Exhibit No. 3
ODWALLA, INC.
SHAREHOLDERS' RIGHTS AGREEMENT
THIS SHAREHOLDERS' RIGHTS AGREEMENT (this "Agreement") is entered
into as of May 2, 2000, by and among Odwalla, Inc., a California
corporation (the "Company"), Samantha Investors, LLC, a Massachusetts
limited liability company, and those shareholders of the Company and other
Persons listed on Schedule 1 hereto (together with these permitted
successors and assigns hereunder, collectively the "Shareholders").
RECITALS
A. The Company previously entered into that certain Investors'
Rights Agreement, dated as of January 29, 1999, with
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Partners III, L.P. ("▇▇▇▇▇▇▇▇▇") in
connection with the acquisition by ▇▇▇▇▇▇▇▇▇ of certain
shares of Series A Preferred Stock of the Company (the
"Existing Rights Agreement"). On or before the date hereof,
▇▇▇▇▇▇▇▇▇ has converted such shares of Series A Preferred
Stock together with those additional shares of Series A
Preferred Stock ▇▇▇▇▇▇▇▇▇ received from the Company on June
30, 1999 and December 31, 1999 as a stock dividend into
Common Stock of the Company. The Company and ▇▇▇▇▇▇▇▇▇ wish
to have this Agreement supersede and terminate the Existing
Rights Agreement.
B. The Company, Orange Acquisition Sub, a Maine corporation
("Merger Sub"), and Fresh Samantha, Inc., a Maine
corporation ("Samantha"), have entered into that certain
Agreement and Plan of Merger, dated as of February 2, 2000
(the "Merger Agreement"), to effectuate the merger (the
"Merger") of Merger Sub with and into Samantha with Samantha
as the surviving corporation and wholly-owned subsidiary of
the Company.
C. Upon consummation of the Merger, the Shareholders identified
as "Samantha Shareholders" on Schedule 1 attached hereto
will exchange certificates formerly representing shares of
the capital stock of Samantha for shares of the Common Stock
of the Company.
D. Concurrent with the Closing of the Merger, the Company
expects to consummate a transaction pursuant to which it
will issue and sell up to Six Million Dollars ($6,000,000)
of Common Stock to WP and ▇▇▇▇▇▇▇▇▇.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement, the parties mutually agree as follows:
1. GENERAL
1.1 DEFINITIONS.
In addition to those terms otherwise defined herein, as used in
this Agreement, the following terms shall have the following respective
meanings:
"ACQUISITION PROPOSAL" shall mean (a) a bona fide, written
proposal, which proposal includes all material terms of a proposed
transaction, received by the Board of Directors of the Company from any
person or Group (as such term is defined in Section 13(d)(3) of the
Exchange Act) proposing to enter into a transaction with the Company or the
Company's shareholders which, if effected, result in such person or group
acquiring more than 50% of the voting securities of the Company, (b) a
tender offer or exchange offer seeking to acquire 50% or more of the
outstanding shares of voting securities of the Company or (c) a public
announcement of the commencement of a bona fide proxy or consent
solicitation subject to Section 14 of the Exchange Act to remove a majority
of the Board of Directors.
"AFFILIATE" shall mean a person or entity that directly or
indirectly, through one or more intermediaries, controls or is controlled
by, or is under common control with, the person specified.
"BAIN SHAREHOLDERS" shall mean, collectively, ▇▇▇▇ Capital Fund
VI, L.P. and its Affiliates.
"CLOSING" shall have the meaning given such term in the Merger
Agreement.
"COMMON STOCK" shall mean the common stock of the Company.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended and any successor rule or regulation thereto, and in the case of
any referenced section of such rule, any successor section thereto,
collectively and as from time to time amended and in effect.
"HOLDER" means any person owning or having the right to acquire
Registrable Securities or any assignee thereof.
"LLC" means Samantha Investors, LLC, a Massachusetts limited
liability company.
"MAJORITY PARTICIPATING HOLDERS" means, with respect to any
registration of Registrable Securities, the holder or holders at the
relevant time of at least a majority of the Registrable Securities to be
included in the registration statement in question.
"NASD" shall mean the National Association of Securities Dealers,
Inc. (or its successor).
"PERMITTED TRANSFEREE" shall mean, as to any Shareholder, (a) any
Affiliate, partner, retired partner, member, retired member, or other
holder of equity interests of such Shareholder and (b) any family member of
such Shareholder or any domestic partner of such Shareholder or any trust,
partnership, limited liability company, custodianship or fiduciary account
for the benefit of a Shareholder and/or members of his or her family or his
or her domestic partner.
"REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act, and the declaration or ordering of
effectiveness of such registration statement or document.
"REGISTRABLE SECURITIES" means (i) the Stock, (ii) any Common
Stock issued as (or issuable upon the conversion or exercise of any
preferred stock warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange for or in
replacement of, or pursuant to a stock split, combination of shares,
recapitalization, merger, consolidation, reorganization or otherwise with
respect to the Stock, and (iii) any Common Stock issued upon exercise of
the Warrant. Notwithstanding the foregoing, Registrable Securities shall
not include any securities either sold by a person to the public pursuant
to a registration statement or Rule 144 under the Securities Act or sold in
a private transaction in which the transferor's rights under Section 2 of
this Agreement are not assigned.
The number of shares of "REGISTRABLE SECURITIES THEN OUTSTANDING"
shall be determined by calculating the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities, including the
Warrant, which are, Registrable Securities.
"REGISTRATION EXPENSES" shall mean all expenses incurred by the
Company in complying with Section 2.1 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, reasonable fees and disbursements
of a single special counsel for the Shareholders, blue sky fees and
expenses and the expense of any special audits incident to or required by
any such registration.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended, and any successor rule or regulation thereto, and in the case of
any referenced section of such rule, any successor section thereto,
collectively and as from time to time amended and in effect.
"STOCK" shall refer to the shares of Common Stock held by the
Shareholders.
"TAG ALONG SELLER" shall have the meaning given such term in
Section 3.6 of this Agreement.
"WARRANT" shall refer to that warrant held by ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇
Partners III, L.P. to purchase shares of Common Stock dated as of January
29, 1999.
"WP" shall mean U.S. Equity Partners, L.P., a Delaware limited
partnership, U.S. Equity Partners (Offshore), L.P., a Cayman Islands
limited partnership, and BancBoston Investments, Inc., a Massachusetts
corporation.
Any capitalized terms not defined herein shall have the meanings
given them in the Merger Agreement.
2. REGISTRATION
2.1 DEMAND REGISTRATIONS.
(A) REGISTRATION ON FORM S-3. From time to time after the first anniversary
of the date of this Agreement, a Holder or Holders may request in writing
that the Company effect the registration on Form S-3 of Registrable Shares,
provided that the gross proceeds of the offering to which such request
applies are expected to be at least $1,000,000. If the Holder or Holders
initiating such registration intend to distribute the Registrable
Securities in an underwritten offering, they shall so state in their
request. Promptly after receipt of such notice, the Company will give
written notice of such requested registration to all other Holders of
Registrable Securities. The Company will then use its commercially
reasonable best efforts to expeditiously effect the registration under the
Securities Act of the Registrable Securities which the Company has been
requested to register by such Holders and all other Registrable Securities
which the Company has been requested to register by other Holders of
Registrable Securities by notice delivered to the Company within twenty
(20) days after the giving of such notice by the Company.
