Document:

Ex. 10.72 JT 3rd Amendment

EXECUTION COPY    Exhibit 10.72

THIRD AMENDMENT (REVISED) TO LICENSE AGREEMENT
THIS THIRD AMENDMENT (REVISED) (this “Amendment”) is made and entered into as of June 10, 2015 by and between JAPAN TOBACCO INC., a Japanese corporation having its principal place of business at JT Building, 2-1 Toranomon, 2-chome, Minato-ku, Tokyo 105-8422, Japan (“JT”), and GILEAD SCIENCES, INC., a Delaware corporation having its principal place of business at 333 Lakeside Drive, Foster City, CA 94404, United States (“Gilead”) and replaces that certain Third Amendment entered into between JT and Gilead dated July 5, 2011.  JT and Gilead are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS, JT and Gilead have previously entered into a License Agreement dated March 22, 2005 which was amended on May 19, 2005, May 17, 2010, and July 5, 2011 (such License Agreement, as amended previously and contemporaneously with this Amendment, the “EVG Agreement”) relating to a compound designated as JTK-303, which is now known as Elvitegravir (“EVG”); and
WHEREAS, Gilead desires to arrange for a product containing EVG as the sole active pharmaceutical ingredient and the Quad (as defined below) to be made available in developing countries which cannot afford developed-world pricing for the products and JT desires to facilitate such Gilead efforts by agreeing to amend the EVG Agreement as set forth herein. 
NOW THEREFORE, based on the foregoing premises and the mutual covenants and obligations set forth below, the Parties agree as follows:
ARTICLE 1

DEFINITIONS
Unless otherwise specified, capitalized terms not defined in this Amendment shall have the definitions set forth therefor in the EVG Agreement.  The EVG Agreement is hereby amended by adding the following defined terms:
1.1    “Access Countries” shall mean the Access Group A Countries, the Access Group B Countries and the Access Group C Countries.
1.2     “Access Group A Countries” shall mean the countries listed on Schedule 1.65 A attached to this Amendment which consists of (i) the countries of Sub-Saharan Africa defined by The World Bank on the date of this Amendment, (ii) countries classified as low-income economies by The World Bank on the date of this Amendment, and (iii) countries listed by United Nations Conference On Trade and Development as least developed countries.  If on the Launch Date or at any time thereafter a country not on Schedule 1.65 A is classified as a low-income economy by The World Bank or a country listed by United Nations Conference On Trade and Development as least developed country, then Gilead may amend Schedule 1.65 A to add such country upon prior written notice to JT and in accordance with any applicable requirements set forth in Section 2.8 of this Amendment.  If such added country is listed on any other Schedule of this Amendment, then such Schedule shall be amended to delete such country.

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1.3     “Access Group B Countries” shall mean the countries listed on Schedule 1.65 B attached to this Amendment.  If on the Launch Date or at any time thereafter a country not on Schedule 1.65 B is classified as a lower-middle-income economy (or lower classification than lower-middle-income economy) by The World Bank, then Gilead may amend Schedule 1.65 B to add such country upon prior written notice to JT and in accordance with any applicable requirements set forth in Section 2.8.  If on the Launch Date or at any time thereafter a country not on Schedule 1.65 B is classified in higher class than lower–middle-income economy by The World Bank, then Gilead may only amend Schedule 1.65 B to add such country upon prior written approval by JT and in accordance with any other requirements, if applicable, set forth in Section 2.8 of this Amendment.  If any such added country is listed on any other Schedule of this Amendment, then such Schedule shall be amended to delete such country. 
1.4     “Access Group C Countries” shall mean the countries listed on Schedule 1.65 C attached to this Amendment. Gilead may only amend Schedule 1.65 C to add such country upon prior written approval by JT and in accordance with any applicable requirements set forth in Section 2.8 of this Amendment. 
1.5    “B/C Countries” shall mean all Access Group B Countries and the Access Group C Countries.
1.6     “Branded Products” shall mean the Products sold by Gilead or its Affiliates or Sublicensees other than Generic Versions. 
1.7     “Excluded Net Sales” shall mean Net Sales of Branded Products sold by Gilead or its Affiliates or Sublicensees for distribution solely within Access Group A Countries and Net Sales of Generic Versions under Generic Licenses in the Generic Territory.
1.8     “Generic License” shall mean a sublicense by Gilead or its Affiliate of its rights granted under Article 6 of the EVG Agreement to a Generic Licensee to (i) sell Generic Versions solely within the Generic Territory, (ii) make Generic Versions in India from Qualified EVG API solely for the purpose of selling them in the Generic Territory, (iii) make Generic Versions in China from Qualified EVG API solely for the purpose of selling them in the Generic Territory, (iv) make Generic Versions in South Africa from Qualified EVG API solely for the purposes of selling them in the Generic Territory, and/or (v) make API of EVG in India, China or South Africa and sell such API of EVG to other Generic Licensees in India, China or in South Africa, solely for the purpose of making Generic Versions pursuant to 1.8(ii) or 1.8(iii) or 1.8(iv) set forth above. For clarity, unless otherwise expressly provided in this Amendment, both of the sublicense granted by Gilead to MPPF as well as MPPF License shall be deemed to be included in Generic Licensee.  “Qualified EVG API” shall mean EVG API made by a Generic Licensee in India, China or South Africa or made by a contract manufacturer that makes EVG API for Gilead’s Branded Product. “India” shall mean Republic of India and “China” shall mean the People’s Republic of China but, for clarity, excluding Hong Kong SAR, Macau SAR, and Chinese Taipei.
1.9     “Generic Licensee” shall mean a Sublicensee of Gilead or its Affiliate that has been granted a Generic License to make and/or sell API of EVG and/or Generic Versions and that has been granted no other rights to Products, except that a Generic Licensee may be granted the right to distribute Branded Products solely within countries in the Generic Territory. For clarity, unless otherwise expressly provided in this Amendment, both of the MPPF and any third party granted the sublicense from MPPF under Section 3.2 of this Amendment shall be deemed to be included in Generic Licensee.  
1.10    “Generic Net Sales” shall mean the net sales of EVG Generic Versions in the Generic Territory as such net sales are defined in the applicable Generic License, and as reported by the applicable Generic Licensee.  For products containing EVG and one or more other APIs, such net 

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sales shall mean the portion of net sales allocated to the EVG component as set forth in section 4.2 of the Generic License templates attached as Attachments A, B and C (for Attachment C, section 4.2 of the form of sublicense agreements attached thereto) to this Amendment.  If such allocations are not reported by the Generic Licensee(s), then Gilead and JT shall agree on the allocation based on available data on net selling prices of applicable generic products in the Generic Territory.
1.11     “Generic Territory” shall mean the Access Group A Countries and the Access Group B Countries.  
1.12    “Generic Versions” shall mean the Products manufactured by Generic Licensees that are not sold under any Regulatory Approvals obtained by or for Gilead or its Affiliate, and which are marketed and promoted using different product trademarks than the Trademark.   For clarity, it is expected that Generic Versions will receive Regulatory Approvals based on reference to Regulatory Approvals obtained by or for Gilead for Branded Products.  
1.13     “JT Patent Expenses” shall mean [*] expenses (including attorneys’ fees) actually incurred by JT to file, maintain, Prosecute or enforce any patents or patent applications in or for the Access Group A Countries which are licensed by JT to Gilead under EVG Agreement. 
1.14     “Launch Date” shall mean the earliest date of Commercial Launch of a Branded Product.
1.15     “MPPF” shall mean the Medicines Patent Pool Foundation, at Chemin Louis-Dunant 17, 1202, 1202 Geneva, Switzerland.  The sublicense of the Generic License granted by Gilead to MPPF pursuant to Section 3.2 of this Amendment shall be referred to as the “MPPF License”.
1.16    “Net Sales” shall mean Net Sales as defined in Section 1.65 of the EVG Agreement and not as defined in section 1.8 of the Second Amendment dated May 10, 2010 to the EVG Agreement.
1.17    ”Region” shall mean any one of Access Group A Countries, Access Group B Countries or Access Group C Countries.
ARTICLE 2
ACCESS COUNTRIES AND NET SALES 
2.1    Net Sales in Access Countries.  “Net Sales” shall [*], provided, however, that annual net sales and unit sales volume of each of Branded Products and Generic Versions (including, but not limited to, Generic Version containing a combination of APIs that are different from any Product under development or being marketed by Gilead, as set forth in Section 3.3 of this Amendment) in the Access Countries shall be reported by Gilead to JT in writing on a country-by-country and product-by-product basis, within ninety (90) days after the end of each calendar year, to the extent such information is available to Gilead.  
2.2    Amendment of Net Sales Definition.  Section 1.65 (“Net Sales”) of the EVG Agreement hereby is amended by deleting the following words and replacing them by the following words:
Deleted Words: “Distribution to Global Access Programs.   To the extent Gilead or its Affiliates distribute Product through government agencies, not-for-profit non-governmental organizations, physicians, pharmacies or patients in the countries listed in Schedule 1.65 at reduced rates (the “Gilead Global Access Program”), Net Sales for the purposes of determining royalties payable under this Agreement on Products distributed to a Gilead Global Access Program will be calculated by reducing the gross amount invoiced to the Global Access Program for such Product by Gilead’s 

