Bona Fide Purchaser or its
nominees and such other documents, including evidence of ownership and
authority, as the Bona Fide Purchaser may reasonably request;

 

(ii)                                  except
as otherwise specifically set forth herein, the disposing stockholder shall not
be required to make any representations or warranties to any Person in
connection with such sale, except as to (A) good title to its Shares being
sold, (B) the absence of Encumbrances with respect to its Shares being sold,
(C) its valid existence and good standing (if applicable), (D) the authority
for, and validity and binding effect of (as against such disposing
stockholder), any agreement entered into by such disposing stockholder  in connection with such sale, (E) the fact
that disposing stockholder ‘s sale will not conflict with or result in a breach
of or constitute a default under, or violation of, its governing documents or
any indenture, lease, loan or other agreement or instrument by which it is
bound or affected,  (F) all required
material consents to disposing stockholder’s sale and material governmental
approvals having been obtained (excluding any securities laws),  and (G) the fact that no broker’s commission
is payable by the disposing stockholder 
as a result of the disposing stockholder’s conduct in connection with
the sale; and

 

(iii)                               the
disposing stockholder shall not be required to provide any indemnities in
connection with such sale except for breach of the representations and
warranties specifically required by the terms of this Section 5.

 

SECTION 6. Repurchase
Rights Upon Cessation of Employment.

 

(a)          If any Stockholder is an employee of the Company or
any of its Subsidiaries, other than a director of the Company or any of its
Subsidiaries who is not otherwise an employee of the Company or any of its
Subsidiaries (each such employee, an “Employee Stockholder”),
upon termination of such Employee Stockholder’s employment for any reason prior
to the third anniversary of the date such Employee Stockholder becomes subject
to the terms of this Agreement (the “Repurchase Period”), then
the Company, or the Whitney Funds, if the Company declines to so purchase,
shall have the right to purchase, and to require such Employee Stockholder and
any Permitted Transferee of such Employee Stockholder (such Employee
Stockholder and any Permitted Transferee thereof or any Permitted Transferees
who derived ownership of any Shares directly or indirectly from such Employee
Stockholder, collectively, the “Terminated Party”) to sell to the
Company and/or the Whitney Funds, as the case may be, up to all of the Shares
then owned by the Terminated Party.  The
Company shall deliver written notice to the Whitney Funds of such termination
within 10 business days after the date such Employee Stockholder’s employment
is so terminated (the “Termination Date”), which notice shall
specify, in reasonable detail, (A) the Termination Date, (B) the circumstances
of such termination, (C) the number of Shares then held by the Terminated
Party, (D) the number of Shares then held by the Terminated Party that the
Company shall elect to purchase hereunder, and (E) the purchase price per share
payable under this Section 6(a), as determined below.  The

 

12

 

Whitney Funds shall have the right to exercise
its rights under this Section 6 as to any or all Shares held by the Terminated
Party that the Company does not ultimately purchase hereunder.  Upon such cessation of employment by the
Employee Stockholder, the Company and/or the Whitney Funds, as the case may be,
may exercise such right at any time within 90 days after the Termination
Date.  During such Repurchase Period, a
Terminated Party shall be prohibited from otherwise Disposing of any Shares
then owned by a Terminated Party without the prior written consent of the
Company and the Whitney Funds.  Such
repurchase right may be exercised by the Company and/or the Whitney Funds, as
the case may be, giving notice to such Terminated Party, with a copy to the
Whitney Funds or the Company, as the case may be.  The purchase price per share payable for any
Shares purchased under this Section 6(a) shall be equal to:

 

(A) in the case of termination by the Company not for
Cause or upon death or disability, the greater of (y) Cost per Share or (z) the
Fair Market Value (as defined in the Purchase Agreement) of such Share; and

 

(B) in the case of termination for any other
reason, the lesser of (y) Cost per Share or (z) the Fair Market Value
per Share.

 

For purposes hereof, the term “Cause” shall have the
meaning ascribed thereto in the respective Employee Stockholder’s employment
agreement with the Company if one exists, and shall otherwise be defined as the
occurrence or existence of any of the following with respect to Employee
Stockholder, as determined by a majority of the disinterested directors of the
Board:  (i) unsatisfactory performance
of Employee Stockholder’s duties or responsibilities as determined by the
Board, provided that the Company has given Employee Stockholder written notice
specifying the unsatisfactory performance of his duties and responsibilities;
(ii) a material breach by Employee Stockholder of any of his material
obligations hereunder which remains uncured after the lapse of thirty (30) days
following the date that the Company has given Employee Stockholder written
notice thereof; (iii) a material breach by Employee Stockholder of his
duty not to engage in any transaction that represents, directly or indirectly,
self-dealing with the Company or any of its Affiliates which has not been
approved by a majority of the disinterested directors of the Board or of the terms
of his employment; (iv) any act of misappropriation, embezzlement,
intentional fraud or similar conduct involving the Company or any of its
Affiliates; (v) the conviction or the plea of nolo  contendere or the
equivalent in respect of a felony involving moral turpitude;
(vi) intentional infliction of any damage of a material nature to any
property of the Company or any of its Affiliates; or (vii) the repeated
non-prescription abuse of any controlled substance or the repeated abuse of
alcohol or any other non-controlled substance which, in any case described in
this clause, the Board reasonably determines renders Employee Stockholder unfit
to serve in his capacity as an officer or employee of the Company or its
Affiliates.

