Exhibit 10.9
STOCKHOLDERS' AGREEMENT
Dated as of
September 30, 1999
Among
WEIGHT WATCHERS INTERNATIONAL, INC.,
ARTAL LUXEMBOURG S.A.
and
THE OTHER STOCKHOLDERS NAMED HEREIN
TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS; REPRESENTATIONS AND WARRANTIES........................1
1.1 DEFINITIONS......................................................1
1.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................4
1.3 REPRESENTATIONS AND WARRANTIES OF ARTAL..........................5
1.4 REPRESENTATIONS AND WARRANTIES OF NAMED INVESTORS................5
ARTICLE II COVENANTS..........................................................6
2.1 TRANSFERS OF COMMON STOCK........................................6
2.2 [Intentionally Omitted.].........................................8
2.3 TAG ALONG........................................................8
2.4 DRAG ALONG......................................................12
2.5 CERTAIN TRANSFERS BY ARTAL......................................13
ARTICLE III REGISTRATION RIGHTS..............................................14
1.1 REGISTRATION RIGHTS.............................................14
ARTICLE IV LEGENDS..........................................................14
4.1 LEGEND..........................................................14
ARTICLE V IRREVOCABLE PROXY................................................16
5.1 IRREVOCABLE PROXY...............................................16
ARTICLE VI POWER OF ATTORNEY................................................16
6.1 POWER OF ATTORNEY...............................................16
ARTICLE VII MISCELLANEOUS....................................................17
7.1 TERMINATION.....................................................17
7.2 REMEDIES........................................................17
7.3 CONSENT TO AMENDMENTS...........................................18
7.4 SUCCESSORS AND ASSIGNS..........................................18
7.5 SEVERABILITY....................................................18
7.6 COUNTERPARTS....................................................19
7.7 NOTICES.........................................................19
7.8 GOVERNING LAW...................................................19
7.9 FURTHER ASSURANCES..............................................19
7.10 JURISDICTION; VENUE; PROCESS...................................19
7.11 MUTUAL WAIVER OF JURY TRIAL....................................20
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT (this "AGREEMENT"), dated as of
September 30, 1999, among WEIGHT WATCHERS INTERNATIONAL, INC., a Virginia
corporation (the "COMPANY"), ARTAL LUXEMBOURG S.A., a Luxembourg corporation
("ARTAL"), MERCHANT CAPITAL, INC. ("MERCHANT"), LOGO INCORPORATED PTY. LTD.
("LOGO"), LONGISLAND INTERNATIONAL LIMITED ("LIL"), ENVOY PARTNERS, ("ENVOY"),
and SCOTIABANC, INC. ("SCOTIA" and, together with Merchant, Logo, LIL and Envoy,
the "NAMED INVESTORS").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, upon the completion of the transactions contemplated
by the Recapitalization and Stock Purchase Agreement, dated as of July 22, 1999
(the "RECAPITALIZATION AGREEMENT"), among the Company, X.X. Xxxxx Company, Artal
International S.A. and Artal, Artal will own 22,372,000 shares of common stock
of the Company, no par value per share (the "COMMON STOCK").
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of
the date hereof (the "STOCK PURCHASE AGREEMENT"), each Named Investor will
purchase from Artal the number of shares of Common Stock set forth opposite its
name on Schedule I hereto.
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein, the parties hereto agree as follows:
DEFINITIONS;
REPRESENTATIONS AND WARRANTIES
DEFINITIONS. Capitalized terms used herein shall have the meanings set forth
below:
" AFFILIATE" means any Person which, directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
another Person. The term "control" includes, without limitation, the possession,
directly or indirectly, of the power to direct the management and policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
" ARTICLES OF INCORPORATION" means the Articles of Incorporation of the Company
as in effect on the date hereof, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with the terms thereof.
" BY-LAWS" means the By-Laws of the Company as in effect on the date hereof, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof.
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" CLOSING DATE" means September 29, 1999.
" CORPORATE GROUP" means, with respect to any Person, (i) such Person together
with its direct and indirect wholly owned subsidiaries and any entity, directly
or indirectly through wholly owned subsidiaries, wholly owning such Person or
(ii) if permitted by each of the agreements governing material debt of such
Person, such Person together with its Affiliates.
" DRAG ALONG NUMBER" shall have the meaning specified in Section 2.4.
" FAMILY GROUP" means, with respect to any individual, such individual's spouse
and descendants and such individual's parents, grandparents, aunts, uncles,
brothers, sisters and their respective spouses and descendants (in each case,
whether natural or adopted) and any trust or similar entity established and
maintained solely for the benefit of such individual and/or his spouse,
descendants and/or such above-listed relatives and all of the aforesaid of the
grantor of a trust that is a stockholder of the Company.