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Manufacturing Costs, including, to the extent not included as Manufacturing Costs, reasonable overhead and depreciated facilities expenses and administrative costs in direct support of the manufacturing of the Product and of Gilead’s Global Access Program in accordance with practices and procedures consistent with those of  other relevant products in the Gilead Global Access Program, for the Product less all credits or allowances granted on account of rejections, returns, billing errors or retroactive price reductions, and duties, taxes and other governmental charges, provided that the total resulting amount shall not be reduced below zero after deduction of applicable credits and allowances.”
Replacement Words:  “Adjustment for Combination Products.”
Schedule 1.65 attached to the EVG Agreement is hereby deleted.
  
2.3    Royalty Due to JT for Sales of Generic Versions.  Gilead shall pay JT a royalty of [*] of Generic Net Sales only in Access Group B Countries of the Generic Territory.  The provisions of Sections 8.4, 8.5, 8.6, 8.7, 8.8 and 8.9 of the EVG Agreement shall apply to such royalty payments, except that Gilead’s payment shall be due thirty (30) days after receipt of the royalty report from the Generic Licensee reporting such Generic Net Sales.
2.4    [*] shall be reported in the quarterly royalty reports to JT under Section 8.4 of the EVG Agreement.
2.5    Access Countries.  Section 5.5 (“Global Access Program”) of the EVG Agreement hereby is amended to read as follows:  
“5.5   Access Countries.  In its program to provide Products in the Access Countries (either by itself or through Generic Licensees) Gilead shall undertake commercially reasonable efforts to seek to prevent adverse effects on Net Sales of Products in countries that are not in the Access Countries, which efforts are consistent with those Gilead uses with its other HIV products.  Gilead will discuss in good faith with JT any such preventative efforts and shall keep JT reasonably informed of actions taken in furtherance of such efforts to prevent adverse effects on Net Sales of Product in countries that are not Access Countries.  In any Gilead press release announcing an expansion of the Gilead global access program with respect to the Product, Gilead shall comply with Section 13.3 of the EVG Agreement and also shall include a statement to the effect that JT has agreed to reduce or waive its right to a royalty on sales of the Product in the Access Countries.” 
2.6    No Application of Certain Provisions to Access Countries.  [*]
2.7    JT Patent Expenses.   JT Patent Expenses will be billed to Gilead quarterly and shall be paid by Gilead to JT within thirty (30) days from receipt of invoice, such invoice and payments to be in United States Dollars (converted from other currencies pursuant to JT’s central currency conversion system).  The IP Subcommittee shall determine a reasonable strategy, including the [*] that would cause JT to incur JT Patent Expenses.  If the IP Subcommittee agrees on the strategy for such proceeding or action, then Gilead will reimburse JT for such JT Patent Expenses.  If the IP Subcommittee does not agree on a strategy for such proceeding or action at any time, then (a) JT will be entitled to pursue its own strategy for such proceeding or action, keeping Gilead reasonably informed, and (b) Gilead [*] for such proceeding or action.  Any such failure by the IP Subcommittee to agree shall not be subject to further review under Section 9.2(c) or Article 15 of the EVG Agreement.  For clarity, [*] even if Gilead does not agree on the strategy therefor.
2.8    Changes to Schedules 1.65 A, 1.65 B or 1.65 C.  Gilead may remove a country from any of Schedules 1.65 A, 1.65 B or 1.65 C (the “ABC Schedules”) upon prior written notice to JT.  If any country on an ABC Schedule (e.g., as was the case with Sudan) is divided into two or more countries, then such countries automatically shall take the place, on such ABC Schedule, of the 

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country which was divided.  If Gilead wishes to add a country to an ABC Schedule and this Amendment does not permit Gilead to do so upon prior written notice to JT, then Gilead shall request the addition of such country to JT along with a justification for such addition, and such addition shall be subject to JT’s written consent.  If the criteria (except routine adjustments to the threshold income levels) of categorization of a country’s economic situation by The World Bank or United Nations Conference On Trade and Development is changed, upon JT’s request, Gilead and JT shall discuss in good faith to modify the criteria to amend Schedules 1.65 A, 1.65 B or 1.65 C set out in Sections 1.2, 1.3 and 1.4. 
ARTICLE 3
GENERIC LICENSES
3.1    JT Consent.  JT consents to Gilead entering into Generic Licenses with Generic Licensees on the condition that: (i) the terms and conditions of Generic Licenses shall not be less favorable to JT than the agreement templates attached hereto as Attachment A for semi-exclusive license and Attachment B for non-exclusive license; and (ii) Gilead shall use reasonable efforts to cause each Generic Licensee to substantially fulfill all its obligations under Generic License and Gilead’s obligations under the EVG Agreement.  Gilead shall not grant to any Generic Licensee or any other entity the right to sublicense the Generic License to a third party.  Notwithstanding the preceding sentence, Gilead may grant any Generic Licensee the right to sublicense the Generic License to an Affiliate of such Generic Licensee (for purposes of this Section 3.1 and Section 3.2 only, “Affiliate” will have the meaning set forth in the Generic License templates attached as Attachments A, B and C to this Amendment) on condition that such Generic Licensee (a) shall ensure any such Affiliate complies with the terms of the Generic License as if they were a party to the Generic License, and (b) will be liable for activities of such Affiliates as if such activities were performed by such Generic Licensee.  For clarity, Gilead may sell Branded Products in the Generic Territory.  
3.2    MPPF License. Notwithstanding Section 3.1 of this Amendment, Gilead may grant the right to MPPF to issue single tier sublicenses to Generic Licensees under terms and conditions no less favorable to JT than the agreement templates attached hereto as Attachment C.  Additionally, Gilead may grant any such Generic Licensees the right to further sublicense the Generic License to an Affiliate of such Generic Licensee on condition that such Generic Licensee (a) shall ensure any such Affiliate complies with the terms of the Generic License as if they were a party to the Generic License, and (b) will be liable for activities of such Affiliates as if such activities were performed by such Generic Licensee. 
3.3    Generic Version of Different Combination.  If a Generic Licensee proposes to commercialize a Generic Version which contains a combination of APIs that are different (including different dosages, other than of EVG) from any Product under development or being marketed by Gilead, then such commercialization shall be subject to prior review and approval by Gilead with regard to safety considerations.  
3.4    Sharing of Generic License Agreement.  Upon JT’s request, Gilead shall promptly provide to JT a list of the then-current Generic Licensees and a copy of the Generic License agreement (including any amendment thereto) with each Generic Licensee, and a copy of the MPPF License.  Gilead may redact information pertaining only to products which are not Products.  
3.5    Generic Licensee Know-How and Patents.  JT understands that Gilead has obligations under Section 6.5 of the EVG Agreement with respect to sublicense of Gilead Sublicensee Know-How and Gilead Sublicensee Patents, and that [*]. Gilead will keep JT apprised of any Gilead Sublicensee Know-How and Gilead Sublicensee Patents of Generic Licensees that is provided or reported to Gilead by the Generic Licensees and sublicensable to JT, including [*].  For purposes of Section 9.3(c) (“Gilead Patents”) and 9.4(c) (“Infringement of Gilead Patents”) of the EVG Agreement, 

