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EXHIBIT 10.7
XXXX CAPITAL FUND VI, L.P.
Two Xxxxxx Xxxxx
Xxxxxx, XX 00000
May 1, 2000
Mr. Xxxxxxx Xxxxxxxxxx, CEO
Odwalla, Inc.
000 Xxxxx Xxxx Xxxx
Xxxx Xxxx Xxx, XX 00000
Xx. Xxxxx Xxxxx
Xxxxxxxxx-Xxxxx Partners III, L.P.
0 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Re: Working Capital Adjustment Agreement dated as of May 1, 2000
Dear Gentlemen:
I refer to the: (i) Working Capital Adjustment agreement (the
"Working Capital Agreement"), entered into as of May 1, 2000, by and among,
Odwalla, Inc. ("Odwalla"), Fresh Samantha, Inc. ("Fresh Samantha") and certain
individuals and entities set forth therein; and (ii) the Shareholders Rights
Agreement (the "Rights Agreement") to be entered into on May 2, 2000, by and
among Odwalla, Samantha Investors, LLC and certain other individuals and
entities set forth on Schedule 1 attached thereto. Capitalized words used herein
without definition are as defined in the Rights Agreement.
Pursuant to Section 4.1(b)(i) of the Rights Agreement, to the
extent additional "independent directors" are required to serve on Odwalla's
Board of Directors to fulfill the rules and regulations promulgated by the NASD
and for so long as the Xxxx Shareholders and their Permitted Transferees hold at
least twenty percent (20%) of the issued and outstanding Common Stock of
Odwalla, the Odwalla Board of Directors shall nominate one independent member of
Odwalla's Board of Directors as designated by the Xxxx Shareholders.
Notwithstanding the foregoing, in consideration of the settlement of the working
capital dispute as reflected in the Working Capital Agreement, as long as
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Xxxxxxxxx-Xxxxx Partners III, L.P. ("Xxxxxxxxx") holds at least five percent
(5%) of the issued and outstanding Common Stock of Odwalla, the Xxxx
Shareholders hereby agree that commencing as of the effective time of the Merger
and for so long as the Xxxx Shareholders have the right to designate an
independent director for nomination to Odwalla's Board of Directors pursuant to
Section 4.1(b)(i) of the Rights Agreement, the Xxxx Shareholders will, prior to
nominating such director, provide written notice of the proposed nominee to
Xxxxxxxxx, and shall only designate such person for nomination with Xxxxxxxxx'x
approval in the manner set forth below, which approval shall not be unreasonably
withheld. The Company, Xxxxxxxxx and the Xxxx Shareholders agree and understand
the aforementioned right of Xxxxxxxxx to approve such proposed designee(s) shall
not apply to an individual already serving on Odwalla's Board.
After the date hereof, if Xxxxxxxxx'x approval shall be required
prior to designating a person to serve on Odwalla's Board of Directors pursuant
to Section 4.1(b)(i) of the Rights Agreement, Xxxxxxxxx shall be deemed to have
approved such person unless, within six (6) business days of the giving of
written notice to Xxxxxxxxx as provided in the previous paragraph, it shall have
given the Xxxx Shareholders written notice that it does not approve of such
person, which notice shall include the reasons for such disapproval . The giving
of all notices hereunder shall be governed by the provisions set forth in
Section 6.9 of the Rights Agreement.
If Xxxxxxxxx shall have given the Xxxx Shareholders notice that
it does not approve a designee for nomination to the Odwalla Board of Directors
as provided in the previous paragraph, (i) the Xxxx Shareholders shall have the
right to propose additional designee(s) and (ii) Odwalla shall not take any
action, or suffer any action to be taken, to elect as an additional director any
person not designated by the Xxxx Shareholders, unless, based upon a written
opinion of counsel, which counsel is reasonably acceptable to the Xxxx
Shareholders, Odwalla determines 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.
The Company hereby agrees that it shall take all actions (including, without
limitation, actions to satisfy the rules and regulations promulgated by the
NASD) to prevent such delisting without electing an additional "independent
director" not designated by the Xxxx Shareholders.
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If the foregoing correctly sets forth our understanding and
agreement, please so indicate by signing a copy of this Letter Agreement in the
space provided below.
Very truly yours,
XXXX CAPITAL FUND IV, L.P.
By:
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Name:
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Title:
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ACKNOWLEDGED AND AGREED:
ODWALLA, INC.
By:
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Name:
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Title:
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XXXXXXXXX-XXXXX PARTNERS III, L.P.
By:
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Name:
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Title:
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