CO-SALE AGREEMENT
THIS CO-SALE AGREEMENT (this "Agreement") is made this 11th day of June,
1998, by and between Vacu-dry Company, a California corporation ("Vacu-dry") and
Global Walk, Inc., a Japanese corporation ("Global").
RECITALS:
WHEREAS, Global desires to acquire from MIN Acquisition Corp., a California
corporation (the "Company") shares of its common stock (the "Common Stock"); and
WHEREAS, Vacu-dry is presently the record and beneficial owner of 85,000
shares of the outstanding Common Stock; and
WHEREAS, Vacu-dry has agreed to grant Global the opportunity to
participate, upon the terms and conditions set forth in this Agreement, in
subsequent sales of the Common Stock of the Company made by Vacu-dry to induce
Global to make the proposed investment.
NOW, THEREFORE, in consideration of these premises and the mutual covenants
and agreements herein contained and other valuable consideration, the receipt
and adequacy of which the parties hereto acknowledge, the parties agree as
follows
1. Sales by Vacu-dry.
(a) Notice of Purchase Offers. Should Vacu-dry propose to accept one or
more bona fide offers (collectively the "Purchase Offer") from any persons to
purchase shares of Common Stock from Vacu-dry, then Vacu-dry shall promptly
notify Global of the terms and conditions of such Purchase Offer.
(b) Right to Participate. Global shall have the right, exercisable upon
written notice to Vacu-dry within 15 business days after receipt of the notice
of the Purchase Offer, to participate in Vacu-dry's sale of Common Stock on the
same terms and conditions. To the extent Global exercises such right of
participation, the number of shares of Common Stock which Vacu-dry may sell
pursuant to such Purchase Offer shall be correspondingly reduced. The right of
participation of Global shall be subject to the following terms and conditions:
(i) Global may sell all or any part of that number of shares of Common
Stock of the Company equal to the product obtained by multiplying (x) the
aggregate number of shares of Common Stock covered by the Purchase Offer by
(y) a fraction the numerator of which is the number of shares of Common
Stock the time owned by Global and the denominator of which is the combined
number of shares of Common Stock at the time owned by Vacu-dry and Global.
(ii) Global may participate in the sale by delivering to Vacu-dry for
transfer to the purchase offeror one or more certificates, properly
endorsed for transfer, which represent the number of shares of Common Stock
which Global elects to sell pursuant to this Section 1(b).
(c) Consummation of Sale. The stock certificate or certificates which
Global delivers to Vacu-dry pursuant to Section 1(b) shall be transferred by
Vacu-dry to the purchase offeror in consummation of the sale of the Common Stock
pursuant to the terms and conditions specified in the Section 1(b) notice to
Global, and Vacu-dry shall promptly thereafter remit to Global that portion of
the sale proceeds to which Global is entitled by reason of its participation in
the sale.
(d) Ongoing Rights. The exercise or non-exerciseof the rights of Global
to participate in one or more sales of Common Stock made by Vacu-dry shall not
adversely affect its rights to participate in subsequent Common Stock sales by
Vacu-dry pursuant to Section 1.
(e) Permitted Exemptions. The participation rights of Global shall not
apply to any pledge of Common Stock made by Vacu-dry pursuant to a bona fide
loan transaction which creates a mere security interest.
2. Legend.
(a) Each certificate representing shares of the Common Stock of the
Company now or hereafter owned by Vacu-dry or issued to any permitted transferee
pursuant to Section 1(e) shall be endorsed with the following legend: "THE SALE
OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN CO-SALE AGREEMENT BY AND BETWEEN THE
SHARE-HOLDER, THE CORPORATION AND CERTAIN HOLDERS OF COMMON STOCK OF THE
CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO
THE SECRETARY OF THE CORPORATION."
(b) Legend Removal. The Section 2(a) legend shall be removed upon
termination of this Agreement in accordance with the provisions of Section 3(a).
3. Miscellaneous Provisions.
(a) Termination of Co-Sale Rights. The rights of Global under this
Agreement and the obligations of Vacu-dry with respect to Global shall terminate
at such time as Global shall no longer be the owners of any Common Stock. Unless
sooner terminated in accordance with the preceding sentence, this Agreement
shall terminate upon the consummation of an underwritten public offering of
Common Stock registered under the Securities Act of 1933
(b) Successors and Assigns. This Agreement and the rights and
obligations of the parties hereunder shall inure to the benefit of, and be
binding upon, their respective successors, assigns and legal representatives.
The participation rights of Global hereunder may not be assigned without the
prior written consent of Vacu-dry other than to Takanashi Milk Products Co.,
Ltd. or members of the Takanashi family and who shall agree to be bound by the
terms hereof.
(c) Severability. In the event one or more of the provisions of this
Agreement should, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
(d) Amendments. Any amendment or modification of this Agreement shall be
effective only if evidenced by a written instrument executed by duly authorized
representatives of the parties hereto. Any waiver by a party of its rights under
this Agreement shall be effective only if evidenced by a written instrument
executed by a duly authorized representative of such party.
(e) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of California. The parties
hereby irrevocably attorn to the exclusive jurisdiction of the courts of the
State of California in respect of the subject matter of this Agreement and
irrevocably agree to be bound by any judgment rendered thereby in connection
with this Agreement, subject to each case to all rights to appeal such decisions
to the extent available to such parties. Each party waives personal service of
process and consents that service of process upon it may be made by delivery in
accordance with the provisions of this Agreement. Nothing shall affect the right
to serve process in any other manner permitted by applicable law.