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“Gilead Patents” shall not include Patents of Generic Licensees. For clarity, any inconsistent or additional obligations of Gilead to obtain rights to Sublicensee Know-How and Sublicensee Patents of Generic Licensees under the EVG Agreement are hereby superseded.
3.6    Generic Licensee Information and Regulatory Filings.  JT acknowledges that it shall have no access to or rights to obtain, use or reference any Regulatory Information, records, regulatory filings, correspondence with Regulatory Authorities, Marketing Authorization Applications, INDs and post-approval Phase IIIB/IV data for Products or Regulatory Approvals of Generic Licensees with respect to Generic Versions, except as provided under Section 3.5 of this Amendment.  Notwithstanding the foregoing, JT shall have the right to obtain, use or reference the above-mentioned data, documents and information, if and to the extent Gilead has the right to obtain, use or reference the above-mentioned data, documents and information.
3.7    Safety Data.  JT agrees that Section 4.4 (“Adverse Event Reporting and Safety Data Exchange”) of the EVG Agreement shall not apply to Generic Versions. Notwithstanding the foregoing, JT shall have the right to obtain, use or reference such data, documents and information with respect to safety or adverse events, if and to the extent Gilead has the right to obtain, use or reference such data, documents and information with respect to safety or adverse events.
3.8    Promotional Materials.  JT agrees that Section 5.3 (“Promotional Materials”) of the EVG Agreement shall not apply to Promotional Materials of Generic Licensees.
3.9    Trademark.  Gilead and JT agree that the Trademark shall not be used with respect to the Generic Versions.  The Generic Licenses shall prohibit the Generic Licensee from using the Trademark with respect to Generic Versions and shall require that the Generic Versions have a trade dress that is distinct from Branded Products.
3.10    Responsibility for Generic Licensees.  JT acknowledges that enforcing legal rights in some or all of the Access Countries is more challenging than in countries that are not Access Countries.  Therefore, JT agrees that if the actions or inactions of a Generic Licensee cause Gilead to be in breach of the EVG Agreement (including situations where the Generic Licensee acts in a manner inconsistent with the EVG Agreement under Section 16.9), then so long as Gilead is acting in good faith to remedy such breaches (including, without limitation, notifying JT of any material breach (e.g. (A) material quantity of leakage of (i) Generic Versions to the countries other than Access Group A Countries and Access Group B Countries or (ii) API to the countries other than India, China or South Africa or (B) substantial deviation from Good Manufacturing Practices) of the EVG Agreement by Generic Licensees promptly after it is known to Gilead and, upon reasonable request by JT, terminating the Generic License with respect to Products in a timely manner in accordance with the relevant provisions of Generic License), then JT agrees that it will not terminate the EVG Agreement with respect to countries that are not Access Countries because of such breach.  Gilead shall indemnify the JT Indemnitees from any losses or damages arising from any breach of the EVG Agreement due to the acts or omissions of Generic Licensees pursuant to Sections 11.2 and 11.4 of the EVG Agreement.  Except as specifically set forth in this Section 3.10, nothing in this Amendment limits any rights or remedies of JT for any breach by Gilead of the EVG Agreement.
3.11    Amendment to Gilead’s Indemnification.  The first sentence of Section 11.2 of the EVG Agreement is hereby amended to read as follows:
“Gilead hereby agrees to Indemnify JT and its Affiliates, agents, directors, officers and employees (the “JT Indemnitees”) from and against any and all Losses resulting from Third Party Claims arising directly or indirectly out of (i) a breach of any obligations of Gilead under this Agreement, including without limitation Gilead’s representation and warranties or covenants pursuant to Article 10; or (ii) the Development, manufacture (to the extent of any formulation work performed by Gilead pursuant to Article 7), storage, distribution, promotion, 

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labeling, handling, use, sale, offer for sale or importation of Compound and/or Products by Gilead, its Affiliates or its Generic Licensees in the Gilead Territory (subject to Section 11.3).”
3.12    Audit of Generic Licensees.  JT agrees that it shall not have the right to directly audit Generic Licensees under Section 12.1 (“Records; Audits”) of the EVG Agreement. Gilead shall secure the right to audit Generic Licensee in each Generic License. When Gilead has audited Generic Licensee(s), Gilead shall provide the portions of the audit result and report relevant to Products to JT within sixty (60) days from completion of each audit. If requested by JT, Gilead shall promptly audit a Generic Licensee in accordance with Gilead’s audit rights under the applicable Generic License.  For clarity, nothing in this Section 3.12 affects JT’s right to audit Gilead or its Affiliates.
3.13    Alternate Dosage. Gilead shall obligate and require Generic Licensees not to manufacture or sell any Generic Versions formulated at a single dose concentration other than those dose concentrations approved by the FDA for such agents, without prior written consent of Gilead.   
3.14    Generic Licensees’ Quarterly Reports.  Gilead shall obligate and require Generic Licensees to provide Gilead with quarterly reports on manufacturing and sales as set forth in section 4.3 in Attachment A, Attachment B and Attachment C (for Attachment C, section 4.3 of the form of sublicense agreements attached thereto).  Upon JT’s request, Gilead shall provide JT with copies of such quarterly reports; provided that Gilead may redact information which does not pertain to the Products.
3.15    Annual Reports on Different Combination or Alternate Dosage.  Gilead shall make commercially reasonable efforts to determine, by itself or through Generic Licensees, the regulatory status in each country of the Generic Version (i) with different combination of APIs and (ii) with alternate dosage, for which Gilead give the approval or consent pursuant to Section 3.3 or 3.13 of this Amendment, respectively and shall annually report to JT thereon.
3.16    Third Party’s Infringement.   If Gilead learns of any alleged or threatened infringement of the JT Patents in the Access Countries, Gilead shall promptly report same in writing to JT in accordance with Section 9.4(a)(i) of the EVG Agreement and shall cooperate and assist JT, by itself or through Generic Licensees, in the investigation and enforcement pertaining to such infringement. 
3.17    JT Mark.  Gilead shall obligate and require Generic Licensees not to use any JT’s trademark, trade name, logo or service mark (each, a “JT Mark”), or any word, logo or any expression that is similar to any JT Mark.
3.18    Consultation before disclosure of the EVG Agreement.  Notwithstanding Section 13.3(c)(iv) of the EVG Agreement, if Gilead plans to disclose any or all of the contents of the EVG Agreement to any Generic Licensee that are not in public domain, Gilead shall give JT reasonable prior written notice thereof, in which case Gilead and JT shall discuss the necessity and the manner of such disclosure and no disclosure shall be made in the absence of agreement by the parties thereon.
3.19    Termination of Generic Licenses.  If the EVG Agreement is terminated, Gilead shall terminate the Generic Licenses with respect to the Products as set forth in Section 10.3(b)(iv) in Attachment A, Attachment B as well as shall terminate the MPPF License with respect to the Products.
ARTICLE 4
MISCELLANEOUS
4.1    Effect.  This Amendment replaces the terms of that certain Third Amendment entered into between the Parties on July 5, 2011.  Except as expressly amended by this Amendment, the EVG Agreement remains in full force and effect. 

