EXECUTION COPY
SHAREHOLDER AGREEMENT
SHAREHOLDER AGREEMENT, dated November 2, 1998, among GROUPE DANONE, a
French SOCIETE ANONYME (the "PARENT"), ZONEO ACQUISITION CORP., a Pennsylvania
corporation and an indirect wholly owned subsidiary of Parent (the "PURCHASER"),
and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "SHAREHOLDER").
WHEREAS, as of the date of this Agreement, Shareholder owns (either
beneficially or of record) the shares of common stock, no par value, of AquaPenn
Spring Water Company, Inc., a Pennsylvania corporation (the "COMPANY") set forth
on Exhibit A hereto (all such shares of the Company (the "SHARES") and any such
Shares hereafter acquired by Shareholder prior to the termination of this
Agreement being referred to herein as the "SHAREHOLDER'S SHARES");
WHEREAS, the Parent, the Purchaser and the Company propose to enter
into an Agreement and Plan of Merger, dated as of the date of this Agreement (as
the same may be amended from time to time, the "MERGER AGREEMENT"), which
provides, upon the terms and subject to the conditions thereof, for the
acquisition by Purchaser of all the outstanding Shares through either (a) (i) a
tender offer (the "OFFER") for any and all Shares for $13.00 per Share (such
amount, or any greater amount per Share paid pursuant to the Offer, being
hereinafter referred to as the "PER SHARE AMOUNT") net to the sellers in cash
and (ii) a second-step merger pursuant to which the Purchaser will merge with
and into the Company (the "MERGER") and all outstanding Shares other than the
Shares held by the Purchaser or the Parent (or any of their respective
affiliates) will be converted into the right to receive the Per Share Amount in
cash or (b) a merger pursuant to which, if approved by the holders of Shares in
accordance with the Pennsylvania Business Corporation Law of 1988, as amended
("PENNSYLVANIA LAW"), and the Articles of Incorporation of the Company, the
Purchaser will merge with and into the Company (the "LONG-FORM MERGER") and all
outstanding Shares other than the Shares held by the Purchaser or the Parent (or
any of their respective affiliates) will be converted into the right to receive
the Per Share Amount in cash, except with respect to the holders of Shares who
elect to exercise their dissenters' rights under Pennsylvania Law, who shall be
entitled to demand the right to receive the fair value of such Shares; and
WHEREAS, as a condition to the willingness of the Parent and the
Purchaser to enter into the Merger Agreement, the Parent and the Purchaser have
requested that the Shareholder agree, and, in order to induce the Parent and the
Purchaser to enter into the Merger Agreement, the Shareholder has agreed, to (i)
tender such Shareholder's Shares into the Offer, (ii) vote such Shareholder's
Shares in favor of the Long-Form Merger, if
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applicable, and (iii) grant the Purchaser an option to purchase such
Shareholder's Shares at the Per Share Amount, in each case upon the terms and
conditions set forth below;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements and covenants set forth herein and in the Merger Agreement, the
parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01. TENDER OF THE SHAREHOLDER'S SHARES PURSUANT TO THE
OFFER. The Shareholder agrees to tender and sell (and not withdraw prior to
termination or expiration of the Offer or the termination of the Merger
Agreement), pursuant to and in accordance with the terms of the Offer, as it may
be amended from time to time, all (but not less than all) the Shareholder's
Shares (provided that the consideration offered in any such amendment is in cash
and in an amount at least equal to the Per Share Amount). In the event the
Offer is not consummated or if the Offer price is not in cash or is less than
the Per Share Amount, the provisions of Article II shall apply.
ARTICLE II
THE OPTIONS
SECTION 2.01. GRANT OF OPTIONS. Shareholder hereby grants to the
Purchaser an irrevocable option ("OPTION") to purchase the Shareholder's Shares
at a price per Share equal to the Per Share Amount. The Option shall expire if
not exercised on the earlier of (i) the time the Merger or the Long-Form Merger
becomes effective and (ii) the close of business on the 30th day following
termination of the Merger Agreement.
