Odwalla Inc – ‘DEF 14A’ for 4/25/00

On:  Thursday, 3/16/00   ·   For:  4/25/00   ·   Accession #:  950149-0-526   ·   File #:  0-23036

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Definitive Proxy Solicitation Material   —   Schedule 14A
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Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Notice and Proxy Statement for Odwalla               215   1.17M 

Document Table of Contents

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PRELIMINARY COPY - CONFIDENTIAL - FOR USE OF THE SECURITIES AND EXCHANGE
 COMMISSION ONLY

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934 

Filed by the Registrant [X]                                                     

Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      

[ ]  Preliminary Proxy Statement                                                
[ ]  Confidential, for Use of the Commission Only (as permitted by              
Rule 14a-6(e)(2))                                                     
[X]  Definitive Proxy Statement                                                 
[ ]  Definitive Additional Materials                                            
[ ]  Soliciting Material Pursuant to 14a-11(c) or 14a-12                        

 ODWALLA, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              

[ ]  No fee required.                                                           

[X]  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.   

(1)  Title of each class of securities to which transaction applies:  

    Class A-3 common stock, Class L-1 common stock, Class L-2 common
        stock, Class N-1 preferred stock, and Class N-2 preferred stock, all
$0.01 par value per share, of Fresh Samantha, Inc.          
         ---------------------------------------------------------------------

(2)  Aggregate number of securities to which transaction applies:     
532,816                                                     

   (excludes the exercise of all currently outstanding options and
warrants to purchase Fresh Samantha capital stock)          
         ---------------------------------------------------------------------

(3)  Per unit price or other underlying value of transaction computed 
         pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):  
$2,513,655                                                  

         The amount on which the filing fee is calculated is $2,513,655, based
       on the book value of Fresh Samantha capital stock as of January 22,
     2000. There is no public market for Fresh Samantha capital stock.
         ---------------------------------------------------------------------

(4)  Proposed maximum aggregate value of transaction: $2,513,655      

         ---------------------------------------------------------------------
(5)  Total fee paid: $502.73 (One-50th of one percent of $2,513,655)  

         ---------------------------------------------------------------------

[X]  Fee paid previously with preliminary materials.                            

[ ]  Check box if any part of the fee is offset as provided by Exchange Act     
  Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
    previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.                   

(1)  Amount Previously Paid:                                          

         ---------------------------------------------------------------------
(2)  Form, Schedule or Registration Statement No.:                    

         ---------------------------------------------------------------------
(3)  Filing Party:                                                    

         ---------------------------------------------------------------------
(4)  Date Filed:                                                      

         ---------------------------------------------------------------------

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[ODWALLA LOGO]

Dear Shareholder:                                                               

      You are cordially invited to attend the annual meeting of shareholders
of Odwalla, Inc., which will be held on April 25, 2000, at 9:30 a.m. local time,
at Mel Mello Center for the Arts, 1167 Main Street, Half Moon Bay, California.  

   At the annual meeting you will consider and vote upon a proposal to
approve the merger and the issuance of shares of Odwalla common stock as set    
forth in the Agreement and Plan of Merger, dated as of February 2, 2000,        
pursuant to which Fresh Samantha, Inc., a Maine corporation, will become a      
wholly owned subsidiary of Odwalla.                                             

  Under the terms of the merger agreement, approximately 3.8 million
shares of Odwalla common stock will be exchanged for all of the outstanding     
Fresh Samantha capital stock as more fully described in the enclosed proxy      
statement.                                                                      

       In addition, you will consider and vote upon proposals to (1) amend the
Certificate of Designation of Odwalla preferred stock to increase the conversion
ratio of the Odwalla preferred stock into common stock from a 1-to-1 ratio to a 
1.2407-to-1 ratio, (2) increase the number of shares of Odwalla common stock    
authorized for issuance under Odwalla's 1997 Stock Option/Stock Issuance Plan   
from 1,648,475 shares to 2,148,475 shares, (3) elect six directors of Odwalla,  
and (4) ratify the appointment of PricewaterhouseCoopers LLP as independent     
accountants of Odwalla for the fiscal year ending September 2, 2000, each as    
more fully described in the attached proxy statement.                           

AFTER CAREFUL CONSIDERATION, ODWALLA'S BOARD OF DIRECTORS HAS   
UNANIMOUSLY APPROVED THE MERGER AGREEMENT. THE BOARD BELIEVES THAT THE TERMS OF 
THE MERGER AGREEMENT ARE FAIR TO, AND IN THE BEST INTERESTS OF, ODWALLA AND ITS 
SHAREHOLDERS, AND UNANIMOUSLY RECOMMENDS THAT HOLDERS OF SHARES OF ODWALLA      
COMMON STOCK VOTE FOR THE (1) APPROVAL OF THE MERGER AND THE ISSUANCE OF ODWALLA
COMMON STOCK PURSUANT TO THE MERGER AGREEMENT, (2) AMENDMENT OF THE CERTIFICATE 
OF DESIGNATION OF PREFERRED STOCK TO CHANGE THE CONVERSION RATIO OF THE         
PREFERRED STOCK, (3) INCREASE IN THE NUMBER OF SHARES UNDER THE 1997 STOCK      
OPTION/STOCK ISSUANCE PLAN, (4) ELECTION OF THE LISTED DIRECTORS AND (5)        
RATIFICATION OF THE APPOINTED ACCOUNTANTS.                                      

        You do not need to attend the annual meeting. Whether or not you plan to
attend, after reading the proxy statement, please mark, date, sign and return   
the enclosed proxy card in the accompanying reply envelope. If you decide to    
attend the annual meeting, please notify the Secretary of Odwalla if you wish to
vote in person and your proxy will not be voted.                                

   A copy of Odwalla's 1999 Annual Report has been mailed concurrently
herewith to all shareholders entitled to notice of and to vote at the annual    
meeting.                                                                        

Sincerely yours,                                                                

/s/ D. STEPHEN C. WILLIAMSON                                                    

D. Stephen C. Williamson                                                        
Chairman of the Board                                                           
Chief Executive Officer                                                         

Half Moon Bay, California                                                       
March 16, 2000                                                                  

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 ODWALLA, INC.
 120 STONE PINE ROAD
 HALF MOON BAY, CALIFORNIA 94019

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
 TO BE HELD APRIL 25, 2000

------------------------------------------------------------------------------- 

 The annual meeting of shareholders of Odwalla, Inc., a California
corporation, will be held on Tuesday, April 25, 2000, at 9:30 a.m. local time,  
at Mel Mello Center for the Arts, 1167 Main Street, Half Moon Bay, California   
to:                                                                             

        1. Approve the merger and the issuance of shares of Odwalla common stock
pursuant to the Agreement and Plan of Merger, dated as of February 2, 2000, by  
and among Odwalla, Orange Acquisition Sub, Inc., a Maine corporation and a      
wholly owned subsidiary of Odwalla, and Fresh Samantha, Inc., a Maine           
corporation. The merger is more completely described in the accompanying proxy  
statement, and a copy of the merger agreement is attached as Appendix A to the  
proxy statement;                                                                

       2. Approve the amendment to the Certificate of Designation of preferred
stock to permit the conversion of the Odwalla preferred stock held by           
Catterton-Simon Partners III, L.P. into Odwalla common stock based on a         
conversion ratio of 1.2407-to-1 rather than on the 1-to-1 conversion ratio set  
forth in the existing Certificate of Designation;                               

3. Approve the adoption of an amendment to Odwalla's 1997 Stock 
Option/Stock Issuance Plan to increase the number of shares of Odwalla common   
stock authorized for issuance thereunder from 1,648,475 shares to 2,148,475     
shares;                                                                         

    4. Elect six (6) directors of Odwalla to serve until the 2001 annual
meeting of shareholders or until their successors are elected and qualified;    

      5. Ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of Odwalla for the fiscal year ending September 2, 2000; and        

      6. Transact any other business as may properly come before the meeting
or any adjournments or postponements thereof.                                   

       Each of the foregoing items of business are more fully described in the
proxy statement that accompanies this Notice.                                   

       Only shareholders of record at the close of business on March 10, 2000,
are entitled to notice of and to vote at the annual meeting and at any          
continuation or adjournment thereof.                                            

   All shareholders are cordially invited and encouraged to attend the
annual meeting. In any event, to assure your representation at the annual       
meeting, please carefully read the accompanying proxy statement which describes 
the matters to be voted on at the annual meeting and sign, date and return the  
enclosed proxy card in the reply envelope provided. Should you receive more than
one proxy because your shares are registered in different names and addresses,  
each proxy should be returned to assure that all your shares will be voted. If  
you attend the annual meeting and vote by ballot, your proxy will be revoked    
automatically and only your vote at the annual meeting will be counted. The     
prompt return of your proxy card will assist us in preparing for the annual     
meeting.                                                                        

                                           BY ORDER OF THE BOARD OF DIRECTORS,

                               /s/ KATHARIN BARR HOGEN

                           KATHARIN BARR HOGEN
                 Secretary
Half Moon Bay, California                                                       
March 16, 2000                                                                  

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                                                        [Enlarge/Download Table]

                                      TABLE OF CONTENTS                                         

                                                                                            PAGE
                                                                                                
QUESTIONS & ANSWERS ABOUT THE MERGER.........................................................1  
SUMMARY OF THE PROXY STATEMENT...............................................................2  
   Date, Time and Place of the Annual Meeting................................................2  
   Purposes of the Annual Meeting............................................................2  
   Voting Rights of Shareholders.............................................................2  
   Required Vote for Approval................................................................3  
   Recommendation of the Odwalla Board of Directors..........................................3  
   The Companies Involved in the Merger......................................................3  
   Summary Terms of the Merger...............................................................4  
   Our Financial Advisor Believes the Merger is Fair to Odwalla Shareholders.................6  
   We Anticipate the Merger Will Not Result in Federal Income Tax............................6  
   We Expect to Use Purchase Accounting......................................................6  
   We Must Receive Regulatory Approvals Before Completing the Merger.........................6  
   The Board and Management of Odwalla Will Change After the Merger..........................6  
   We Will Need to Sell Stock and Arrange Additional Debt Financing in Connection with          
      the Merger.............................................................................6  
   Odwalla Shareholders are Not Entitled to Appraisal Rights.................................7  
   Forward-Looking Statements in this Proxy Statement........................................7  
   Selected Historical Financial Data of Odwalla and Fresh Samantha..........................8  
   Selected Unaudited Pro Forma Combined Condensed Financial Data...........................10  
   Comparative Per Share Data...............................................................11  
RISK FACTORS................................................................................12  
   We may not be able to successfully integrate Fresh Samantha and achieve the                  
      benefits expected to result from the merger...........................................12  
   Despite the best efforts of both Odwalla and Fresh Samantha, the merger may not be           
      completed, which may harm our business, results of operations, and financial              
      condition.............................................................................12  
   Failure to qualify for federal tax treatment as a reorganization may harm our                
      future results of operations..........................................................12  
   We may not be able to obtain the financing necessary to cover the costs of the               
      merger and resulting integration of the two companies or may only be able to do           
      so on unfavorable terms...............................................................13  
   Because the number of shares issued to Fresh Samantha shareholders in connection             
      with the merger is fixed, Odwalla shareholders will in effect pay more for Fresh          
      Samantha if our stock price increases.................................................13  
   We may be exposed to liabilities that are not covered by the indemnification                 
      available under the merger agreement, which may harm our results of operation             
      and financial condition...............................................................13  
   Our board of directors will change substantially after the merger........................14  
   A small number of shareholders will control Odwalla after the merger.....................14  
INFORMATION CONCERNING THE ANNUAL MEETING...................................................15  
   Date, Time and Place of the Annual Meeting...............................................15  
   Purposes of the Annual Meeting...........................................................15  
   Voting Rights of Shareholders............................................................16  
   Revocability of Proxies..................................................................16  
   Solicitation of Proxies..................................................................16  
SPECIAL FACTORS ABOUT THE PROPOSED MERGER...................................................18  
   General..................................................................................18  
   Background of the Merger.................................................................18  
   Recommendation of the Odwalla Board; Reasons of Odwalla for the Merger...................20  
   Opinion of W.R. Hambrecht + Co...........................................................21  
   Interests of Odwalla Directors in the Merger.............................................24  
   Federal Income Tax Consequences of the Merger............................................25  
   Accounting Treatment.....................................................................26  
   Regulatory Approvals.....................................................................26  
   Management After the Merger..............................................................26  

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   Voting Agreement of Odwalla Shareholders.................................................27
   We Will Need to Sell Stock and Arrange Additional Debt Financing in Connection with        
      the Merger............................................................................28
   No Odwalla Shareholders Are Entitled to Appraisal Rights.................................28
UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION OVERVIEW.......................29
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS........................34
PROPOSALS AT THE ANNUAL MEETING.............................................................37
   Proposal No. 1 -- Approval of the Merger.................................................37
      Terms of the Merger:..................................................................37
      Consideration to be Received by Security Holders......................................37
      Indemnification by the Shareholders of Fresh Samantha and Samantha Investors..........38
      Other Provisions of the Merger Agreement..............................................38
      Related Agreements....................................................................42
      Vote Required.........................................................................45
      Recommendation of the Board...........................................................45
   PROPOSAL NO. 2 --  AMENDMENT OF THE CERTIFICATE OF DESIGNATION OF PREFERRED STOCK........46
   PROPOSAL NO. 3 --  APPROVAL OF THE AMENDMENT TO ODWALLA'S 1997 STOCK OPTION/STOCK          
      ISSUANCE PLAN ........................................................................47
   PROPOSAL NO. 4 -- ELECTION OF DIRECTORS..................................................53
      Nominees..............................................................................53
      Vote Required.........................................................................54
      Recommendation of the Board...........................................................54
      Board Meetings and Committees.........................................................54
      Executive Officer and Director Compensation...........................................55
      Performance Graph.....................................................................61
      Section 16(a) Beneficial Ownership Reporting Compliance...............................61
      Security Ownership of Certain Beneficial Owners and Management of Odwalla.............62
      Certain Relationships and Related Transactions of Odwalla.............................63
   PROPOSAL NO. 5 -- RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS.........................64
INFORMATION ABOUT ODWALLA...................................................................65
   BUSINESS OF ODWALLA......................................................................65
      Overview..............................................................................65
      Products, distribution and trade partners.............................................65
      Raw materials.........................................................................66
      Competition...........................................................................67
      Dependence on one or a few major trade partners.......................................67
      Government regulation.................................................................67
      Employees.............................................................................68
      Other factors affecting Odwalla's business............................................68
   PROPERTIES OF ODWALLA....................................................................71
   LEGAL PROCEEDINGS OF ODWALLA.............................................................71
   SELECTED FINANCIAL DATA OF ODWALLA.......................................................72
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                 
      OPERATIONS OF ODWALLA.................................................................73
      Overview..............................................................................73
      General Business......................................................................73
      Results of operations.................................................................74
      Liquidity and capital resources.......................................................77
      Year 2000.............................................................................79
   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK OF ODWALLA....................80
   MARKET FOR ODWALLA'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.......................80
      Dividend policy.......................................................................80
INFORMATION ABOUT FRESH SAMANTHA............................................................81
   BUSINESS OF FRESH SAMANTHA...............................................................81
      Overview..............................................................................81