(B) REGISTRATION ON FORM S-1 OR S-2. From time to time after the first
anniversary of the date of this Agreement, when the Company is ineligible
to file a Registration Statement on Form S-3, one or more Holders of
Registered Securities may request in writing that the Company effect the
registration under the Securities Act of Registrable Securities; provided
that the gross proceeds of the offering to which such request applies are
expected to be at least $5 million. If the Holder or Holders initiating
such registration intend to distribute the Registrable Securities in an
underwritten offering, they shall so state in their request. Promptly after
receipt of such notice, the Company will give written notice of such
requested registration and related information to all other Holders of
Registrable Securities. The Company will then use its commercially
reasonable best efforts to expeditiously effect the registration under the
Securities Act of the Registrable Securities which the Company has been
requested to register by such Holders and all other Registrable Securities
which the Company has been requested to register by other Holders of
Registrable Securities by notice delivered to the Company within twenty
(20) days after the giving of such notice by the Company.
(C) FORM. Each registration requested pursuant to Section 2.1(b) shall be
effected by the filing of a registration statement on Form S-1 or S-2 (or
the successor form of either, unless the use of a different form has been
agreed to in writing by the Company and the Majority Participating
Holders). No registration of Registrable Securities under this Section 2.1
which shall not have become and remained effective for the period set forth
in Section 2.5(a), shall be deemed to be a registration for any purpose of
this Section 2.1. In the case of the filing of a registration statement on
Form S-3 pursuant to this Section 2.1, the Company shall include such
additional disclosure in such registration statement and the prospectus
used in connection with such registration statement as reasonably requested
by the Majority Participating Holders or, in the case of an underwritten
offering, by the managing underwriter(s), in order to successfully market
the Common Stock offered in such registration statement.
(D) LIMITATION OF REGISTRATION OBLIGATIONS. Notwithstanding the foregoing
provisions of this Section 2.1, the Company shall not be obligated to
effect any registration, qualification or compliance (i) more than twice
pursuant to Section 2.1(b), (ii) if the Company shall furnish to the
Shareholders a certificate signed by the Chairman of the Board or the Chief
Executive Officer of the Company stating that in the good-faith judgment of
the Board of Directors of the Company, it would be seriously detrimental to
the Company and its shareholders for such registration to be effected at
such time, in which event the Company shall have the right to defer the
filing of the registration statement for a period of not more than ninety
(90) days after receipt of the request of the Holder or Holders under this
Section 2.1, provided that the Company may not delay the filing of a
registration statement pursuant to this clause (ii) more than once in any
twelve (12) month period; (iii) within one hundred eighty (180) days of the
effective date of a prior registration statement in respect of an
underwritten offering to which the provisions of Section 2.2(a) applied in
connection with which all Holders were able to sell 75% of the number of
Registrable Securities they had requested to be included in such prior
registration statement; or (iv) more than twice in a single year.
(E) FURNISHING INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 2.1
that the Shareholders shall furnish to the Company such information
regarding themselves, the Registrable Securities held by them and the
intended method of disposition of such securities as shall be reasonably
requested by the Company as required to effect the registration of their
Registrable Securities.
2.2 COMPANY REGISTRATION.
(A) GENERAL. The Company shall notify the Shareholders in writing at least
thirty (30) days prior to the filing of any registration statement under
the Securities Act for purposes of offering securities of the Company
(excluding registration statements relating solely to employee benefit
plans or solely with respect to the issuance by the Company of securities
pursuant to corporate reorganizations or other transactions under Rule 145
under the Securities Act), either for its own account or for the account of
a security holder or security holders, and the Company will afford each
Shareholder an opportunity to include in such registration statement all or
part of such Registrable Securities held by such Shareholder. Such notice
by the Company shall describe such securities and specify the form, manner
and other relevant aspects of such proposed registration. Each Shareholder
desiring to include in any such registration statement all or any part of
the Registrable Securities held by it shall, within twenty (20) days after
the above-described notice from the Company, so notify the Company in
writing. Such notice shall state the number of Registrable Securities such
Shareholder desires to have included in such registration statement and the
intended method of disposition of the Registrable Securities by such
Shareholder. If a Shareholder decides not to include all of its Registrable
Securities in any registration statement thereafter filed by the Company,
such Shareholder shall nevertheless continue to have the right to include
any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth
herein. No registration of Registrable Securities effected under this
Section 2.2 shall relieve the Company of any of its obligations to effect
registrations of Registrable Securities pursuant to Section 2.1 hereof.
(B) RIGHT TO TERMINATE REGISTRATION. The Company shall have the right to
terminate or withdraw any registration initiated by it under this Section
2.2 prior to the effectiveness of such registration whether or not any
Shareholder has elected to include securities in such registration. The
Registration Expenses of such withdrawn registration shall be borne by the
Company in accordance with Section 2.4 hereof.
(C) NO OBLIGATION. Nothing in this Section 2.2 shall obligate the Company
to file a registration statement.
2.3 ADDITIONAL PROCEDURES IN CONNECTION WITH UNDERWRITTEN OFFERINGS;
LOCKUPS; CUTBACKS.
(A) REGISTRATIONS PURSUANT TO SECTION 2.1; CUTBACK. In the case of a
registration pursuant to Section 2.1 hereof, whenever the Majority
Participating Holders shall request that such registration shall be
effected pursuant to an underwritten offering, such registration shall be
so effected, and only securities which are to be distributed by the
underwriters may be included in such registration. Such underwriters shall
be designated by the following method: (i) the Company will provide a list
to the Majority Participating Holders of six (6) underwriters, each of
which shall be on the list of the top twenty (20) equity underwriters in
the United States, (ii) the Majority Participating Holders may then remove
no more than three (3) underwriters from such list, and (iii) the Company
may then designate the underwriters for the underwritten offering pursuant
to Section 2.1 from those remaining underwriters on such list. If requested
by such underwriters, the Company and each participating seller will enter
into an underwriting agreement with such underwriters for such offering
containing such representations and warranties by the Company and such
other terms and provisions applicable to the Company as are customarily
contained in underwriting agreements with respect to secondary
distributions, including, without limitation, indemnity and contribution.
In each such registration pursuant to Section 2.1, each Shareholder agrees
that without the consent of the managing underwriter, for a period from
fifteen (15) days prior to the effective date of the registration statement
until ninety (90) days after such effective date, such Shareholder will not
directly or indirectly sell, offer to sell, grant any option for the sale
of, or otherwise dispose of any common equity or securities convertible
into common equity except (x) for Registered Securities sold in such
registered offering and (y) transfers to Permitted Transferees of such
Shareholder, each of whom shall have furnished to the Company and the
managing underwriter their written consent to be bound by this Agreement,
including this Section 2.3.
If the managing underwriter shall advise the Shareholders
initially requesting registration that the total amount of securities to be
included in a registration pursuant to Section 2.1 should be limited due to
market conditions or otherwise, the securities so included shall be reduced
as follows: (a) all securities which shareholders other than the
Shareholders seek to include in the offering shall be excluded from the
offering to the extent limitation on the number of shares included in the
underwriting is required, (b) if further limitation on the number of shares
to be included in the underwriting is required, the number of Registrable
Securities held by Shareholders that may be included in the underwriting
shall be reduced pro rata among the selling Shareholders in accordance with
the number of shares of Registrable Securities held by each such
Shareholder.