SECTION 2.02. EXERCISE OF OPTION. Provided that (a) to the extent
necessary, any applicable waiting periods (and any extension thereof) under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and the rules
and regulations promulgated thereunder (the "HSR ACT") with respect to the
exercise of the Option shall have expired or been terminated, (b) no preliminary
or permanent injunction or other order, decree or ruling issued by any court or
governmental or regulatory authority, domestic or foreign, of competent
jurisdiction prohibiting the exercise of the Option or the delivery of Shares
shall be in effect, and (c) the number of Shares to be purchased by the
Purchaser pursuant to the exercise of the Option shall not cause the aggregate
number of Shares, including, without
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limitation, any Shares acquired by the Purchaser pursuant to (x) the third
sentence of Section 1.01 of the Merger Agreement and (y) the other Shareholder
Agreements (as defined in the Merger Agreement), to be held by the Purchaser
immediately following such exercise to exceed 19.9% of the then issued and
outstanding Shares, the Purchaser may exercise the Option at any time and from
time to time, with respect to all or part of the Shareholder's Shares, following
termination of the Merger Agreement until the expiration of such Option. In the
event that the Purchaser wishes to exercise the Option, the Purchaser shall give
written notice (the date of such notice being herein called the "NOTICE DATE"),
to the Shareholder specifying a place and date (not later than ten Business Days
(as defined below) and not earlier than two Business Days following the Notice
Date) for closing such purchase (the "CLOSING"). For the purposes of this
Agreement, the term "BUSINESS DAY" shall mean any day except (i) a Saturday, a
Sunday or (ii) a day on which national banks are required or authorized by law
or executive order to be closed in the City of New York.
SECTION 2.03. VESTED OPTIONS; WARRANTS. The Shareholder agrees to
exercise, upon written notice from the Purchaser, the Shareholder's vested
options in respect of the number of Shares granted under the Company's 1989
Stock Option Plan, 1992 Stock Option Plan, 1994 Incentive Option Plan and stock
option agreements with the Shareholder, each as amended (the "STOCK OPTION
PLANS") as may be specified in the Purchaser's written notice. In addition, the
Shareholder agrees to exercise, upon written notice from the Purchaser, the
Shareholder's warrant issued pursuant to the Warrant dated as of November 21,
1995, for the number of Shares as may be specified in the Purchaser's written
notice. All the Shareholder's Shares resulting from the exercise of such vested
options and such warrant automatically shall become subject to the Option which
may be exercised by the Purchaser pursuant to the terms of Section 2.02.
Nothing herein shall preclude the Shareholder from exercising the Shareholder's
vested options and warrant prior to receipt of notice from the Purchaser, and
the Shareholder's Shares resulting from such independent exercise automatically
shall become subject to the Option which may be exercised by Purchaser pursuant
to the terms of Section 2.02.
SECTION 2.04. PAYMENT FOR AND DELIVERY OF CERTIFICATES. At the
Closing, (a) the Purchaser shall pay the aggregate purchase price for the
Shareholder's Shares being purchased from the Shareholder by wire transfer in
immediately available funds to an account designated by the Shareholder by
written notice to Purchaser and (b) the Shareholder shall deliver to Purchaser a
certificate or certificates evidencing the Shareholder's Shares, and the
Shareholder agrees that such Shares shall be transferred free and clear of all
Liens (as defined below). All such certificates shall be duly endorsed in
blank, or with appropriate stock powers duly executed in blank attached thereto,
in proper form for transfer, with the signature of the Shareholder thereon
guaranteed, and with all applicable taxes paid or provided for.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF
SHAREHOLDER
The Shareholder hereby represents and warrants to the Parent and the
Purchaser as follows:
SECTION 3.01. DUE EXECUTION AND DELIVERY; ENFORCEABILITY. This
Agreement has been duly executed and delivered by the Shareholder and, assuming
its due authorization, execution and delivery by the Purchaser and the Parent,
constitutes a legal, valid and binding obligation of the Shareholder,
enforceable against the Shareholder in accordance with its terms.
SECTION 3.02. NO CONFLICTS; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Shareholder do not, and the
performance of this Agreement by the Shareholder will not, (i) conflict with or
violate any law, rule, regulation, order, judgment or decree applicable to the
Shareholder or by which the Shareholder or any of the Shareholder's properties
is bound or affected, or (ii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or encumbrance on any of
the property or assets of the Shareholder pursuant to, any note, mortgage,
contract, agreement, lease, license, permit, or other instrument or obligation
to which the Shareholder is a party or by which the Shareholder or any of the
Shareholder's properties is bound or affected.