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                                                        [Enlarge/Download Table]
                                                                                              
   SELECTED HISTORICAL FINANCIAL DATA OF FRESH SAMANTHA.....................................81
   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                 
      OPERATIONS OF FRESH SAMANTHA..........................................................82
      Overview..............................................................................82
      General business......................................................................82
      Results of operations.................................................................83
      Liquidity and capital resources.......................................................85
      Year 2000.............................................................................87
   MARKET FOR FRESH SAMANTHA'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS................87
OTHER MATTERS...............................................................................88
   Shareholder Proposals....................................................................88
OTHER BUSINESS..............................................................................88
FINANCIAL STATEMENTS.......................................................................F-1

                                          APPENDICES                                          
Agreement and Plan of Merger...............................................................A-1

Shareholders' Rights Agreement.............................................................B-1

Opinion of W.R. Hambrecht + Co.............................................................C-1

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 PROXY STATEMENT

 FOR THE ANNUAL MEETING OF SHAREHOLDERS OF
 ODWALLA, INC.
 TO BE HELD APRIL 25, 2000

------------------------------------------------------------------------------- 

QUESTIONS & ANSWERS ABOUT THE MERGER

Q:      WHY ARE WE PROPOSING TO ACQUIRE FRESH SAMANTHA?                         

A:      We believe Odwalla's leadership position in the super-premium,          
      refrigerated juice category will be strengthened nationally by uniting
       Odwalla, the leading West Coast brand, with Fresh Samantha, the leading
       East Coast brand. We will better support national sales efforts through
our two strong brands. Our combined distribution organizations, 
 including both existing Odwalla and Fresh Samantha owned delivery
      systems and our expanding network of independent distribution systems,
        will allow us to efficiently deliver product to major markets throughout
the United States.                                              

Q:      WHAT DO I NEED TO DO NOW?                                               

A:      After carefully reading and considering the information contained in    
       this proxy statement, please complete and sign your proxy and return it
        in the enclosed return envelope as soon as possible, so that your shares
     may be represented at the annual meeting of shareholders. If you sign
        and send in your proxy and do not indicate how you want to vote, we will
     count your proxy as a vote in favor of the proposals presented at the
meeting.                                                        

Q:      IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER, WILL MY BROKER VOTE
MY SHARES FOR ME?                                               

A:      Your broker will vote your shares only if you provide instructions on   
     how to vote. You should follow the directions provided by your broker
        regarding how to instruct your broker to vote your shares. If you do not
instruct your broker, your shares will not be voted.            

Q:      CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY?               

A:      Yes. You can change your vote at any time before your proxy is voted at 
        the annual meeting. If you hold your shares in your own name, you can do
       this in one of three ways. First, you can send a written notice stating
      that you would like to revoke your proxy. Second, you can complete and
       submit a new proxy. If you choose either of these two methods, you must
      submit your notice of revocation or your new proxy to the Secretary of
   Odwalla at the address set forth in the answer to the last question
   below prior to the annual meeting. Third, you can attend the annual
     meeting and vote in person. If you hold your shares in "street name,"
      you should follow the directions provided by your broker regarding how
to change your vote.                                            

Q:      WHEN DO YOU EXPECT THE MERGER TO BE COMPLETED?                          

A:      We expect to complete the merger in late April of 2000.                 

Q:      WHO CAN HELP ANSWER MY QUESTIONS?                                       

A:      If you have any questions about the merger or if you need additional    
      copies of this proxy statement or the enclosed proxy, you should write
      or call Odwalla's Investor Relations at 120 Stone Pine Road, Half Moon
Bay, California 94019, telephone (650) 726-1888.                

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SUMMARY OF THE PROXY STATEMENT

     The following is a summary of information contained elsewhere in this
proxy statement and the attached Appendices. This summary does not purport to   
contain a complete statement of all material information relating to the merger 
agreement, the merger, and the other matters discussed herein and is subject to,
and is qualified in its entirety by, the more detailed information and financial
statements contained in or attached to this proxy statement. Odwalla            
shareholders should carefully read this proxy statement in its entirety, as well
as the merger agreement attached to this proxy statement as Appendix A.         

DATE, TIME AND PLACE OF THE ANNUAL MEETING (see page 15)                        

    The annual meeting will be held on April 25, 2000 at 9:30 a.m. local
time, at Mel Mello Center for the Arts, 1167 Main Street, Half Moon Bay,        
California.                                                                     

PURPOSES OF THE ANNUAL MEETING (see page 15)                                    

 At the annual meeting, the Odwalla shareholders will be asked to:

     1.     approve the merger and the issuance of Odwalla common stock to
              shareholders of Fresh Samantha according to the merger agreement
            among Odwalla, Fresh Samantha and a wholly owned subsidiary of
Odwalla;                                          

 2.     approve the amendment of the Certificate of Designation of
               preferred stock to permit the conversion of the Odwalla preferred
          stock held by Catterton-Simon Partners III, L.P. into common
              stock based on a conversion ratio of 1.2407-to-1 rather than the
              1-to-1 conversion ratio set forth in the existing Certificate of
Designation;                                      

 3.     approve the amendment to Odwalla's 1997 Stock Option/Stock
              Issuance Plan to increase the number of shares of Odwalla common
               stock authorized for issuance thereunder from 1,648,475 shares to
2,148,475 shares;                                 

        4.     elect six (6) directors of Odwalla to serve until the 2001 annual
               meeting of shareholders or until their successors are elected and
qualified;                                        

5.     ratify the appointment of PricewaterhouseCoopers LLP as  
           independent accountants of Odwalla for the fiscal year ending
September 2, 2000; and                            

  6.     transact any other business as may properly come before the
   meeting or any adjournments or postponements thereof.

VOTING RIGHTS OF SHAREHOLDERS (see page 16)                                     

      The board of directors has set the close of business on March 10, 2000
as the record date for determining shareholders entitled to vote at the annual  
meeting. At the annual meeting, each share of Odwalla common stock outstanding  
will be entitled to one vote and each share of Odwalla preferred stock          
outstanding will be entitled to one vote. As of the record date, there were     
5,125,761 shares of Odwalla common stock and 1,074,666 shares of Odwalla        
preferred stock outstanding and entitled to vote. As of that date, there were   
approximately 310 holders of record of Odwalla common stock and one holder of   
record of Odwalla preferred stock.                                              

     Any proxy given by a shareholder may be revoked by the shareholder at
any time before it is voted by delivering a written notice of revocation to the 
Secretary of Odwalla, by executing and delivering a later-dated proxy or by     
attending the annual meeting and giving oral notice of your intention to vote in
person. Attendance at the annual meeting by a shareholder who has executed and  
delivered a proxy to Odwalla will not in and of itself constitute a revocation  
of the proxy.                                                                   

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REQUIRED VOTE FOR APPROVAL (see page 16)                                        

     Each of the proposals to be voted on by Odwalla shareholders requires
the affirmative vote of the holders of a majority of the shares of Odwalla      
common stock and preferred stock voting together as a class present, or         
represented, and voting at the Odwalla annual meeting, except for the following:
(1) the approval of the amendment to the Odwalla Certificate of Designation     
requires the affirmative vote of the holders of a majority of the outstanding   
shares of Odwalla common stock and preferred stock voting together as a class   
entitled to vote at the Odwalla annual meeting and (2) directors shall be       
elected by a plurality of the votes cast by the common stock and preferred stock
holders voting together as a class.                                             

      Two Odwalla shareholders have entered into a voting agreement in which
they promise to vote shares representing approximately 27% of Odwalla capital   
stock in favor of the merger and the issuance of shares of Odwalla common stock 
to Fresh Samantha shareholders in connection with the merger.                   

RECOMMENDATION OF THE ODWALLA BOARD OF DIRECTORS (see page 20)                  

  The Odwalla board of directors has unanimously approved the merger
agreement. The Odwalla board of directors believes that the terms of the merger 
agreement are fair to, and in the best interests of, Odwalla and its            
shareholders, and unanimously recommends that holders of shares of Odwalla      
common stock vote "for" approval of the merger and the issuance of Odwalla      
common stock to the shareholders of Fresh Samantha pursuant to the merger.      

     Additionally, the Odwalla board of directors has unanimously approved
and recommends that Odwalla shareholders vote "FOR" approval of the (1)         
amendment to the Certificate of Designation increasing the ratio for converting 
the preferred stock into common stock, (2) increase in the number of shares     
under the Odwalla 1997 Stock Option/Stock Issuance Plan, (3) election of the    
listed directors and (4) ratification of the appointed accountants.             

THE COMPANIES INVOLVED IN THE MERGER                                            

        The name, address and phone number of the principal executive offices of
the parties to the merger, as well as a description of each party's business, is
as follows:                                                                     

ODWALLA, INC.                                                                   
120 Stone Pine Road                                                             
Half Moon Bay, CA 94019                                                         
Attn:  Investor Relations                                                       
(650) 726-1888                                                                  

   Odwalla is the nation's leading brand of all-natural, super-premium
refrigerated juices and smoothies, serving thousands of accounts coast to coast 
from its production facility in Dinuba, California. The company also offers     
all-natural meal replacement and dairy-free shakes, natural spring water and    
all-natural food bars.                                                          

     Odwalla maintains a site on the Internet at www.odwalla.com; however,
information found at Odwalla's Web site is not a part of this proxy statement.  
Odwalla began operations in September 1980 and was incorporated in California in
September 1985.                                                                 

FRESH SAMANTHA, INC.                                                            
84 Industrial Park Road                                                         
Saco, Maine 04072                                                               
(207) 284-0011                                                                  

        Fresh Samantha is a leading supplier of all-natural, super-premium fruit
and vegetable juices and soy shakes. Fresh Samantha beverages are available     
across New England, New York City, Philadelphia, Washington, D.C., North        
Carolina, New Jersey and Florida and can be found in delicatessens,             
supermarkets, natural food stores, convenience stores, warehouse outlets and    
selected restaurants.                                                           

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Fresh Samantha maintains a site on the Internet at              
www.freshsamantha.com; however, information found at Fresh Samantha's Web site  
is not a part of this proxy statement. Fresh Samantha was founded in 1970 as a  
sole proprietorship. In 1983, the business was incorporated as Down East        
Sunsprouts, Inc., as a Maine corporation. In January 1997, it filed an amendment
to its Articles of Incorporation to change its name to Fresh Samantha.          

ORANGE ACQUISITION SUB, INC.                                                    
120 Stone Pine Road                                                             
Half Moon Bay, CA 94019                                                         
Attn:  Investor Relations                                                       
(650) 726-1888                                                                  

      The Orange Acquisition Sub is a Maine corporation organized by Odwalla
for the purpose of effecting the merger. It has no material assets and has not  
engaged in any activities except in connection with the merger.                 

SUMMARY TERMS OF THE MERGER                                                     

WHAT FRESH SAMANTHA SHAREHOLDERS WILL RECEIVE (see page 37)             

   Upon consummation of the merger, based on the number of outstanding
shares of Odwalla common stock on March 10, 2000, Fresh Samantha shareholders   
will receive approximately 3,812,000 shares of Odwalla common stock for all of  
the outstanding capital stock of Fresh Samantha.                                

OWNERSHIP OF ODWALLA FOLLOWING THE MERGER                               

       Fresh Samantha shareholders will receive approximately 3,812,000 shares
of Odwalla common stock in the merger. Based on that number and on the number of
outstanding shares of Odwalla common stock, as of March 10, 2000, former Fresh  
Samantha shareholders will own approximately 34.0% of the outstanding shares of 
Odwalla common stock following the merger.                                      

       On a fully diluted basis, which assumes: (1) no exercise of outstanding
options or warrants to acquire Odwalla common stock or options or warrants to   
acquire Fresh Samantha capital stock, (2) the conversion of all of the preferred
stock held by Catterton-Simon Partners III, L.P. at a conversion ratio of       
1.2407-to-1 as contemplated in the proposed amendment to the Certificate of     
Designation, and (3) the purchase immediately prior to the closing of the merger
of $6,000,000 of common stock by Catterton-Simon Partners and U.S. Equity       
Partners, L.P. as contemplated in the merger agreement, following the merger,   
Fresh Samantha shareholders will own approximately 34.0% of the outstanding     
shares of Odwalla common stock.                                                 

CONDITIONS TO THE COMPLETION OF THE MERGER (see page 41)                

    Odwalla and Orange Acquisition Sub are not obligated to complete the
merger unless a number of conditions are satisfied. These conditions include the
following:                                                                      

       -      Fresh Samantha's representations and warranties must be true and
correct;                                          

-      Fresh Samantha must perform in all material respects all 
       obligations in the merger agreement and the other related
               agreements required to be performed by Fresh Samantha at or prior
to the closing of the merger;                     

   -      delivery of duly executed copies of the escrow agreement and
shareholders' rights agreement;                   

        -      receipt of a legal opinion from counsel to Fresh Samantha and its
shareholders;                                     

       -      receipt of the written resignations of the board of directors of
Fresh Samantha;                                   

-      receipt of written evidence of the termination of Fresh  
       Samantha's option plan and the cancellation of all option
            agreements and warrants to purchase the capital stock of Fresh
Samantha;                                         

    -      as of the consummation of the merger, Fresh Samantha's actual
        working capital must not be less than negative $5,250,000;

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     -      not more than 1% of the shares of Fresh Samantha capital stock
shall have dissented from the merger; and         

 -      concurrently with the closing of the merger or immediately
            thereafter, Odwalla must have sold not less than $6,000,000 of
 its common stock on specified terms and conditions.