 

(b)         Employees; Noncompetition and Nonsolicitation.  In addition to the general repurchase rights
of the Company and the Whitney Funds set forth in Section 6(a) above, if
following cessation of any Employee Stockholder’s employment with the Company
or any of its Subsidiaries for any reason, such Employee Stockholder serves in
a Competitive Position, or engages in activities inimical, contrary or harmful
to the interests of the Company or any of its Subsidiaries, including, but not
limited to: (A) directly or indirectly soliciting any business involving or
similar to any existing or planned products marketed by the Company from any

 

13

 

person or organization which is, or has been, a
customer of the Company; (B) requesting or advising any customer, bona fide
prospective customer, supplier, licensee, licensor, landlord or other business
relation of the Company or any Affiliate thereof to withdraw, curtail or cancel
its business dealings with the Company or any such Affiliate (including making
any negative statements or communications about the Company or any of its
Affiliates); (C) directly or indirectly recruiting, hiring, soliciting or
attempting to solicit (other than through advertisements or general
solicitations) any person who was an employee of the Company or any of its
Affiliates at any time during the six-month period immediately prior to the
date on which such hiring would take place, or encourage or otherwise cause any
employee of the Company or any Affiliate to terminate his or her employment in
order to become an employee, consultant or independent contractor to or for any
other employer; (D) directly or indirectly, having an interest in, being
employed by, or being connected with, as an employee, consultant, officer,
director, partner, stockholder or joint venturer, in any person or entity
owning, managing, controlling, operating or otherwise participating or
assisting in any business which is in competition with the business of the
Company (x) during the term of Employee Stockholder’s employment with the
Company, in any location, and (y) for the twenty-four (24) month period
following the termination of the Employee Stockholder’s employment, in any
jurisdiction identified in Exhibit A attached hereto; provided,
however, that the foregoing shall not prevent Employee Stockholder from
being a stockholder of less than 1% of the issued and outstanding securities of
any class of a corporation listed on a national securities exchange or
designated as national market system securities on an interdealer quotation
system by the National Association of Securities Dealers, Inc.,  then the Company and/or the Whitney Funds (to
the extent the Company elects not to fully exercise its rights hereunder),
shall have the following rights:

 

(i)                                     If
such activities occur during the Repurchase Period, in addition to any other
rights available to it at law or in equity (including, without limitation,
obtaining an injunction, as described in clause (ii) below if applicable), the
Company and/or the Whitney Funds, as the case may be, may purchase the Shares
then owned by such Employee Stockholder and his or her Permitted Transferees
(or any Permitted Transferees who derived ownership of any Shares directly or
indirectly from such Employee Stockholder) at a purchase price per Share which
shall be equal to the lower of Cost or Fair Market Value per Share; or

 

(ii)                                  If
such activities occur within two years of cessation of an Employee
Stockholder’s employment with the Company or such Subsidiary (whether or not
such cessation occurs during the Repurchase Period) as set forth above, the
Company and its Subsidiaries shall be entitled to an injunction prohibiting the
Employee Stockholder from engaging in such activities, as the Employee
Stockholder agrees that the Company and its Subsidiaries would be irreparably
harmed by any such actual or threatened conduct.

 

The
Company shall provide the Whitney Funds with prompt written notice of its
becoming aware of any event that would give rise to the rights set forth in
this Section 6(b), which notice shall specify, in reasonable detail, (A)
the nature of such event, (B) the number of Shares then held by such Employee
Stockholder and any of its Permitted Transferees, (C) the number of Shares then
held by such Employee Stockholder and any of its Permitted Transferees that the
Company shall elect to purchase hereunder, (D) the purchase price per Share
payable under this Section 6(b), as determined above, and (E) the nature
of any other remedies the Company or any of its Subsidiaries intends to
exercise against such Employee Stockholder.The

 

14

 

repurchase right described in clause (i) above may be
exercised by the Company and/or the Whitney Funds, as the case may be,
delivering written notice to such Employee Stockholder, with a copy to the
Whitney Funds or the Company, as the case may be.

 

Notwithstanding
anything herein to the contrary, this Section 6(b) shall be governed by
the law of the jurisdiction in which the alleged prohibited activity
occurred.  For the avoidance of doubt,
the parties acknowledge that the applicability of the immediately preceding
sentence may result in the application of a different law for each jurisdiction
in which the alleged violations of this Section 6(b) occurred.

 

(c)          Closing Mechanics.  The closing of any purchase and sale under
this Section 6 shall be held at the principal offices of the Company at
10:00 a.m. local time on a date specified by the Company and/or the Whitney
Funds, as the case may be, not later than 30 days after the date of its
notice.  At such closing, the Employee
Stockholder shall deliver one or more certificates representing the Shares to
be purchased, duly endorsed for transfer and accompanied by all requisite stock
transfer taxes, if any, and such Shares shall be fee and clear of any liens,
claims or Encumbrances (other than restrictions imposed pursuant to this
Agreement and applicable federal and state securities laws), and the Employee
Stockholder shall so represent and warrant, and further represent and warrant
that he or she is the record and beneficial owner of such Shares.  The Company and/or the Whitney Funds, as the
case may be, shall deliver at such closing, payment for such Shares in such
form and upon such reasonable terms as the Company and/or the Whitney Funds, as
the case may be, shall specify.