" HEINZ" means X. X. Xxxxx Company, a Pennsylvania corporation.
" INVESTOR JOINDER" means a joinder agreement, substantially in the form of
Exhibit 2.1(a) hereto, by which a Person becomes an Investor Stockholder after
the date hereof.
" INVESTOR STOCKHOLDERS" means, collectively, Artal, each Named Investor and any
Person who hereafter becomes an Investor Stockholder pursuant to an Investor
Joinder under this Agreement.
PERMITTED TRANSFEREE" shall mean those Persons to whom
Transfers are permitted pursuant to clauses (i), (ii) and (iv) of Section
2.1(b).
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" PERSON" means an individual, a partnership, a joint venture, a corporation, an
association, a joint stock company, a limited liability company, a trust, an
unincorporated organization or a governmental entity or any department, agency
or political subdivision thereof.
" PUBLIC OFFERING" means a public offering of Common Stock pursuant to a
registration statement declared effective under the Securities Act.
" REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement, dated
as of September 29, 1999, among the Company, Artal and Heinz.
" RULE 144 SALE" means a Transfer of Common Stock which occurs after the initial
Public Offering under Rule 144 under the Securities Act.
" SALE NOTICE" shall have the meaning specified in Section 2.3. ??""
" SEC" means the Securities and Exchange Commission.
" SECURITIES ACT" means the Securities Act of 1933, as amended.
" SECURITIES HOLDING COMPANY" shall have the meaning specified in Section 2.3.
" SUBSIDIARY" means any corporation of which the securities having a majority of
the ordinary voting power in electing the board of directors are, at the time as
of which any determination is being made, owned by a Person either directly or
through one or more of its Subsidiaries.
" TRANSFER" shall be construed broadly and shall include any transfer by way of
issuance, sale, assignment, hypothecation, disposition, participation, pledge,
gift, bequeath, intestate transfer, distribution, liquidation, merger or
consolidation.
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" TRANSFEROR GROUP" shall have the meaning specified in Section 2.4.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to each of the Investor Stockholders as follows:
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Virginia and
has the corporate power and authority to execute and deliver this Agreement and
to perform its obligations hereunder. The execution and delivery by the Company
of this Agreement and the performance by it of its obligations hereunder have
been duly authorized by all necessary corporate action of the Company. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery thereof by Artal and each of the Named
Investors, constitutes the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms; and
(b) The execution, delivery and performance by the Company of
this Agreement will not, with or without the giving of notice or lapse of time,
or both, (i) conflict with the Articles of Incorporation or By-Laws of the
Company (or the corresponding documents of any of its Subsidiaries), (ii) result
in any breach of any terms or provisions of, or constitute a default under, or
conflict with any material contract, agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of
its Subsidiaries is bound, except for such breaches, defaults or conflicts
which, individually or in the aggregate, would not be likely to have a material
adverse effect on the financial condition, results of operations or business of
the Company and its Subsidiaries, taken as a whole, or (iii) violate any
material provision of law, statute, rule or regulation to which it is subject or
any material order, judgment or decree applicable to it.
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REPRESENTATIONS AND WARRANTIES OF ARTAL. Artal hereby represents and warrants to
the Company and the Named Investors as follows:
(c) Artal is a corporation duly organized, validly existing
and in good standing under the laws of Luxembourg and has the corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. The execution and delivery by Artal of this Agreement and
the performance by it of its obligations hereunder have been duly authorized by
all necessary corporate action of Artal. This Agreement has been duly executed
and delivered by Artal and, assuming the due authorization, execution and
delivery thereof by the Company and each of the Named Investors, constitutes the
valid and legally binding obligation of Artal, enforceable against Artal in
accordance with its terms; and
(d) The execution, delivery and performance of this Agreement
by Artal will not, with or without the giving of notice or lapse of time, or
both, (i) conflict with the certificate of incorporation or by-laws or similar
constitutive documents of Artal or (ii) result in any breach of any terms or
provisions of, or constitute a default under, or conflict with any material
contract, agreement or instrument to which Artal is a party or by which Artal is
bound, except for such breaches, defaults or conflicts which, individually or in
the aggregate, would not be likely to have a material adverse effect on the
financial position, results of operations or business of Artal or (iii) violate
any material provision of law, statute, rule or regulation to which it is
subject or any material order, judgment or decree applicable to Artal.