   Additionally, the merger agreement provides that the obligations of
Fresh Samantha, Samantha Investors and Fresh Samantha shareholders to complete  
the merger are subject to various conditions, including the following:          

-      the representations and warranties of Odwalla and Orange 
Acquisition Sub, Inc.. must be true and correct;  

   -      delivery of duly executed copies of the escrow agreement and
shareholders' rights agreement;                   

     -      as of the consummation of the merger, Odwalla's actual working
capital shall not be less than $4,250,000;        

    -      the shares of Odwalla preferred stock held by Catterton-Simon
             Partners shall have been converted into shares of common stock;

        -      cancellation of the warrant to purchase Odwalla common stock held
by Catterton-Simon Partners; and                  

 -      concurrently with the closing of the merger or immediately
             thereafter, Odwalla shall have sold not less than $6,000,000 of
its common stock.                                 

TERMINATION OF THE MERGER AGREEMENT (see page 42)                       

      Odwalla or Fresh Samantha may terminate the merger agreement by mutual
consent. Additionally, either Odwalla or Fresh Samantha may terminate the merger
agreement if the conditions to the completion of the merger cannot be satisfied 
because of a material breach of the merger agreement by the other party or a    
representation or warranty of the other party in the merger agreement becomes   
materially untrue.                                                              

SHAREHOLDERS' RIGHTS AGREEMENT (see page 42)                            

     As a condition to each party's obligation to complete the merger, the
Chief Executive Officer of Odwalla and other major direct or indirect           
shareholders of Odwalla after the merger, including investment funds affiliated 
with Bain Capital, Inc., Samantha Investors LLC, U.S. Equity Partners and       
Catterton-Simon Partners, must execute a shareholders' rights agreement. The    
shareholders' rights agreement grants the parties to the agreement rights to    
register their shares of Odwalla common stock and co-sale rights in the event   
another party sells its shares of Odwalla common stock, and includes a voting   
agreement to elect members of the board of directors of Odwalla. The            
shareholders' rights agreement also grants Odwalla a right of first offer with  
respect to transfers of Odwalla common stock by the financial investors that are
parties to the agreement.                                                       

        You are urged to read the shareholders' rights agreement; a form of what
will be signed is attached as Appendix B, in its entirety.                      

ESCROW AGREEMENT (see page 44)                                          

        As a condition to each party's obligation to complete the merger, all of
the shareholders of Fresh Samantha and Samantha Investors must execute an escrow
agreement. On the closing date of the merger, Odwalla will deposit with an      
escrow agent shares of Odwalla common stock equal to 15% of the aggregate merger
consideration received by Fresh Samantha shareholders to be held for a period of
one year. The escrow account will be the sole source of indemnification payments
to Odwalla under the merger agreement other than claims based upon fraud.       

STOCK PURCHASE AGREEMENT  (see page 45)                                 

        As a condition to the completion of the merger, Odwalla has entered into
a common stock purchase agreement, dated February 11, 2000, with U. S. Equity   
Partners, a private equity investment fund managed by Wasserstein Perella Group,
Inc., and Catterton-Simon Partners to sell $5.0 million of Odwalla common stock 
to U.S. Equity Partners and $1.0 million of Odwalla common stock to             
Catterton-Simon Partners at the time of the closing of the merger.              

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INTERESTS OF ODWALLA DIRECTORS IN THE MERGER  (see page 24)             

  A number of directors of Odwalla have interests in the merger that
differ from those of shareholders generally. The three directors who will be    
resigning from the Odwalla board at the completion of the merger have had the   
vesting schedules of their stock option grants accelerated so that all of their 
stock options are now immediately exercisable. Additionally, the exercise period
of their stock option grants has been extended until the end of the year 2000.  
Furthermore, one director has an interest in the increase in the change to the  
conversion ratio of the Odwalla preferred stock held by Catterton-Simon         
Partners.                                                                       

OUR FINANCIAL ADVISOR BELIEVES THE MERGER IS FAIR TO ODWALLA SHAREHOLDERS       
(see page 21)                                                                   

 W.R. Hambrecht + Co. has acted as financial advisor to Odwalla in
connection with the evaluation of the merger. WRH+Co delivered a written        
opinion, dated February 2, 2000, to the Odwalla board of directors that as of   
that date and based upon and subject to the various limitations, qualifications 
and assumptions stated in the opinion, that the merger consideration to be paid 
to the Fresh Samantha shareholders was fair to Odwalla from a financial point of
view.                                                                           

A copy of the written opinion of WRH+Co, which sets forth the   
assumptions made, matters considered and limitations on the reviews undertaken, 
is attached as Appendix C to this proxy statement and should be read carefully  
in its entirety.                                                                

WE ANTICIPATE THE MERGER WILL NOT RESULT IN FEDERAL INCOME TAX (see page 25)    

        The merger is intended to qualify as a reorganization within the meaning
of Section 368 of the Internal Revenue Code and, assuming the merger does so    
qualify, generally no gain or loss will be recognized by Odwalla as a result of 
the merger. Consummation of the merger is conditioned upon delivery of opinions 
of counsel that the merger will qualify as a reorganization within the meaning  
of the Internal Revenue Code.                                                   

WE EXPECT TO USE PURCHASE ACCOUNTING (see page 26)                              

  The merger is expected to be treated as a purchase transaction for
accounting and financial reporting purposes.                                    

WE MUST RECEIVE REGULATORY APPROVALS BEFORE COMPLETING THE MERGER (see page     
26)                                                                             

     United States antitrust laws prohibit Odwalla and Fresh Samantha from
completing the merger until after they have furnished information and materials 
to the Antitrust Division of the Department of Justice and the Federal Trade    
Commission and a required waiting period has ended. Odwalla and Fresh Samantha  
each filed the required notification and report forms with the Antitrust        
Division and the Federal Trade Commission on March 10, 2000. Under antitrust    
laws, the merger may not be completed until after the expiration or early       
termination of the applicable waiting period. We expect to receive notice of    
termination of the waiting period on April 9, 2000.                             

THE BOARD AND MANAGEMENT OF ODWALLA WILL CHANGE AFTER THE MERGER (see page 26)  

    If the merger is consummated, the Odwalla board will be increased to
seven directors. Three of Odwalla's current directors will resign and four new  
directors will be appointed. Additionally, an officer of Fresh Samantha will be 
appointed President of Odwalla at the effective time of the merger.             

WE WILL NEED TO SELL STOCK AND ARRANGE ADDITIONAL DEBT FINANCING IN CONNECTION  
WITH THE MERGER (see page 28)                                                   

  Odwalla will bear all expenses incurred by both Fresh Samantha and
Odwalla in connection with the merger, and will assume all of Fresh Samantha's  
liabilities. To help finance these obligations, Odwalla has received a          
commitment letter from Imperial Bank to arrange an increase in Odwalla's credit 
facility from $5.0 million to $10.0 million and has entered into the previously 
described stock purchase agreement with U.S. Equity Partners and Catterton-Simon
Partners to sell $5.0 million of Odwalla common stock to U.S. Equity Partners   
and $1.0 million of Odwalla common stock to Catterton-Simon Partners at the time
of the closing of the merger.                                                   

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ODWALLA SHAREHOLDERS ARE NOT ENTITLED TO APPRAISAL RIGHTS (see page 28)         

       Odwalla shareholders are not entitled under California law to appraisal
rights with respect to the merger.                                              

FORWARD-LOOKING STATEMENTS IN THIS PROXY STATEMENT (see page 12)                

     This proxy statement and the documents incorporated by reference into
this proxy statement contain forward-looking statements with respect to         
Odwalla's and Fresh Samantha's financial condition, results of operations and   
business and on the expected impact of the merger on Odwalla's financial        
performance. When used in this proxy statement, the words "anticipate,"         
"expect," "intend," "plan," "believe," "seek," "estimate" and similar           
expressions identify forward-looking statements. These forward-looking          
statements are not guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially from the     
results contemplated by the forward-looking statements. In evaluating the       
merger, you should carefully consider the discussion of risks and uncertainties 
in the section entitled "Risk Factors" on page 12 of this proxy statement.      

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SELECTED HISTORICAL FINANCIAL DATA OF ODWALLA AND FRESH SAMANTHA                

     The following selected historical financial data of Odwalla and Fresh
Samantha have been derived from their respective audited and unaudited          
historical financial statements. This information should be read in conjunction 
with the following consolidated financial statements and notes thereto that are 
included elsewhere in this proxy statement.                                     

ODWALLA, INC.                                                                   

 Consolidated Balance Sheets, August 29, 1998, August 28, 1999 and
November 27, 1999                                                               

      Consolidated Statements of Operations, three years in the period ended
August 28, 1999 and thirteen weeks in the periods ended November 28, 1998 and   
November 27, 1999                                                               

       Consolidated Statements of Changes in Shareholders' Equity, three years
in the period ended August 28, 1999 and thirteen weeks in the period ended      
November 27, 1999                                                               

      Consolidated Statements of Cash Flows, three years in the period ended
August 28, 1999 and thirteen weeks in the periods ended November 28, 1998 and   
November 27, 1999                                                               

FRESH SAMANTHA, INC.                                                            

   Consolidated Balance Sheets, October 31, 1998, October 30, 1999 and
January 22, 2000                                                                

      Consolidated Statements of Operations, three years in the period ended
October 30, 1999 and twelve weeks in the periods ended January 23, 1999 and     
January 22, 2000                                                                

       Consolidated Statements of Changes in Shareholders' Equity, three years
in the period ended October 30, 1999 and twelve weeks in the period ended       
January 22, 2000                                                                

      Consolidated Statements of Cash Flows, three years in the period ended
October 30, 1999 and twelve weeks in the periods ended January 23, 1999 and     
January 22, 2000                                                                

   The unaudited consolidated financial information presented has been
derived from the unaudited consolidated financial statements of Odwalla and     
Fresh Samantha as of and for the periods as indicated and, in the opinion of    
Odwalla's and Fresh Samantha's respective management, reflect all adjustments   
necessary for the fair presentation of this unaudited financial information. The
results of operations for all interim periods presented are not necessarily     
indicative of the results to be expected for the entire year.                   

ODWALLA SELECTED HISTORICAL FINANCIAL DATA
 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                                                             13 weeks ended       
                                                                 Year Ended August,                    ---------------------------
                                           ----------------------------------------------------------  November 28,   November 27,
                                             1995        1996        1997         1998         1999         1998         1999     
                                           --------    --------    --------     --------     --------     --------     --------   
                                                                                                        (unaudited)   (unaudited) 
HISTORICAL CONSOLIDATED STATEMENT OF OPERATIONS DATA:                                                                             
                                                                                                                                  
Net sales                                  $ 35,869    $ 59,197    $ 52,630     $ 59,088     $ 68,042     $ 15,332     $ 16,769   
Gross profit                                 17,444      29,308      24,980       29,852       32,500        7,696        7,813   
Income (loss) from operation                  1,389         687     (14,547)      (1,241)      (2,361)        (490)        (841)  
Net income (loss)                               997         633     (12,436)      (1,379)      (2,042)        (479)        (725)  
Preferred stock dividend                          -           -           -            -         (267)           -         (213)  
                                           --------    --------    --------     --------     --------     --------     --------   
Net income (loss) applicable to                                                                                                   
 common shareholders                       $    997    $    633    $(12,436)    $ (1,379)    $ (2,309)    $   (479)    $   (938)  
                                           ========    ========    ========     ========     ========     ========     ========   

Basic net income (loss) applicable to                                                                                             
 common shareholders per share             $   0.24    $   0.13    $  (2.49)    $  (0.27)    $  (0.45)    $  (0.09)    $  (0.18)  
                                           ========    ========    ========     ========     ========     ========     ========   

Diluted net income (loss) applicable to                                                                                           
 common  shareholders per share            $   0.22    $   0.12    $  (2.49)    $  (0.27)    $  (0.45)    $  (0.09)    $  (0.18)  
                                           ========    ========    ========     ========     ========     ========     ========   

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                                                        [Enlarge/Download Table]

                                                                     Year Ended August,                  13 weeks ended
                                            -----------------------------------------------------------   November 27, 
                                             1995         1996         1997          1998        1999         1999     
                                            -------      -------      -------      -------      -------      -------   
                                                                                                           (unaudited) 
HISTORICAL CONSOLIDATED BALANCE SHEET DATA:                                                                            
                                                                                                                       
Cash, cash equivalents and                                                                                             
 short-term investments                     $18,496      $12,413      $ 3,225      $ 3,191      $ 7,369      $ 4,618   
Working capital                              17,918       14,655        1,300        1,669        7,384        5,608   
Total assets                                 35,481       37,700       31,006       29,350       35,305       33,773   
Long-term liabilities                           736          501          441          888          688          592   
Mandatorily redeemable and convertible                                                                                 
 preferred stock                                  -            -            -            -        7,505        7,718   
Total shareholders' equity                   28,499       29,574       17,635       16,445       14,449       13,512   

 FRESH SAMANTHA SELECTED HISTORICAL FINANCIAL DATA
 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                                                          12 weeks ended      
                                                            Year Ended October,                      -------------------------
                                        ----------------------------------------------------------   January 23,   January 22,
                                          1995         1996        1997        1998         1999         1999         2000    
                                        --------     --------    --------    --------     --------     --------     --------  
                                      (unaudited)  (unaudited) (unaudited)                            (unaudited) (unaudited) 
HISTORICAL CONSOLIDATED STATEMENT OF OPERATIONS DATA:                                                                         
                                                                                                                              
Net sales                               $  1,662     $  3,194    $  7,180    $ 15,708     $ 32,158     $  4,208     $  8,731  
Gross profit                                 452        1,283       3,169       6,813       15,270        1,817        4,417  
Income (loss) from operations                 (6)          65         316         100       (6,420)      (1,084)      (1,357) 
Net income (loss)                       $    (19)    $     41    $     99    $   (118)    $ (6,577)    $ (1,035)    $ (1,430) 
                                        ========     ========    ========    ========     ========     ========     ========  
Basic net income (loss) per common                                                                                            
 share                                  $  (1.73)    $   3.73    $   9.00    $  (2.55)    $ (21.31)    $  (3.35)    $  (4.63) 
                                        ========     ========    ========    ========     ========     ========     ========  
Diluted net income (loss) per common                                                                                          
 share                                  $  (1.73)    $   3.73    $   9.00    $  (2.55)    $ (21.31)    $  (3.35)    $  (4.63) 
                                        ========     ========    ========    ========     ========     ========     ========  