(B) REGISTRATIONS PURSUANT TO SECTION 2.2; CUTBACK. In connection with the
exercise of any registration rights granted to Shareholders pursuant to
Section 2.2 hereof, if the registration is to be effected by means of an
underwritten offering, the Company shall not be required to include any of
the Shareholders' securities in such underwriting unless they agree to be
bound by the terms of the underwriting as agreed upon between the Company
and the underwriters selected by it (or by other persons entitled to select
the underwriters), and then only in such quantity as the underwriters
determine in their sole discretion will not jeopardize the success of the
offering by the Company.
If the managing underwriter for the offering shall advise
the Company that the total amount of securities, including Registrable
Securities, requested by shareholders to be included in such offering
exceeds the amount of securities to be sold other than by the Company that
can be successfully offered, then the Company shall be required to include
in the offering only that number of such securities, including Registrable
Securities, which the managing underwriter believes will not jeopardize the
success of the offering. In such case, the securities so included shall be
reduced as follows: (a) all securities which shareholders other than the
Company and the Shareholders seek to include in the offering shall be
excluded from the offering to the extent limitation on the number of shares
included in the underwriting is required, (b) if further limitation on the
number of shares to be included in the underwriting is required, the number
of Registrable Securities held by Shareholders that may be included in the
underwriting shall be reduced pro rata among the selling Shareholders in
accordance with the total shares proposed to be included by each
Shareholder in the underwriting.
(C) SELLERS PARTY TO UNDERWRITING AGREEMENT. The Company shall request and
make commercially reasonable good-faith efforts to persuade the
underwriter(s) not to require any Shareholder to make any representations
and warranties to any underwriter in a registration effected pursuant to
Sections 2.1 or 2.2 other than the customary representations, warranties
and agreements relating to such Shareholder's title to Registrable
Securities and authority to enter into the underwriting agreement.
2.4 EXPENSES OF REGISTRATION.
(A) All fees and expenses incident to the Company's performance of or
compliance with this Agreement shall be paid by the Company, including
without limitation: (i) all registration and filing fees (including,
without limitation, with respect to filings required to be made with the
NASD); (ii) fees and expenses of compliance with securities or blue sky
laws (including, without limitation, fees and disbursements of counsel for
the underwriters or selling holder in connection with blue sky
qualifications of the Registrable Securities and determination of their
eligibility for investment under the laws of such jurisdictions as the
managing underwriters or holders of a majority of the Registrable
Securities being sold may designate); (iii) printing (including, without
limitation, expenses of printing or engraving certificates for the
Registrable Securities in a form eligible for deposit with Depository Trust
Company and of printing prospectuses), messenger, telephone and delivery
expenses; (iv) reasonable fees and disbursements of counsel for the
Company, underwriters and for the selling holders of the Registrable
Securities; (v) fees and disbursements of all independent certified public
accountants of the Company (including, without limitation, the expenses of
any special audit and "cold comfort" letters required by or incident to
such performance); (vi) fees and disbursements of underwriters as
reasonably approved by the Company (excluding (x) discounts, commissions or
fees of underwriters, selling brokers, dealer managers or similar
securities industry professionals relating to the distribution of the
Registrable Securities or (y) legal expenses of any Person other than the
Company, the underwriters and the selling holders); (vii) securities acts
liability insurance if the Company so desires, and in such event, coverage
for the underwriters or selling holders of the Registrable Securities
should they so request; (viii) fees and expenses associated with other
Persons retained by the Company, and (ix) fees and expenses associated with
any NASD filing required to be made in connection with the Registration
Statement, including, if applicable, the fees and expenses of any
"qualified independent underwriter" (and its counsel) that is required to
be retained in accordance with the rules and regulations of the NASD (all
such expenses being herein called "Registration Expenses").
The Company will, in any event, pay its internal expenses
(including, without limitation, all salaries and expenses of its officers
and employees performing legal or accounting duties), the expenses of any
annual audit, the fees and expenses incurred in connection with the listing
of the securities to be registered on each securities exchange on which
similar securities issued by the Company are then listed, rating agency
fees and the fees and expenses of any person, including special experts,
retained by the Company.
(B) In connection with each registration statement subject to this
Agreement, the Company will reimburse the holders of Registrable Securities
being registered pursuant to such registration statement for the reasonable
fees and disbursements of not more than one counsel (or more than one
counsel if a conflict exists among such selling holders in the exercise of
the reasonable judgment of counsel for the selling holders and counsel for
the Company) chosen by the Majority Participating Holders.
2.5 OBLIGATIONS OF THE COMPANY.
Whenever required to effect the registration of any Registrable
Securities, the Company shall, as expeditiously as reasonably possible:
(A) Prepare and file promptly (and in any event within ninety (90) days in
the case of a Form S-1, and thirty (30) days in the case of a Form S-3,
from receipt by the Company of the written request of the requesting
Shareholders) with the SEC a registration statement with respect to such
Registrable Securities and use all commercially reasonable best efforts to
cause such registration statement to become effective as expeditiously as
possible, and, upon the request of the holders of a majority of the
Registrable Securities registered thereunder, keep such registration
statement effective for up to one hundred twenty (120) days or, if earlier,
until the Shareholders have completed the distribution related thereto.
(B) Prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such registration statement.
(C) Furnish to the Shareholders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of
the Securities Act, and such other documents as they may reasonably request
in order to facilitate the disposition of Registrable Securities owned by
the Shareholders.
(D) Use its commercially reasonable best efforts to register and qualify
the securities covered by such registration statement under such other
securities or Blue Sky laws of such jurisdictions as shall be reasonably
requested by the Shareholders, provided that the Company shall not be
required in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions.
(E) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each
Shareholder participating in such underwriting shall also enter into and
perform its obligations under such an agreement subject to Section 2.3(c)
hereof.
(F) Use its commercially reasonable best efforts to cooperate, and to cause
its key executives to cooperate, with the Shareholder and, in the case of
an underwritten offering, the managing underwriter, in connection with the
disposition of the Registrable Securities owned by the Shareholders,
including without limitation causing key executives of the Company to
participate under the direction of the managing underwriter in a "road
show" scheduled by the managing underwriter.
(G) Without limiting the obligations of the Company under clause (b) above,
notify each holder of Registrable Securities covered by such registration
statement at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a
result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
then existing.
(H) Furnish, at the request of any Shareholder participating in the
registration, on the date that such Registrable Securities are delivered to
the underwriters for sale, if such securities are being sold through
underwriters, or, if such securities are not being sold through
underwriters, on the date that the registration statement with respect to
such securities becomes effective, (i) an opinion, dated as of such date,
of the counsel representing the Company for the purposes of such
registration, in such form and substance as is customarily given to
underwriters in an underwritten public offering and reasonably satisfactory
to the Shareholder requesting registration, addressed to the underwriters,
if any, and to the Shareholder requesting registration of Registrable
Securities, and (ii) a letter dated as of such date, from the independent
certified public accountants of the Company, in such form and substance as
is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory
to such Shareholder requesting registration, addressed to the underwriters,
if any, and if permitted by applicable accounting standards, to the
Shareholders requesting registration of Registrable Securities.
2.6 TERMINATION OF REGISTRATION RIGHTS.
All registration rights granted pursuant to Section 2.1 shall
terminate and be of no further force and effect with respect to a
Shareholder as of the date when all Registrable Securities held by and
issuable to such Shareholder may be sold under Rule 144 under the
Securities Act during any ninety (90) day period.