REPRESENTATIONS AND WARRANTIES OF NAMED INVESTORS. Each Named Investor hereby
represents and warrants to the Company, Artal and the other Named Investors as
follows:
(e) Such Named Investor is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and
has the corporate power and authority to
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execute and deliver this Agreement and to perform its obligations hereunder. The
execution and delivery by such Named Investor of this Agreement and the
performance by it of its obligations hereunder have been duly authorized by all
necessary corporate action of such Named Investor. This Agreement has been duly
executed and delivered by such Named Investor and, assuming the due
authorization, execution and delivery thereof by Artal, the other Named
Investors and the Company, constitutes the valid and legally binding obligation
of such Named Investor, enforceable against such Named Investor in accordance
with its terms; and
(f) The execution, delivery and performance of this Agreement
by such Named Investor will not, with or without the giving of notice or lapse
of time, or both, (i) conflict with the articles of incorporation or by-laws or
similar constitutive documents of such Named Investor or (ii) result in any
breach of any terms or provisions of, or constitute a default under, or conflict
with any material contract, agreement or instrument to which such Named Investor
is a party or by which such Named Investor is bound, except for such breaches,
defaults or conflicts which, individually or in the aggregate, would not be
likely to have a material adverse effect on the financial position, results of
operations or business of such Named Investor, or (iii) violate any material
provision of law, statute, rule or regulation to which it is subject or any
material order, judgment or decree applicable to it.
COVENANTS
TRANSFERS OF COMMON STOCK.
(g) Except as permitted pursuant to Section 2.1(b) or with
the prior written consent of Artal, no Named Investor shall Transfer any shares
of Common Stock until the third anniversary of the completion of the initial
Public Offering. Prior to making any permitted (whether as result of the
exceptions set forth in Section 2.1(b) or otherwise) Transfer of shares of
Common Stock to any Person at any time prior to the termination of this
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Agreement (other than a Transfer pursuant to a Public Offering, a Rule 144 Sale
or a Transfer pursuant to Sections 2.1(b)(iii)), such Named Investor shall
obtain an Investor Joinder from such transferee, and such transferee shall, by
execution thereof, agree to become and automatically be deemed to be an Investor
Stockholder subject to all of the rights and obligations contained in this
Agreement applicable to Named Investors and to have made on the date thereof all
representations and warranties made on the date hereof by such Named Investor
(modified, if necessary, to reflect the nature of such Person as a corporation,
partnership, other entity or natural person). Promptly thereafter, the Named
Investor shall cause originally executed copies of such Investor Joinder to be
delivered to the Company and the other Investor Stockholders and shall notify
such Investor Stockholders of the number of shares of Common Stock Transferred.
(h) The restriction on Transfer contained in the first
sentence of Section 2.1(a) above shall be inapplicable with respect to:
(i) any Transfers of Common Stock made by an
individual Investor Stockholder to his or her Family Group
and, thereafter, among members of such Family Group;
(ii) any Transfers of Common Stock by an Investor
Stockholder to a member of its Corporate Group and,
thereafter, among members of such Corporate Group; PROVIDED,
HOWEVER, if such transferee ceases to be a member of such
Corporate Group, such transferee shall immediately Transfer
such Common Stock to a member of such Investor Stockholder's
Corporate Group;
(iii) any Transfer of Common Stock pursuant to the
terms of Sections 2.3 or 2.4 or the Registration Rights
Agreement; and
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(iv) any Transfers of Common Stock made by an
individual Investor Stockholder upon his or her death to his
or her estate, PROVIDED that the beneficiaries of the estate
are Persons specified in clause (i) of this Section 2.1(b);
PROVIDED, that no such Transfer shall be permitted under this Section 2.1(b) if
it would constitute a default or event of default under any agreement governing
material debt of the Company or any of its Subsidiaries; PROVIDED, FURTHER, that
in order to facilitate compliance with federal securities laws and the
provisions of this Agreement, the aggregate number of Permitted Transferees
under Section 2.1(b) shall not exceed 35 Persons at any time without the consent
of Artal, which consent shall not be unreasonably withheld or delayed.
(i) Any Transfer made in violation of this Section 2.1
(including, without limitation, a Transfer made without obtaining a necessary
Investor Joinder) shall be null and void. The Company shall not permit such
Transfer to be recorded on the Company's books and records and shall not
otherwise cooperate in consummating such Transfer.
(j) No Person shall be permitted to become a party to this
Agreement except by executing an Investor Joinder pursuant to the terms set
forth in this Section 2.1 or pursuant to the terms set forth in Section 2.5.
[Intentionally Omitted.]