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4.2    Governing Law.  This Amendment shall be governed and construed in accordance with the substantive laws of the State of New York and the federal law of the United States of America without regard to its conflict of law rules that would require the application of the laws of a foreign state or country. 
4.3    Further Actions.  Each Party agrees to execute, acknowledge and deliver such further instruments, and to do all such other acts, as may be necessary or appropriate in order to carry out the purposes and intent of this Amendment. 
4.4    Headings.  The headings for each Article and Section in this Amendment have been inserted for convenience of reference only and are not intended to limit or expand on the meaning of the language contained in the particular Article or Section. 
4.5    Translations.  This Amendment is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall be for accommodation only and shall not be binding upon the Parties.  All communications and notices to be made or given pursuant to this Amendment, and any dispute proceeding related to or arising hereunder, shall be in the English language.  If there is a discrepancy between any Japanese translation of this Amendment and this Amendment, this Amendment shall prevail. 
4.6    Counterparts.  This Amendment may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one (1) and the same instrument. 

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IN WITNESS WHEREOF the Parties have executed this Amendment in duplicate originals by their duly authorized officers as of the date first set forth above.

	
		
	Gilead Sciences, Inc.

By:  /s/ Gregg H. Alton         
       Name: Gregg H. Alton

Title: Executive Vice President, Corporate &       Medical Affairs

	    Japan Tobacco Inc.

    By:  /s/ Muneaki Fujimoto         
           Name: Muneaki Fujimoto

    Title: President, Pharmaceutical Business

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SCHEDULE 1.65 A

List of Access A Countries set forth in Section 1.2.

1.    Afghanistan    44.    Nigeria
2.    Angola    45.    Rwanda
3.    Bangladesh    46.    Samoa
4.    Benin    47.    São Tomé and Principe
5.    Bhutan    48.    Senegal
6.    Botswana    49.    Seychelles
7.    Burkina Faso    50.    Sierra Leone
8.    Burundi    51.    Solomon Islands
9.    Cambodia    52.    Somalia
10.    Cameroon    53.    South Africa
11.    Cape Verde    54.    South Sudan
12.    Central African Republic    55.    Sudan
13.    Chad    56.    Swaziland
14.    Comoros    57.    Tajikistan
15.    Congo, Dem. Rep.    58.    Tanzania
16.    Congo, Rep.    59.    Timor-Leste
17.    Côte d'Ivoire    60.    Togo
18.    Djibouti    61.    Tuvalu
19.    Equatorial Guinea    62.    Uganda
20.    Eritrea    63.    Vanuatu
21.    Ethiopia    64.    Yemen, Rep.
22.    Gabon    65.    Zambia
23.    Gambia, The    66.    Zimbabwe
24.    Ghana
25.    Guinea
26.    Guinea-Bissau
27.    Haiti
28.    Kenya
29.    Kiribati
30.    Kyrgyz Republic
31.    Lao PDR
32.    Lesotho
33.    Liberia
34.    Madagascar
35.    Malawi
36.    Mali
37.    Mauritania
38.    Mauritius
39.    Mozambique
40.    Myanmar
41.    Namibia
42.    Nepal
43.    Niger

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SCHEDULE 1.65 B

List of Access B Countries set forth in Section 1.3.

1.    Anguilla (UK)
2.    Antigua and Barbuda
3.    Armenia
4.    Bahamas, The
5.    Barbados
6.    Belize
7.    Bolivia
8.    British Virgin Islands
9.    Cuba
10.    Dominica
11.    Ecuador
12.    El Salvador
13.    Fiji
14.    Georgia
15.    Grenada
16.    Guatemala
17.    Guyana
18.    Honduras
19.    India
20.    Indonesia
21.    Jamaica
22.    Kazakhstan
23.    Maldives
24.    Moldova
25.    Mongolia
26.    Nauru, Rep (UK)
27.    Nicaragua
28.    Pakistan
29.    Palau
30.    Papua New Guinea
31.    Sri Lanka
32.    St. Kitts and Nevis
33.    St. Lucia
34.    St. Vincent and the Grenadines
35.    Suriname
36.    Syrian Arab Republic
37.    Thailand
38.    Tonga
39.    Trinidad and Tobago
40.    Turkmenistan
41.    Turks and Caicos Islands
42.    Uzbekistan
43.    Vietnam

11

SCHEDULE 1.65 C

List of Access C Countries set forth in Section 1.4.

1.    Algeria
2.    Dominican Republic
3.    Egypt, Arab Rep.
4.    Morocco
5.    Tunisia

12

ATTACHMENT A
See attached.

13

ATTACHMENT B
See attached.

14

ATTACHMENT C
See attached.

15hlf-ex1023_406.htm

Exhibit 10.23

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

This Amended and Restated Employment Agreement (“Agreement”), dated as of January 1, 2010 is made and entered into by RICHARD P. GOUDIS (“Executive”) and HERBALIFE INTERNATIONAL OF AMERICA, INC., a California corporation (“Company”). The parties to this Agreement agree as follows:

1.  Employment At-Will . The Company and Executive acknowledge and agree that each can terminate the employment relationship at any time upon written notice to the other, with or without prior notice, for any reason or for no reason. Executive has received no promise of continued employment or employment for any specific period of time, and no employee of the Company, including without limitation the Company’s officers, has the authority to alter the at-will nature of the employment relationship except in a written employment contract signed by an authorized Company executive and by Executive.

2.  Duties . Executive shall serve in the Los Angeles, California area as Chief Operating Officer of the Company, with all of the authority, duties, and responsibilities commensurate with such position. Executive shall report only to the Chief Executive Officer or Chairman of the Company. Executive’s service on any outside board of directors, including any non-profit board, shall be subject to joint approval by the Chief Executive Officer and the Company’s Board of Directors (the “Board”); provided, however, the board set forth in Schedule A attached hereto is deemed approved.

3.  Compensation and Related Matters .

(a) Salary . Executive shall receive a salary (the “Salary”) at the per annum rate of Six Hundred Twenty Five Thousand Dollars ($625,000), payable in accordance with the Company’s payroll practices. Executive’s Salary shall be subject to an annual review and adjustment in the discretion of the Chief Executive Officer, subject to approval by the Board’s Compensation Committee. Executive’s Salary shall be subject to a reduction of not more than ten percent in the event that the Company adopts an across-the-board reduction for the Company’s most senior executives.

(b) Employee Benefits . Executive and Executive’s qualified dependents shall be entitled to participate in or receive benefits under benefit plans and arrangements made available by the Company generally to its most senior executives, including, without limitation, those relating to group medical, dental, vision, long-term disability, D&O, accidental death and dismemberment, and life insurance, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and subject to the Company’s right to modify, amend or terminate any such plan or arrangement with or without prior notice. Executive shall be eligible to participate in the Company’s 401K program and the Company’s Deferred Compensation program, if any. Executive shall be entitled to reimbursement of reasonable business expenses in accordance with the Company’s practices and procedures; provided, however, that in no event shall any such reimbursements be paid later than the end of the calendar year following the year in which the expense was incurred. Executive shall be entitled to paid vacation in accordance with Company policy.

(c) Bonus . Executive shall have the opportunity to receive an annual bonus on such terms and conditions as may be determined from time to time by the Compensation Committee of the Board, provided that Executive’s annual target bonus opportunity (the “Target Bonus”) shall be no less than eighty percent of Executive’s Salary, with a maximum bonus opportunity of no more than two times the Target Bonus. Any bonus will be paid in the calendar year following the calendar year to which such bonus relates at such time bonuses are paid to the Company’s senior executives generally.