2.7 COMPANY LOCKUP.
In the case of an underwritten offering under Section 2.1 hereof,
the Company shall refrain, without the consent of the managing underwriter,
for a period from fifteen (15) days before the effective date of the
registration sale until ninety (90) days after such effective date, from
directly or indirectly selling, offering to sell, granting any option for
the sale of, or otherwise disposing of any common equity or securities
convertible into common equity (excluding sales, offers and grants relating
solely to employee benefit plans or solely with respect to the issuance by
the Company of securities pursuant to corporate reorganizations or other
transactions under Rule 145 under the Securities Act).
2.8 INDEMNIFICATION.
In the event any Registrable Securities are included in a
registration statement under Section 2.1 or 2.2:
(A) To the extent permitted by law, the Company will, indemnify and hold
harmless each Shareholder, the partners, officers, directors and legal
counsel of each Shareholder, any underwriter (as defined in the Securities
Act) for such Shareholder and each person, if any, who controls such
Shareholder or underwriter within the meaning of the Securities Act or the
Exchange Act (each a "Covered Person"), against any losses, claims,
damages, or liabilities (joint or several) to which they may become subject
under the Securities Act, the Exchange Act or other federal or state law,
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
any of the following statements, omissions or violations (collectively a
"Violation") by the Company: (i) any untrue statement or alleged untrue
statement of a material fact contained in or incorporated by reference in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, or
any document incorporated by reference therein, or any other such
disclosure document (including without limitation reports and other
documents filed under the Exchange Act to the extent incorporated by
reference therein), (ii) the omission or alleged omission to state therein
a material fact required to be stated therein, or necessary to make the
statements therein not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act, any state
or federal law, rule or regulation, including without limitation, any rule
or regulation promulgated under the Securities Act, the Exchange Act or any
state securities law in connection with the offering covered by such
registration statement; and the Company will reimburse each such Covered
Person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 2.8(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent
shall not be unreasonably withheld, nor shall the Company be liable in any
such case for any such loss, claim, damage, liability or action to the
extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished by any
Covered Person expressly for use in connection with such registration by
such Covered Person.
(B) To the extent permitted by law, each Shareholder will severally and not
jointly, if Registrable Securities held by such Shareholder are included in
the securities as to which such registration, qualification or compliance
is being effected, indemnify and hold harmless the Company, each of its
directors, its officers, and legal counsel and each person, if any, who
controls the Company within the meaning of the Securities Act or the
Exchange Act, any underwriter and any other Shareholder selling securities
under such registration statement or any of such other Shareholder's
partners, directors or officers or any person who controls such
Shareholder, against any losses, claims, damages or liabilities (joint or
several) to which the Company or any such director, officer, legal counsel,
controlling person, underwriter or other such Shareholder, or partner,
director, officer or controlling person of such other Shareholder may
become subject under the Securities Act, the Exchange Act or other federal
or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation,
in each case to the extent (and only to the extent) that such Violation
occurs in reliance upon and in conformity with written information
furnished by such Shareholder under an instrument duly executed by such
Shareholder and stated to be specifically for use in connection with such
registration; and each such Shareholder will reimburse any legal or other
expenses reasonably incurred by the Company or any such director, officer,
legal counsel, controlling person, underwriter or other Shareholder, or
partner, officer, director or controlling person of such other Shareholder
in connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in
this Section 2.8(b) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Shareholder, which consent shall not be
unreasonably withheld; provided, further, that no Shareholder shall provide
an indemnity under this Section 2.8 for an amount in excess of such
Shareholder's net proceeds received in such offering.
(C) Promptly after receipt by an indemnified party under this Section 2.8
of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party under this Section 2.8, deliver to
the indemnifying party a written notice of the commencement thereof, and
the indemnifying party shall have the right to participate therein, and, to
the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own counsel, with the
fees and expenses to be paid by the indemnifying party, if representation
of such indemnified party by the counsel retained by the indemnifying party
would be inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, to the extent materially prejudicial to its ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section 2.8, but the omission so to deliver
written notice to the indemnifying party will not relieve it of any
liability that it may have to any indemnified party otherwise than under
this Section 2.8.
(D) If the indemnification provided for in this Section 2.8 is held by a
court of competent jurisdiction to be unavailable to an indemnified party
with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified
party thereunder, shall to the extent permitted by applicable law
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
Violation(s) that resulted in such loss, claim, damage or liability, as
well as any other relevant equitable considerations. The relative fault of
the indemnifying party and of the indemnified party shall be determined by
a court of law by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the indemnifying party or
by the indemnified party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or omission; provided, that in no event shall any contribution by a
Shareholder hereunder exceed the net proceeds from the offering received by
such Shareholder.
(E) The obligations of the Company and Shareholders under this Section 2.8
shall survive completion of any offering of Registrable Securities in a
registration statement. No indemnifying party, in the defense of any such
claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such indemnified party of a release from all
liability in respect of such claim or litigation.
2.9 ASSIGNMENT OF REGISTRATION RIGHTS.
The rights to cause the Company to register Registrable Securities
pursuant to this Section 2 may be assigned by a Shareholder to a transferee
or assignee of Registrable Securities which (a) is a Permitted Transferee
or (b) acquires at least twenty-five percent (25%) of the Registrable
Securities held by such Shareholder as of the date of this Agreement (as
adjusted for stock splits and combinations etc.); provided, however, (i)
the transferor shall, within a reasonable time after such transfer, furnish
to the Company written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights
are being assigned and (ii) such transferee shall agree to be subject to
all rights and obligations of such transferor Shareholder set forth in this
Agreement. Notwithstanding the foregoing, the right to cause the Company to
register Registrable Securities pursuant to this Section 2 shall be deemed
to have been transferred by the LLC to any of its Members in connection
with the transfer by the LLC of Registrable Securities to such Member(s);
provided that, such Members are signatories to this Agreement or are
Permitted Transferees of such signatories.
2.10 PARTICIPATION BY SHAREHOLDERS.
In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, and
before filing any such registration statement or any other document in
connection therewith, the Company shall give the participating Holders and
their underwriters, if any, and their respective counsel and accountants,
the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the SEC, each
amendment thereof or supplement thereto and any related underwriting
agreement or other document to be filed, and give each of the
aforementioned Persons such access to its books and records and such
opportunities to discuss the business of the Company with its officers and
the independent public accountants who have certified its financial
statements as shall be necessary, in the opinion of such Holders,
underwriters, counsel or accountants, to conduct a reasonable investigation
within the meaning of the Securities Act.
2.11 REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934.
With a view to making available to Holders the benefits of Rule
144 promulgated under the Securities Act and any other rule or regulation
of the SEC that may at any time permit a Holder to sell Securities of the
Company to the public without registration or pursuant to a registration on
Form S-3, the Company agrees to:
(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144 at all times for so long as the
Company remains subject to the periodic reporting requirements under
Section 13 or 15(d) of the Exchange Act;
(b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Act and the 1934 Act; and
(c) furnish to any Holder, so long as the Holder owns any
Registrable Securities, promptly upon written request (i) a written
statement by the Company that it has complied with the reporting
requirements of SEC Rule 144, the Act and the 1934 Act, or that it
qualifies as a registrant whose securities may be resold pursuant to Form
S-3, and (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed.