TAG ALONG. (a) At least 30 days prior to making any Transfer of any shares of
Common Stock held by Artal (other than pursuant to a Public Offering or a Rule
144 Sale), Artal shall deliver a written notice (the "SALE NOTICE") to the Named
Investors, specifying in reasonable detail the number of shares of Common Stock
proposed to be transferred, the identity of the prospective transferee(s), the
terms and conditions of the Transfer (including without limitation, the price to
be paid, terms of payment, form of consideration and other material terms,
including Artal's reasonable estimate of the fair
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market value of any non-cash consideration offered) and all information
reasonably required to make the calculations set forth in this Section 2.3(a);
PROVIDED, HOWEVER, that the provisions of this Section shall not apply to (i)
any Transfer of any shares of Common Stock to any of the employees of the
Company or any of its Subsidiaries (or to the Company for related issuance to
such employees) in connection with management equity participation or similar
contracts, plans or programs (PROVIDED, that such contracts, plans or programs
are created in good faith and not for purposes of avoiding the transfer
restrictions contained in this Section), (ii) any Transfer of shares of Common
Stock made by an individual to his or her Family Group and, thereafter, among
members of such Family Group, (iii) any Transfers by Artal to a member of its
own Corporate Group and thereafter among members of such Corporate Group, (iv)
any Transfers of shares of Common Stock pursuant to a pledge or similar
agreement to secure debt of such Person (incurred in good faith and not for
purposes of avoiding the rights granted to the Named Investors in this Section
2.3) owing to a bank or other BONA FIDE financial institution, including,
without limitation, any such Transfer upon the exercise by such bank or other
BONA FIDE financial institution of its rights under such pledge or similar
agreement to acquire beneficial or other ownership of the shares of Common Stock
pledged thereunder; (v) any Transfer of shares of Common Stock made by an
individual upon his or her death to his or her estate; PROVIDED, that the
beneficiaries of the estate are Persons specified in clause (ii) above or (vi)
any Transfer of Common Stock by Artal in a transaction which does not constitute
a Public Offering within 12 months of the Closing Date to the extent such
Transfer under this clause (vi), together with all other Transfers made pursuant
to this clause (vi) during such period, do not exceed 35% of the number of
shares of Common Stock that Artal owned on the Closing Date after making the
Transfers to the Named Investors pursuant to the Stock Purchase Agreement. Each
Named Investor may elect to participate in the proposed Transfer by delivering
written notice to Artal within 15 days after delivery of the Sale Notice. If any
or all of the Named Investors have elected to participate in such
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Transfer pursuant to the terms hereof, each such Named Investor shall be
entitled to sell in the proposed Transfer, at the same price and on the same
terms and conditions as Artal, up to a number of shares of Common Stock being
Transferred by Artal equal to the product of (i) the number of such shares of
Common Stock then beneficially owned by each such Named Investor(s) MULTIPLIED
BY, (ii) a percentage calculated by dividing the aggregate number of shares of
Common Stock which Artal proposes to sell in the aggregate in such Transfer by
the total number of shares of Common Stock then owned by Artal in the aggregate;
PROVIDED that the number of shares of Common Stock which such Named Investor(s)
is permitted to sell pursuant to this Section 2.3(a) shall not include any
shares of Common Stock acquired by such Named Investor(s) in connection with or
after the consummation of a Public Offering. If any or all of the Named
Investors elect to participate in such Transfer, each such Named Investors shall
be obligated to pay its PRO RATA portion of the transaction costs associated
therewith. If the aggregate number of shares of Common Stock the Named Investors
elect and are permitted under the foregoing provisions to sell in the proposed
Transfer is, together with the aggregate number of shares of Common Stock that
Artal proposes to so sell and the aggregate number of shares of Common Stock
that any other Person elects and is permitted to sell pursuant to any similar
agreement, more than the total number of shares of Common Stock that the
transferee wishes to purchase, then each of the Named Investors and Artal shall
be entitled to sell to the transferee that number of shares of Common Stock
equal to the number of shares of Common Stock to be so purchased by the
transferee from all such selling parties (including any such other Person)
multiplied by a fraction, the numerator of which is the number of such shares of
Common Stock such selling party elects and is permitted under the foregoing
provisions to sell and the denominator of which is the aggregate number of
shares of Common Stock all such selling parties elect to sell and are permitted
to sell under the foregoing provisions and pursuant to any similar agreement. If
and to the extent that the transferee purchases any shares of Common Stock from
Artal but does not purchase, upon the
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same terms and conditions and for the same price, the shares of Common Stock the
Named Investors elect and are permitted under the foregoing provisions to sell
to the transferee, Artal shall, simultaneously with the sale of its shares of
Common Stock, purchase from such Named Investor(s), at the same price and on the
same terms and conditions as are applicable to the shares of Common Stock
purchased from Artal, such shares of Common Stock of such Named Investor. If a
Named Investor has not delivered written notice to Artal that such Named
Investor elects to participate in a proposed Transfer within the 15-day period
provided above for the delivering of such notice, then Artal shall have the
right, for a period of 45 days after the expiration of such 15-day period, to
consummate such proposed Transfer to the proposed transferee named in the
related Sales Notice and at the same price and on the same terms and conditions
stated in such Sales Notice. If, at the end of such 45-day period, Artal has not
consummated such proposed Transfer, the terms of this Section 2.3 shall again be
in effect with respect to such proposed Transfer.