 

SECTION 7. Election
of Directors.

 

(a)          From and after the date hereof, at any annual or
special stockholders’ meeting called for such purpose, or by written consent in
lieu of a meeting, the Stockholders agree to vote the Shares owned of record or
beneficially by them to maintain a  Board
consisting of such number of members as may be determined by Whitney from time
to time and to elect (i) to the Board (A) Michael R. Stone, James H. Fordyce
and John C. Hockin as nominees designated by Whitney constituting a majority of
the Board, (B) a number of “independent”
nominees (which number shall be selected by Whitney) who are agreeable to
Whitney, (C) the Chief Executive Officer of the Company and (ii) one nominee of
Whitney to each of the Company’s executive committee, audit committee, stock
option committee and compensation committee. 
All such directors shall hold office until their respective successors
shall have been elected and shall have qualified.  The Company shall provide to such directors
the same information concerning the Company and its Subsidiaries, and access
thereto, provided to other members of the Board and such committees.  The reasonable travel expenses incurred by
any such director in attending any such meetings shall be reimbursed by the
Company to the extent consistent with the Company’s then existing policy of
reimbursing directors generally for such expenses.  Within two months following the date hereof,
the Company shall purchase directors’ and officers’ insurance upon terms and
pricing customary for a company of its size and operating in its industry; provided,
however, the Company shall not be obligated to purchase such insurance
in the event that such terms and pricing are not commercially available.

 

(b)         In the event that Whitney shall not have a designee
serving on the Board for any reason, the Company shall give Whitney notice of
(in the same manner as notice is given to

 

15

 

directors), and permit one Person designated by
Whitney to attend as observer, all meetings of the Board and all executive and
other committee meetings of the Board and shall provide to Whitney the same
information concerning the Company, and access thereto, provided to members of
the Board and such committees. The reasonable travel expenses incurred by any
such designee of Whitney in attending any board or committee meetings shall be
reimbursed by the Company to the extent consistent with the Company’s then
existing policy of reimbursing directors generally for such expenses.

 

(c)          The parties hereto will cause the Board to meet at
least once every quarter on as regular a basis as possible, or more frequently
to the extent that the directors designated by Whitney, or in the event no such
directors are then serving on the Board, an observer designated thereby,
reasonably wishes the Board to meet.

 

(d)         At the request of Whitney, the Company shall use its
best efforts to cause the board of directors of the Operating Company to be
composed of the same nominees designated by such Persons pursuant to
Section 7(a).

 

SECTION 8. Legend on
Stock Certificates.  Each certificate of the signatories
hereto representing Shares shall bear the following legends until such time as
the Shares represented thereby are no longer subject to the provisions hereof:

 

“THE
SALE, TRANSFER OR ENCUMBRANCE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO THE TERMS AND CONDITIONS OF A SECURITYHOLDERS AGREEMENT, DATED
AS OF AUGUST 22, 2003 AMONG
INTERACTIVE HEALTH, INC. AND
CERTAIN HOLDERS OF ITS OUTSTANDING CAPITAL SECURITIES, AS SUCH AGREEMENT MAY BE
AMENDED.  COPIES OF SUCH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
CERTIFICATE TO THE SECRETARY OF INTERACTIVE
HEALTH, INC.

 

THIS
SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
NOR UNDER APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.”

 

SECTION 9. Duration of
Agreement.  The rights and obligations of each
Stockholder under this Agreement shall terminate as to such Stockholder upon
the transfer of all Shares owned by such Stockholder in accordance with this
Agreement.  Upon consummation of an
Initial Public Offering of the Company, the rights and obligations of each
Stockholder under this Agreement shall terminate.

 

SECTION 10. Representations
and Warranties.  Each Stockholder represents and warrants
to the other Stockholders as follows:

 

(a)          The execution, delivery and performance of this
Agreement by such Stockholder will not violate any provision of law, any order
of any court or other agency of government, or any provision of any indenture,
agreement or other instrument to which such

 

16

 

Stockholder or any of his, her or its properties
or assets is bound, or conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument, or result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the properties
or assets of such Stockholder other than pursuant to the pledge of the Shares
held by WMF pursuant to the terms of the partnership agreement or other
agreement of WMF pursuant to which WMF issued any bonds, promissory notes or
other evidences of indebtedness.

 

(b)         This Agreement has been duly executed and delivered
by such Stockholder and constitutes the legal, valid and binding obligation of
such Stockholder, enforceable against such Stockholder in accordance with its
terms.

 

(c)          The Shares of such Stockholder listed on Schedule I
hereto constitute all the shares of capital stock owned by such Stockholder
and, except as set forth in the Transaction Documents, such Stockholder does
not have any right or obligation to acquire any additional shares of capital
stock of the Company.