(d) Long-Term Incentives . Executive shall be eligible to participate in the Company’s long-term incentive plan for its senior executives, if any. The size, form, and timing of grants, if any, shall be consistent with competitive practice, internal position responsibilities, and subject to the joint approval of the Chief Executive Officer and the Board’s Compensation Committee.

4.  Severance .

(a) Although nothing in this Section 4 shall be construed to alter the at-will nature of employment as set forth in Section 1 above, if Executive is terminated by the Company without Cause or resigns for Good Reason, Executive will be paid a lump sum amount equal to two times Executive’s then-current annual salary (the “Salary Severance”), in addition to all other accrued entitlements such as unpaid salary and accrued vacation, if any. If Executive is terminated by the Company without Cause or resigns for Good Reason, the Company will also provide Executive with outplacement services for up to six months by a provider selected and paid for by the Company in an amount not to exceed $20,000; Executive shall not be entitled to cash in lieu of outplacement services. If Executive is terminated by the Company without Cause, resigns for Good Reason, retires, dies, or resigns as a result of a disability, Executive will be entitled to receive a pro rata bonus payment (based on the actual performance of the Company over the entire year), at such time bonuses are paid to the Company’s senior executives generally, based on the number of months worked in the applicable fiscal year of the Company (the “Bonus Severance”). Executive will have no duty to mitigate. As a precondition to the Company’s obligation to pay Executive severance of two years of salary and a pro rata bonus, Executive agrees to execute and deliver to the Company a fully effective general release in the form attached to this Agreement as Attachment A within 30 days following the date Executive’s employment with the Company terminates. Company shall pay Executive the Salary Severance on the date which is the later of ten days after the date on which it receives the signed release (so long as such release has become effective and irrevocable in accordance with its terms), subject to Section 21, and the Company shall pay the Bonus Severance on the date which is the later of ten days after the date on which it receives the signed release (so long as such release has become effective and irrevocable in accordance with its terms) or the date on which Company pays bonuses to Company’s senior executives generally for the applicable year (such date to be in the calendar year following the year in which the separation from service occurs), subject to Section 21. Executive understands and agrees that Executive shall not be entitled to any other severance benefit not set forth in this Section 4, and accordingly Executive expressly acknowledges that the Company will not be obligated to make 401(k) contributions following the termination of Executive’s employment.

(b) In the event that Executive is qualified for and elects COBRA coverage under the Company’s health plans after a termination without Cause or a resignation for Good Reason, the Company will continue to pay its share of the cost of premiums under such plans until Executive is reemployed, or for a period of two years, whichever occurs first, payable in accordance with the Company’s normal benefit practices. Upon a termination for Cause and upon a resignation without Good Reason (other than due to death, disability or retirement), except as set forth in Section 4(a) above and/or one or more separate written agreements between Company and Executive, all unearned compensation, benefits and unvested options shall be forfeited.

(c) Notwithstanding the terms of any stock incentive plan of the Company or stock option or stock appreciation right agreement to which Executive is a party, if Executive is terminated by the Company without Cause or resigns for Good Reason, and on the effective date of such termination Executive is subject to a “trading blackout” or “quiet period” with respect to the Company’s common shares or if the Company determines, upon the advice of legal counsel, that on the effective date of such termination Executive may not to trade in the Company’s common shares due to Executive’s possession of material non-public information, in each case, which restriction or prohibition continues for a period of at least twenty consecutive calendar days, the Company hereby agrees that Executive shall be permitted to pay the exercise price and/or any tax withholding obligation payable in connection with the exercise of any of Executive’s then outstanding and exercisable Company stock options and/or stock appreciation rights by either tendering common shares of the Company then owned by Executive and/or instructing the Company to withhold from the common shares otherwise issuable upon exercise such stock options and/or stock appreciation rights a number of common shares having a fair market value on the date of exercise equal to the exercise price and/or tax withholding obligation.

(d) For purposes of this Agreement, the Company shall have “Cause” to terminate Executive’s services in the event of any of the following acts or circumstances: (i) Executive’s conviction of a felony or entering a plea of guilty or nolo contendere to any crime constituting a felony (other than a traffic violation or by reason of vicarious liability); (ii) Executive’s substantial and repeated failure to attempt to perform Executive’s lawful duties as contemplated in Section 2 of this Agreement, except during periods of physical or mental incapacity; (iii) Executive’s gross negligence or willful misconduct with respect to any material aspect of the business of the Company or any of its affiliates, which gross negligence or willful misconduct has a material and demonstrable adverse effect on the Company; (iv) Executive’s material violation of a Company policy resulting in a material and demonstrable adverse effect to the Company or an affiliate, including but not limited to a violation of the Company’s Code of Business Conduct and Ethics; or (v) any material breach of this Agreement or any material breach of any other written agreement between Executive and the Company’s affiliates governing Executive’s equity compensation arrangements (i.e., any agreement with respect to Executive’s stock, stock appreciation right and/or stock options of any of the Company’s affiliates); provided, however, that Executive shall not be deemed to have been terminated for Cause in the case of clause (ii), (iii), (iv) or (v) above, unless any such breach is not fully corrected prior to the expiration of the thirty (30) calendar day period following delivery to Executive of the Company’s written notice of its intention to terminate his employment for Cause describing the basis therefore in reasonable detail.

(e) Executive will be deemed to have a “Good Reason” if Executive terminates his employment because of (i) a material diminution of Executive’s duties as Chief Operating Officer, (ii) the failure by any successor of the Company to assume in writing the Company’s obligations under this Agreement, (iii) the breach by the Company in any respect of any of its obligations under this Agreement, and, in any such case (but only if correction or cure is possible), the failure by the Company to correct or cure the circumstance or breach on which such resignation is based within 30 days after receiving notice from Executive describing such circumstance or breach in reasonable detail, (iv) the relocation of Executive’s primary office location of more than 50 miles that places the primary office farther from Executive’s residence than it was before, or (v) the imposition by the Company of a requirement that Executive report to a person other than the Chief Executive Officer of the Company or the Chairman of the Board. Executive shall not have a Good Reason to resign if the Company suspends Executive due to an indictment of Executive on felony charges, provided that the Company continues to pay Executive’s salary and benefits. No Salary Severance is payable after Executive turns age 65, regardless of whether Executive has a Good Reason for resignation and regardless whether the Company has Cause to terminate Executive.

5.  Adjustment to Payments Triggering Excise Tax . In the event that any amount or benefit that may be paid or otherwise provided to or in respect of Executive by the Company or any affiliated company, whether pursuant to this Agreement or otherwise (collectively, “Covered Payments”), is or may become subject to the tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), or any successor provision (“Excise Tax”), the Company shall promptly pay to Executive a “Reimbursement Amount,” defined as an amount, which when added to the Covered Payments and after taking into account any federal, state or local tax resulting from the Covered Payment and the Reimbursement Amount will provide Executive with after tax net income equal to the amount Executive would have earned had no Excise Tax been imposed on the Covered Payments, no later than the end of the calendar year following the year in which Executive remits the Excise Tax.