(k) For purposes of Section 2.3(a), if Artal has Transferred
all or part of its shares of Common Stock to one or more of its Subsidiaries or
other similar entities controlled by it (a "SECURITIES HOLDING COMPANY"), a sale
or other disposition by Artal (by merger or otherwise) of an equity or
beneficial interest in a Securities Holding Company (other than a sale or
disposition of the nature set forth in the proviso to the first sentence of
Section 2.3(a)) shall be treated as follows: (i) if such sale or other
disposition is of 50% or more of the equity or beneficial interest in such
Securities Holding Company, then such sale or other disposition shall be deemed
to be a Transfer of all such shares of Common Stock directly or indirectly owned
or controlled by such Securities Holding Company, and (ii) if such sale or other
disposition is of less than 50% of the equity or beneficial interest in such
Securities Holding Company, then such sale or other disposition shall be deemed
to be Transfer of a percentage of the number of shares of Common Stock directly
or indirectly owned or controlled by such Securities Holding Company equal to
the
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percentage of the equity or beneficial interest in such Securities Holding
Company sold or disposed of in such transaction. In either such event, if the
Securities Holding Company owns assets other than shares of Common Stock, the
consideration paid to the transferring party for the Transfer and allocable to
the shares of Common Stock, in the absence of agreement of the parties to this
Agreement, shall be determined by an investment banking firm of national
reputation selected by mutual agreement of the parties hereto, PROVIDED, that
such investment banking firm shall not have a material direct or indirect
financial interest in or other relationship with any of the parties hereto or
their Affiliates.
(l) The exercise or nonexercise of the rights of any Named
Investor in this Section 2.3 to participate in one or more Transfers by Artal
shall not adversely affect any Named Investor's rights to participate in
subsequent Transfers by Artal.
DRAG ALONG.
(m) In the case that Artal proposes to make a Transfer of
shares of Common Stock (or of a Securities Holding Company) owned by it or its
Affiliates (the "TRANSFEROR GROUP") that would trigger the Named Investors' tag
along rights pursuant to Section 2.3 (assuming solely for the purpose of this
Section 2.4(a) that the exception contained in Section 2.3(a)(vi) shall not
apply with respect to the provisions of Section 2.3(a)) , Artal may elect, by so
specifying in the Sale Notice, to require each Named Investor to, and each Named
Investor will, participate in such transaction on the same terms and conditions
as the Transferor Group with respect to a number of shares of Common Stock
determined as set forth below. Each Named Investor shall be required to sell in
the proposed Transfer, at the same price and on the same terms and conditions as
the Transferor Group, a number of shares of Common Stock equal to the lesser of
(i) the product of (A) the number of shares of Common Stock then beneficially
owned by such Named Investor MULTIPLIED BY, (B) a percentage calculated by
dividing the aggregate number of shares of Common Stock which the Transferor
Group
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proposes to sell in the aggregate in such Transfer by the total number of shares
of Common Stock then owned by the Transferor Group and (ii) the number of such
shares of Common Stock specified by Artal in the relevant Sale Notice (such
number being hereinafter referred to as the "DRAG ALONG NUMBER").
(n) In connection with any proposed transaction described in
Section 2.4(a) above, each Named Investor agrees (i) to consent to and raise no
objections (other than with respect to its rights under this Section 2.4) to,
and to take all other actions (including, without limitation, voting, or
entering into written consents with respect to, all of its shares of Common
Stock in favor of such transaction) necessary or desirable to cause, the
consummation of such transaction and (ii) to sell, Transfer and deliver its
shares of Common Stock as required by the terms of such transaction.
(o) If the Drag Along Number is less than the number of
shares of Common Stock that any Named Investor may sell in the proposed Transfer
pursuant to its rights under Section 2.3, then, notwithstanding the exercise by
Artal of their rights under this Section 2.4, such Named Investor may elect to
sell such additional shares of Common Stock pursuant to its rights under Section
2.3.
CERTAIN TRANSFERS BY ARTAL.
Artal agrees that it will not effect any Transfer of Common
Stock held by it as described in clause (ii), (iii), (iv) or (v) of the proviso
in the first sentence of Section 2.3(a), unless such transferee has delivered to
the Company an Investor Joinder whereby such transferee shall, by execution
thereof, agree to become and shall automatically be deemed to be an Investor
Stockholder subject to all of the rights (to the extent of the terms of the
assignment of such rights) and all of the obligations contained in this
Agreement applicable to Artal and to have made on the date thereof all
representations and warranties made on the date hereof by Artal (modified, if
necessary, to reflect the nature of such Person as a corporation, partnership,
other entity or natural person).