 

(d)         The representations and warranties contained in this
Section 10 shall survive the execution and delivery of this Agreement.

 

SECTION 11.  GOVERNING LAW. 
EXCEPT AS EXPRESSLY PROVIDED IN SECTION 6(B), THIS AGREEMENT SHALL
BE GOVERNED BY, CONSTRUED IN ACCORDANCE WITH, AND ENFORCED UNDER, THE LAW OF
THE STATE OF DELAWARE APPLICABLE
TO AGREEMENTS OR INSTRUMENTS ENTERED INTO AND PERFORMED ENTIRELY WITHIN SUCH
STATE.

 

SECTION 12.  JURISDICTION.

 

(a)          EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY AGREES
THAT THE ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT THE SHARES, OR ANY AGREEMENTS OR TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND HEREBY EXPRESSLY
SUBMITS TO THE PERSONAL JURISDICTION AND VENUE OF SUCH COURTS FOR THE PURPOSES
THEREOF AND EXPRESSLY WAIVES ANY CLAIM OF IMPROPER VENUE AND ANY CLAIM THAT THE
SUCH COURTS ARE AN INCONVENIENT FORUM.  EACH
PARTY HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS ADDRESS
SET FORTH IN SECTION 14 HEREOF, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS
AFTER SUCH MAILING.

 

(b)         EACH PARTY TO THIS AGREEMENT HEREBY WAIVES ITS RIGHT
TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS AGREEMENT OR THE SHARES, ANY

 

17

 

RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR
THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. 
EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES.  EACH PARTY TO THIS AGREEMENT (I) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION,
SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II) ACKNOWLEDGES THAT SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.

 

SECTION 13. Benefits of
Agreement.  This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, legal representatives and heirs.  Any purported issuance of Equity Equivalents
by the Company, or Disposition of the Shares, in violation of the provisions of
this Agreement shall be null and void ab
initio.

 

SECTION 14. Notices.  All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier (with receipt confirmed), courier service or personal delivery:

 

	
   

  	
  (a)  if to the Company:

  
	
   

  
	
   

  	
  Interactive Health, Inc.

  3030 Walnut Avenue

  Long Beach, CA 90807

  Attn: Chief Executive Officer

  
	
   

  
	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Gibson, Dunn & Crutcher LLP

  2029 Century Park East, 40th Floor

  Los Angeles, CA 90067

  Telecopier No.: (310) 552-7053

  
	
   

  	
  Attention:

  	
  Jonathan K. Layne

  
	
   

  
	
   

  	
  (b) if to Whitney V:

  
	
   

  
	
   

  	
  Whitney V, L.P.

  177 Broad Street

  Stamford, Connecticut 06901

  Telecopier No.:  (203) 973-1422

  
	
   

  	
  Attention:

  	
  Daniel J. O’Brien

  
	
   

  	
   

  	
  Michael C. Salvator

  
					

 

18

 

	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Gibson, Dunn & Crutcher LLP

  2029 Century Park East, 40th Floor

  Los Angeles, CA 90067

  Telecopier No.: (310) 552-7053

  
	
   

  	
  Attention:

  	
  Jonathan K. Layne

  
	
   

  	
   

  	
   

  
	
   

  	
  (c) if to any of the Warrant
  Purchasers:

  
	
   

  	
   

  	
   

  
	
   

  	
  Whitney Private Debt Fund, L.P.

  177 Broad Street

  Stamford, Connecticut 06901

  Telecopier No.:  (203) 973-1422

  
	
   

  	
  Attention: 

  	
  Daniel J. O’Brien

  
	
   

  	
   

  	
  Michael C. Salvator

  
	
   

  	
   

  
	
   

  	
  J.H. Whitney Mezzanine Fund,
  L.P.

  177 Broad Street

  Stamford, Connecticut 06901

  Telecopier No.:  (203) 973-1422

  
	
   

  	
  Attention: 

  	
  Daniel J. O’Brien 

  	
   

  
	
   

  	
   

  	
  Michael C. Salvator

  	
   

  
	
   

  	
   

  
	
   

  	
  GreenLeaf Capital, L.P.

  177 Broad Street

  Stamford, Connecticut 06901

  Telecopier No.:  (203) 973-1422

  
	
   

  	
  Attention: 

  	
  Daniel J. O’Brien 

  	
   

  
	
   

  	
   

  	
  Michael C. Salvator

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Gibson, Dunn & Crutcher LLP

  2029 Century Park East, 40th Floor

  Los Angeles, CA 90067

  Telecopier No.: (310) 552-7053

  
	
   

  	
  Attention: 

  	
  Jonathan K. Layne

  
	
   

  	
   

  
	
   

  	
  (d)  if to Management Purchasers:

  
	
   

  
	
   

  	
  the address set forth after the
  signature of each Management Purchaser  

  
							

 

or to such other address or
addresses as shall have been furnished in writing to the other parties
hereto.  Each Stockholder agrees, at all
times, to provide the Company with an address for notices hereunder.