6.  Confidential and Proprietary Information .

(a) The parties agree and acknowledge that during the course of Executive’s employment, Executive will be given and will have access to and be exposed to trade secrets and confidential information in written, oral, electronic and other forms regarding the Company and its affiliates (which includes but is not limited to all of its business units, divisions and affiliates) and their business, equipment, products and employees, including, without limitation: the identities of the Company’s and its affiliates’ distributors and customers and potential distributors and customers (hereinafter referred to collectively as “Distributors”), including, without limitation, the identity of Distributors that Executive cultivates or maintains while providing services at the Company or any of its affiliates using the Company’s or any of its affiliates’ products, name and infrastructure, and the identities of contact persons with respect to those Distributors; the particular preferences, likes, dislikes and needs of those Distributors and contact persons with respect to product types, pricing, sales calls, timing, sales terms, rental terms, lease terms, service plans, and other marketing terms and techniques; the Company’s and its affiliates’ business methods, practices, strategies, forecasts, pricing, and marketing techniques; the identities of the Company’s and its affiliates’ licensors, vendors and other suppliers and the identities of the Company’s and its affiliates’ contact persons at such licensors, vendors and other suppliers; the identities of the Company’s and its affiliates’ key sales representatives and personnel and other employees; advertising and sales materials; research, computer software and related materials; and other facts and financial and other business information concerning or relating to the Company or any of its affiliates and their business, operations, financial condition, results of operations and prospects. Executive expressly agrees to use such trade secrets and confidential information only for purposes of carrying out his duties for the Company and its affiliates as he deems appropriate in his good faith judgment, and not for any other purpose, including, without limitation, not in any way or for any purpose that could reasonably be foreseen to be detrimental to the Company or any of its affiliates; provided, Executive shall be permitted to disclose such trade secrets and confidential information to third parties in the course of performing his duties for the Company and its affiliates as he deems appropriate in his good faith judgment provided that prior to such disclosure Executive causes the intended recipient of such information to sign a confidentiality agreement. Executive shall not at any time, either during the course of his employment hereunder or after the termination of such employment, use for himself or others, directly or indirectly, any such trade secrets or confidential information, and, except as required by law or as permitted hereunder, Executive shall not disclose such trade secrets or confidential information, directly or indirectly, to any other person or entity. Trade secret and confidential information hereunder shall not include any information which (i) is already in or subsequently enters the public domain, other than as a result of any unauthorized direct or indirect disclosure by Executive, (ii) becomes available to Executive on a non-confidential basis from a source other than the Company or any of its affiliates, provided that Executive has no knowledge that such source is subject to a confidentiality agreement or other obligation of secrecy or confidentiality (whether pursuant to a contract, legal or fiduciary obligation or duty or otherwise) to the Company or any of its affiliates or any other person or entity or (iii) is approved for release by the Chief Executive Officer or the board of directors of the Company or any of its affiliates or which the Chief Executive Officer or the board of directors of the Company or any of its affiliates makes available or authorizes Executive to make available to third parties without an obligation of confidentiality.

(b) All physical property and all notes, memoranda, files, records, writings, documents and other materials of any and every nature, written or electronic, which Executive shall prepare or receive in the course of his employment with the Company and which relate to or are useful in any manner to the business now or hereafter conducted by the Company or any of its affiliates are and shall remain the sole and exclusive property of the Company and its affiliates, as applicable. Executive shall not remove from the Company’s premises any such physical property, the original or any reproduction of any such materials nor the information contained therein except for the purposes of carrying out his duties to the Company or any of its affiliates and all such property (except for any items of personal property not owned by the Company or any of its affiliates), materials and information in his possession or under his custody or control upon the termination of his employment (other than such materials received by Executive solely in his capacity as a shareholder) or at any other time upon request by the Company shall be immediately turned over to the Company and its affiliates, as applicable.

(c) All inventions, improvements, trade secrets, reports, manuals, computer programs, tapes and other ideas and materials developed or invented by Executive during the period of his employment, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company or any of its affiliates which result from or are suggested by any work Executive may do for the Company or any of its affiliates or which result from use of the Company’s or any of its affiliates’ premises or property (collectively, the “Developments”) shall be the sole and exclusive property of the Company and its affiliates, as applicable. Executive assigns and transfers to the Company his entire right and interest in any such Development, and Executive shall execute and deliver any and all documents and shall do and perform any and all other acts and things necessary or desirable in connection therewith that the Company or any of its affiliates may reasonably request, it being agreed that the preparation of any such documents shall be at the Company’s expense. Nothing in this paragraph applies to an invention which qualifies fully under the provisions of California Labor Code Section 2870.

(d) Following the termination of Executive’s employment, Executive will reasonably cooperate with the Company (at the Company’s expense, if Executive reasonably incurs any out-of-pocket costs with respect thereto, including, but not limited to, lost salary or the value of vacation benefits used in connection therewith) in any defense of any legal, administrative or other action in which the Company or any of its affiliates or any of their distributors or other business relations are a party or are otherwise involved, so long as any such matter was related to Executive’s duties and activities conducted on behalf of the Company or its Subsidiaries.

(e) The provisions of this Section 6 and Section 7 shall survive any termination of this Agreement and termination of Executive’s employment with the Company.

7.  Non-Solicitation . Executive acknowledges that in the course of his employment for the Company he will become familiar with the Company’s and its affiliates’ trade secrets and other confidential information concerning the Company and its affiliates. Accordingly, Executive agrees that, during Executive’s employment and for a period of twenty-four (24) months immediately thereafter (the “Nonsolicitation Period”), he will not directly or indirectly through another entity (i) induce or attempt to induce any employee or Distributor of the Company or any of its affiliates to leave the employment of, or cease to maintain its distributor relationship with, the Company or such affiliate, or in any way interfere with the relationship between the Company or any such affiliate and any employee or Distributor thereof, (ii) hire any person who was an employee of the Company or any of its affiliates at any time during the Nonsolicitation Period unless such person’s employment was terminated by the Company or such affiliate or enter into a distributor relationship with any person or entity who was a Distributor of the Company or any of its affiliates at any time during the Nonsolicitation Period, (iii) induce or attempt to induce any Distributor, supplier, licensor, licensee or other business relation of the Company or any of its affiliates to cease doing business with the Company or such affiliate, or in any way interfere with the relationship between such Distributor, supplier, licensor, licensee or business relation and the Company or any of its affiliates or (iv) use any trade secrets or other confidential information of the Company or any of its affiliates to directly or indirectly participate in any means or manner in any business which is a direct competitor of the Company.

8.  Non-Disparagement . During Executive’s employment and thereafter, Executive agrees not to make any derogatory, negative or disparaging public statement about the Company, its officers, its employees, or members of its Board, or to make any public statement (or any statement likely to become public) that could reasonably be expected to adversely affect or disparage the reputation, or, to the extent applicable, business or goodwill of the Company, it being agreed and understood that nothing herein shall prohibit Executive (a) from disclosing that Executive is no longer employed by the Company, (b) from responding truthfully to any governmental investigation or inquiry related thereto, whether by the Securities and Exchange Commission or other governmental entity or any other law, subpoena, court order or other compulsory legal process or any disclosure requirement of the Securities and Exchange Commission, or (c) from making traditional competitive statements in the course of promoting a competing business, so long as any statements made by Executive described in this clause (c) are not based on confidential information obtained during the course of Executive’s employment with the Company. The Company agrees that it will not make any derogatory, negative or disparaging public statements about Executive that are untruthful in any authorized Company statement (whether written or oral), including, but not limited to, any press release or public announcement.

9.  Injunctive Relief . Executive and the Company (a) intend that the provisions of Sections 6 and 7 be and become valid and enforceable, (b) acknowledge and agree that the provisions of Sections 6 and 7 are reasonable and necessary to protect the legitimate interests of the business of the Company and its affiliates and (c) agree that any violation of Section 6 or 7 might result in irreparable injury to the Company and its affiliates, the exact amount of which would be difficult to ascertain and the remedies at law for which may not be reasonable or adequate compensation to the Company and its affiliates for such a violation. Accordingly, Executive agrees that if Executive violates or threatens to violate the provisions of Section 6 or 7, in addition to any other remedy which may be available at law or in equity, the Company shall be entitled to seek specific performance and injunctive relief, and without the necessity of proving actual damages. In addition, in the event of a violation or threatened violation by Executive of Section 6 or 7 of this Agreement, the Nonsolicitation Period will be tolled until such violation or threatened violation has been duly cured. If, at the time of enforcement of Sections 6 or 7 of this Agreement, a court holds that the restrictions stated therein are unreasonable under circumstances then existing, the parties hereto agree that the maximum period, scope or geographical area reasonable under such circumstances shall be substituted for the stated period, scope or area.