3. RIGHT OF FIRST OFFER; CO-SALE RIGHTS
Subject to Sections 3.7 and 3.8, the Company is hereby granted a
right of first offer with respect to any proposed disposition of shares of
Stock owned by ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇ Shareholders, and WP, as of the date of
this Agreement, and to any shares of Stock transferred to their Permitted
Transferees. Any transfer or disposition of stock not in accordance with
the provisions of this Section 3 may at the option of the Company be
treated as void and not reflected on the stock transfer records of the
Company.
3.1 NOTICE OF INTENDED DISPOSITION.
In the event that ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇ Shareholders, WP or any of
their Permitted Transferees are contemplating the transfer of shares of
Stock owned by such Shareholder as of the date of this Agreement which
transfer is not exempt from the provisions of this Section 3 under the
terms of Section 3.7 (the "Transferring Shareholder," and the shares
subject to such offer to be hereafter called the "Target Shares"), the
Transferring Shareholder shall promptly deliver to the Secretary of the
Company and to ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇ Shareholders, WP and any of their
Permitted Transferees, as the case may be, written notice stating that such
Shareholder is contemplating such a transfer and setting forth the number
of Target Shares and the purchase price proposed by the Transferring
Shareholder (the "Disposition Notice").
3.2 EXERCISE OF RIGHT BY THE COMPANY.
The Company shall, for a period of forty-five (45) business days
from receipt of the Disposition Notice (the "Company Exercise Period"),
have the right to make an offer to purchase all of the Target Shares at the
purchase price set forth in the Disposition Notice by giving the
Transferring Shareholder a written binding offer to purchase the Target
Shares (the "Company Offer Notice"), which offer, by its terms, shall
remain open for thirty (30) days. At the same time it gives such notice to
the Transferring Shareholder, the Company shall provide a copy of the
Company Offer Notice to ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇ Shareholders, WP and any of
their Permitted Transferees, as the case may be. If the Company gives the
Transferring Shareholder a Company Offer Notice before expiration of the
Company Exercise Period, then, for a period of thirty (30) days following
the date on which the Company Offer Notice is given, the Transferring
Shareholder may not transfer the Target Shares except to the Company or to
a Permitted Transferee pursuant to the terms of this Agreement. If, at the
end of the thirtieth (30th) day following the effective date of such
Company Offer Notice, the Transferring Shareholder shall not have
transferred the Target Shares pursuant to the prior sentence, the Company's
first offer rights shall continue to be applicable to any subsequent
disposition of the Target Shares by the Transferring Shareholder.
3.3 NON-EXERCISE OF RIGHT OF FIRST REFUSAL.
Subject to the co-sale rights described in Section 3.6 below of
▇▇▇▇▇▇▇▇▇, the ▇▇▇▇ Shareholders, WP and any of their Permitted
Transferees, in the event the Company Offer Notice with respect to the
Target Shares is not given to the Transferring Shareholder before the
expiration of the Company Exercise Period, the Transferring Shareholder
shall have a period of one hundred twenty (120) days from the expiration of
the Company Exercise Period in which to sell the Target Shares to the
third-party transferee at a purchase price not less than that specified in
the Disposition Notice without any further obligation to the Company, with
respect to the Target Shares. The third-party transferee shall acquire the
Target Shares free and clear of subsequent rights of first offer under this
Agreement. In the event the Transferring Shareholder does not consummate
the sale or disposition of the Target Shares within one hundred twenty
(120) days from the expiration of the Company Exercise Period, the
Company's first offer rights shall continue to be applicable to any
subsequent disposition of the Target Shares by the Transferring Shareholder
until such rights lapse in accordance with Section 3.8 below. Furthermore,
the exercise or non-exercise of the rights of the Company under this
Agreement to purchase Target Shares from a Transferring Shareholder shall
not adversely affect its rights to make subsequent purchases from a
Transferring Shareholder of Target Shares.
3.4 CLOSING OF SALE OF TARGET SHARES.
If the Transferring Shareholder shall accept the offer contained
in the Company Offer Notice, the closing of such purchase and sale of
Target Shares by the Company (and/or its assignees) shall take place as
soon as reasonably practicable, and in no event later than ten (10)
business days, after the Transferring Shareholder gives written notice to
the Company that it accepts such offer. At the closing of such purchase and
sale of capital stock, and upon delivery by the Company (and/or its
assignees) of the purchase price of such capital stock by wire transfer of
immediately available funds to an account or accounts designated by the
Transferring Shareholder, the Shareholder shall deliver to the Company
(and/or its assignee) certificates representing the Target Shares to be
purchased, each certificate to be properly endorsed for transfer.
3.5 ASSIGNMENT.
The right of the Company to purchase any part of the Stock under
this Section 3 may be assigned in whole or in part to one or more
employees, officers or directors of the Company, or to the Shareholders,
following acceptance of the offer contained in the Company Offer Notice by
the Transferring Shareholders; provided that if assigned to the
Shareholders, such right shall be assigned on a pro rata basis in
accordance with the number of Registrable Securities held by each such
Shareholder.
3.6 CO-SALE RIGHTS IN SALES BY A TRANSFERRING SHAREHOLDER.
(A) Grant of Co-Sale Rights. In the event that the Company does not
exercise its right of first offer pursuant to Section 3.2 with respect to
the Target Shares, then ▇▇▇▇▇▇▇▇▇, the ▇▇▇▇ Shareholders, WP and any of
their Permitted Transferees , as the case may be (each a "Tag Along
Seller"), shall have the right, exercisable upon written notice to the
Transferring Shareholder within twenty (20) days after receipt of the
Disposition Notice, to sell a number of shares of Stock owned by such Tag
Along Seller to any third-party transferee of the Target Shares upon the
same terms and conditions as the Transferring Shareholder and the
Transferring Shareholder shall not consummate such sale of Target Shares
except in compliance with this Section 3.6. Such written notice delivered
to the Transferring Shareholder by such Tag Along Seller shall set forth
the number of shares of Stock which such Tag Along Seller desires to sell
to a third-party transferee, which number shall not exceed the product
obtained by multiplying (i) the aggregate number of Target Shares, by (ii)
a fraction, the numerator of which is the number of shares of Stock at the
time owned by such Tag Along Seller and the denominator of which is the
number of shares of Stock at the time owned by the Transferring Shareholder
and such Tag Along Seller, collectively.
(B) CUTBACK. If a third-party transferee does not agree to purchase all of
the shares of Stock which the Transferring Shareholder and any Tag Along
Seller wish to sell, the number of shares which each selling Shareholder
shall sell to such third-party transferee shall be reduced pro rata among
the selling Shareholders in accordance with the number of shares of Stock
which they proposed be sold in such transaction.
(C) CONTROL OF SALE PROCESS. The Transferring Shareholder shall, in its
sole discretion, decide whether or not to pursue, consummate, postpone or
abandon any proposed sale to a third-party transferee and the terms and
conditions thereof. The Transferring Shareholder and its Affiliates shall
have no liability to a Tag Along Seller or its Affiliates arising from,
relating to or in connection with the pursuit, consummation, postponement,
abandonment or terms and conditions of any proposed sale of Stock to a
third-party transferee except to the extent the Transferring Shareholder
shall have failed to comply with the provisions of this Section 3.6.