                                                        [Enlarge/Download Table]

                                                          Year Ended October,                        12 weeks ended
                                  -----------------------------------------------------------------    January 22, 
                                     1995        1996           1997           1998         1999          2000     
                                  ---------    ---------      ---------      --------     ---------     ---------  
                                 (unaudited)  (unaudited)    (unaudited)                               (unaudited) 
HISTORICAL CONSOLIDATED BALANCE SHEET DATA:                                                                        
                                                                                                                   
Cash and cash equivalents           $  -      $     39       $    100       $  2,440      $    463     $    265    
Working capital                       43           (54)          (301)         2,628        (2,781)      (3,939)   
Total assets                         485         1,033          2,362          6,936        12,728       11,848    
Long-term liabilities                229           422            639            356           610          531    
Total shareholders' equity            80           121            220          4,776         3,944        2,514    

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SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA                  

       The following selected unaudited pro forma combined condensed financial
data are derived from the unaudited pro forma combined condensed financial      
statements and notes thereto appearing elsewhere herein, which give effect to   
the merger as a purchase for accounting purposes, and should be read in         
conjunction with the unaudited pro forma statements and notes thereto and the   
separate consolidated financial statements and related notes thereto of Odwalla 
and Fresh Samantha included in or attached to this proxy statement. See         
"Unaudited Pro Forma Combined Condensed Financial Statements." For purposes of  
the unaudited pro forma combined financial statements of operations, Odwalla's  
consolidated financial statement of operations for the year ended August 28,    
1999 and for the thirteen weeks ended November 27, 1999 has been combined with  
Fresh Samantha's consolidated financial statement of operations for the year    
ended October 30, 1999 and the twelve weeks ended January 22, 2000. For purposes
of the unaudited pro forma combined balance sheets, Odwalla's consolidated      
balance sheet as of November 27, 1999 has been combined with Fresh Samantha's   
consolidated balance sheet as of January 22, 2000.                              

The unaudited pro forma information is presented for comparative
purposes only and does not purport to be indicative of the operating results or 
financial position that would have occurred if the merger had been consummated  
at the beginning of the periods presented, nor is the information necessarily   
indicative of the future operating results or financial position of Odwalla and 
Fresh Samantha.                                                                 

              SELECTED UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL DATA
             (IN THOUSANDS, EXCEPT PER SHARE DATA)
             (UNAUDITED)

                                                        [Enlarge/Download Table]

                                                                      Year ended   Quarter ended
                                                                      August 28,    November 27,
                                                                         1999           1999    
                                                                       ----------    ---------- 
PRO FORMA STATEMENT OF OPERATIONS DATA:                                                         

                                                                                                
Net sales                                                              $ 100,200     $  25,500  
Loss from operations                                                     (10,345)       (2,590) 
Net loss                                                                 (10,043)       (2,472) 
Net loss applicable to common shareholders                               (10,043)       (2,472) 

Basic and diluted loss per share attributable to common shareholders   $   (0.90)    $   (0.22) 

Basic and diluted weighted average common shares outstanding              11,204        11,232  

                                                                [Download Table]

                                                                  November 27,
                                                                      1999    
                                                                  ------------
PRO FORMA COMBINED BALANCE SHEET DATA:                                        
                                                                              
Working capital..................................................  $  5,869   
Total assets.....................................................    74,831   
Total shareholders' equity.......................................    55,834   

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COMPARATIVE PER SHARE DATA                                                      

     The following table presents historical per share data of Odwalla and
Fresh Samantha which is derived from the financial statements, audited and      
unaudited, appearing elsewhere in this proxy statement. The table also includes 
unaudited pro forma combined per share data using the purchase method of        
accounting, assuming the merger had been effective as of the beginning of the   
periods presented. The unaudited pro forma combined per share data also assumes 
the conversion of all outstanding Odwalla Series A preferred stock into common  
stock and the issuance of additional shares of common stock resulting from the  
$6.0 million private equity transaction to occur at the time of the merger. More
information on both of these assumptions appears elsewhere in this proxy        
statement. The pro forma data presented does not purport to be indicative of the
results of future operations or the results that would have occurred had the    
merger been consummated at the beginning of the periods presented. The          
information set forth below should be read in conjunction with the historical   
financial statements and notes thereto of Odwalla and Fresh Samantha presented  
elsewhere in this proxy statement. Neither Odwalla nor Fresh Samantha has paid  
cash dividends for any of the periods presented.                                

                                                        [Enlarge/Download Table]

                                                                  Year ended  Quarter ended
                                                                  August 28,  November 27, 
                                                                    1999          1999     
                                                                  ----------  -----------  
HISTORICAL - ODWALLA COMMON STOCK:                                                         
                                                                                           
Basic loss per share attributable to common shareholders.........  $  (0.45)   $   (0.18)  
Diluted loss per share attributable to common shareholders.......  $  (0.45)   $   (0.18)  
Book value per share (Note A)....................................  $   2.35    $    2.19   

HISTORICAL - FRESH SAMANTHA COMMON STOCK:                                                  

Basic loss per share attributable to common shareholders.........  $ (21.31)   $   (4.63)  
Diluted loss per share attributable to common shareholders.......  $ (21.31)   $   (4.63)  
Book value per share (Note A)....................................  $   7.49    $    4.77   

PRO FORMA COMBINED NET LOSS PER SHARE:                                                     

Basic loss per share attributable to common shareholders.........  $  (0.90)   $   (0.22)  
Diluted loss per share attributable to common shareholders.......  $  (0.90)   $   (0.22)  

                                                                [Download Table]

                                                                  November 27,
                                                                      1999    
                                                                  ------------
PRO FORMA COMBINED BOOK VALUE PER SHARE:                                      
                                                                              
Book value per share (Note B)....................................  $    4.97  

Note A: The historical book value per share is computed by dividing             
shareholders' equity by the number of shares of common stock and preferred      
stock, on an as if converted basis, outstanding at the end of the period.       

Note B: The pro forma combined book value per share is computed by dividing pro 
forma shareholders' equity by the pro forma number of shares of common stock    
outstanding at the end of the period.                                           

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RISK FACTORS

     This proxy statement and the documents incorporated by reference into
this proxy statement contain forward-looking statements with respect to         
Odwalla's and Fresh Samantha's financial condition, results of operations and   
business and on the expected impact of the merger on Odwalla's financial        
performance. When used in this proxy statement, the words "anticipate,"         
"expect," "intend," "plan," "believe," "seek," "estimate" and similar           
expressions identify forward-looking statements. These forward-looking          
statements are not guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially from the     
results contemplated by the forward-looking statements.                         

      In addition to the other information included in this proxy statement,
you should carefully consider the following risk factors in determining how to  
vote on the merger. These matters should be considered in conjunction with the  
other information included or incorporated by reference in this proxy statement,
including the other factors that affect Odwalla's business that are discussed at
page 68 of this proxy statement.                                                

WE MAY NOT BE ABLE TO SUCCESSFULLY INTEGRATE FRESH SAMANTHA AND ACHIEVE THE     
BENEFITS EXPECTED TO RESULT FROM THE MERGER                                     

The merger will present challenges to management, including the 
integration of the operations, product lines, technologies and personnel of     
Odwalla and Fresh Samantha, and special risks, including possible unanticipated 
liabilities, unanticipated costs and diversion of management attention.         

      We cannot assure you that we will successfully integrate or profitably
manage Fresh Samantha's business. In addition, we cannot assure you that,       
following the transaction, the combined businesses will achieve increased sales 
levels, profitability, efficiencies or synergies or that the merger will result 
in increased earnings for the combined companies in any future period. The      
difficulties of combining the operations of Odwalla and Fresh Samantha are      
exacerbated by the necessity of coordinating geographically separated           
organizations. The process of integrating operations could cause an interruption
of, or loss of momentum in, the activities of Odwalla's businesses, including   
the business acquired in the merger. Additionally, the combined company may     
experience slower rates of growth as compared to historical rates of growth of  
Odwalla and Fresh Samantha independently. Although the Odwalla board of         
directors believes that the merger is in the best interests of Odwalla and its  
shareholders, we cannot assure you that the companies will realize the          
anticipated benefits of the merger.                                             

DESPITE THE BEST EFFORTS OF BOTH ODWALLA AND FRESH SAMANTHA, THE MERGER MAY NOT 
BE COMPLETED, WHICH MAY HARM OUR BUSINESS, RESULTS OF OPERATIONS, AND FINANCIAL 
CONDITION                                                                       

        In the event that the merger is not consummated, we will be subject to a
number of material risks, including (1) the incurrence of large legal,          
accounting, financial advisory and other fees and costs in connection with the  
merger, all of which must be paid even if the merger is not completed, (2)      
potential reputational harm, and (3) the failure to meet the expectations of    
public market analysts and investors that the merger would be consummated. As a 
result, the market price of our common stock may decline and our business,      
results of operations, and financial condition may be harmed.                   

FAILURE TO QUALIFY FOR FEDERAL TAX TREATMENT AS A REORGANIZATION MAY HARM OUR   
FUTURE RESULTS OF OPERATIONS                                                    

      Odwalla and Fresh Samantha will not complete the merger unless each of
them receives an opinion from its counsel that the merger qualifies for federal 
income tax treatment as a "reorganization" under the Internal Revenue Code. If  
the merger is treated as reorganization, no gain or loss will be recognized by  
Odwalla as a result of the merger.                                              

        However, even if Odwalla and Fresh Samantha each receive an opinion from
its counsel that the merger constitutes a "reorganization," there is no         
guarantee that the Internal Revenue Service will treat the merger as a          
"reorganization." If the merger fails to qualify as a "reorganization" for      
federal tax purposes, we may be exposed to tax liabilities that could harm our  
results of operations and financial condition.                                  

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WE MAY NOT BE ABLE TO OBTAIN THE FINANCING NECESSARY TO COVER THE COSTS OF THE  
MERGER AND RESULTING INTEGRATION OF THE TWO COMPANIES OR MAY ONLY BE ABLE TO DO 
SO ON UNFAVORABLE TERMS                                                         

     Upon consummation of the merger, the businesses of Fresh Samantha and
Odwalla will be combined and we will bear all the expenses incurred by both     
Fresh Samantha and Odwalla in connection with the merger, including the costs   
associated with filing this proxy statement and fees associated with obtaining  
regulatory approval for the merger from the Antitrust Division of the Department
of Justice and the Federal Trade Commission. As of January 22, 2000, Fresh      
Samantha had negative working capital of $3.9 million, which will impose        
additional post-merger financing requirements on us. In order to cover these    
expenses and expenses associated with the integration and operation of Odwalla  
and Fresh Samantha's combined businesses, we are arranging additional financing.
We have received a commitment letter from Imperial Bank for an increase in our  
credit facility from $5.0 million to $10.0 million and entered into a common    
stock purchase agreement, dated February 11, 2000, with Catterton-Simon Partners
and U.S. Equity Partners to sell $6.0 million of Odwalla common stock. U.S.     
Equity Partners will purchase $5.0 million of common stock and Catterton-Simon  
Partners will purchase $1.0 million of common stock. Both the credit facility   
increase and the sale of Odwalla common stock are to have been completed by or  
before the time of the closing. However, there is no guarantee that the         
transactions will be consummated and if not, we may be unable to obtain         
financing through other means and upon favorable terms. Failure to complete     
these transactions may prevent the merger or jeopardize its success and harm our
business, results of operations, and financial condition.                       

BECAUSE THE NUMBER OF SHARES ISSUED TO FRESH SAMANTHA SHAREHOLDERS IN CONNECTION
WITH THE MERGER IS FIXED, ODWALLA SHAREHOLDERS WILL IN EFFECT PAY MORE FOR FRESH
SAMANTHA IF OUR STOCK PRICE INCREASES                                           

        Under the merger agreement, Odwalla will deliver approximately 3,812,000
shares of Odwalla common stock in exchange for all of the outstanding stock of  
Fresh Samantha. The number of shares to be delivered by Odwalla will not be     
adjusted if the price of our common stock increases or decreases. The price of  
our common stock at the closing of the merger may vary from the price on the    
date of this proxy statement and on the date of the annual meeting. Factors that
could affect the price of our common stock include:                             

-      changes in our business, operations or prospects;        

   -      market assessments of the likelihood that the merger will be
completed;                                        

-      timing of the completion of the merger;                  

-      prospects of post-merger operations;                     

-      regulatory and tax considerations; and                   

-      general market and economic conditions.                  

 If the price of our common stock increases, we will still need to
deliver the same number of shares of our common stock, in effect paying more to 
acquire the stock of Fresh Samantha. Additionally, the merger agreement contains
a working capital "target" amount for each of Odwalla and Fresh Samantha, and   
subject to the detailed provisions of the merger agreement, the number of shares
of Odwalla common stock to be issued in the merger may be increased or decreased
if Odwalla and Fresh Samantha exceed or fall short of their respective working  
capital target.                                                                 

WE MAY BE EXPOSED TO LIABILITIES THAT ARE NOT COVERED BY THE INDEMNIFICATION    
AVAILABLE UNDER THE MERGER AGREEMENT, WHICH MAY HARM OUR RESULTS OF OPERATION   
AND FINANCIAL CONDITION                                                         

      Upon consummation of the merger, we will assume all the liabilities of
Fresh Samantha. We believe based upon our due diligence and representations made
in the merger agreement that we have accurately assessed and can absorb these   
liabilities. However, it is possible that liabilities may arise in the future   
which we did not discover or anticipate. To the extent these liabilities are    
inconsistent with representations and warranties made in the merger agreement,  
we may have a claim for indemnification against the former shareholders of Fresh
Samantha. The merger agreement provides that 15% of Odwalla common stock to be  
issued in the merger will be placed in an                                       

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escrow account and held for a period of one year to cover any indemnification   
claims. The escrow amount will be our sole recourse for indemnification claims  
other than in the case of fraud. However, Fresh Samantha's liabilities, both at 
the time of and arising after the consummation of the merger, may exceed our    
expectations and the escrow amount may be insufficient to cover these           
liabilities. If total liabilities for which indemnification is available exceed 
the escrow amount or if liabilities arise after the one year escrow period, we  
may suffer financial losses, which will harm our business, results of operation 
and financial condition.                                                        

OUR BOARD OF DIRECTORS WILL CHANGE SUBSTANTIALLY AFTER THE MERGER               

Upon consummation of the merger, the composition of our board of
directors will change substantially Under the terms of the merger agreement,    
Fresh Samantha's shareholders have the right to nominate three (3) new members  
to our board of directors. The new appointments to our board of directors will  
affect the continuity of our board of directors and the management of our       
business. We cannot guarantee that the new board of directors as a whole will   
have similar expertise and experience in the management of our business. The    
challenges that our new board of directors may face could harm our business,    
results of operation and financial condition.                                   