10.  Indemnification. The Company shall indemnify Executive to the fullest extent permitted by applicable law as more fully described in the Indemnification Agreement between the Company and Executive; in the event that California law is deemed to apply and to permit the Company to provide more indemnification to Executive for the matters described in the Indemnification Agreement, the Company agrees to provide such indemnification to the fullest extent permitted under California law.

11.  Assignment: Successors and Assigns . Executive agrees that he shall not assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or involuntarily, any rights or obligations under this Agreement, nor shall Executive’s rights hereunder be subject to encumbrance of the claims of creditors. This Agreement may be assigned by the Company without the consent of Executive to (a) any entity succeeding to all or substantially all of the assets or business of the Company, whether by merger, consolidation, acquisition or otherwise (upon which entity the Agreement shall be binding), or (b) any affiliate; provided, however, that in neither case shall the Company be released from its obligations hereunder, nor shall any assignment to an affiliate lessen Executive’s rights with respect to his position, duties, responsibilities or authority with respect to the Company.

12.  Governing Law: Jurisdiction and Venue . This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of California without regard to the conflicts of law principles thereof. Suit to enforce this Agreement or any provision or portion thereof may be brought in the federal or state courts located in Los Angeles, California.

13.  Severability of Provisions . In the event that any provision of this Agreement should ever be adjudicated by a court of competent jurisdiction to be unenforceable, then such provision shall be deemed reformed to the maximum extent permitted by applicable law, and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of any other provision of this Agreement.

14  Warranty . As an inducement to the other party to enter into this Agreement, each party represents and warrants to the other that it/he has the power and authority to enter into this Agreement and is not a party to any other agreement or obligation, and that there exists no impediment or restraint, contractual or otherwise, on its/his power, right or ability to enter into this Agreement and to perform its/his duties and obligations hereunder.

15.  Notices . All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received if personally delivered; when transmitted if transmitted by telecopy, electronic or digital transmission method upon receipt of telephonic or electronic confirmation; the day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery service (e.g., Federal Express); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice will be sent to:

(a) If to the Company:

Herbalife International of America, Inc.
1800 Century Park East
Los Angeles, California 90067
Attention: General Counsel
Telecopy: (310) 557-3906

with a copy to:

Herbalife International of America, Inc.
1800 Century Park East
Los Angeles, California 90067
Attention: Chief Executive Officer
Telecopy: (310) 557-3906

(b) if to Executive, to:

Richard Goudis
26620 Alsace Drive
Calabasas, California 91302

with a copy to:

Cathy J. Frankel, Esq.
Moses & Singer LLP
1301 Avenue of the Americas
New York, New York 10019-6076

or to such other place and with other copies as either party may designate as to itself or himself by written notice to the others.

16.  Counterparts . This Agreement may be executed in several counterparts, each of which will be deemed to be an original, but all of which together shall constitute one and the same Agreement.

17.  Entire Agreement . The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the subject matter hereof and this Agreement supersedes (and may not be contradicted by, modified or supplemented by) any prior or contemporaneous agreement, written or oral, with respect thereto. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

18.  Amendments: Waivers . This Agreement may not be modified or amended except by an instrument in writing, signed by Executive and a duly authorized representative of the Company. No waiver of any of the provisions of this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be construed as a further, continuing, or subsequent waiver of any such provision or as a waiver of any other provision of this Agreement. No failure to exercise and no delay in exercising any right, remedy or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

19.  Representation of Counsel; Mutual Negotiation . Each party has had the opportunity to be represented by counsel of its choice in negotiating this Agreement. This Agreement shall therefore be deemed to have been negotiated and prepared at the joint request, direction and construction of the parties, at arm’s-length, with the advice and participation of counsel, and shall be interpreted in accordance with its terms without favor to any party.

20.  Surviving Terms . The provisions of Sections 4(a), 4 (b), 5, 6, 7, 8, 10 and 21 shall survive the termination or expiration of this Agreement.

21.  Compliance with Section 409A .

(a) The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “ Section 409A ”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. If Executive notifies the Company (with reasonable specificity as to the reason therefor) that Executive believes that any provision of this Agreement (or of any award of compensation, including equity compensation or benefits) would cause Executive to incur any additional tax or interest under Section 409A and the Company concurs with such belief or the Company (without any obligation whatsoever to do so) independently makes such determination, the Company shall, after consulting with Executive, reform such provision to attempt to comply with Section 409A through good faith modifications to the minimum extent reasonably appropriate to conform with Section 409A. To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit/burden to Executive and the Company of the applicable provision without violating the provisions of Section 409A.

(b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.” If Executive is deemed on the date of termination to be a “specified employee” within the meaning of that term under Section 409A(a)(2)(B) of the Code, then with regard to any payment or the provision of any benefit that is specified as subject to this Section or that is otherwise considered deferred compensation under Section 409A payable on account of a “separation from service,” and that is not exempt from Section 409A as involuntary separation pay or a short-term deferral (or otherwise), such payment or benefit shall be made or provided at the date which is the earlier of (i) the expiration of the six (6)-month period measured from the date of such “separation from service” of Executive, and (ii) the date of Executive’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments and benefits delayed pursuant to this Section 21(b) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to Executive in a lump sum without interest, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

(c) With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated without regard to expenses reimbursed under any arrangement covered by Internal Revenue Code Section 105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect and (iii) such payments shall be made on or before the last day of Executive’s taxable year following the taxable year in which the expense occurred.

(d) Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

[Signature Page Follows]IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.

	
 
	
EXECUTIVE
	
 

	
 
	
 
	
 

	
 
	
/s/ Richard P. Goudis
	
 

	
 
	
 
	
 

	
 
	
By: Richard P. Goudis
	
 

	
 
	
 
	
 

	
 
	
HERBALIFE INTERNATIONAL OF AMERICA, INC.
	
 

	
 
	
 
	
 

	
 
	
/s/ Michael O. Johnson
	
 

	
 
	
 
	
 

	
 
	
By: Michael O. Johnson
	
 

	
 
	
Title: Chief Executive Officer
	
 

 

 

ATTACHMENT A

Agreement and General Release

Agreement and General Release (“AGREEMENT”), by and among RICHARD GOUDIS (“EXECUTIVE” and referred to herein as “you”) and HERBALIFE INTERNATIONAL OF AMERICA, INC., a California corporation (the “COMPANY”).

1. In exchange for your waiver of claims against the Company Entities (as defined below) and compliance with other terms and conditions of this Agreement, upon the effectiveness of this Agreement, the Company agrees to provide you with the payments and benefits provided in Section 4 of your Amended and Restated Employment Agreement with the Company.

2. (a) In consideration for the payments and benefits to be provided to you pursuant to paragraph 1 above, you, for yourself and for your heirs, executors, administrators, trustees, legal representatives, and assigns (hereinafter referred to collectively as “RELEASORS”), FOREVER RELEASE AND DISCHARGE THE Company and its past, present and future parent entities, subsidiaries, divisions, affiliates and related business entities, successors and assigns, assets, employee benefit plans or funds (including, without limitation, each of Whitney & Co., LLC, Golden Gate Private Equity, Inc., any investment fund managed by either of them and any affiliate of any of the aforementioned persons or entities), and any of its or their respective past, present and/or future directors, officers, fiduciaries, agents, trustees, administrators, employees and assigns, whether acting on behalf of the Company or in their individual capacities (collectively the “COMPANY ENTITIES”) from any and all claims, suits, demands, causes of action, covenants, obligations, debts, costs, expenses, fees and liabilities of any kind whatsoever in law or equity, by statute or otherwise, whether known or unknown, vested or contingent, suspected or unsuspected and whether or not concealed or hidden (collectively, the “CLAIMS”), which you ever had, now have, or may have against any of the Company Entities by reason of any act, omission, transaction, practice, plan, policy, procedure, conduct, occurrence, or other matter related in any way to your employment by (including, but not limited to, termination thereof) the Company Entities up to and including the date on which you sign this Agreement, except as provided in subsection (c) below.

