EXHIBIT 10.1
SHAREHOLDER AGREEMENT
---------------------
THIS SHAREHOLDER AGREEMENT (the "Agreement") is made and entered into as of
February 27, 2001 by and between Sonic Solutions, a California corporation
("Sonic"), Daikin Industries, Ltd., a corporation organized under the laws of
Japan ("Daikin").
A. Concurrently with the execution of this Agreement, Sonic and Daikin
are consummating the transactions contemplated by that certain Asset Purchase
Agreement, dated as of February 27, 2001 (the "Asset Purchase Agreement"), under
which Daikin is selling to Sonic certain assets related to the "DVD Business"
(as defined in the Asset Purchase Agreement) of Daikin and Sonic is issuing to
Daikin shares of the common stock, no par value, and shares of the Series D
Preferred Stock, no par value, of Sonic.
B. As an inducement and condition to entering into, and consummating the
transactions contemplated by, the Asset Purchase Agreement, Sonic and Daikin
have agreed as set forth in this Agreement.
ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Certain Definitions. For purposes of this Agreement, these terms have
these meanings:
(a) "Affiliate" means a person which is an affiliate of Daikin as
specified in Rule 1-02(b) of Regulation S-X under the Securities Act and which
Beneficially Owns any Voting Securities.
(b) "Beneficially Own" or "Beneficial Ownership" with respect to any
securities means having "beneficial ownership" of such securities as determined
under Rule 13d-3 under the Exchange Act. Without duplicative counting of the
same securities by the same holder, securities Beneficially Owned by a Person
include all securities Beneficially Owned by all Affiliates of that Person.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(d) "Existing Shares" means all issued and outstanding shares of
Sonic common stock owned of record or Beneficially Owned by Daikin as of the
record date for determining the Persons entitled to receive notice of, and to
vote at, a meeting of the shareholders of Daikin called for any purpose.
(e) "Person" means any individual or entity.
(f) "Securities Act" means the Securities Act of 1933, as amended.
(g) "Voting Power" means the number of votes that the Voting
Securities are entitled to cast in an election of directors of Sonic.
(h) "Voting Securities" means the capital stock and any other
securities issued by Sonic having the power to vote in the election of directors
of Sonic, other than securities having such power only upon the happening of a
contingency.
2. Representations and Warranties of Daikin. Daikin represents and warrants
to Sonic that, as of the date of this Agreement:
(a) Immediately following the consummation of the transactions
contemplated by the Asset Purchase Agreement (the "Closing"), Daikin will
Beneficially Own 1,095,000 Existing Shares. The Existing Shares constitute all
the shares of Sonic common stock Beneficially Owned by Daikin. Daikin does not
Beneficially Own any options or other rights to purchase any other shares of
Sonic common stock.
(b) All the Existing Shares are held by Daikin, free and clear of any
voting trusts or other agreements with respect to the exercise of the Voting
Power, except for those imposed by this Agreement.
(c) The representations and warranties set forth in this Section 2
shall survive the Closing.
3. Restrictions on Transfer. Notwithstanding that the Existing Shares may
be registered for resale with the Securities and Exchange Commission, Daikin
agrees that it will not Transfer, in any calendar month, a number of Existing
Shares, through NASDAQ or such other stock exchange as Sonic's common stock may
be listed, which exceed 15% (fifteen percent) of the aggregate of the trading
volume of the common stock as reported by NASDAQ for the complete calendar month
preceding the day of any intended Transfer.
4. Disclosure. Daikin hereby agrees to permit Sonic to publish and disclose
in the registration statement contemplated by the Asset Purchase Agreement, and
in any other disclosure document such information as may be required under
applicable law in connection with Daikin's identity and ownership of Sonic
common stock and the arrangements and understandings under this Agreement.
5. Voting of Sonic Common Stock. Daikin hereby irrevocably and
unconditionally agrees that, during the period commencing with the date hereof
and continuing until the termination of this Agreement, Daikin shall, and shall
cause its affiliates, at the written request of Sonic, as specifically expressed
in a resolution of its board of directors to use:
(a) use reasonable commercial efforts appear (in person or by proxy)
at any meeting (whether annual or special and whether or not an adjourned or
postponed meeting) of the holders of Sonic common stock, however called, or
otherwise cause the Voting Securities Beneficially Owned by them to be counted
as present thereat for purposes of establishing and maintaining a quorum.
(b) to, vote or provide a written consent or proxy with respect to
the Voting Securities Beneficially Owned by them in the manner directed by Sonic
at any such meeting or
2
pursuant to such written consent in connection with any of the following matters
which may be considered at such meeting:
(i) fixing the number of and electing the Board of Directors of
Sonic;
(ii) appointing or ratifying the appointment of the independent
auditors of Sonic and authorizing the Board of Directors of
Sonic to negotiate and fix the consideration to be paid to
the Auditors;
(iii) approving of any share compensation plan (including stock
option plans, stock purchase plans or other share-based
compensation plans) of general application to the
directors, officers or employees of Sonic and its
subsidiaries (and for greater certainty, not with respect
to the compensation or a share compensation plan with
respect to any particular officer or director);
(iv) approval of any third-party arrangement to provide debt or
equity financing to Sonic.