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REGISTRATION RIGHTS
REGISTRATION RIGHTS. Currently herewith, the Named Investors
will become parties to the Registration Rights Agreement by executing a joinder
agreement.
LEGENDS
LEGEND. (a) Each certificate or instrument evidencing shares of Common Stock
that is held by a Named Investor or a transferee thereof which is required to
execute an Investor Joinder pursuant to Section 2.1(a) of this Agreement on or
after the date hereof shall bear the following legend on the face thereof:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A
STOCKHOLDERS' AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE SECRETARY
OF THE COMPANY). NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION
OR OTHER DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
MAY BE MADE EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF SUCH
STOCKHOLDERS' AGREEMENT AND (A) PURSUANT TO A REGISTRATION STATEMENT
EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT
TO AN EXEMPTION FROM REGISTRATION THEREUNDER. THE HOLDER OF THIS
CERTIFICATE, BY
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ACCEPTANCE OF THIS CERTIFICATE, AGREES TO BE BOUND BY ALL OF THE
PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT.
(p) Each certificate or instrument evidencing shares of
Common Stock, which is issued to a transferee of a Named Investor which is not
required to execute an Investor Joinder pursuant to Section 2.1(a) of this
Agreement (other than transferees in a Public Offering) on or after the date
hereof shall bear the following legend on the face thereof:
NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER
DISPOSITION OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY BE
MADE EXCEPT (A) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) PURSUANT TO AN EXEMPTION
FROM REGISTRATION THEREUNDER.
(q) Upon the sale of any shares of Common Stock pursuant to
an effective registration statement under the Securities Act or upon the
termination or expiration of this Agreement, the certificates or instruments
representing such shares of Common Stock shall be replaced, at the expense of
the Company, with certificates or instruments not bearing the legends required
by this Section 4.1.
(r) Until such time as the certificates or instruments
evidencing shares of Common Stock that are held by the Named Investors, or a
transferee thereof which is required to execute an Investor Joinder pursuant to
Section 2.1(a) hereof, are no longer required to bear either of the legends
contained in Sections 4.1(a) and 4.1(b), the Named Investors and each such
transferee agrees that it will not Transfer any shares of Common Stock except
(i) pursuant to a registration statement under the
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Securities Act or (ii) pursuant to an exemption from registration thereunder.
IRREVOCABLE PROXY
IRREVOCABLE PROXY. Each Named Investor hereby irrevocably appoints Artal or any
designee of Artal the lawful agent, attorney and proxy of such shareholder, for
so long as such Named Investor owns any shares of Common Stock acquired pursuant
to the Stock Purchase Agreement, to vote all such shares of Common Stock with
respect to any and all matters such shares are entitled to vote. Each Named
Investor intends this proxy to be irrevocable and coupled with an interest and
will take such further action or execute such other instruments as may be
necessary to effectuate the intent of this proxy and hereby revokes any proxy
previously granted by it with respect to the shares of Common Stock. Each Named
Investor shall not hereafter, unless and until this Agreement terminates
pursuant to Section 7.1 hereof or with the written consent of Artal, purport to
vote (or execute a consent with respect to) such shares of Common Stock (other
than through this irrevocable proxy) or grant any other proxy or power of
attorney with respect to any shares of Common Stock, deposit any such shares
into a voting trust or enter into any agreement (other than this Agreement),
arrangement or understanding with any person, directly or indirectly, to vote,
grant any proxy or give instructions with respect to the voting of such shares
of Common Stock.
POWER OF ATTORNEY
POWER OF ATTORNEY. (a) Each Named Investor hereby irrevocably constitutes and
appoints Artal or any designee of Artal, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Named Investor and in the name of such Named
Investor or in Artal's own name, from time to time in Artal's discretion, for
the purpose of carrying out the terms of this
17
Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the
purposes of this Agreement, including, without limitation, any financing
statements, endorsements, assignments or other instruments of transfer.
(s) Each Named Investor hereby ratifies all that said
attorneys shall lawfully do or cause to be done pursuant to the power of
attorney granted in Section 6.1(a). All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable
until this Agreement is terminated and the security interests created hereby are
released.
MISCELLANEOUS
TERMINATION. As to any particular Investor Stockholder, this Agreement shall no
longer be binding or of further force or effect as to such Investor Stockholder,
except as noted below, as of the date such Investor Stockholder has Transferred
all such Investor Stockholder's interest in the Common Stock; PROVIDED, HOWEVER,
that no such termination shall be effective if such Investor Stockholder is in
breach of this Agreement.