(D) NON-EXERCISE. The exercise or non-exercise of the rights of such
Shareholder hereunder to participate in one or more sales of capital stock
made by a Transferring Shareholder shall not adversely affect its rights to
participate in subsequent sales by the Transferring Shareholder.
3.7 EXEMPT TRANSFERS.
Notwithstanding the foregoing, the first offer right of the
Company and the co-sale rights of the Tag Along Seller set forth in this
Section 3 shall not apply to:
(A) any transfer of Stock by a Shareholder (i) to a Permitted Transferee of
such Shareholder; provided, that, the Permitted Transferee shall furnish
the Company with a written agreement to be bound by and comply with the
terms of this Agreement, and such transferred Stock shall remain subject to
the terms of this Agreement, and (ii) to the public pursuant to a
registration statement or pursuant to a "brokers' transaction," within the
meaning of the Securities Act, pursuant to Rule 144 under the Securities
Act (each, an "Exempt Transfer"); and
(B) the transfer of a number of shares of Stock by a Shareholder which, in
addition to all other shares of Stock transferred by such Shareholder
(except for (i) Shares transferred by such Shareholder in Exempt Transfers
and (ii) Target Shares transferred by such Shareholder), does not exceed
five percent (5%) of the fully diluted Common Stock of the Company at the
time of such transfer.
3.8 TERMINATION.
Notwithstanding anything to the contrary in this Agreement, the
rights and obligations of the parties pursuant to this Section 3 shall
terminate upon (a) a merger of the Company with another corporation or
entity (without regard to which entity survives), in which the Company's
shareholders immediately prior to the transaction own immediately after the
transaction less than fifty percent (50%) of the equity securities of the
surviving corporation or its parent, as applicable or (b) a sale of all or
substantially all of the assets of the Company.
4. VOTING AGREEMENT
4.1 ELECTION OF MEMBERS OF THE BOARD OF DIRECTORS.
(A) The Board of Directors of the Company (and, if applicable, the
Nominating Committee thereof) shall: (i) for so long as ▇▇▇▇▇▇▇▇▇ and its
Permitted Transferees hold at least five percent (5%) of the issued and
outstanding Common Stock of the Company, nominate one (1) member of the
Company's Board of Directors designated by ▇▇▇▇▇▇▇▇▇, who initially shall
be ▇▇▇▇▇ ▇▇▇▇▇, (ii) for so long as the ▇▇▇▇ Shareholders and their
Permitted Transferees hold at least twenty percent (20%) of the issued and
outstanding Common Stock of the Company, nominate two (2) members of the
Company's Board of Directors designated by the ▇▇▇▇ Shareholders, (iii) for
so long as the ▇▇▇▇ Shareholders and their Permitted Transferees hold at
least five percent (5%) but less than twenty percent (20%) of the issued
and outstanding Common Stock of the Company, nominate one (1) member of the
Company's Board of Directors designated by the ▇▇▇▇ Shareholders, (iv) for
so long as WP and its Permitted Transferees hold at least five percent (5%)
of the issued and outstanding Common Stock of the Company, nominate one (1)
member of the Company's Board of Directors designated by WP, who initially
shall be ▇▇▇▇▇ ▇▇▇▇▇, and (v) nominate one (1) member of the Company's
Board of Directors designated by the Chief Executive Officer of the
Company, who initially shall be D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇.
(B) To the extent that additional "independent directors" in addition to
those Directors elected pursuant to Section 4.1(a) are required to serve on
the Board of Directors of the Company to fulfill the rules and regulations
promulgated by the NASD, the Board of Directors of the Company (and, if
applicable, the Nominating Committee thereof) shall, for so long as the
▇▇▇▇ Shareholders and their Permitted Transferees hold at least twenty
percent (20%) of the issued and outstanding Common Stock of the Company,
nominate (i) one (1) person designated by the ▇▇▇▇ Shareholders to serve as
a member of the Company's Board of Directors, and (ii) one (1) person
designated by, collectively, the Company, ▇▇▇▇▇▇▇▇▇ and WP to serve as a
member of the Company's Board of Directors; provided, that, such
individuals must meet the criteria established by the NASD for "independent
directors" to be so nominated.
(C) Each of the Company and the Shareholders shall, in the case of the
Shareholders, vote any shares of Common Stock he may own and, in the case
of the Company and the Shareholders, take such other action, whether by
written consent or otherwise, to (i) elect or cause the election of the
foregoing nominees, (ii) fix the number of members of the Company's Board
of Directors at five (5), or, in the event that additional "independent
directors" are required to serve on the Purchaser Board to fulfill the
rules and regulations promulgated by the NASD, then fix the number of
members of the Company's Board of Directors at seven (7), and (iii) remove
from the Board of Directors such nominee at the written request (and only
at the written request) of the party entitled to designate such director.
(D) In the event the Company's Board of Directors does not nominate an
individual pursuant to Section 4.1(b)(i) or (ii), the parties to this
Agreement shall not nominate or vote in favor of a candidate who was not
nominated pursuant to the applicable subsection, unless, based upon a
written opinion of counsel, which counsel is reasonably acceptable to the
relevant designating party pursuant to Section 4.1(b), that the failure to
elect an additional "independent director" would be reasonably likely to
result in Odwalla's common stock being delisted from the NASDAQ National
Market within 30 calendar days.
4.2 TERMINATION OF VOTING AGREEMENT.
The rights and obligations of each Shareholder and the Company
with respect to Section 4.1 shall cease, (i) with respect to ▇▇▇▇▇▇▇▇▇, the
▇▇▇▇ Shareholders and WP, at such time as such Shareholder ceases to hold
at least five percent (5%) of the issued and outstanding Common Stock of
the Company, or (ii) with respect to the other Shareholders, at such time
as such Shareholder ceases to hold at least fifty percent (50%) of the
shares held as of the date hereof as reflected in Schedule 1.
5. OTHER AGREEMENTS
5.1 INFORMATION RIGHTS.
For so long as each of the ▇▇▇▇ Shareholders, ▇▇▇▇▇▇▇▇▇ and WP,
and each such party's Permitted Transferee, holds at least fifty percent
(50%) of the shares held by such party as of the date hereof as reflected
in Schedule 1, the Company shall deliver to such party, promptly following
delivery to the Company's Board of Directors, a copy of each unaudited
balance sheet of the Company and its subsidiaries and each unaudited
statement of income of the Company and its subsidiaries, in each case
prepared in accordance with GAAP (subject to normal year-end adjustments
and without footnote disclosure).
5.2 RESTRICTIVE LEGEND.
All certificates representing the Stock and any certificates
subsequently issued with respect thereto or in substitution therefor shall
bear a legend substantially as follows, in addition to any legend the
Company determines is required pursuant to any applicable legal
requirement:
"The shares represented by this certificate may not be offered,
sold, pledged, transferred or otherwise disposed of except in
accordance with the requirements of the Securities Act of 1933, as
amended, and a Shareholders' Rights Agreement, dated as of May 2,
2000, a copy of which Shareholders' Rights Agreement Odwalla, Inc.
will furnish, without charge, to the holder of this certificate
upon written request therefor."
provided, however, that the holder of any such certificate shall be
entitled to receive from the Company, at no expense to such holder, a new
certificate which does not bear such legend if (a) the Stock represented by
such certificate shall have been sold, transferred or otherwise disposed of
pursuant to one or more of the alternative conditions set forth in Section
5.28(m) of the Merger Agreement or (b) the conditions of paragraph (k) of
Rule 144 promulgated under the Securities Act shall have been satisfied.