A SMALL NUMBER OF SHAREHOLDERS WILL CONTROL ODWALLA AFTER THE MERGER            

Immediately following the merger, the following shareholders    
collectively will own approximately 65% of the outstanding shares of Odwalla    
common stock and will beneficially own individually the percentage set forth    
opposite their respective names:                                                

                                                                [Download Table]
                                                   
Catterton-Simon Partners III, L.P.            13.3%

Samantha Investors, LLC                       33.9%

Greg A. Steltenpohl                            4.9%

U.S. Equity Partners, L.P.                     7.1%

D. Stephen C. Williamson                       5.4%

        Samantha Investors, LLC, is an entity formed by the selling shareholders
of Fresh Samantha and is controlled by investment funds affiliated with Bain.   

     With the exception of Mr. Steltenpohl, all of the shareholders listed
above will be parties to a shareholders' rights agreement that dictates the     
manner in which the parties to the agreement will nominate members of the       
Odwalla board of directors. The shareholders' rights agreement provides that the
Odwalla board of directors will include the following: (1) one member nominated 
by Catterton-Simon Partners as long as Catterton-Simon Partners holds at least  
5% of the outstanding common stock of Odwalla; (2) one member nominated by U.S. 
Equity Partners as long as U.S. Equity Partners holds at least 5% of the        
outstanding common stock of Odwalla; (3) one member nominated by the Chief      
Executive Officer of Odwalla; and (4) two members nominated by Bain as long as  
Bain or Samantha Investors holds at least 20% of the outstanding common stock of
Odwalla or one member nominated by Bain as long as Bain or Samantha Investors   
holds at least 5% but less than 20% of the outstanding common stock of Odwalla. 
In addition, if necessary to meet the requirements of the National Association  
of Securities Dealers, so long as Bain or Samantha Investors holds at least 20% 
of the outstanding common stock of Odwalla, Bain may nominate one independent   
director to the Odwalla board and the Chief Executive Officer of Odwalla, U.S.  
Equity Partners and Catterton-Simon Partners may collectively nominate one      
independent director to the board.                                              

Through their collective ownership interest and pursuant to the 
shareholders' rights agreement described above, these shareholders will have the
power to influence the election of our directors, the appointment of new        
management and the approval of any other action requiring the approval of our   
shareholders, including any amendments to our certificate of incorporation and  
mergers or sales of all of our assets. In addition, without the consent of these
shareholders, we could be prevented from entering into transactions that could  
be beneficial to our company or its shareholders in general. As a result, third 
parties could be discouraged from making a tender offer or bid to acquire our   
stock at a price per share that is above the price at which it trades on Nasdaq.

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 INFORMATION CONCERNING THE ANNUAL MEETING

DATE, TIME AND PLACE OF THE ANNUAL MEETING                                      

        This proxy statement is furnished in connection with the solicitation by
the board of directors of Odwalla, Inc., a California corporation, of proxies to
be voted at the annual meeting of shareholders to be held on April 25, 2000, or 
at any adjournment or postponement thereof, for the purposes set forth in the   
accompanying Notice of Annual Meeting of Shareholders. Shareholders of record on
March 10, 2000, will be entitled to vote at the annual meeting. The annual      
meeting will be held at Mel Mello Center for the Arts, 1167 Main Street, Half   
Moon Bay, California.                                                           

       It is anticipated that this proxy statement and the enclosed proxy card
will be first mailed to shareholders on or about March 16, 2000.                

PURPOSES OF THE ANNUAL MEETING                                                  

   At the Odwalla annual meeting, holders of Odwalla common stock will
consider and vote upon proposals to:                                            

     1.     approve the merger and the issuance of Odwalla common stock to
            shareholders of Fresh Samantha according to a merger agreement
            among Odwalla, Fresh Samantha and a wholly owned subsidiary of
Odwalla;                                          

 2.     approve the amendment of the Certificate of Designation of
               preferred stock to permit the conversion of the Odwalla preferred
          stock held by Catterton-Simon Partners III, L.P. into common
              stock based on a conversion ratio of 1.2407-to-1 rather than the
              1-to-1 conversion ratio set forth in the existing Certificate of
Designation;                                      

 3.     approve the amendment to Odwalla's 1997 Stock Option/Stock
              Issuance Plan to increase the number of shares of Odwalla common
               stock authorized for issuance thereunder from 1,648,475 shares to
2,148,475 shares;                                 

        4.     elect six (6) directors of Odwalla to serve until the 2001 annual
               meeting of shareholders or until their successors are elected and
qualified; and                                    

5.     ratify the appointment of PricewaterhouseCoopers LLP as  
           independent accountants of Odwalla for the fiscal year ending
September 2, 2000.                                

For a description of the terms of the merger and share issuance 
proposal, see "Proposal No. 1 -- Approval of the Merger" on page 37. For a      
description of the amendment to the Certificate of Designation, see "Proposal   
No. 2 -- Approval of the Amendment of the Certificate of Designation of         
Preferred Stock" on page 46. For a description of the amendment to the Odwalla  
1997 Stock Option/Stock Issuance Plan, see "Proposal No. 3 -Approval of the     
Amendment to the Odwalla 1997 Stock Option/Stock Issuance Plan" on page 47. For 
a description of the directors for election, see "Proposal No. 4 -- Election of 
Directors" on page 53. For a description of the appointment of Odwalla's        
independent accountants, see "Proposal No. 5 -- Ratification of Independent     
Public Accountants" on page 64. Shareholders of Odwalla also will consider and  
vote on any other matter that may properly come before the meeting.             

       Neither the California General Corporation Law nor the Odwalla Articles
of Incorporation requires Odwalla to obtain shareholder approval of the merger. 
However, due to the number of shares of Odwalla common stock to be issued in the
merger, Nasdaq rules require Odwalla to obtain shareholder approval of the      
issuance of the shares. Shareholder approval of the merger and the issuance of  
shares as requested in this proxy statement and described in the merger         
agreement will constitute the approval required by Nasdaq for the issuance of   
the Odwalla common stock in connection with the merger. Shareholder approval of 
the amendment to the Odwalla Certificate of Designation is required by the      
California General Corporation Law. Shareholder approval of the amendment to the
1997 Stock Option/Stock Issuance Plan also is being sought to (1) comply with   
Nasdaq rules; (2) permit options under the 1997 Stock Option/Stock Issuance Plan
to qualify as incentive stock options under Section 422 of the Internal Revenue 
Code; and (3) permit stock options and stock appreciation rights granted to     
Odwalla executives under the 1997 Stock Option/Stock Issuance Plan to qualify as
"performance-based compensation" under 162(m) of the Internal Revenue Code. The 
California General Corporation Law as well as the Articles of Incorporation and 
Bylaws of Odwalla require                                                       

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shareholder election of the nominees for director. Additionally, as a matter of 
corporate policy, the Odwalla board requests that the Odwalla shareholders      
ratify the appointment of Odwalla's accountants.                                

VOTING RIGHTS OF SHAREHOLDERS                                                   

     The close of business on March 10, 2000, has been fixed as the record
date for determining the holders of shares of Odwalla common stock entitled to  
notice of and to vote at the annual meeting and at any adjournments thereof. As 
of the close of business on the record date, Odwalla had 5,125,761 shares of its
common stock outstanding and entitled to vote at the annual meeting, held by 310
shareholders of record and 1,074,666 shares of its preferred stock outstanding  
and entitled to vote at the annual meeting, held by one shareholder of record.  
The presence at the annual meeting of a majority of these shares of common and  
preferred stock, either in person or by proxy, will constitute a quorum for the 
transaction of business at the annual meeting. An automated system administered 
by Odwalla's transfer agent tabulates shareholder votes. Each outstanding share 
of Odwalla common and preferred stock on the record date is entitled to one vote
on all matters. Directors shall be elected by a plurality of the votes cast.    

If any shareholder is unable to attend the annual meeting, the  
shareholder may vote by proxy. The enclosed proxy is solicited by Odwalla's     
board of directors, and, when the proxy card is returned properly completed, it 
will be voted as directed by the shareholder on the proxy card. Shareholders are
urged to specify their choices on the enclosed proxy card. If a proxy card is   
signed and returned without choices specified, in the absence of contrary       
instructions, the shares of common stock represented by the proxy will be voted 
FOR Proposals 1, 2, 3, 4, and 5 and will be voted in the proxy holders'         
discretion as to other matters that may properly come before the annual meeting.

       Each of the proposals requires the affirmative vote of the holders of a
majority of the shares of Odwalla common stock and preferred stock voting       
together as a class present, or represented, and voting at the Odwalla annual   
meeting, except for the following: (1) the approval of the amendment to the     
Odwalla Certificate of Designation requires the affirmative vote of the holders 
of a majority of the outstanding shares of Odwalla common stock and preferred   
stock voting together as a class entitled to vote at the Odwalla annual meeting 
and (2) directors shall be elected by a plurality of the votes cast by the      
common stock and preferred stock holders voting together as a class.            

       Approval of the amendment to the 1997 Stock Option/Stock Issuance Plan,
election of directors and ratification of independent accountants are not       
conditions to the consummation of the merger, and each of the proposals will be 
implemented, if approved by Odwalla shareholders, even if the merger is not     
consummated.                                                                    

  Except as described below, for purposes of determining whether the
proposals have been approved, the inspector of election will exclude abstentions
and broker non-votes from the number of shares deemed to be present, or         
represented, and entitled to vote on the matters at the Odwalla annual meeting. 
Accordingly, abstentions and broker non-votes will have no effect on the voting 
of the proposals. However, for purposes of determining whether the amendment to 
the Odwalla Certificate of Designation has been approved, the inspector of      
election will include abstentions and broker non-votes in the number of         
outstanding shares of Odwalla common stock entitled to vote thereon at the      
Odwalla annual meeting. Accordingly, abstentions and broker non-votes will have 
the effect of a "NO" vote on the amendment to the Odwalla Certificate of        
Designation proposal.                                                           

      As of the record date, directors and executive officers of Odwalla and
their affiliates were beneficial owners of an aggregate of 2,273,946 shares of  
Odwalla common stock and preferred stock together (exclusive of any shares      
issuable upon the exercise of stock options remaining unexercised as of that    
date), or approximately 36.7% of the 6,200,427 shares of Odwalla common stock   
and preferred stock that were issued and outstanding as of that date. See       
"Security Ownership of Certain Beneficial Owners and Management of Odwalla" on  
page 62 of this proxy statement.                                                

REVOCABILITY OF PROXIES                                                         

       Any person giving a proxy has the power to revoke it at any time before
its exercise. A proxy may be revoked by (1) filing with the Secretary of Odwalla
an instrument of revocation or a duly executed proxy bearing a later date, or   
(2) attending the annual meeting and voting in person.                          

SOLICITATION OF PROXIES                                                         

        Odwalla will bear the cost of soliciting proxies. Copies of solicitation
material will be furnished to brokerage houses, fiduciaries, and custodians     
holding shares in their names that are beneficially owned by others to forward  
to the                                                                          

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beneficial owners. Odwalla may reimburse these persons for their costs of       
forwarding the solicitation material to these beneficial owners. The original   
solicitation of proxies by mail may be supplemented by solicitation by          
telephone, telegram, or other means by directors, officers, employees or agents 
of Odwalla. No additional compensation will be paid to these individuals for any
of these services. Except as described above, Odwalla does not intend to solicit
proxies other than by mail.                                                     

      ODWALLA'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED AUGUST 28, 1999, HAS
BEEN MAILED CONCURRENTLY WITH THE MAILING OF THE NOTICE OF ANNUAL MEETING AND   
PROXY STATEMENT TO ALL SHAREHOLDERS ENTITLED TO NOTICE OF AND TO VOTE AT THE    
ANNUAL MEETING. THE ANNUAL REPORT IS NOT INCORPORATED INTO THIS PROXY STATEMENT 
AND IS NOT CONSIDERED PROXY SOLICITING MATERIAL.                                

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 SPECIAL FACTORS ABOUT THE PROPOSED MERGER

     This section of the proxy statement describes aspects of the proposed
merger. To the extent that it relates to the merger agreement and the terms of  
the merger, the following description does not purport to be complete and is    
qualified in its entirety by reference to the merger agreement, which is        
attached as Appendix A to this proxy statement and is incorporated herein by    
reference. All Odwalla shareholders are urged to read the merger agreement.     