REMEDIES.
(t) Each Investor Stockholder shall have all rights and
remedies reserved for such Investor Stockholder pursuant to this Agreement, the
Company's Articles of Incorporation and By-Laws and all rights and remedies
which such holders have been granted at any time under any other agreement or
contract and all of the rights which such holders have under any law or equity.
Any Person having any rights under any provision of this Agreement will be
entitled to enforce such rights specifically, to recover damages by reason of
any breach of any provision of this Agreement and to exercise all other rights
granted by law or equity.
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(u) It is acknowledged that it will be impossible to measure
in money the damages that would be suffered if the parties fail to comply with
any of the obligations herein imposed on them and that in the event of any swch
failure, an aggrieved Person will be irreparably damaged and will not have an
adequate remedy at law. Any such Person shall, therefore, be entitled to
injunctive relief, including specific performance, to enforce such obligations,
and if any action should be brought in equity to enforce any of the provisions
of this Agreement, none of the parties hereto shall raise the defense that there
is an adequate remedy at law.
CONSENT TO AMENDMENTS. Except as expressly set forth herein, the provisions of
this Agreement may only be amended or waived with the prior written consent of
each of the parties hereto.
SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided herein, all
provisions contained in this Agreement by or on behalf of any of the parties
hereto will bind and inure to the benefit of the respective successors and
permitted transferees of the parties hereto whether so expressed or not. This
Agreement is not intended to create any third party beneficiaries.
SEVERABILITY. Whenever possible, each provision of this Agreement will be
interpreted in such a manner as to be effective and valid under applicable law.
The parties agree that (i) the provisions of this Agreement shall be severable
in the event that any of the provisions hereof are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, (ii) such invalid,
void or otherwise unenforceable provisions shall be automatically replaced by
other provisions which are as similar as possible in terms to such invalid, void
or otherwise unenforceable provisions but are valid and enforceable and (iii)
the remaining provisions shall remain enforceable to the extent permitted by
law. To the extent there exists any inconsistency between the provisions of this
Agreement and the By-Laws of the Company, the provisions of this Agreement shall
govern in all instances.
19
COUNTERPARTS. This Agreement may be executed in two or more counterparts, any
one of which need not contain the signatures of more than one party, but all
such counterparts taken together will constitute one and the same Agreement.
NOTICES. All notices, demands and other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing or
sent by facsimile and shall be deemed to have been given (i) when personally
delivered or sent by facsimile (with proof of receipt at the number to which
notices are required to be sent), (ii) one business day after being sent by
overnight courier (receipt confirmation requested) or (iii) five business days
after being mailed by certified or registered mail (return receipt requested and
postage prepaid) to the recipient. Such notices, demands and other
communications will be sent to the Company and each Investor Stockholder at the
address or addresses indicated on the signature pages hereto or on the Investor
Joinder (as the case may be), or to such other address or to the attention of
such other person as the recipient party has specified by prior written notice
under this Section 7.7 to the sending party.
GOVERNING LAW. This Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.
FURTHER ASSURANCES. Each party hereto shall do and perform or cause to be done
and performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments, and documents as any other
party hereto reasonably may request in order to carry out the provisions of this
Agreement and the consummation of the transactions contemplated hereby.
JURISDICTION; VENUE; PROCESS. (a) The parties to this Agreement agree that
jurisdiction and venue in any action brought by any party hereto pursuant to
this Agreement shall properly lie and shall be brought in any federal or state
court located in the State of New York. By execution and delivery of this
Agreement, each party hereto irrevocably submits to the jurisdiction of such
courts for itself or himself
20
and in respect of its or his property with respect to such action. The parties
hereto irrevocably agree that venue would be proper in such court, and hereby
irrevocably waive any objection that such court is an improper or inconvenient
forum for the resolution of such action.
(b) Artal hereby irrevocably and unconditionally designates
and directs Xx. Xxxxx Xxx Xxxxx, with offices on the date hereof at Northwestern
University School of Law, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, as
its agent to receive service of any and all process and documents on its behalf
in any legal action or proceeding related to this Agreement and agrees that
service upon such agent shall constitute valid and effective service upon Artal
and that failure of such agent to give any notice of such service to Artal shall
not affect or impair in any way the validity of such service or of any judgment
rendered in any action or proceeding based thereon.
MUTUAL WAIVER OF JURY TRIAL. THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT OR PROCEEDING BROUGHT TO ENFORCE OR DEFEND ANY RIGHTS OR
REMEDIES UNDER THIS AGREEMENT OR ANY DOCUMENTS RELATED HERETO.