The Company, at its discretion, may cause a stop transfer order to
be placed with its transfer agent(s) with respect to the certificates for
the Stock but not as to the certificates for any part of the Stock as to
which said legend is no longer appropriate.
5.3 SHAREHOLDER LOCKUP.
Except as provided in Section 5.4(b), notwithstanding anything in
this Agreement to the contrary: each of the Shareholders agrees not to sell
or otherwise transfer or dispose of any shares of Stock except to a
Permitted Transferee for a period of one (1) year commencing on the date of
this Agreement.
5.4 STANDSTILL.
(A) For the period beginning on the date of this Agreement and ending upon
a merger of the Company with another corporation or entity (without regard
to which entity survives), or a sale of all or substantially all of the
assets of the Company, in either case in which the Company's shareholders
immediately prior to the transaction own immediately after the transaction
less than fifty percent (50%) of the equity securities of the surviving
corporation or its parent, neither ▇▇▇▇▇▇▇▇▇, ▇▇ nor any ▇▇▇▇ Shareholder
or any of their respective Affiliates, shall, without the prior written
consent of the Board of Directors of the Company:
(I) acquire, offer to acquire, or agree to acquire, directly or indirectly,
including as part of a Group (as such term is defined in Section 13(d)(3)
of the Exchange Act), by purchase or otherwise, any additional shares of
Common Stock or other voting securities or direct or indirect rights to
acquire any additional shares of Common Stock or other voting securities of
the Company or any subsidiary of the Company, or of any successor to or
person in control of the Company (except pursuant to a stock split, stock
dividend, recapitalization, reclassification or similar transaction), or
any assets of the Company or any subsidiary or division of the Company or
of any such successor or controlling person;
(II) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are defined in Rule
14a-1 under the Exchange Act), with respect to the solicitation or voting
of any voting securities of the Company in opposition to any matter that
has been recommended by the Board of Directors of the Company or in favor
of any matter that has not been approved by the Board, or become a
"participant" in any "election contest" (as such terms are defined or used
in Rule 14a-11 under the Exchange Act) with respect to the Company.
(III) make any unsolicited offer or proposal to acquire the Company or
shares of Common Stock or other voting securities of the Company.
Notwithstanding the foregoing, nothing in this Agreement shall prohibit the
▇▇▇▇ Shareholders, ▇▇▇▇▇▇▇▇▇ or WP from purchasing in one or more
transactions any debt securities, or up to an aggregate of 5% of any class
of publicly traded equity securities (the "5% Limitation"), of any company
referred to in this Section 5.4. The 5% Limitation shall be computed on a
cumulative basis and shall be measured at the time of each purchase of such
equity securities, such that at the time of each such purchase the
aggregate amount of such equity securities purchased by the ▇▇▇▇
Shareholders, ▇▇▇▇▇▇▇▇▇ or WP, as applicable, from the date of this
Agreement to the time of such purchase, shall not exceed 5% of the
outstanding shares of such class of publicly traded equity securities. The
▇▇▇▇ Shareholders, ▇▇▇▇▇▇▇▇▇ and WP acknowledge that they are aware, and
that they will advise their representatives who are informed of any of the
confidential information referred to in this Agreement and/or related to
the Company, of the restrictions imposed by applicable securities laws
restricting trading in securities while in possession of material
non-public information received from the issuer of such securities and on
communication of such information when it is reasonably foreseeable that
the recipient is likely to trade such securities in reliance on such
information.
(B) The limitations provided in Section 5.3 and Section 5.4(a) shall
immediately be suspended as to each Shareholder upon the occurrence of any
of the following events: (i) the occurrence of an Acquisition Proposal
which has not been initiated by such Shareholder or its Affiliates, (ii) a
public announcement that the Company is "for sale" or (iii) the adoption by
the Board of Directors of a plan of liquidation or dissolution. The Company
shall provide the Shareholders with prompt written notice of the occurrence
of any of the events set forth in this clause (b), and in no event more
than five (5) business days after the occurrence of such event.
6. MISCELLANEOUS
6.1 LLC SHARES.
For all purposes of this Agreement, all shares of Stock owned by
the LLC shall be deemed to be owned by the Bain Shareholders for so long as
the Bain Shareholders are Members of the LLC.
6.2 AMENDMENT OF LLC AGREEMENT.
Each of the LLC and each Shareholder party to the LLC Agreement
dated as of February 2, 2000 hereby agrees that it will not amend,
supplement or otherwise modify the provisions of Section 5.2 of such
agreement without the prior written consent of the Company.
6.3 GOVERNING LAW.
This Agreement is to be construed in accordance with and governed
by the laws of the State of California (as permitted by Section 1646.5 of
the California Civil Code or any similar successor provision), without
giving effect to any choice of law rule that would cause the application of
the laws of any jurisdiction other than the State of California to the
rights and duties of the parties.
6.4 TERMINATION OF EXISTING RIGHTS AGREEMENT.
Each of the Company and ▇▇▇▇▇▇▇▇▇ hereby agrees the Existing
Rights Agreement is hereby terminated and shall be of no further force and
effect and that no party thereto shall have any further rights or
obligations thereunder.
6.5 SUCCESSORS AND ASSIGNS.
Except as otherwise expressly provided herein, the provisions
hereof shall inure to the benefit of, and be binding upon, the successors,
assigns, heirs, executors, and administrators of the parties hereto and
shall inure to the benefit of and be enforceable by each person who shall
be a transferee of a Shareholder from time to time; provided, however, that
prior to the receipt by the Company of adequate written notice of the
transfer of any Registrable Securities specifying the full name and address
of the transferee, the Company may deem and treat the person listed as the
holder of such Registrable Securities in its records as the absolute owner
and holder of such Registrable Securities for all purposes, including the
payment of dividends or any redemption price.
6.6 SEVERABILITY.
In case any provision of this Agreement shall be invalid, illegal,
or unenforceable, the validity, legality, and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
6.7 AMENDMENT AND WAIVER.
Except as otherwise expressly provided, the rights and obligations
of the Company and the Shareholders under this Agreement may be amended,
modified or waived only with the written consent of the Company and the
holders of at least a seventy-five percent (75%) of the Registrable
Securities, provided, however, that such consent is not required if the
sole purpose of such amendment or modification is to add additional
shareholders of the Company to this Agreement; and provided further that no
amendment which would adversely affect any Shareholder or group of
Shareholders shall be effective without the written consent of such
Shareholder or such group.
6.8 DELAYS OR OMISSIONS.
It is agreed that no delay in exercising or omission to exercise
any right, power, or remedy accruing to any Shareholder, upon any breach,
default or noncompliance of the Company under this Agreement, shall impair
any such right, power, or remedy, nor shall it be construed to be a waiver
of any such breach, default or noncompliance, or any acquiescence therein,
or of any similar breach, default or noncompliance thereafter occurring. It
is further agreed that any waiver, permit, consent, or approval of any kind
or character on any Shareholder's part of any breach, default or
noncompliance under the Agreement or any waiver on such Shareholder's part
of any provisions or conditions of this Agreement must be in writing and
shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement, by law, or otherwise
afforded to Shareholders, shall be cumulative and not alternative.