 

All
such notices and communications shall be deemed to have been duly given: when
delivered by hand, if personally delivered; when delivered by courier, if
delivered by commercial overnight courier service; if mailed, five Business
Days (as defined in the Purchase

 

19

 

Agreement) after being deposited in the mail, postage
prepaid; or if telecopied, when receipt is acknowledged.

 

SECTION 15. Modification.  Except as otherwise provided herein, neither
this Agreement nor any provision hereof shall be modified, changed, discharged
or terminated except by an instrument in writing signed by the party against
whom the enforcement of any modification, change, discharge or termination is
sought or by the agreement of all of the Stockholders, subject to this
Agreement; provided, however, that no modification or amendment
shall be effective to reduce the percentage of the Shares the consent of the
holders of which is required under this Section 15.

 

SECTION 16. Entire
Agreement.  This Agreement
constitutes the entire agreement among the undersigned with respect to the
subject matter contained herein and supersedes any and all prior agreements or
understandings, oral or written, among any or all of the undersigned relating
to such subject matter.

 

SECTION 17. Signatures;
Counterparts.  Telefacsimile
transmissions of any executed original document and/or retransmission of any
executed telefacsimile transmission shall be deemed to be the same as the
delivery of an executed original.  At the
request of any party hereto, the other parties hereto shall confirm
telefacsimile transmissions by executing duplicate original documents and
delivering the same to the requesting party or parties.  This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

 

SECTION 18. Severability.  If any one or more of the provisions
contained in this Agreement, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall
substantially impair the benefits of the remaining provisions of this
Agreement.  The parties hereto further
agree to replace such invalid, illegal or unenforceable provision of this
Agreement with a valid, legal and enforceable provision that will achieve, to
the extent possible, the economic, business and other purposes of such invalid,
illegal or unenforceable provision.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

20

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.

 

	
   

  	
  INTERACTIVE HEALTH, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kevin A. Smith

  	
   

  
	
   

  	
   

  	
  Name: Kevin Smith

  
	
   

  	
   

  	
  Title:  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  J.H. WHITNEY MEZZANINE FUND, L.P.

  
	
   

  	
  By:

  	
  Whitney GP, L.L.C.

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  	
  Daniel J. O’Brien

  
	
   

  	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WHITNEY PRIVATE DEBT FUND,
  L.P.

  
	
   

  	
  By:

  	
  Whitney Private Debt GP, LLC

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  	
  Daniel J. O’Brien

  
	
   

  	
   

  	
   

  	
  Managing Member

  
						

 

 

[SIGNATURE
PAGE TO SECURITYHOLDERS’ AGREEMENT]

 

 

	
   

  	
  GREENLEAF CAPITAL, L.P.

  
	
   

  	
  By:

  	
  GreenLeaf GP, L.L.C.
its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  	
  Daniel J. O’Brien

  
	
   

  	
   

  	
   

  	
  Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WHITNEY V, L.P.

  
	
   

  	
  By:

  	
  Whitney Equity Partners V, L.P.

  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  	
  Daniel J. O’Brien

  
	
   

  	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WHITNEY & CO., LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel J. O’Brien

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Daniel J. O’Brien

  
	
   

  	
   

  	
   

  	
  Title:   Partner

  
	
   

  	
   

  	
   

  	
   

  
					

 

[SIGNATURE
PAGE TO SECURITYHOLDERS’ AGREEMENT]

 

 

	
   

  	
  MANAGEMENT PURCHASERS

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Craig Womack

  	
   

  
	
   

  	
  Name: Craig Womack

  
	
   

  	
  Number of Preferred
  Shares:  50,000

  
	
   

  	
  Address:

  
	
   

  	
  850 E. Ocean Blvd. #204

  
	
   

  	
  Long Beach, CA 90802

  
	
   

  	
  Telephone No.: (562) 435-6305

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Andrew B.
  Cohen

  	
   

  
	
   

  	
  Name: Andrew Cohen

  
	
   

  	
  Number of Preferred
  Shares:  40,000

  
	
   

  	
  Address:

  
	
   

  	
  3015 Tiffany Circle

  
	
   

  	
  Los Angeles, CA 90077

  
	
   

  	
  Telephone No.: (310) 446-1438

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   /s/ Hans Dehli

  	
   

  
	
   

  	
  Name: Hans Dehli

  
	
   

  	
  Number of Preferred
  Shares:  30,000

  
	
   

  	
  Address:

  
	
   

  	
  32826 Leah Drive

  
	
   

  	
  Dana Point, CA 92629

  
	
   

  	
  Telephone No.: (949) 661-6386

  

 

 

[SIGNATURE PAGE TO
SECURITYHOLDERS’ AGREEMENT]

 

 

Exhibit A

 

 

Anywhere in the world.Exhibit
10.23

 

AMENDMENT NO. 1

TO

SECURITYHOLDERS AGREEMENT

 