(b) The execution and delivery of this Agreement by the Shareholder
do not, and the performance of this Agreement by the Shareholder will not,
require any consent, approval, authorization or permit of, or filing with or
notification to, any governmental or regulatory authority, domestic or foreign,
except (i) for applicable requirements, if any, of the Securities Exchange Act
of 1934, as amended, and the rules and regulations thereunder (the "EXCHANGE
ACT"), and the HSR Act and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay the performance by the Shareholder of such
Shareholder's obligations under this Agreement.
SECTION 3.03. TITLE TO SHARES. At the Closing, the Shareholder will
deliver good and valid title to the Shareholder's Shares, free and clear of any
pledge, lien, security interest, charge, claim, equity, option, proxy, voting
restriction, right of first refusal or other limitation on disposition or
encumbrance of any kind ("LIENS"), other than pursuant to this Agreement. The
Shareholder has full right, power and authority to sell, transfer and deliver
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the Shareholder's Shares pursuant to this Agreement. Upon delivery of the
Shareholder's Shares and payment of the Purchase Price therefor as contemplated
herein, the Purchaser will receive good, valid, marketable and freely
transferable title to the Shareholder's Shares, free and clear of all Liens.
The Shareholder's Shares, including such Shareholder's options and warrants to
purchase Shares, are set forth on Exhibit A hereto and are all the securities of
the Company owned of record or beneficially by the Shareholder on the date of
this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE PURCHASER AND THE PARENT
The Purchaser and the Parent hereby represent and warrant to the
Shareholder as follows:
SECTION 4.01. DUE ORGANIZATION, ETC. Each of the Purchaser and the
Parent is a corporation duly organized and validly existing under the laws of
the jurisdiction of its incorporation. Each of the Purchaser and the Parent has
all necessary corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby by the Purchaser and the Parent have been duly authorized by
all necessary corporate action on the part of the Purchaser and the Parent.
This Agreement has been duly executed and delivered by the Purchaser and the
Parent and, assuming its due authorization, execution and delivery by the
Shareholder, constitutes a legal, valid and binding obligation of the Purchaser
and the Parent, enforceable against the Purchaser and the Parent in accordance
with its terms.
SECTION 4.02. NO CONFLICT; REQUIRED FILINGS AND CONSENTS. (a) The
execution and delivery of this Agreement by the Purchaser and the Parent do not,
and the performance of this Agreement by the Purchaser and the Parent will not,
(i) conflict with or violate the Articles of Incorporation or By-laws or
equivalent organizational documents of the Purchaser or the Parent,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Purchaser or the Parent or by which the Purchaser or
the Parent or any of their properties is bound or affected, or (iii) result in
any breach of or constitute a default (or an event that with notice or lapse of
time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the property or assets of the
Purchaser or the Parent pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Purchaser or the Parent is a party or by which they or
any of their properties is bound or affected.
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(b) The execution and delivery of this Agreement by the Purchaser and
the Parent do not, and the performance of this Agreement by the Purchaser and
the Parent will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Exchange Act and the HSR Act and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or delay the performance by the Purchaser or the Parent of
their obligations under this Agreement.
SECTION 4.03. INVESTMENT INTENT. The purchase of Shares from the
Shareholder pursuant to this Agreement is for the account of the Purchaser and
not with a view to the public distribution or resale thereof in any manner which
would be in violation of applicable United States securities laws.
ARTICLE V
TRANSFER AND VOTING OF SHARES
SECTION 5.01. TRANSFER OF SHARES. During the term of the Option, and
except as otherwise provided herein, the Shareholder shall not (a) sell, pledge,
hypothecate or otherwise dispose of any of the Shareholder's Shares, or any
options or warrants with respect thereto, (b) deposit the Shareholder's Shares,
or any options or warrants with respect thereto, into a voting trust or enter
into a voting agreement or arrangement with respect to the Shareholder's Shares
or grant any proxy with respect thereto or (c) enter into any contract, option
or other arrangement or undertaking with respect to the direct or indirect
acquisition or sale, assignment, transfer or other disposition of any
Shareholder's Shares.