GENERAL                                                                         

        The merger agreement provides that the merger will be consummated if the
required approval of the Odwalla shareholders is obtained and all other         
conditions to the merger are satisfied or waived as provided in the merger      
agreement. Upon consummation of the merger, Orange Acquisition Sub will be      
merged with and into Fresh Samantha, and Fresh Samantha will become a wholly    
owned subsidiary of Odwalla.                                                    

Upon consummation of the merger, each outstanding share of Fresh
Samantha capital stock will be converted into fully paid and nonassessable      
shares of Odwalla common stock, subject to dissenters' rights of Fresh Samantha 
shareholders under Maine law, and the shareholders of Fresh Samantha will have  
the rights, as holders of Odwalla common stock, provided by Odwalla's Articles  
of Incorporation and Bylaws, each as are amended from time to time, as well as  
the California General Corporation Law. The consideration to be received by the 
shareholders of Fresh Samantha in the merger is more fully described below in   
the section entitled "Consideration to be Received by Security Holders" on page 
37 of this proxy statement.                                                     

  Based upon the capitalization of Odwalla as of March 10, 2000, the
shareholders of Fresh Samantha will own approximately 34.0% of the outstanding  
Odwalla common stock following consummation of the merger, assuming: (1) no     
exercise of outstanding options or warrants to acquire Odwalla common stock or  
options to acquire Fresh Samantha capital stock, (2) the conversion of all of   
the Odwalla preferred stock owned by Catterton-Simon Partners into Odwalla      
common stock at a conversion ratio of 1.2407 to 1 as contemplated in the        
proposed amendment to the Certificate of Designation for the preferred stock,   
and (3) the purchase immediately prior to the closing of the merger of          
$6,000,000 of common stock by Catterton-Simon Partners and U.S. Equity Partners 
as contemplated in the merger agreement. This percentage could change depending 
on whether and to what extent shares of Odwalla common stock and Fresh Samantha 
capital stock issuable upon exercise of outstanding Odwalla or Fresh Samantha   
stock options or warrants are issued, whether any Fresh Samantha shareholders   
perfect their statutory dissenters' rights and the adjustment for changes in    
working capital described below.                                                

BACKGROUND OF THE MERGER                                                        

  Because of the similarity of the two businesses, Odwalla and Fresh
Samantha have been familiar with each other since 1995, although the two        
companies did not operate in the same markets until 1998. From the earliest     
discussions between the companies, both Odwalla and Fresh Samantha discovered   
that their businesses were founded on similar principles and philosophies.      

       After Odwalla's business began to stabilize in early 1998 following the
October 1996 recall of shipments of unpasteurized apple juice from a single     
contaminated batch, Odwalla began to enter new geographic areas on the east     
coast and consider a long-term growth strategy as a national organization. In   
connection with these growth plans, D. Stephen C. Williamson, Chairman and CEO  
of Odwalla, Doug Levin, CEO of Fresh Samantha, and other senior management of   
both companies met twice in 1998 to discuss the possibility of a business       
combination.                                                                    

      Because of the uncertainties associated with Odwalla's settlement with
the United States Government concerning the recall, discussions between Odwalla 
and Fresh Samantha in 1998 were of a general nature. The discussions between the
companies ceased in September 1998 when Fresh Samantha entered into an agreement
with a group of investors affiliated with Bain.                                 

Mr. Williamson and Mr. Levin again began discussions regarding a
business combination in December 1998, and on December 18, 1998, Odwalla's board
of directors first discussed the matter. In the beginning of 1999, the companies
began to discuss the practical aspects of a business combination, including the 
due diligence process and the need for a confidentiality agreement, which the   
companies executed at the end of January 1999.                                  

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        On February 1, 1999, Odwalla's board of directors decided to continue to
explore the possibility of the business combination, but the discussions between
the companies remained sporadic during the Spring as each company focused on its
respective operations. On May 9, 1999, a new confidentiality agreement was      
signed between Fresh Samantha, Odwalla and Bain, and the companies began to     
share financial and other information to a limited extent.                      

      Jim Steichen, Senior Vice President and CFO of Odwalla, Doug Hrdlicka,
Senior Vice President of Sales of Odwalla, and Ted Leaman, Vice President,      
Manufacturing of Odwalla, visited Fresh Samantha's offices in Saco, Maine, in   
May 1999 and met with representatives of Fresh Samantha, including Mr. Levin,   
Michael Carter, President of Fresh Samantha, and John Stankiewicz, Vice         
President, Finance of Fresh Samantha, regarding the potential business          
combination and to gain a more detailed understanding of Fresh Samantha's       
business, focusing primarily on the financial, sales and distribution           
organizations and production process.                                           

        During the summer of 1999, the senior management of each company, Andrew
Balson, a Fresh Samantha board member representing Bain, and Craig Sakin, an    
Odwalla board member, held additional discussions about the terms of the        
possible business combination. Odwalla's legal counsel began to draft the merger
documents and Fresh Samantha retained legal counsel to perform a legal due      
diligence investigation of Odwalla. By the end of the summer, however, the      
parties were unable to agree on several key terms and discussions again ceased. 

      The parties then agreed to continue negotiations, met in Breckenridge,
Colorado, from October 3 through October 6, 1999, and shared financial and      
strategic information about their organization. Senior management discussed the 
opportunities and concerns of the proposed transaction, challenges of combining 
the organizations, and other matters.                                           

        After the meeting in Colorado, the parties and their respective advisors
continued to discuss the structure and terms of the proposed transaction, and by
November 1999, sufficient agreement had been reached to enable formal due       
diligence to begin.                                                             

     Odwalla retained WRH+Co on December 17, 1999 as its financial advisor
for the proposed transaction and to render an opinion to the Odwalla board of   
directors on the fairness of the proposed merger.                               

In early January 2000, Messrs. Williamson, Levin, Sakin, Balson,
Steichen, Carter and Stankiewicz met in San Francisco to review the financial   
and strategic business implications of the proposed merger, as well as to       
resolve some of the issues which had stalled negotiations between the parties.  
Selected senior management and other key personnel of each company met in Denver
later in the month to address additional business implications and              
organizational structure resulting from the proposed merger. During this period,
Odwalla's legal counsel circulated versions of the merger agreement and Fresh   
Samantha's counsel, Bain's counsel, and counsel for the other shareholders of   
Fresh Samantha provided comments to the merger agreement and related documents. 
After extensive negotiations, the agreements were substantially finalized by the
end of January 2000.                                                            

        On January 31, 2000, Odwalla's board of directors met via telephone with
outside legal counsel, at a meeting called to review the merger agreement as    
well as the financial and the strategic business implications of the proposed   
organization and the attendant risks and benefits. A copy of the merger         
agreement and other transaction materials had previously been circulated to the 
board. At that meeting, WRH+Co discussed the proposed merger with the board and 
presented their preliminary fairness opinion, which the board reviewed.         

       By unanimous written consent dated February 2, 2000, the Fresh Samantha
board and shareholders voted unanimously to approve the proposed merger,        
approved the final terms of the merger agreement, and authorized Fresh Samantha 
to execute, deliver and perform the merger agreement. On February 2, 2000,      
Odwalla's board of directors met via telephone and reviewed the fairness opinion
of WRH+Co, which stated that the consideration to be paid in the merger, subject
to certain assumptions, factors, limitations and other matters stated in its    
opinion, was fair to Odwalla. Odwalla's board unanimously voted to approve the  
merger and to recommend to the Odwalla shareholders that the Odwalla            
shareholders vote in favor of the merger and the issuance of shares to          
effectuate the merger. After such approval, Odwalla and Fresh Samantha executed 
and delivered the merger agreement and publicly announced the transaction.      

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RECOMMENDATION OF THE ODWALLA BOARD; REASONS OF ODWALLA FOR THE MERGER          

  THE ODWALLA BOARD HAS UNANIMOUSLY APPROVED THE TERMS OF THE MERGER
AGREEMENT AND THE MERGER, BELIEVES THAT THE TERMS OF THE MERGER AGREEMENT ARE   
FAIR TO, AND IN THE BEST INTERESTS OF, ODWALLA AND ITS SHAREHOLDERS, AND        
UNANIMOUSLY RECOMMENDS THAT HOLDERS OF SHARES OF ODWALLA COMMON STOCK VOTE FOR  
APPROVAL OF THE MERGER AGREEMENT, INCLUDING THE ISSUANCE OF THE SHARES OF       
ODWALLA COMMON STOCK TO SHAREHOLDERS OF FRESH SAMANTHA IN CONNECTION WITH THE   
MERGER.                                                                         

 The Odwalla board has concluded that the financial aspects of the
proposed merger are fair to, and in the best interests of, Odwalla and its      
shareholders. The Odwalla board also has concluded that the proposed merger is  
in the best interests of Odwalla and its shareholders because, among other      
reasons, the merger would further Odwalla's strategic objectives of providing   
easy access to great tasting nourishment on a national basis in markets that    
will provide a desired rate of return and to maintain Odwalla's position as the 
national leader of the all-natural super-premium refrigerated juice category.   

        In considering the recommendation of Odwalla's board with respect to the
merger agreement you should be aware that some directors of Odwalla have        
interests in the merger that are different from the interests of Odwalla        
shareholders generally. Please see the section entitled "Interests of Odwalla   
Directors in the Merger" on page 24 of this proxy statement.                    

     The Odwalla board concluded that the proposed merger will further its
strategic objectives because of its belief that:                                

  1.     The merger will increase Odwalla's ability to service large
               national accounts through the combined distribution channels. The
             merger will provide a national refrigerated distribution system
              consisting of a blend of direct-store-delivery systems owned and
          operated by the merged companies and independent third-party
        distributors. We also believe that Odwalla's experience in
             blending owned and independent distribution systems will expand
          geographic distribution of the merged companies brands at an
acceptable cost.                                  

       2.     Because Odwalla and Fresh Samantha currently compete strongly in
   only one major market, the merger will provide growth
           opportunities in virtually all markets currently serviced. We
              will use existing direct-store-delivery systems to introduce the
             Odwalla product lines into some existing Fresh Samantha markets
             and the Fresh Samantha product lines into some existing Odwalla
            markets. The timetable, products and markets have not yet been
              selected. Sales opportunities also will be increased for product
        lines unique to one brand. For example, we expect that the
       distribution of Odwalla food bars will begin through many
existing Fresh Samantha accounts.                 

3.     The merger will allow us to consolidate some duplicative 
          functions, primarily in the general and administrative area,
            which is expected to reduce overall costs. We also expect some
         cost benefits from improved purchasing capabilities, better
            ability to source raw citrus products throughout the year, and
          modifications to some production processes and manufacturing
techniques.                                       

      In reaching its conclusion that the proposed merger is fair to, and in
the best interests of, Odwalla and its shareholders, the Odwalla board also     
considered, among other factors:                                                

     1.     its knowledge of the business, operations, properties, assets,
             financial condition, operating results and prospects of Odwalla
and Fresh Samantha;                               

2.     current industry, economic and market conditions;        

     3.     presentations by Odwalla's management with respect to, and the
            fairness opinion rendered by W.R. Hambrecht in connection with
              the merger (see the "Opinion of W.R. Hambrecht + Co." on page 21
of this proxy statement);                         

4.     the terms of the merger agreement;                       

5.     the accounting and tax treatment of the merger; and      

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   6.     the opportunity for Odwalla shareholders to participate in a
larger, more diversified company.                 

   In view of the variety of factors considered in connection with its
evaluation of the merger, the Odwalla board did not find it practicable to and  
did not quantify or otherwise assign relative weights to the specific factors   
considered in reaching its determination. In addition, individual members of the
Odwalla board may have given different weights to different factors.            

OPINION OF W.R. HAMBRECHT + CO.                                                 

   WRH+Co acted as financial advisor to Odwalla in connection with the
merger. At the January 31, 2000 meeting of the Odwalla board of directors,      
WRH+Co delivered its oral opinion to the Odwalla board, subsequently confirmed  
in a written opinion dated February 2, 2000, to the effect that, based upon and 
subject to various considerations set forth in the opinion, as of February 2,   
2000, the aggregate merger consideration to be paid by Odwalla in connection    
with the merger is fair, from a financial point of view, to Odwalla. No         
limitations were imposed by the Odwalla board upon WRH+Co with respect to       
investigations made or procedures followed by WRH+Co in rendering its opinion.  

     THE FULL TEXT OF WRH+CO'S OPINION, WHICH SETS FORTH ASSUMPTIONS MADE,
PROCEDURES FOLLOWED, MATTERS CONSIDERED, LIMITATIONS ON AND SCOPE OF THE REVIEW 
BY WRH+CO IN RENDERING ITS OPINION, IS ATTACHED TO THIS PROXY STATEMENT AS      
APPENDIX C AND IS INCORPORATED BY REFERENCE HEREIN. WRH+CO'S OPINION IS DIRECTED
ONLY TO THE FAIRNESS TO ODWALLA FROM A FINANCIAL POINT OF VIEW OF THE AGGREGATE 
MERGER CONSIDERATION TO BE PAID BY ODWALLA IN CONNECTION WITH THE MERGER, HAS   
BEEN PROVIDED TO THE ODWALLA BOARD IN CONNECTION WITH ITS EVALUATION OF THE     
MERGER, DOES NOT ADDRESS ANY OTHER ASPECT OF THE MERGER AND DOES NOT CONSTITUTE 
A RECOMMENDATION TO ANY HOLDER OF ODWALLA COMMON STOCK AS TO HOW TO VOTE AT THE 
ODWALLA ANNUAL MEETING. THE SUMMARY OF WRH+CO'S OPINION SET FORTH IN THIS PROXY 
STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THE     
OPINION. HOLDERS OF ODWALLA COMMON STOCK ARE URGED TO READ WRH+CO'S OPINION     
CAREFULLY AND IN ITS ENTIRETY.                                                  

   In conducting its investigation and analysis and in arriving at its
opinion, WRH+Co reviewed the information and took into account financial and    
economic factors as it has deemed relevant under the circumstances. In that     
connection, WRH+Co has, among other things:                                     

-       reviewed internal information, primarily financial in nature, including 
     projections, concerning the business and operations of Fresh Samantha
and Odwalla furnished to WRH+Co by Odwalla or Fresh Samantha for
        purposes of WRH+Co's analysis, as well as publicly available information
including but not limited to Odwalla's recent filings with the  
      Securities and Exchange Commission and equity analyst research reports
prepared by various investment banking firms;                   

-       reviewed a draft of the merger agreement in the form presented to       
Odwalla's board of directors;                                   

-       compared the historical market prices and trading activity of Odwalla's 
      common stock with those of some other publicly traded companies WRH+Co
deemed relevant;                                                

-       compared the financial position and operating results of Fresh Samantha 
   with those of publicly traded companies WRH+Co deemed relevant; and

-       compared the proposed financial terms of the merger with the financial  
terms of some other transactions WRH+Co deemed relevant.        

