EXHIBIT 10.44
EXECUTION COPY
SIDE LETTER AGREEMENT
AGREEMENT (this "Agreement") entered into as of the 3rd day of
April, 2003, by and among WH Holdings (Cayman Islands) Ltd., a Cayman Islands
company (the "Company"), Xxxxxxx X. Xxxxxxx ("Xxxxxxx") and certain of the
shareholders of the Company listed on the signature pages hereto (each an
"Institutional Shareholder" and collectively, the "Institutional Shareholders").
Reference is made to that certain Shareholders' Agreement
dated as of July 31, 2002, by and among the Company and certain of its
shareholders (as the same may be amended from time to time, the "Shareholders'
Agreement"). Capitalized terms used in this Agreement without definition shall
have the meanings ascribed thereto in the Shareholders' Agreement.
Concurrently with the execution of this Agreement, Xxxxxxx is
entering into (i) that certain Non-Statutory Stock Option Agreement (as the same
may be amended or modified from time to time, the "Stock Option Agreement") of
even date herewith, with the Company and (ii) that certain Employment Agreement
(as amended or modified from time to time, the "Employment Agreement"), of even
date herewith, with Herbalife International, Inc. and Herbalife International of
America, Inc., which are direct or indirect wholly owned subsidiaries of the
Company.
Whereas, (i) Section 11 of the Stock Option Agreement requires
Xxxxxxx to become a party to the Shareholders' Agreement in the instances
specified therein and (ii) Xxxxxxx and/or the trustee of his 401(k) trust will
be required to become a party to the Shareholders' Agreement if Xxxxxxx and/or
his 401(k) trust purchase Preferred Shares of the Company.
Each of the undersigned desires to make certain modifications
to the Shareholders' Agreement and set forth their agreement with respect to
registration rights to be granted to Xxxxxxx.
Accordingly, each of the undersigned agrees:
1. Repurchase Period. The fourth sentence of Section
6(a) of the Shareholders' Agreement is amended and restated in its entirety,
with respect to any Shares acquired by Xxxxxxx or his 401(k) trust, as follows:
"Upon such Termination by Xxxxxxx, the Company and/or the
Institutional Shareholders, as the case may be, may exercise
such right at any time within one hundred eighty one (181)
days of the Termination Date (the "REPURCHASE PERIOD")."
2. Repurchase Price. Section 6(d) and 6(e) of the
Shareholders' Agreement are amended and restated in their entirety, with respect
to any Shares acquired by Xxxxxxx or his 401(k) trust, as follows:
"(d) The purchase price per Share payable under Section 6(a)
where such Termination was due to Xxxxxxx'x resignation
without
Good Reason (as defined in the Employment Agreement) or for
Cause (as defined in the Employment Agreement) shall be an
amount equal to (x) in respect of Preferred Shares, the lesser
of (i) the Formula Price or (ii) Cost or (y) in respect of
Common Shares, the lesser of (i) Current Market Price or (ii)
Cost; provided, however, that after the earlier to occur of
the fifth anniversary of the Effective Date (as defined in the
Employment Agreement) or the consummation of a Change of
Control (as defined in the Stock Option Agreement), Section
6(e) shall apply in lieu of this Section 6(d); and
(e) The purchase price per Share payable under Section 6(a)
where such Termination was without Cause, because of death or
Disability (as defined in the Employment Agreement), due to
Xxxxxxx'x resignation for Good Reason or as provided in the
proviso of Section 6(d), shall be an amount equal to (x) in
respect of Preferred Shares, the greater of (i) Formula Price
or (ii) Cost or (y) in respect of Common Shares, the greater
of (i) Current Market Price or (ii) Cost."
3. Section 6(f) of Shareholders Agreement. The terms and
conditions of Section 6(f) of the Shareholders Agreement shall not apply to
Xxxxxxx, his 401(k) trust or any Shares acquired by either of them.
4. Registration Rights. Reference is made to that
certain Registration Rights Agreement, dated as of July 31, 2002, by and among
the Company and certain of its shareholders, including the Institutional
Shareholders (as the same may be amended from time to time, the "Registration
Agreement"). Xxxxxxx and/or his 401(k) trust will become a party to the
Registration Agreement in connection with any purchase of Preferred Shares. In
addition, Xxxxxxx has requested that he be granted registration rights with
respect to his Common Shares acquired pursuant to any exercise of his stock
options (as well as any then vested and exercisable portion of the stock option
granted pursuant to the Stock Option Agreement). However, Section 8 of the
Registration Agreement requires the approval of the Distributor Directors (as
defined therein) to amend the Registration Agreement. Accordingly, the Company
and the Institutional Shareholders agree to use commercially reasonable efforts
to obtain the approval of the Distributor Directors to amend the Registration
Agreement as soon as practical following the date hereof, such that the defined
term "Other Shareholder Shares" will include any Common Shares acquired by
Xxxxxxx pursuant to any exercise of his stock options (as well as any then
vested and exercisable portion of the stock option granted pursuant to the Stock
Option Agreement), it being agreed that each of the Company and the
Institutional Shareholders hereby consent to such amendment of the Registration
Agreement.
5. Tag-Along Rights. For the avoidance of doubt, Common
Shares issuable with respect to any vested and exercisable portion of the stock
option granted pursuant to the Stock Option Agreement shall be considered
"Shares" for the purposes of Section 4 of the Shareholders' Agreement.
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6. 401(k) Trust. If and when Xxxxxxx'x 401(k) trust
purchases Preferred Shares of the Company, such trust will become an intended
third-party beneficiary of this Agreement and shall have all the same rights and
obligations as Xxxxxxx hereunder with respect to any such purchased shares.
7. Amendments. No term, condition or provision of this
Agreement may be waived, modified or amended without the prior written consent
of each of the undersigned.
8. Governing Law; Jurisdiction. The Governing Law
(Section 14) and Jurisdiction (Section 16) provisions of the Shareholders'
Agreement are incorporated by reference herein as if fully set forth herein.
9. 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.
* * * * * * * * * *
[Signatures on Following Pages]
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
XX HOLDINGS (CAYMAN ISLANDS) LTD.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: President
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WH INVESTMENTS LTD.
By: /s/ Xxxxxx Xxxxxxx
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Name: Xxxxxx Xxxxxxx
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Title: President
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WHITNEY V, L.P.
By: Whitney Equity Partners V, LLC
Its: General Partner
By: /s/ Xxxxxx X. X'Xxxxx
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Name: Xxxxxx X. X'Xxxxx
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Title: Managing Member
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WHITNEY STRATEGIC PARTNERS V, L.P.
By: Whitney Equity Partners V, LLC
Its: General Partner
By: /s/ Xxxxxx X. X'Xxxxx
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Name: Xxxxxx X. X'Xxxxx
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Title: Managing Member
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CCG INVESTMENTS (BVI), L.P.
CCG ASSOCIATES -- QP, LLC
CCG ASSOCIATES -- AI, LLC
CCG INVESTMENT FUND -- AI, L.P.
CCG AV, LLC - SERIES C
CCG AV, LLC - SERIES E
CCG CI, LLC
By: Golden Gate Capital Management, L.L.C.
Its: Authorized Representative
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Managing Director
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