(c) not to deposit any Voting Securities Beneficially Owned by them
in a voting trust or subject any Voting Securities Beneficially Owned by them to
any arrangements or agreements with respect to the voting of such Voting
Securities.
6. Equitable Remedies. Sonic and Daikin acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their terms or were otherwise
breached. Accordingly, they agree that the non-breaching or potentially
breaching party shall be entitled to an injunction, specific performance or
other equitable relief, without the need to post bond, to prevent or cure any
breaches of this Agreement and to enforce specifically the provisions hereof in
any court having jurisdiction, this being in addition to any other remedy to
which that party may be entitled at law or in equity.
7. Termination. This Agreement shall terminate at such time as Daikin
Beneficially Owns less than 2% of the Voting Power.
8. Miscellaneous.
(a) This Agreement may be amended, modified or supplemented only by
written agreement of Sonic and Daikin.
(b) Any failure of Daikin, on one hand, or Sonic, on the other hand,
to comply with any provision of this Agreement may be waived by Sonic or Daikin,
respectively, only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with that
provision shall not operate as a waiver of, or estoppel with respect to, any
subsequent or other failure.
3
(c) Any notice or other communication required or permitted
hereunder shall be in writing and shall be deemed to have been duly given on the
date of service if served personally, by recognized expedited delivery service,
or by facsimile (with confirmation copies of any facsimile notice to be provided
by at least one other method of delivery permitted hereunder), or five (5) days
after the date of mailing if mailed, by first class mail, registered or
certified, postage prepaid. Notices shall be addressed as follows:
(1) if to Daikin, to:
Daikin Industries, Ltd.
Tokyo Opera City Building
20-2, 3-Chome, Nishi-Shinjuku
Shinjuku-ku, Tokyo 163-14
Japan
Attn: General Manager, Electronics Division
with a copy (which shall not constitute notice) to:
McCarthy Tetrault
P.O Box 10424
Pacific Centre, Suite 1300
777 Dunsmuir Street
Vancouver, B.C.
Canada V7Y 1K2
Attn: Tim McCafferty
Cooley Godward LLP
3000 El Camino Real
Palo Alto, CA 94306
Attn: Thomas M. Shoesmith
(2) if to Sonic, to
Sonic Solutions
101 Rowland Way
Novato, California 94945
Attn: Chief Financial Officer
with a copy (which shall not constitute notice) to:
Heller Ehrman White & McAuliffe LLP
2500 Sand Hill Road, Suite 100
Menlo Park, California 94025
Attn: Kyle Guse
or to such other address as a party has designated by notice
in writing to the other party in the manner provided by this
Section.
4
(d) Neither this Agreement nor any right, interest or obligation
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other party. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns and with respect to any equity securities that replace or are
issued in exchange for Sonic common stock. This Agreement is not intended to
confer any rights or remedies hereunder upon any other Person except the parties
hereto.
(e) This Agreement shall be governed by and construed in accordance
with the laws of the State of California applicable to contracts entered into
and wholly to be performed in the State of California by California residents.
The parties hereby waive trial by jury in connection with any action or suit
under this Agreement or otherwise arising from the relationship between the
parties hereto.
(f) 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
one and the same instrument.
(g) If any provision of this Agreement is held to be invalid, illegal
or incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
(h) The section headings contained in this Agreement are solely for
the purpose of reference and shall not in any way affect the meaning or
interpretation of this Agreement. The word "including" shall mean "including
without limitation."
(i) This Agreement, the Asset Purchase Agreement and the other
"Transactional Agreements" referenced in the Asset Purchase Agreement embody the
entire agreement and understanding of the parties hereto with respect to the
subject matter of this Agreement.
(j) From time to time, at either party's request and without further
consideration, the other party hereto shall execute and deliver such additional
documents and take such other actions as may be necessary or desirable to
effectuate the provisions of this Agreement.
(k) Each party to this Agreement has been represented by counsel
during the preparation and negotiation of this Agreement, and therefore waives
any rule of construction that would construe ambiguities against the party
drafting this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
5
[THIS PAGE LEFT INTENTIONALLY BLANK]
6
IN WITNESS WHEREOF, the parties hereto have caused this Shareholder
Agreement to be executed by their duly authorized officers as of the date first
written above.
SONIC SOLUTIONS
By: /s/ Clay Leighton
------------------------------
Name: A. Clay Leighton
Title: Senior Vice President
DAIKIN INDUSTRIES, LTD.
By: /s/ Kiyoshi Nakajima
------------------------------
Name: Kiyoshi Nakajima
----------------------------
Title: General Manager -
Electronics Division
---------------------------
[SIGNATURE PAGE TO SHARHOLDERS' AGREEMENT]
7