      WRH+Co held discussions with members of Odwalla's and Fresh Samantha's
respective senior managements concerning Odwalla's and Fresh Samantha's         
historical and current financial condition and operating results, as well as the
future prospects of each of Odwalla and Fresh Samantha. WRH+Co also considered  
other information, financial studies, analysis and investigations and financial,
economic and market criteria which WRH+Co deemed relevant for the preparation of
this opinion.                                                                   

  In arriving at the its opinion, WRH+Co assumed and relied upon the
accuracy and completeness of all of the financial and other information that was
publicly available or provided to WRH+Co by or on behalf of each of Odwalla and 
Fresh Samantha, and have not assumed any obligation to independently verify any 
of this information. WRH+Co assumed, with Odwalla's consent, that               

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    -      all material assets and liabilities (contingent or otherwise,
              known or unknown) of Odwalla and Fresh Samantha are as set forth
            in their most recent financial statements and, accordingly, no
              adjustment to the consideration to be received by Fresh Samantha
             shareholders in the merger will be made pursuant to the working
       capital adjustment set forth in Section 1.4 of the merger
agreement;                                        

    -      the merger will be accounted for under the purchase method of
accounting;                                       

     -      the merger will be consummated in accordance with the terms of
             the merger agreement, without any amendment thereto and without
     waiver by the parties of any of the conditions to their
respective obligations thereunder; and            

 -      in the course of consummating the merger and obtaining any
          regulatory approvals, no restrictions, including divestiture
             requirements, will be imposed that could have an adverse effect
on the contemplated benefits of the merger.       

    WRH+Co also assumed that the financial forecasts examined by it were
reasonably prepared on bases reflecting the best available estimates and good   
faith judgments of Odwalla's and Fresh Samantha's respective senior managements 
as to future performance of Odwalla and Fresh Samantha, respectively. In        
conducting its review, WRH+Co did not undertake nor obtain an independent       
evaluation or appraisal of any of the assets or liabilities, contingent or      
otherwise, of Odwalla and Fresh Samantha, nor did WRH+Co make a physical        
inspection of the properties or facilities of Odwalla or Fresh Samantha. WRH+Co 
relied on advice of counsel and independent accountants to Odwalla as to all    
legal and financial reporting matters with respect to Odwalla, the merger and   
the merger agreement, including the legal status and financial reporting of any 
litigation involving Odwalla. WRH+Co's opinion relates solely to the fairness,  
from a financial point of view, of the consideration to be received by Fresh    
Samantha shareholders in the merger and does not express any view as to the     
allocation of this consideration among the holders of Fresh Samantha common     
stock and Fresh Samantha preferred stock. In addition, WRH+Co's opinion         
necessarily is based upon economic, monetary and market conditions as they exist
and can be evaluated on the date of WRH+Co's opinion, and does not predict or   
take into account any changes which may occur, or information which may become  
available, after the date of WRH+Co's opinion. Accordingly, although            
developments after February 2, 2000 may affect this opinion, WRH+Co has not     
assumed any obligation to update, revise or reaffirm this opinion. Furthermore, 
WRH+Co expressed no opinion as to the price or trading range at which Odwalla's 
securities will trade at any time.                                              

        The following summarizes the significant financial analyses performed by
WRH+Co and reviewed with the Odwalla board on January 31, 2000 in connection    
with the delivery of the its opinion:                                           

        ODWALLA COMMON STOCK PERFORMANCE. WRH+Co reviewed the closing prices and
trading volumes of Odwalla common stock from January 28, 1996 to January 28,    
2000. During the period from January 28, 1996 to January 28, 2000, the high     
closing price for Odwalla common stock was $28.25 per share on June 7, 1996 and 
the low closing price was $4.75 per share on November 26, 1999. During the      
period from January 28, 1999 to January 28, 2000, the high closing price for    
Odwalla common stock was $9.00 per share on May 18, 1999 and the low closing    
price was $4.75 per share on November 26, 1999. On January 28, 2000, the closing
price for Odwalla common stock was $6.875 per share.                            

 ANALYSIS OF SELECTED PUBLICLY TRADED COMPARABLE COMPANIES. WRH+Co
reviewed and compared selected financial information, ratios and transaction    
multiples for Fresh Samantha to corresponding financial information, ratios and 
public market multiples of the following four publicly-traded companies:        
Odwalla, Hanson Natural Corporation, Saratoga Beverage Group and Vermont Pure   
Holdings. The selected companies were chosen because they are publicly-traded   
companies with operations that for purposes of analysis may be considered       
similar to Fresh Samantha. WRH+Co calculated and compared various financial     
multiples and ratios using the closing price for the common stock of each of the
selected companies on January 28, 2000 and the most recent publicly available   
information. WRH+Co's analyses of the selected companies compared the following 
to the results for Fresh Samantha based on the consideration being paid to Fresh
Samantha shareholders in connection with the merger:                            

        -      Enterprise Value (Market Valuation of fully diluted common equity
           plus outstanding debt, preferred stock and minority interests
               less cash) to net sales for the latest twelve months ("LTM"); and

-      Stock price to current book value/share.                 

The results of these analyses are summarized as follows:        

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                                                                [Download Table]

Multiple                          Range    Median  Mean  Fresh Samantha
--------                        ---------  ------  ----  --------------
                                                                       
Enterprise Value/LTM Net Sales  0.6x-1.3x   0.9x   0.9x       0.9x     
Price/Book                      2.4x-3.0x   2.6x   2.6x       4.9x     

 ANALYSIS OF SELECTED COMPARABLE TRANSACTIONS. WRH+Co reviewed and
compared selected financial information, ratios and transaction multiples for   
Fresh Samantha to corresponding financial information, ratios and transaction   
multiples of the following comparable transactions: Snapple Beverage acquisition
of Snapple Distributors of Long, Suntory Water acquisition of Great Pines Water,
Saratoga Beverage acquisition of Fresh Juice, Whitman acquisition of Pepsico    
Inc.'s operations in Illinois, Indiana, Ohio and Missouri, Pepsico Inc.'s       
acquisition of Whitman's operations in West Virginia, Virginia and Russia,      
Canada Dry's acquisition of Atlantic Premium Brands, Danone Group's acquisition 
of AquaPenn Spring Water, Coca Cola Bottling's acquisition of Carolina Coca-Cola
Bottling, and Triarc's acquisition of Snapple Beverage. These transaction were  
chosen because they represent transactions similar to the merger. WRH+Co's      
analysis of the selected transactions compared Enterprise Value to LTM Net Sales
for the comparable transactions to the results for Fresh Samantha based on the  
consideration being paid to Fresh Samantha shareholders in connection with the  
merger.                                                                         

The results of these analyses are summarized as follows:        

                                                                [Download Table]

Multiple                          Range    Median  Mean  Fresh Samantha
--------                        ---------  ------  ----  --------------
                                                                       
Enterprise Value/LTM Net Sales  0.2x-2.3x   1.1x   1.3x       0.9x     

      CONTRIBUTION ANALYSIS. WRH+Co reviewed the relative contributions of a
number of historic and estimated income statement items for Odwalla and Fresh   
Samantha to a combined company without considering any costs savings or         
incremental revenues. The results of this analysis were compared to the portion 
of common stock of Odwalla that the consideration being paid to the Fresh       
Samantha shareholders represents.                                               

The results of these analyses are summarized as follows:        

                                                                [Download Table]
                                                      Fresh Samantha Pro 
Income Statement Line Item   Odwalla  Fresh Samantha    Forma Ownership  
--------------------------   -------  --------------  -------------------
                                                                         
LTM Net Sales                 67.9%        32.1%              37.0%      
LTM Gross Profit              68.0%        32.0%              37.0%      
2000 estimated Net Sales      62.4%        37.6%              37.0%      
2000 estimated Gross Profit   61.1%        38.9%              37.0%      

      PRO FORMA MERGER ANALYSIS. An analysis of the merger, based on Odwalla
management's projections that include $10.1 million in pre-tax synergies        
(estimated operating cost savings due to the combination and incremental        
cross-selling revenues resulting from the transaction) and one-time integration 
costs (estimated costs of reducing the number of employees due to redundancy,   
combining operations and other restructuring costs related to the merger) of    
$1.8 million, shows the transaction to be accretive to earnings. Based on these 
projections, Odwalla fiscal year 2000 pro forma estimated earnings per share    
would increase to $0.02 per share, an increase in earnings per share of $0.09   
over current consensus fiscal year 2000 earnings per share estimates for Odwalla
of ($0.07) and an increase in earning per share of $0.04 over current Odwalla   
management stand-alone estimates of ($0.02). Odwalla fiscal year 2001 pro forma 
estimated earnings per share would increase to $0.47 per share, an increase in  
earnings per share of $0.24 over current Odwalla management estimates for fiscal
year 2001 earnings per share of $0.23. Excluding these adjustments Odwalla pro  
forma earnings per share would be ($0.81) for fiscal year 2000 and ($0.31) for  
fiscal year 2001. Based on these projections, the amount of synergies required  
for Odwalla to break even on a pro forma basis is $9.9 million in fiscal year   
2000 (98.1% of Odwalla management estimated synergies) and $4.0 million in      
fiscal year 2001 (39.3% of Odwalla management estimated synergies).             

   In arriving at its opinion, WRH+Co performed a variety of financial
analyses, the material portions of which are summarized above. The preparation  
of a fairness opinion is a complex process involving various determinations as  
to the most appropriate and relevant methods of financial analyses and the      
application of those methods to the particular circumstances and, therefore,    
such an opinion is not necessarily susceptible to a partial analysis or summary 
description. In arriving at its opinion, WRH+Co did not attribute any particular
weight to any analysis or factor considered by it, but rather made qualitative  
judgments as to significance and relevance of each analysis and factor.         
Accordingly, WRH+Co believes that its analysis must be considered as a whole and
that selecting portions of its analysis, without considering all these analyses,
could create an incomplete view of the process underlying the WRH+Co opinion.   

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      In performing its analyses, WRH+Co relied on numerous assumptions made
by the management of Odwalla and Fresh Samantha and made numerous judgments of  
its own with regard to industry performance, general business and economic      
conditions and other matters, many of which are beyond the control of Odwalla   
and Fresh Samantha. Actual values will depend upon several factors, including   
changes in interest rates, dividend rates, market conditions, general economic  
conditions and other factors that generally influence the price of securities.  
The analyses performed by WRH+Co are not necessarily indicative of actual values
or actual future results, which may be significantly more or less favorable than
suggested by these analyses. These analyses were prepared solely as a part of   
WRH+Co's analysis of the fairness to Odwalla from a financial point of view of  
the aggregate merger consideration to be paid by Odwalla in connection with the 
merger and were provided to the Odwalla board in connection with the delivery of
WRH+Co's opinion. The analyses do not purport to be appraisals or necessarily   
reflect the prices at which businesses or securities might actually be sold,    
which are inherently subject to uncertainty. Since these estimates are          
inherently subject to uncertainty, none of Odwalla, Fresh Samantha, WRH+Co or   
any other person assumes responsibility for their accuracy. With regard to the  
comparable public company analysis and the comparable transactions analysis     
summarized above, WRH+Co selected comparable public companies and comparable    
transactions on the basis of various factors; however, no public company or     
transaction utilized as a comparison is identical to Fresh Samantha or this     
proposed merger. Accordingly, an analysis of the foregoing is not mathematical; 
rather, it involves complex considerations and judgments concerning differences 
in financial and operating characteristics of the comparable companies and other
factors that could affect the acquisition or public trading value of the        
comparable companies and transactions to which Fresh Samantha and this proposed 
merger are being compared. In addition, as described above, WRH+Co's opinion and
the information provided by WRH+Co to the Odwalla board were two of many factors
taken into consideration by the Odwalla board in making its determination to    
approve the merger. Consequently, the WRH+Co analyses described above should not
be viewed as determinative of the opinion of the Odwalla board or the view of   
Odwalla management with respect to the value of Fresh Samantha.                 

 As part of its investment banking activities, WRH+Co is regularly
engaged in the evaluation of businesses and their securities in connection with 
mergers and acquisitions, restructurings and valuations for corporate or other  
purposes. In the ordinary course of its business, WRH+Co may from time to time  
trade the securities of Odwalla for its own account or the accounts of its      
customers and, accordingly, may at any time hold long or short positions in     
these securities. Bill Hambrecht, Chairman of WRH+Co, is a shareholder of       
Odwalla. His holdings constitute less than 0.5% of Odwalla on a fully diluted   
basis and he did not participate in the preparation of this opinion or the      
presentation to Odwalla's board of directors.                                   

    Pursuant to the terms of a letter agreement dated December 17, 1999,
Odwalla retained WRH+Co as its exclusive financial advisor and to render an     
opinion to the Odwalla board with respect to this proposed merger. Under the    
terms of the letter agreement, Odwalla has paid WRH+Co a fairness opinion fee of
$250,000. Odwalla also has agreed to reimburse WRH+Co for reasonable expenses   
incurred by WRH+Co and to indemnify WRH+Co and its affiliates, counsel and other
professional advisors, and their respective directors, officers, controlling    
persons, agents and employees against some liabilities and expenses, including  
some liabilities under the federal securities laws, relating to or arising out  
of this engagement.                                                             

       If the merger and the issuance of shares to Fresh Samantha shareholders
in connection with the merger is approved and completed, the following Odwalla  
directors will be asked to resign from the board: Martin S. Gans, Ranzell       
Nickelson and Greg A. Steltenpohl. Each of these directors is being asked to    
resign only to effectuate the merger. In connection with requesting their       
resignation for this purpose, Odwalla's management believed it to be appropriate
to accelerate the vesting schedule of stock options granted to these directors, 
so that all stock options held by each director became exercisable on February  
2, 2000, the date the board approved the merger agreement. For Odwalla's tax    
purposes, the vesting of these options will remain accelerated, even if the     
merger is not consummated. The Odwalla board was aware of these interests and   
considered them, among other matters, in approving the merger agreement and the 
transactions contemplated by the merger agreement.                              