(f) Notices. Any notice to any party hereto given pursuant to this
Agreement shall be in writing addressed as follows:
if to Global Walk, Inc.: Global Walk, Inc.
c/o Takanashi Milk Products Co., Ltd.
Nisseki Yokahama Bl.8F
1-1-8 Sakuragi-cho Naka-ku
Yokohama-shi 281, Japan
Attention: Nobuyoshi Takanashi
Telecopier: (011)(81) 4 5633-5254
with a copy to: Farella, Braun & Martel LLP
235 Montgomery Street, 30th Floor
San Francisco, California 940104
Attention: Daniel E. Cohn, Esq.
Telecopier: (415) 954-4480
if to Vacu-dry: Vacu-dry Company
7765 Healdsburg Avenue
Sebastopol, California 95437
Attn: Gary L. Hess, President
Telecopier: (707) 829-4610
with a copy to: Severson & Werson
One Embarcadero Center, 26th Floor
San Francisco, California 94111
Attn: Roger S. Mertz, Esq.
Telecopier: (415) 956-0439
Any such address may be changed by any party by written notice to the other
party. Any notice shall be deemed delivered (i) if transmitted by electronic
facsimile transmission, when the appropriate number and answerback are
transmitted, (ii) if delivered personally, when received, or (iii) if mailed by
registered or certified mail, postage prepaid, return receipt requested, when
received.
4. Dispute Resolution.
(a) Arbitration. All disputes between the parties arising in connection
with this Agreement shall be finally settled under the Commercial Arbitration
Rules of the American Arbitration Association then in effect (as modified by
this section). The arbitration panel shall be composed of three arbitrators
appointed in accordance with this section. The arbitration shall be held in San
Francisco, California, and it shall be conducted in the English language. The
law governing the procedures and substance of the arbitration will be that of
the State of California. The arbitration proceedings and all documents and
testimony, written or oral, produced in connection therewith shall be kept
confidential. The arbitration panel may determine all questions of law and
jurisdiction (including questions as to whether the dispute is arbitrable) and
has the right to grant legal and equitable relief (including injunctive and
other interim relief and the right to grant permanent and interim injunctive
relief), and shall apportion all costs between Licensee and Licensor taking into
consideration, among other factors, the percentage of the total amount in
dispute that is represented by the amount of claims asserted by a party but
rejected by the arbitrators, including reasonable legal fees, interest and costs
of the arbitration, provided that nothing herein shall prevent the parties
hereto from seeking interim injunctive relief in a court of competent
jurisdiction pending resolution of the dispute in accordance with this section.
The arbitrators may not amend or otherwise alter the terms and conditions of
this Agreement.
(b) Selection of Arbitrators. The parties shall have fifteen (15) days
to agree upon the qualifications of the arbitrators (the "Qualifications")
commencing on the day on which notice is given by the party initiating the
arbitration. Upon the expiration of the fifteen day period and regardless of an
agreement being reached as to the Qualifications, either or both of the parties
shall apply to any court having jurisdiction over the parties or their assets in
accordance with Section 3(e) to appoint the three arbitrators. The court shall
appoint the arbitrators within 30 days after such request (on the basis of the
Qualifications if agreed but otherwise in its discretion) and shall notify the
parties of the appointment.
(c) Award Binding. The arbitral award shall state the reasons for the
award, and the relief granted shall be final and binding on the parties to the
arbitration. Any award rendered may be confirmed; judgment upon any award
rendered may be entered; such award or the judgment thereon may be enforced; and
any interim or supplemental relief may be sought in any court having
jurisdiction over the parties or their assets in accordance with Section 3(e)
hereof. Any monetary award shall be payable in U.S. dollars, free of any tax or
any other deduction, other than taxes in the nature of income taxes imposed by
the country, province or political subdivision in which the recipient is
organized or is otherwise subject to such taxes. Such award shall bear interest
from the date of the award at a variable rate equal to the rate publicly
announced from time to time by Wells Fargo Bank, N.A. at its principal office in
San Francisco, California as its "prime rate".
(d) Discovery. The parties shall make available to the arbitrators all
information requested by them in accordance with the applicable rules of
arbitration, including production of all relevant records and documents. All
notices and other communications required to be delivered pursuant to the
applicable rules of arbitration shall be delivered to the address specified in
this Agreement.
(e) Certain Disputes. In the event that the parties disagree as to
whether any issue or issues are to be submitted to arbitration under the terms
of this Agreement or either party asserts that the other is refusing to
arbitrate either overtly or by delay, the parties agree that any such action,
lawsuit or proceeding over such dispute or assertion shall be brought in
accordance within the provisions of Section 3(e) hereof.
(f) Attorneys' Fees. If any party hereto must institute arbitration to
collect any payments due hereunder, the party liable therefor shall reimburse
the other party for reasonable attorneys' fees and other costs incurred in
connection with such arbitration.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and
year indicated above.
VACU-DRY COMPANY
By: /s/ Gary L. Hess
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Its: President
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By: /s/ Tom Eakin
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Its: VP Finance
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GLOBAL WALK, INC.
By: /s/ Nobuyoshi Takanashi
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Its: President
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By:
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Its:
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