This Amendment
No. 1 (this “Amendment”)  to the
Securityholders Agreement, dated as of August 22, 2003 (the “Agreement”),
by and among INTERACTIVE HEALTH, INC., a Delaware corporation (the “Company”),
J. H. WHITNEY MEZZANINE FUND, L.P., a Delaware limited partnership (“WMF”),
WHITNEY PRIVATE DEBT FUND, L.P., a Delaware limited partnership (“WPDF”),
GREENLEAF MEZZANINE CAPITAL, L.P., a Delaware limited partnership (“GMC”)
and GREENLEAF CAPITAL, L.P., a Delaware limited partnership (“GreenLeaf”
and together with WMF, WPDF and GMC, collectively, the “Warrant Purchasers”),
WHITNEY V, L.P., a Delaware limited partnership (“Whitney V” and
collectively with the Warrant Purchasers, the “Whitney Funds”), and the
individuals identified as “Management Purchasers” in the signature pages hereto
(the “Management
Purchasers” and collectively with the Whitney Funds, the “Stockholders”
and each individually, a “Stockholder”) is entered into as of
this 18th day of February, 2004, to be effective upon the adoption of the
Company’s 2003 Stock Incentive Plan. 
Capitalized terms used in this Amendment and not otherwise defined shall
have the meanings ascribed to them in the Agreement.

 

Whereas, the parties hereto desire to
amend the Agreement pursuant to Section 15 thereof.

 

Now, therefore, in consideration of the
premises and of the mutual covenants and obligations hereinafter set forth, the
parties hereto hereby agree as follows:

 

(1)                                  Section 6 of the
Agreement is hereby amended and restated to read in its entirety as follows:

 

“SECTION 6. Repurchase Rights Upon Cessation of Employment.

 

(a)                                  If any Stockholder is an
employee of the Company or any of its Subsidiaries, other than a director of
the Company or any of its Subsidiaries who is not otherwise an employee of the
Company or any of its Subsidiaries (each such employee, an “Employee Stockholder”),
upon termination of such Employee Stockholder’s employment for any reason prior
to the third anniversary of the date such Employee Stockholder becomes subject
to the terms of this Agreement, subject to Section 6(d) below (the “Repurchase
Period”), then the Company, or the Whitney Funds, if the Company
declines to so purchase, shall have the right to purchase, and to require such
Employee Stockholder and any Permitted Transferee of such Employee Stockholder
(such Employee Stockholder and any Permitted Transferee thereof or any
Permitted Transferees who derived ownership of any Shares directly or
indirectly from such Employee Stockholder, collectively, the “Terminated
Party”) to sell to the Company and/or the Whitney Funds, as the case
may be, up to all of the Shares then owned by the Terminated Party.  The Company shall deliver written notice to
the Whitney Funds of such termination within 10 business days after the date
such Employee Stockholder’s employment is so terminated (the “Termination
Date”), which notice shall specify, in reasonable detail, (A) the
Termination Date, (B) the circumstances of such termination, (C) the number of
Shares then held by the Terminated Party, (D) the number

 

 

of Shares then held by the
Terminated Party that the Company shall elect to purchase hereunder, and (E)
the purchase price per share payable under this Section 6(a), as
determined below.  The Whitney Funds
shall have the right to exercise its rights under this Section 6 as to any
or all Shares held by the Terminated Party that the Company does not ultimately
purchase hereunder.  Upon such cessation
of employment by the Employee Stockholder, the Company and/or the Whitney
Funds, as the case may be, may exercise such right at any time during a 90 day
period beginning on the later of (i) the day after the six month anniversary of
the day the Shares at issue are acquired or (ii)  the Termination Date.  During such Repurchase Period, a Terminated
Party shall be prohibited from otherwise Disposing of any Shares then owned by
a Terminated Party without the prior written consent of the Company and the
Whitney Funds.  Such repurchase right may
be exercised by the Company and/or the Whitney Funds, as the case may be,
giving notice to such Terminated Party, with a copy to the Whitney Funds or the
Company, as the case may be.  Subject to
Section 6(d), the purchase price per share payable for any Shares purchased
under this Section 6(a) shall be equal to:

 

(A) in the case
of termination by the Company not for Cause or upon death or disability, the
greater of (y) Cost per Share or (z) the Fair Market Value of such Share at the
time of such repurchase; and

 

(B) in the case
of termination for any other reason, the lesser of (y) Cost per Share or (z)
the Fair Market Value per Share at the time of such repurchase.

 

For purposes
hereof, the term “Cause” shall have the meaning ascribed thereto in the
respective Employee Stockholder’s employment agreement with the Company if one
exists, and shall otherwise be defined as the occurrence or existence of any of
the following with respect to Employee Stockholder, as determined by a majority
of the disinterested directors of the Board: 
(i) unsatisfactory performance of Employee Stockholder’s duties or
responsibilities as determined by the Board, provided that the Company has
given Employee Stockholder written notice specifying the unsatisfactory
performance of his duties and responsibilities; (ii) a material breach by
Employee Stockholder of any of his material obligations hereunder which remains
uncured after the lapse of thirty (30) days following the date that the Company
has given Employee Stockholder written notice thereof; (iii) a material breach
by Employee Stockholder of his duty not to engage in any transaction that
represents, directly or indirectly, self-dealing with the Company or any of its
Affiliates which has not been approved by a majority of the disinterested
directors of the Board or of the terms of his employment; (iv) any act of
misappropriation, embezzlement, intentional fraud or similar conduct involving
the Company or any of its Affiliates; (v) the conviction or the plea of nolo  contendere
or the equivalent in respect of a felony involving moral turpitude; (vi)
intentional infliction of any damage of a material nature to any property of
the Company or any of its Affiliates; or (vii) the repeated non-prescription
abuse of any controlled substance or the repeated abuse of alcohol or any other
non-controlled substance which, in any case described in this clause, the Board
reasonably determines renders Employee Stockholder unfit to serve in his
capacity as an officer or employee of the Company or its Affiliates.