* * * *
21
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
WEIGHT WATCHERS INTERNATIONAL, INC.
By: /s/ Xxx Xxxxxxx
--------------------------------------
Address for Notices: With copies to:
Weight Watchers International, Inc. Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxx Xxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000 Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: Facsimile No.: 0-000-000-0000
Attn: Chief Executive Officer Attn: Xxxxxx X. Xxxxx, Esq.
22
ARTAL LUXEMBOURG S.A.
By: /s/ Xxxxx Xxx Xxxxx
--------------------------------------
Address for Notices: With copies to:
Artal Luxembourg S.A. Xxxxx Xxx Xxxxx
105, Grand-Rue Northwestern University School of Law
X-0000 Xxxxxxxxxx 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Facsimile No.: 352-22-42-59-22 Facsimile No.: 0-000-000-0000
Attn: Managing Director
and
Xxxxxxx Xxxxxxx &
Xxxxxxxx 000
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: 0-000-000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
23
INCORPORATED PTY. LTD.
LOGO
By: /s/ Xxxxxxx Xxxx
--------------------------------------
Address for Notices: With copies to:
Logo Incorporated Pty. Ltd. Xxxxxxxx Legal
000/0 Xxxxxxxxxx Xxxxxx 000 Xxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx Xxxxxx
N.S.W. 2061 XXX 0000
Xxxxxxxxx Australia
Facsimile No.: 011-612-9959-5025 Facsimile No.: 011-612-9964-6650
Attn: Chief Executive Officer Attn: Xxxxxx Xxxxxxxxx
Xxxxxxx Xxxxxxxxx
24
MERCHANT CAPITAL, INC.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Address for Notices: With copies to:
Facsimile No.: Facsimile No.:
Attn: Attn:
25
SCOTIABANC, INC.
By: /s/ X. X. Xxxxx
--------------------------------------
Address for Notices: With copies to:
Xxxxxxx Xxxxx Xxxx Xxxxxx
Scotiabanc, Inc. One Liberty Plaza
000 Xxxxxxxxx Xxxxxx, XX Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, XX 00000 Facsimile No.: 212-225-5172
Facsimile No.: 000-000-0000
ENVOY PARTNERS
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Address for Notices: With copies to:
Facsimile No.: Facsimile No.:
Attn: Attn:
26
LONGISLAND INTERNATIONAL LIMITED
By: /s/ Nicolas Karpuchess
--------------------------------------
Address for Notices: With copies to:
Facsimile No.: Facsimile No.:
Attn: Attn:
SCHEDULE 1
Number of Shares
Named Investor of Common Stock
-------------- ---------------
Merchant Capital, Inc. 200,000
Logo Incorporated Pty. Ltd. 230,000
Longisland International Limited 140,000
Envoy Partners 200,000
Scotiabanc, Inc. 200,000
EXHIBIT 2.1(a)
INVESTOR JOINDER
By execution of this Investor Joinder, the undersigned agrees
to become a party to that certain Stockholders' Agreement, dated as of September
30, 1999 (the "Agreement"), among Weight Watchers International, Inc. (the
"Company"), Artal Luxembourg S.A. and the other stockholders of the Company
named therein. By execution of this Investor Joinder, the undersigned shall have
all rights, and shall observe all the obligations, applicable to [fill in name
of transferee] (except as otherwise set forth in the Agreement), and to have
made on the date hereof all representations and warranties made by such Investor
Stockholder, modified, if necessary, to reflect the nature of the undersigned as
a corporation, partnership, other entity or natural person.
Name:_________________________
Address for Notices: With copies to:
------------------------------ -----------------------------------------
------------------------------ -----------------------------------------
------------------------------ -----------------------------------------
------------------------------ -----------------------------------------
------------------------------ -----------------------------------------
If an individual, are you presently married or separated?
yes _____ no _____
(If yes, you must also have your spouse execute a spousal consent in the form
attached hereto.)
Signature:___________________
Date:___________________
CONSENT AND AGREEMENT OF SPOUSE
-------------------------------
I, _________________________________, am the spouse of
____________________, one of the stockholders of Weight Watchers International,
Inc., a Virginia corporation (the "Company"). I acknowledge that my spouse is a
party to that certain Stockholders' Agreement, dated as of September 30, 1999,
among the Company Artal Luxembourg S.A. and the other stockholders of the
Company named therein (the "Agreement"), and that I have read the Agreement. I
consent to, agree to, approve and ratify each and every one of the terms and
provisions of the Agreement, and I further agree to provide all notices and
information required of me in the time and manner set forth in the Agreement.
Executed this ____ day of __________, 199_.
--------------------------------
(Signature of Consenting Spouse)