SECTION 5.02. VOTING OF SHARES; FURTHER ASSURANCES. (a) The
Shareholder, by this Agreement, does hereby constitute and appoint the
Purchaser, or any nominee of the Purchaser, with full power of substitution,
during and for the term of the Option, as such Shareholder's true and lawful
attorney and proxy, for and in its name, place and stead, to vote each of the
Shareholder's Shares as such Shareholder's proxy, at every annual, special or
adjourned meeting of the shareholders of the Company (including the right to
sign its name (as shareholder) to any consent, certificate or other document
relating to the Company that Pennsylvania Law may permit or require) (i) in
favor of the adoption of the Merger Agreement and the Long-Form Merger, if
applicable, and the other transactions contemplated by the Merger Agreement,
(ii) against any proposal for any recapitalization, merger, sale of assets or
other business combination between the Company and any person or entity (other
than the Merger or the Long-Form Merger) or any other action or agreement that
would result
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in a breach of any covenant, representation or warranty or any other obligation
or agreement of the Company under the Merger Agreement or that could result in
any of the conditions to the Company's obligations under the Merger Agreement
not being fulfilled, and (iii) in favor of any other matter relating to
consummation of the transactions contemplated by the Merger Agreement. The
Shareholder further agrees to cause the Shareholder's Shares to be voted in
accordance with the foregoing. THIS PROXY AND POWER OF ATTORNEY IS IRREVOCABLE
AND COUPLED WITH AN INTEREST. The Shareholder acknowledges receipt and review
of a copy of the Merger Agreement.
(b) If the Purchaser shall exercise all or part of the Option in
accordance with the terms of this Agreement, and without additional
consideration, the Shareholder shall execute and deliver further transfers,
assignments, endorsements, consents and other instruments as the Purchaser may
reasonably request for the purpose of effectively carrying out the transactions
contemplated by this Agreement and the Merger Agreement, including the transfer
of any and all of the Shareholder's Shares to the Purchaser and the release of
any and all liens, claims and encumbrances covering the Shareholder's Shares.
(c) The Shareholder shall perform such further acts and execute such
further documents and instruments as may reasonably be required to vest in the
Purchaser and the Parent the power to carry out the provisions of this
Agreement, including, without limitation, causing all certificates representing
the Shareholder's Shares to bear, until the expiration of the Option granted
with respect to the Shareholder's Shares, in a conspicuous place the following
legend:
THE SHARES REPRESENTED BY THE WITHIN CERTIFICATE MAY NOT BE
SOLD, EXCHANGED OR OTHERWISE TRANSFERRED OR DISPOSED OF
EXCEPT IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THE
SHAREHOLDER AGREEMENT, DATED NOVEMBER 2, 1998, AMONG GROUPE
DANONE, ZONEO ACQUISITION CORP. AND THE REGISTERED HOLDER OF
THE WITHIN CERTIFICATE.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by cable,
telecopy, telegram or telex or
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by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties at the following addresses (or at such other address for
a party as shall be specified in a notice given in accordance with this Section
6.01):
(a) If to Parent or Purchaser:
Groupe Danone
▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇
Fax: 011-33-1-44-35-20-97
Attention: M. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to:
Shearman & Sterling
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇'▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) If to the Shareholder:
c/o AquaPenn Spring Water Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇/▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
SECTION 6.02. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect in
any way the meaning or interpretation of this Agreement.
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SECTION 6.03. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions 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 to the fullest extent
permitted by applicable law in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the extent possible.
SECTION 6.04. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties, or any of them, with respect to the subject matter hereof.
SECTION 6.05. ASSIGNMENT. This Agreement shall not be assigned by
operation of law or otherwise, except that the Parent and the Purchaser may
assign any or all of their rights and obligations hereunder to any affiliate of
the Parent.
SECTION 6.06. PARTIES IN INTEREST. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any person
any right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 6.07. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
SECTION 6.08. AMENDMENTS. This Agreement may not be amended except
by an instrument in writing signed by the Parent, the Purchaser and the
Shareholder.
SECTION 6.09. GOVERNING LAW; CONSENT TO JURISDICTION. Except to the
extent that Pennsylvania Law is mandatorily applicable to the voting of the
Shareholder's Shares and the related proxy, this Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws. All actions and proceedings arising out of or relating to this
Agreement shall be heard and determined in any New York State or federal court
sitting in the City of New York.
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SECTION 6.10. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties (with respect to the Parent and the
Purchaser, by duly authorized officers thereof) have executed this Agreement as
of the date first written above.
GROUPE DANONE
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Director of Corporate Development
ZONEO ACQUISITION CORP.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III
-------------------------------------
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ III, in his individual
capacity