 

(b)                                 Employees; Noncompetition
and Nonsolicitation.  In addition to
the general repurchase rights of the Company and the Whitney Funds set forth in
Section 6(a) above and 6(d) below, if following cessation of any Employee
Stockholder’s employment with the

 

2

 

Company or any of its
Subsidiaries for any reason, such Employee Stockholder serves in a Competitive
Position, or engages in activities inimical, contrary or harmful to the
interests of the Company or any of its Subsidiaries, including, but not limited
to: (A) directly or indirectly soliciting any business involving or similar to
any existing or planned products marketed by the Company from any person or
organization which is, or has been, a customer of the Company; (B) requesting
or advising any customer, bona fide prospective customer, supplier, licensee,
licensor, landlord or other business relation of the Company or any Affiliate
thereof to withdraw, curtail or cancel its business dealings with the Company
or any such Affiliate (including making any negative statements or
communications about the Company or any of its Affiliates); (C) directly or
indirectly recruiting, hiring, soliciting or attempting to solicit (other than
through advertisements or general solicitations) any person who was an employee
of the Company or any of its Affiliates at any time during the six-month period
immediately prior to the date on which such hiring would take place, or
encourage or otherwise cause any employee of the Company or any Affiliate to
terminate his or her employment in order to become an employee, consultant or
independent contractor to or for any other employer; (D) directly or
indirectly, having an interest in, being employed by, or being connected with, as
an employee, consultant, officer, director, partner, stockholder or joint
venturer, in any person or entity owning, managing, controlling, operating or
otherwise participating or assisting in any business which is in competition
with the business of the Company (x) during the term of Employee Stockholder’s
employment with the Company, in any location, and (y) for the twenty-four (24)
month period following the termination of the Employee Stockholder’s
employment, in any jurisdiction identified in Exhibit A attached hereto;
provided, however, that the foregoing shall not prevent Employee
Stockholder from being a stockholder of less than 1% of the issued and
outstanding securities of any class of a corporation listed on a national
securities exchange or designated as national market system securities on an
interdealer quotation system by the National Association of Securities Dealers,
Inc., then the Company and/or the Whitney Funds (to the extent the Company
elects not to fully exercise its rights hereunder), shall have the following
rights:

 

(i)                                     If
such activities occur during the Repurchase Period, in addition to any other
rights available to it at law or in equity (including, without limitation,
obtaining an injunction, as described in clause (ii) below if applicable), the
Company and/or the Whitney Funds, as the case may be, may purchase the Shares
then owned by such Employee Stockholder and his or her Permitted Transferees
(or any Permitted Transferees who derived ownership of any Shares directly or
indirectly from such Employee Stockholder) at a purchase price per Share which
shall be equal to the lower of Cost or Fair Market Value per Share at the time
of such repurchase; or

 

(ii)                                  If such
activities occur within two years of cessation of an Employee Stockholder’s
employment with the Company or such Subsidiary (whether or not such cessation
occurs during the Repurchase Period) as set forth above, the Company and its
Subsidiaries shall be entitled to an injunction prohibiting the Employee
Stockholder from engaging in such activities, as the Employee Stockholder
agrees that the Company and its Subsidiaries would be irreparably harmed by any
such actual or threatened conduct.

 

The Company
shall provide the Whitney Funds with prompt written notice of its becoming
aware of any event that would give rise to the rights set forth in this
Section 6(b),

 

3

 

which notice shall specify, in
reasonable detail, (A) the nature of such event, (B) the number of Shares then
held by such Employee Stockholder and any of its Permitted Transferees, (C) the
number of Shares then held by such Employee Stockholder and any of its
Permitted Transferees that the Company shall elect to purchase hereunder, (D)
the purchase price per Share payable under this Section 6(b), as
determined above, and (E) the nature of any other remedies the Company or any
of its Subsidiaries intends to exercise against such Employee Stockholder.  The repurchase right described in clause (i)
above may be exercised by the Company and/or the Whitney Funds, as the case may
be, delivering written notice to such Employee Stockholder, with a copy to the
Whitney Funds or the Company, as the case may be.

 

Notwithstanding
anything herein to the contrary, this Section 6(b) shall be governed by
the law of the jurisdiction in which the alleged prohibited activity
occurred.  For the avoidance of doubt,
the parties acknowledge that the applicability of the immediately preceding
sentence may result in the application of a different law for each jurisdiction
in which the alleged violations of this Section 6(b) occurred.