(b) Without limiting the generality of the foregoing, this Agreement is intended to and shall release the Company Entities from any and all claims, whether known or unknown, which Releasors ever had, now have, or may have against the Companies Entities arising out of your employment or termination thereof, including, but not limited to: (i) any claim under the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Employee Retirement Income Security Act of 1974,(excluding claims for accrued, vested benefits under any employee benefit or pension plan of the Company Entities subject to the terms and conditions of such plan and applicable law), the Family and Medical Leave Act, the Worker Adjustment and Retraining Notification Act of 1988, or the Fair Labor Standards Act of 1938, in each case as amended; (ii) any claim under the California Fair Employment and Housing Act, the California Labor Code, the California Family Rights Act, or the California pregnancy Disability Leave Law; (iii) any other claim (whether based on federal, state, or local law (statutory or decisional), rule, regulation or ordinance) relating to or arising out of your employment, the terms and conditions of such employment, the termination of such employment, including, but not limited to, breach of contract (express or implied), wrongful discharge, detrimental reliance, defamation, emotional distress or compensatory or punitive damages; and (iv) any claim for attorneys’ fees, costs, disbursements and/or the like.

(c) Notwithstanding the foregoing, nothing in this Agreement shall be a waiver of claims: (1) that may arise after the date on which you sign this Agreement; (2) with respect to your right to enforce your rights that survive termination under the Amended and Restated Employment Agreement or any other written agreement entered into between you and the Company (including, without limitation, any agreements granting you any stock units, stock appreciation rights, stock options or any other equity grants or equivalents); (3) regarding rights of indemnification, receipt of legal fees and directors and officers liability insurance to which you are entitled under the Amended and Restated Employment Agreement, the Company’s Certificate of Incorporation or By-laws, pursuant to any separate writing between you and the Company or pursuant to applicable law; (4) relating to any claims for accrued, vested benefits under any employee benefit plan or pension plan of the Company Entities subject to the terms and conditions of such plan and applicable law; or (5) as a stockholder or optionholder of the Company.

(d) In signing this Agreement, you acknowledge that you intend that this Agreement shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. You expressly consent that this Agreement shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown, unsuspected or unanticipated Claims (notwithstanding any state statute that expressly limits the effectiveness of a general release of unknown, unsuspected or unanticipated Claims), if any, as well as those relating to any other claims hereinabove mentioned or implied. You acknowledge and agree that this waiver is an essential and material term of this Agreement, and if you bring your own Claim in which you seek damages against any Company Entity, or if you seek to recover against any Company Entity in any Claim brought by a governmental agency on your behalf, the release set forth in this Agreement shall serve as a complete defense to such Claims, and you shall reimburse each Company Entity for any attorneys’ fees or expense or other fees and expense incurred in defending such Claim; provided, however, if a class action claim or governmental claim is brought on your behalf, your obligations will be limited to (i) opting out of such action or other proceedings received in connection therewith to the Company, it being agreed that you shall not be liable to the Company for any attorneys’ fees or expense or other fees or expenses in the case of any such class action claim or governmental claim.

(e) Without limiting the generality of the foregoing, you waive all rights under California Civil Code Section 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

3. (a) This Agreement is not intended, and shall not be construed, as an admission that any of the Company Entities has violated any federal, state or local law (statutory or decisional), ordinance or regulation, breached any contract or committed any wrong whatsoever against you.

(b) Should any provision of this Agreement require interpretation or construction, it is agreed by the parties that the entity interpreting or constructing this Agreement shall not apply a presumption against one party by reason of the rule of construction that a document is to be construed more strictly against the party who prepared the document.

4. For two years from and after the date of your employment termination, you agree not to make any derogatory, negative or disparaging public statement about any Company Entity, or to make any public statement (or any statement likely to become public) that could reasonably be expected to adversely affect or disparage the reputation, or, to the extent applicable, business or goodwill of any Company Entity, it being agreed and understood that nothing herein shall prohibit you (a) from disclosing that you are no longer employed by the Company, (b) from responding truthfully to any governmental investigation or inquiry related thereto, whether by the Securities and Exchange Commission or other governmental entity or any other law, subpoena, court order or other compulsory legal process or any disclosure requirement of the Securities and Exchange Commission, or (c) from making traditional competitive statements in the course of promoting a competing business, so long as any statements made by you described in this clause (c) are not based on confidential information obtained during the course of your employment with the Company. The Company agrees that it will not make any derogatory, negative or disparaging public statement about you in an authorized press release or authorized public announcement.

5. This Agreement is binding upon, and shall inure to the benefit of, the parties and their respective heirs, executors, administrators, successors and assigns.

6. This Agreement shall be construed and enforced in accordance with the laws of the State of California applicable to agreements made and to be performed entirely within such State.

7. You acknowledge that your obligations pursuant to Sections 6, 7 and 8 of the Employment Agreement survive the termination of your employment in accordance with the terms thereof. The Company acknowledges that its obligations under Sections 4(a), 4(b), 5, 8, 10 and 21 of the Amended and Restated Employment Agreement survive the termination of your employment in accordance with the terms thereof.

8. You acknowledge that you: (a) have carefully read this Agreement in its entirety; (b) have had an opportunity to consider for at least twenty-one (21) days the terms of this Agreement; (c) are hereby advised by the Company in writing to consult with an attorney of your choice in connection with this Agreement; (d) fully understand the significance of all of the terms and conditions of this Agreement and have discussed them with your independent legal counsel, or have had a reasonable opportunity to do so; (e) have had answered to your satisfaction by your independent legal counsel any questions you have asked with regard to the meaning and significance of any of the provisions of this Agreement; and (f) are signing this Agreement voluntarily and of your own free will and agree to abide by all the terms and conditions contained herein.

9. You understand that you will have at least twenty-one (21) days from the date of receipt of this Agreement to consider the terms and conditions of this Agreement. You may accept this Agreement by signing it and returning it to the Company’s Chief Executive Officer at the address specified pursuant to Section 15 of the Amended and Restated Employment Agreement. After executing this Agreement, you shall have seven (7) days (the “REVOCATION PERIOD”) to revoke this Agreement by indicating your desire to do so in writing delivered to the Chief Executive Officer at the address above by no later than 5:00 p.m. on the seventh (7th) day after the date you sign this Agreement. The effective date of this Agreement shall be the eighth (8th) day after you sign the Agreement (the “AGREEMENT EFFECTIVE DATE”). If the last day of the Revocation Period falls on a Saturday, Sunday or holiday, the last day of the Revocation Period will be deemed to be the next business day. In the event you do not accept this Agreement as set forth above, or in the event you revoke this Agreement during the Revocation Period, this Agreement, including but not limited to the obligation of the Company to provide the payments and benefits provided in paragraph 1 above, shall be deemed automatically null and void.

 

	
 
	
EXECUTIVE
	
 

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
 

	
 
	
Richard P. Goudis
	
 

	
 
	
 
	
 

	
 
	
HERBALIFE INTERNATIONAL OF AMERICA, INC.
	
 

	
 
	
 
	
 

	
 
	
By
	
 

	
 
	
 
	
 

	
 
	
Name: Michael O. Johnson
	
 

	
 
	
Title: Chief Executive Officer

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