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.........................................................18
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6.1 LLC Shares......................................................18
6.2 Amendment of LLC Agreement......................................18
6.3 Governing Law...................................................18
6.4 Termination of Existing Rights Agreement........................18
6.5 Successors and Assigns..........................................18
6.6 Severability....................................................18
6.7 Amendment and Waiver............................................18
6.8 Delays or Omissions.............................................18
6.9 Notices.........................................................18
6.10 Attorneys' Fees.................................................18
6.11 Titles and Subtitles............................................18
6.12 Counterparts....................................................18
6.13 Construction....................................................18
6.14 Entire Agreement................................................18
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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 Xxxxxxxxx-Xxxxx
Partners III, L.P. ("Xxxxxxxxx") in connection with the acquisition
by Xxxxxxxxx of certain shares of Series A Preferred Stock of the
Company (the "Existing Rights Agreement"). On or before the date
hereof, Xxxxxxxxx has converted such shares of Series A Preferred
Stock together with those additional shares of Series A Preferred
Stock Xxxxxxxxx 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 Xxxxxxxxx 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
Xxxxxxxxx.
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:
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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, Xxxx 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
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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 Xxxxxxxxx-Xxxxx 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.
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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,
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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
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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
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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
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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.
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(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.
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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.
10
(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,
11
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
12
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
Xxxxxxxxx, the Xxxx 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 Xxxxxxxxx, the Xxxx 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 Xxxxxxxxx, the Xxxx 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").
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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 Xxxxxxxxx, the Xxxx
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 Xxxxxxxxx,
the Xxxx 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
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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 Xxxxxxxxx, the Xxxx 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
15
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 Xxxxxxxxx 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 Xxxxxxxxx, who initially shall be
Xxxxx Xxxxx, (ii) 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 the Company, nominate two (2) members of the Company's Board of
Directors designated by the Xxxx Shareholders, (iii) for so long as the Xxxx
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 Xxxx 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
16
Xxxxx Xxxxx, 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. Xxxxxxx X. Xxxxxxxxxx.
(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 Xxxx
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 Xxxx Shareholders to serve as a member of the Company's
Board of Directors, and (ii) one (1) person designated by, collectively, the
Company, Xxxxxxxxx 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 Xxxxxxxxx, the Xxxx
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 Xxxx Shareholders, Xxxxxxxxx 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
17
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 Xxxxxxxxx, XX nor any Bain 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),
18
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 Bain
Shareholders, Xxxxxxxxx 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 Bain Shareholders, Xxxxxxxxx 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 Bain
Shareholders, Xxxxxxxxx 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.
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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 Xxxxxxxxx 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.
20
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.
21
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.
22
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. Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: D. Xxxxxxx X. Xxxxxxxxxx
Title: Chief Executive Officer
SHAREHOLDER: XXXXXXXXX-XXXXX PARTNERS III, L.P.,
By Its General Partner:
Xxxxxxxxx-Xxxxx Managing Partner III, L.L.C.
a Delaware limited liability company
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title:
SHAREHOLDER: D. Xxxxxxx X. Xxxxxxxxxx,
an individual
By: /s/ D. Xxxxxxx X. Xxxxxxxxxx
-----------------------------------
Name: D. Xxxxxxx X. Xxxxxxxxxx
SHAREHOLDER: U.S. EQUITY PARTNERS, L.P.,
a Delaware limited partnership
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
SHAREHOLDER: U.S. EQUITY PARTNERS (OFFSHORE), L.P.,
a Cayman Islands limited partnership
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director
Signature Page to Rights Agreement
SHAREHOLDER: BANCBOSTON INVESTMENTS INC.
a Massachusetts corporation
By: /s/ X.X. Xxxxx Xx.
-----------------------------------
Name: X.X. Xxxxx Xx.
Title: Director
SHAREHOLDER: XXXX CAPITAL FUND VI, L.P.,
By: Xxxx Capital Partners VI, L.P.,
its general partner
By: Xxxx Capital Investors VI, Inc.,
its general partner
By: /s/ illegible
-----------------------------------
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: Xxxx Capital, Inc.,
their Managing Partner
By: /s/ illegible
-----------------------------------
Name:
Title: Managing Director
SHAREHOLDER: PEP INVESTMENTS PTY LTD.,
By: Xxxx Capital, Inc.,
its Attorney-in-Fact
By: /s/ illegible
-----------------------------------
Name:
Title: Managing Director
SHAREHOLDER: RGIP, LLC,
a Delaware limited liability company
By: /s/ illegible
-----------------------------------
Name:
Title: Authorized Person
SHAREHOLDER: JIP ENTERPRISES, INC.,
a British Virgin Islands corporation
By: /s/ illegible
-----------------------------------
Name: illegible
Title: Authorized Person
Signature Page to Rights Agreement
SHAREHOLDER: Xxxxxxx Xxxxxx,
an individual
By: /s/ Xxxxxxx Xxxxxx
-----------------------------------
SHAREHOLDER: Xxxxxxx Xxxxx,
an individual
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
SHAREHOLDER: Samantha Investors, LLC,
a Massachusetts limited liability
company
By: /s/ illegible
-----------------------------------
Name:
Title:
Schedule 1
--------------------------------------------------------------------------------
SHAREHOLDER SHARES OF COMMON STOCK OWNED AS OF THE
DATE HEREOF
--------------------------------------------------------------------------------
Xxxxxxxxx-Xxxxx Partners III, L.P. 1,493,461
--------------------------------------------------------------------------------
D. Xxxxxxx X. Xxxxxxxxxx [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:
--------------------------------------------------------------------------------
Xxxx 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*
--------------------------------------------------------------------------------
Xxxxxxx Xxxxx 246,973*
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxx 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