 

(c)                                  Closing Mechanics.  The closing of any purchase and sale under
this Section 6 shall be held at the principal offices of the Company at
10:00 a.m. local time on a date specified by the Company and/or the Whitney
Funds, as the case may be, not later than 30 days after the date of its
notice.  At such closing, the Employee
Stockholder shall deliver one or more certificates representing the Shares to
be purchased, duly endorsed for transfer and accompanied by all requisite stock
transfer taxes, if any, and such Shares shall be fee and clear of any liens,
claims or Encumbrances (other than restrictions imposed pursuant to this
Agreement and applicable federal and state securities laws), and the Employee
Stockholder shall so represent and warrant, and further represent and warrant
that he or she is the record and beneficial owner of such Shares.  The Company and/or the Whitney Funds, as the
case may be, shall deliver at such closing, payment for such Shares in such
form and upon such reasonable terms as the Company and/or the Whitney Funds, as
the case may be, shall specify.

 

(d)                                 Certain Option Shares.  Notwithstanding anything contained elsewhere
in this Section 6, the Repurchase Period applicable to repurchases under
Section 6(a) of any options granted by the Company to Employee
Stockholders pursuant to the 2004 Stock Incentive Plan (“Options”) shall continue
until the tenth anniversary of the date of grant of such Options and the
purchase price per share payable for any Shares issued upon exercise of the
Options shall be as set forth in the Option Agreement applicable to such
Options.  For the avoidance of doubt, the
Repurchase Period and the purchase price per share payable for any Shares other
than those issued upon exercise of the Options shall be as set forth in
Section 6(a) or 6(b) above, as applicable.

 

(2)                                  Except as modified hereby,
the Agreement, as heretofore amended, shall remain in full force and effect and
unmodified.

 

(3)                                  Telefacsimile transmissions
of any executed original document and/or retransmission of any executed
telefacsimile transmission shall be deemed to be the same as the delivery of an
executed original.  At the request of any
party hereto, the other parties hereto shall confirm telefacsimile
transmissions by executing duplicate original documents and delivering the same
to the requesting party or parties.  This
Agreement may be executed in any number of

 

4

 

counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

 

(4)                                  Except as expressly provided
in Section 6(b) of the Agreement, as amended, this Amendment shall be
governed by, construed in accordance with, and enforced under, the law of the
state of Delaware applicable to agreements or instruments entered into and
performed entirely within such state.

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]

 

5

 

IN WITNESS
WHEREOF, the parties hereto have executed this Amendment on the date first
above written.

 

 

	
   

  	
  INTERACTIVE HEALTH, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Craig Womack

  	
   

  
	
   

  	
   

  	
  Name: Craig Womack

  	
   

  
	
   

  	
   

  	
  Title: CEO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  J.H. WHITNEY MEZZANINE FUND, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Whitney GP, L.L.C.

  	
   

  
	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Salvator

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorney-in-Fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WHITNEY PRIVATE DEBT FUND, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Whitney Private Debt GP, LLC

  	
   

  
	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Salvator

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorney-in-Fact

  	
   

  

 

[SIGNATURE
PAGE TO AMENDMENT NO. 1 TO SECURITYHOLDERS AGREEMENT]

 

 

	
   

  	
  GREENLEAF CAPITAL, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GreenLeaf GP, L.L.C.

  	
   

  
	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Salvator

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attorney-in-Fact

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WHITNEY V, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Whitney Equity Partners V, L.P.

  	
   

  
	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Salvator

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WHITNEY & CO., LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Salvator

  	
   

  
	
   

  	
   

  	
  Name: Michael C. Salvator

  	
   

  
	
   

  	
   

  	
  Title: CFO

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GREENLEAF MEZZANINE CAPITAL, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  GreenLeaf GP, LLC,

  	
   

  
	
   

  	
   

  	
  its General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael C. Salvator

  	
   

  

 

[SIGNATURE
PAGE TO AMENDMENT NO. 1 TO SECURITYHOLDERS AGREEMENT]

 

 

	
   

  	
  MANAGEMENT PURCHASERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Craig Womack

  	
  .

  	
   

  
	
   

  	
  Name: Craig Womack

  	
   

  
	
   

  	
  Number of Preferred Shares:
  50,000

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  850 E. Ocean Blvd. #204

  	
   

  
	
   

  	
  Long Beach, CA 90802

  	
   

  
	
   

  	
  Telephone No.: (562) 435-6305

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Andrew B. Cohen

  	
  .

  	
   

  
	
   

  	
  Name: Andrew Cohen

  	
   

  
	
   

  	
  Number of Preferred Shares:
  40,000

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  3015 Tiffany Circle

  	
   

  
	
   

  	
  Los Angeles, CA 90077

  	
   

  
	
   

  	
  Telephone No.: (310) 446-1438

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Hans Dehli

  	
  .

  	
   

  
	
   

  	
  Name: Hans Dehli

  	
   

  
	
   

  	
  Number of Preferred Shares:
  30,000

  	
   

  
	
   

  	
  Address:

  	
   

  
	
   

  	
  32826 Leah Drive

  	
   

  
	
   

  	
  Dana Point, CA 92629

  	
   

  
	
   

  	
  Telephone No.: (949) 661-6386

  	
   

  
					

 

[SIGNATURE
PAGE TO AMENDMENT NO. 1 TO SECURITYHOLDERS AGREEMENT]

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