6.9 NOTICES.
All notices required or permitted hereunder shall be in writing
and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient; if not, then on the
next business day, (iii) three (3) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or
(iv) one (1) day after deposit with a nationally recognized overnight
courier, specifying next-day delivery, with written verification of
receipt. All communications shall be sent to the addresses set forth on
Schedule 2 attached hereto or such other address as may be specified by any
Shareholder by giving notice to the Company as aforesaid.
6.10 ATTORNEYS' FEES.
In the event that any dispute among the parties to this Agreement
should result in litigation, arbitration or other method of dispute
resolution, the Person presiding over such action or other proceeding may
award reasonable attorneys' fees, costs and disbursements to the prevailing
party (in addition to any other relief to which the prevailing party may be
entitled).
6.11 TITLES AND SUBTITLES.
The headings contained in this Agreement are for convenience of
reference only, shall not be deemed to be a part of this Agreement and
shall not be referred to in connection with the construction or
interpretation of this Agreement.
6.12 COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall
constitute but one and the same instrument.
6.13 CONSTRUCTION.
For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender
shall include the masculine and neuter genders; and the neuter gender shall
include the masculine and feminine genders.
6.14 ENTIRE AGREEMENT.
This Agreement, which includes the Exhibits and other agreements
expressly referenced herein (if any), constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes any
prior agreements (including, but not limited to, the Existing Rights
Agreement), representations, statements, negotiations, understandings,
proposals or undertakings, oral or written, with respect to the subject
matter expressly set forth herein.
IN WITNESS WHEREOF, the parties hereto have executed this
SHAREHOLDERS' RIGHTS AGREEMENT as of the date set forth in the first
paragraph hereof.
THE COMPANY: ODWALLA, INC.,
a California corporation
By: /s/ D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------------
Name: D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
SHAREHOLDER: ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ PARTNERS III, L.P.,
a Delaware limited partnership
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Person
SHAREHOLDER: D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
an individual
By: /s/ D/. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------
Name: D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
SHAREHOLDER: U.S. EQUITY PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
SHAREHOLDER: U.S. EQUITY PARTNERS (OFFSHORE), L.P.,
a Cayman Islands limited partnership
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
SHAREHOLDER: BANCBOSTON INVESTMENTS INC.
a Massachusetts corporation
By: /s/ ▇.▇. ▇▇▇▇▇, ▇▇.
----------------------------------
Name: ▇.▇. ▇▇▇▇▇, ▇▇.
Title: Director
SHAREHOLDER: ▇▇▇▇ CAPITAL FUND VI, L.P.,
By: ▇▇▇▇ Capital Partners VI, L.P.,
its general partner
By: ▇▇▇▇ Capital Investors VI, Inc.,
its general partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
SHAREHOLDER: BCIP ASSOCIATES II
BCIP TRUST ASSOCIATES II
BCIP ASSOCIATES II-B
BCIP TRUST ASSOCIATES II-B
BCIP ASSOCIATES II-C,
By: ▇▇▇▇ Capital, Inc.,
their Managing Partner
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
SHAREHOLDER: PEP INVESTMENTS PTY LTD.,
By: ▇▇▇▇ Capital, Inc.,
its Attorney-in-Fact
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Managing Director
SHAREHOLDER: RGIP, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Malt
________________________________
Name: ▇▇▇▇▇▇▇▇ ▇. Malt
Title: Authorized Person
SHAREHOLDER: JIP ENTERPRISES, INC.,
a British Virgin Islands corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Authorized Person
SHAREHOLDER: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
an individual
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
SHAREHOLDER: ▇▇▇▇▇▇▇ ▇▇▇▇▇,
an individual
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
SHAREHOLDER: SAMANTHA INVESTORS, LLC,
a Massachusetts limited liability
company
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Authorized Person
SCHEDULE 1
SHAREHOLDER SHARES OF COMMON STOCK OWNED
AS OF THE DATE HEREOF
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇ Partners III, L.P. 1,493,461
D. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ [810,326]
U.S. Equity Partners, L.P. 601,667
U.S. Equity Partners (Offshore), L.P. 162,945
BancBoston Investments Inc. 36,029
Samantha Shareholders:
---------------------
▇▇▇▇ Capital Fund VI, L.P. 1,971,664*
BCIP Associates II 472,960 *
BCIP Associates II-B 92,331*
BCIP Associates II-C 88,166*
BCIP Trust Associates II 91,430*
BCIP Trust Associates II-B 51,474*
PEP Investments PTY Ltd 6,543*
RGIP, LLC 28,055*
JIP Enterprises, Inc. 57,492*
▇▇▇▇▇▇▇ ▇▇▇▇▇ 246,973*
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 246,973*
Samantha Investors, LLC 3,612,122
* Share numbers set forth in connection with Section 4.2 and 5.1 only and
may change upon dissolution of LLC.
SCHEDULE 2
NOTICE ADDRESSES
ODWALLA, INC.
SHAREHOLDERS' RIGHTS AGREEMENT
MAY 2, 2000
TABLE OF CONTENTS
PAGES
1. GENERAL 2
1.1 Definitions.....................................................................................2
2. REGISTRATION.............................................................................................4
2.1 Demand Registrations............................................................................4
2.2 Company Registration............................................................................5
2.3 Additional Procedures in Connection with Underwritten Offerings; Lockups;
Cutbacks........................................................................................6
2.4 Expenses of Registration........................................................................7
2.5 Obligations of the Company......................................................................8
2.6 Termination of Registration Rights..............................................................9
2.7 Company Lockup.................................................................................10
2.8 Indemnification................................................................................10
2.9 Assignment of Registration Rights..............................................................12
2.10 Participation by Shareholders..................................................................12
2.11 Reports Under Securities Exchange Act of 1934..................................................13
3. RIGHT OF FIRST OFFER; CO-SALE RIGHTS....................................................................13
3.1 Notice of Intended Disposition.................................................................13
3.2 Exercise of Right by the Company...............................................................14
3.3 Non-Exercise of Right of First Refusal.........................................................14
3.4 Closing of Sale of Target Shares...............................................................14
3.5 Assignment.....................................................................................15
3.6 Co-Sale Rights in Sales by a Transferring Shareholder..........................................15
3.7 Exempt Transfers...............................................................................16
3.8 Termination....................................................................................16
4. VOTING AGREEMENT........................................................................................16
4.1 Election of Members of the Board of Directors..................................................16
4.2 Termination of Voting Agreement................................................................17
5. OTHER AGREEMENTS........................................................................................17
5.1 Information Rights.............................................................................17
5.2 Restrictive Legend.............................................................................18
5.3 Shareholder Lockup.............................................................................18
5.4 Standstill.....................................................................................18
6. MISCELLANEOUS...........................................................................................20
6.1 LLC Shares.....................................................................................20
6.2 Amendment of LLC Agreement.....................................................................20
6.3 Governing Law..................................................................................20
6.4 Termination of Existing Rights Agreement.......................................................20
6.5 Successors and Assigns.........................................................................20
6.6 Severability...................................................................................20
6.7 Amendment and Waiver...........................................................................20
6.8 Delays or Omissions............................................................................21
6.9 Notices........................................................................................21
6.10 Attorneys' Fees................................................................................21
6.11 Titles and Subtitles...........................................................................21
6.12 Counterparts...................................................................................22
6.13 Construction...................................................................................22
6.14 Entire Agreement...............................................................................22