INTERESTS OF ODWALLA DIRECTORS IN THE MERGER                                    

      In considering the recommendation of the Odwalla board with respect to
the merger agreement and the transactions contemplated by the merger agreement, 
Odwalla shareholders should be aware that some members of the board have        
interests in the merger that are in addition to the interests of the Odwalla    
shareholders generally.                                                         

        If the merger and the issuance of Odwalla common stock to Fresh Samantha
shareholders in connection with the merger is approved and completed, the       
following Odwalla directors will be asked to resign from the board at the       

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effective time of the merger: Martin S. Gans, Ranzell Nickelson and Greg A.     
Steltenpohl. Each of these directors is being asked to resign only to effectuate
the merger. In connection with requesting their resignation for this purpose,   
Odwalla's management believed it to be appropriate to accelerate the vesting    
schedule of stock options granted to these directors, so that all stock options 
held by each of these directors became exercisable on February 2, 2000, the date
the board approved the merger agreement. Additionally, the exercise period of   
these stock options was extended to the end of the year 2001. For Odwalla's tax 
purposes, the vesting of these options will remain accelerated and the exercise 
period will remain extended, even if the merger is not consummated. The Odwalla 
board was aware of these interests and considered them, among other matters, in 
approving the merger agreement and the transactions contemplated by the merger  
agreement.                                                                      

       If the Odwalla shareholders approve the amendment of the Certificate of
Designation of preferred stock as previously described, then the conversion     
ratio of the preferred stock will be increased from 1-to-1 to 1.2407-to-1 and   
will entitle Catterton-Simon Partners to receive a greater number of shares of  
Odwalla common stock upon conversion of the Odwalla preferred stock than they   
would receive if conversion occurred prior to the amendment. Odwalla's          
management believed it to be appropriate to increase the conversion ratio       
because Catterton-Simon Partners is converting its Odwalla preferred stock at a 
time when it is not obligated to do so, and canceling the warrant it holds to   
purchase Odwalla common stock, to facilitate the closing of the merger. Craig   
Sakin, who is a member of the Odwalla board, also is a managing director of an  
affiliate of Catterton-Simon Partners. Please see Proposal Number 2, "Approval  
of the Amendment of the Certificate of Designation of Preferred Stock," on page 
46 of this proxy statement.                                                     

   The Odwalla board was aware of these interests and considered them,
among other matters, in approving the merger agreement and the transactions     
contemplated by the merger agreement.                                           

FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER                                   

    The following discussion summarizes the anticipated material federal
income tax consequences of the merger that are generally applicable to Odwalla  
under the Internal Revenue Code. No foreign, state or local tax considerations  
are addressed in this discussion.                                               

The following discussion is based on the Internal Revenue Code, 
applicable U.S. Treasury Regulations, judicial authority, and administrative    
rulings and practice, all as of the date of this proxy statement. The Internal  
Revenue Service is not precluded from adopting a contrary position. In addition,
there can be no assurance that future legislative, judicial, or administrative  
changes or interpretations will not adversely affect the accuracy of the        
statements and conclusions set forth in this discussion. Any of these changes or
interpretations could be applied retroactively and could affect the tax         
consequences of the merger to Odwalla. The parties have not requested and will  
not request a ruling from the Internal Revenue Service as to the tax            
consequences of the merger.                                                     

    The anticipated federal income tax consequences of the merger are as
follows:                                                                        

       1.     the merger will constitute a "reorganization" within the meaning
             of Section 368(a) of the Internal Revenue Code, and Odwalla and
              Fresh Samantha will each be a "party to a reorganization" within
             the meaning of Section 368(b) of the Internal Revenue Code; and

        2.     Odwalla will recognize no gain or loss as a result of the merger.

        It is a condition to the consummation of the merger that Odwalla receive
an opinion from its counsel, Morrison & Foerster LLP, and that Fresh Samantha   
receive an opinion from its counsel, Ropes & Gray, to the effect that the merger
will constitute a "reorganization" within the meaning of Section 368(a) of the  
Internal Revenue Code and that Odwalla and Fresh Samantha will each be a "party 
to a reorganization" within the meaning of Section 368(b) of the Internal       
Revenue Code. These tax opinions neither bind the Internal Revenue Service nor  
preclude the Internal Revenue Service from adopting a contrary position. These  
tax opinions are subject to assumptions and qualifications and the continued    
accuracy and completeness of representations made by Odwalla, Orange Acquisition
Sub and Fresh Samantha, including representations in certificates to be         
delivered to counsel by the managements of Odwalla and Fresh Samantha.          

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ACCOUNTING TREATMENT                                                            

     The merger of Odwalla and Fresh Samantha is being accounted for using
the purchase method of accounting as prescribed by Accounting Principles Board  
Opinion No. 16. Under this accounting treatment, the excess of the cost of      
acquiring Fresh Samantha over the fair market value of the assets and           
liabilities of Fresh Samantha assumed will be recorded as goodwill. Odwalla     
intends to amortize this goodwill on a straight line basis over a 20 year       
period.                                                                         

 The unaudited pro forma condensed combined consolidated financial
information contained in this document has been prepared using the purchase     
accounting method to account for the merger. See "Unaudited Pro Forma Combined  
Condensed Financial Information Overview" on page 29 of this proxy statement.   

REGULATORY APPROVALS                                                            

       Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and the
rules promulgated thereunder by the Federal Trade Commission, the merger cannot 
be consummated until notifications have been given and information has been     
furnished to the Federal Trade Commission and the Antitrust Division of the     
Department of Justice and specified waiting period requirements have been       
satisfied. Odwalla and Fresh Samantha each filed notification and report forms  
under the Hart-Scott-Rodino Antitrust Improvements Act with the Federal Trade   
Commission and the Antitrust Division on March 10, 2000. Accordingly, the       
waiting period under the Hart-Scott-Rodino Antitrust Improvement Act will expire
at 11:59 p.m., Eastern Time, on April 9, 2000.                                  

     At any time before or after consummation of the merger, the Antitrust
Division or the Federal Trade Commission, or any state, could take action under 
the antitrust laws as it deems necessary or desirable in the public interest,   
including seeking to enjoin the consummation of the merger or seeking           
divestiture of substantial assets of Odwalla or Fresh Samantha. Private parties 
also may seek to take legal action under the antitrust laws under some          
circumstances. In addition, non-United States governmental and regulatory       
authorities may seek to take action under applicable antitrust laws. There can  
be no assurance that a challenge to the merger will not be made or, if a        
challenge is made, that Odwalla will prevail.                                   

      The obligations of Odwalla and Fresh Samantha to consummate the merger
are subject to the condition that there be no preliminary or permanent          
injunction or other order by any federal, state or foreign court of competent   
jurisdiction that prevents consummation of the merger, and that there be no     
statute, rule, regulation, executive order, stay, decree or judgment by any     
court or governmental authority that prohibits or restricts the consummation of 
the merger. See "Conditions to the Completion of the Merger" on page 41. Either 
Odwalla or Fresh Samantha may terminate the merger agreement if any court of    
competent jurisdiction in the United States or other United States governmental 
body shall have issued an order, decree or ruling or taken any other action     
restraining, enjoining or otherwise prohibiting the merger and the order,       
decree, ruling or any other action shall have become final and non-appealable,  
provided that the party seeking to terminate the merger agreement for this      
reason shall have used all reasonable best efforts to remove the order, decree  
or ruling. See "Conditions to the Completion of the Merger" on page 41 and      
"Termination of the Merger Agreement" on page 42.                               

MANAGEMENT AFTER THE MERGER                                                     

DIRECTORS AFTER THE MERGER                                              

As provided in the merger agreement and the shareholders' rights
agreement, at the effective time of the merger, Odwalla's board of directors    
will be increased to seven members. The new board of directors will be formed by
(1) the resignations of directors Martin S. Gans, Ranzell Nickelson and Greg A. 
Steltenpohl and (2) the election of Andrew E. Balson, and Mark E. Nunnelly, as  
Bain's nominees, and Ellis B. Jones, as U.S. Equity Partners' nominee, as       
directors of Odwalla to serve until the next annual meeting of shareholders     
until a successor is elected and qualified. A seventh member of the board will  
be nominated by Bain at the effective time of the merger.                       

  Biographical information with respect to the proposed directors of
Odwalla at the effective time of the merger is set forth below.                 

     D. Stephen C. Williamson, age 41, currently serves as Chairman of the
Board and as Chief Executive Officer, a position he has held since June 1996.   
Prior to that time, Mr. Williamson served as Co-Chairman of the Board and       
Co-Chief Executive Officer from January 1995 to June 1996 and as Chief Financial
Officer of Odwalla from March                                                   

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1991 to August 1996. Mr. Williamson also served as the Odwalla's President from 
May 1992 until January 1995. Mr. Williamson holds a B.A. degree in history from 
the University of California at Berkeley. He is also Chairman of Avenal Land &  
Oil Company, a private investment company.                                      

    Andrew B. Balson, age 33, has been a Principal of Bain Capital since
June 1998 and was an Associate at Bain Capital from 1996 to 1998. From 1994 to  
1996, Mr. Balson was a consultant at Bain & Company. Mr. Balson serves on the   
board of directors of Domino's Pizza and the board of Managers of Anthony Crane 
Rental, L.P.                                                                    

       Richard L. Grubman, age 37, has been a director of Odwalla since August
1997. Mr. Grubman has been a Managing Director of Highfields Capital Management,
LP since April 1998. Prior to this, Mr. Grubman was a Managing Director of      
Development Capital, LLC since January 1997 and a general partner of its        
affiliate, Corporate Value Partners, LP, since November 1996. Mr. Grubman also  
was previously President of Sycamore Capital Management, Inc. From December 1992
to November 1995, Mr. Grubman was a general partner of Lakeview Partners, L.P.  
During 1992, he was a vice president of Gollust, Tierney and Oliver,            
Incorporated. Mr. Grubman holds an A.B. degree in Art and Archaeology from      
Princeton University. He is also a director of the Children's Motility Disorder 
Foundation.                                                                     

Ellis B. Jones, age 46, currently serves as Managing Director of
Wasserstein Perella & Co., Inc. and President of Wasserstein Perella Asset      
Management, the firm's merchant banking and venture capital businesses. Prior to
joining Wasserstein Perella in February 1995, Mr. Jones was Managing            
Director/Head of Los Angeles Corporate Finance at Salomon Brothers, Inc. from   
1989 through 1994. Mr. Jones graduated from the Yale School of Management and   
the University of California at Berkeley. He currently serves as a director for 
a number of privately held companies.                                           

      Mark E. Nunnelly, age 41, has been a Managing Director of Bain Capital
since 1990. Prior to that time, Mr. Nunnelly was a partner at Bain & Company and
was employed by Procter & Gamble Company Inc. in product management. Mr.        
Nunnelly serves on the board of directors of several companies, including       
Domino's Pizza, eCredit.com, Modus Media, Stream International, Inc., Advanced  
Telecommunications, Inc. and DoubleClick, Inc.                                  

 Craig H. Sakin, age 39, has served as a director of Odwalla since
February 1999. Mr. Sakin has served as Managing Director of Catterton Partners, 
a group of affiliated venture capital funds, since August 1996. From November   
1991 to August 1996, Mr. Sakin was Chairman of Gold Coast Beverage Distributors,
a beer distribution company, and also served as the Chief Executive Officer     
during this period. Mr. Sakin holds a B.S. degree from St. Lawrence University. 

OFFICERS AFTER THE MERGER                                               

 As provided in the merger agreement, at the effective time of the
merger, Doug Levin, chief executive officer and a founder of Fresh Samantha,    
will become President of Odwalla. His biographical information is set forth     
below:                                                                          

   Doug Levin, age 38, was a founder of Fresh Samantha in 1992 and has
served in various positions, including Chief Executive Officer since April 1,   
1994. Mr. Levin holds a B.A. degree in American Studies from Wesleyan           
University.                                                                     

VOTING AGREEMENT OF ODWALLA SHAREHOLDERS                                        

       As a condition to signing the merger agreement, Fresh Samantha required
Odwalla shareholders D. Stephen C. Williamson and Catterton-Simon Partners to   
enter into an agreement to vote their shares representing approximately 27% of  
outstanding Odwalla capital stock (1) in favor of (a) the merger and the        
transactions specifically contemplated in the merger agreement and (b) an       
amendment to the Odwalla 1997 Stock Option/Stock Issuance Plan to provide that  
the number of shares available for issuance be increased; and (2) against any   
action or agreement that would result in a breach of any representation,        
warranty, covenant or obligation of Odwalla in the merger agreement or that     
would preclude fulfillment of a condition precedent under the merger agreement  
to Fresh Samantha's or Odwalla's obligation to consummate the merger.           

        The voting agreement will terminate on either (1) the termination of the
merger agreement or (2) April 26, 2000, if by then the closing of the merger    
agreement has not been consummated or changed to some other date as the parties 
have agreed.                                                                    

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WE WILL NEED TO SELL STOCK AND ARRANGE ADDITIONAL DEBT FINANCING IN CONNECTION  
WITH THE MERGER                                                                 

  Odwalla will bear all expenses incurred by both Fresh Samantha and
Odwalla in connection with the merger, including the costs of filing this proxy 
statement with the Securities and Exchange Commission, printing and mailing this
proxy statement and the filing fees incurred in connection with obtaining       
regulatory approval for the merger from the Antitrust Division of the Department
of Justice and the Federal Trade Commission.                                    

    To help finance these obligations, Odwalla has received a commitment
letter from Imperial Bank to arrange an increase in Odwalla's credit facility   
from $5.0 million to $10.0 million and has entered into the previously described
stock purchase agreement with U. S. Equity Partners and Catterton-Simon Partners
to sell $5.0 million of Odwalla common stock to U.S. Equity Partners and $1.0   
million of Odwalla common stock to Catterton-Simon Partners at the time of the  
closing of the merger.                                                          

     Odwalla plans to use a portion of the funds received from the sale of
its common stock to U.S. Equity Partners and Catterton-Simon Partners to pay the
expenses incurred in connection with the merger and to satisfy Fresh Samantha's 
financial obligations. The increase in Odwalla's credit facility will, among    
other things, meet Odwalla's working capital needs for the combined companies   
after the merger.                                                               

NO ODWALLA SHAREHOLDERS ARE ENTITLED TO APPRAISAL RIGHTS                        

    Approval of the merger by Odwalla shareholders is not required under
California law. As a result, Odwalla shareholders are not entitled under        
California law to appraisal rights with respect to the merger.                  

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UNAUDITED PRO FORMA COMBINED CONDENSED
FINANCIAL INFORMATION OVERVIEW

     On February 2, 2000, Odwalla agreed to acquire all of the outstanding
shares of Fresh Samantha. The acquisition will be accounted for using the       
purchase method of accounting and, accordingly, the purchase price will be      
allocated to the tangible and intangible assets acquired and liabilities assumed
on the basis of their estimated respective fair values on the acquisition date. 
The acquisition is expected to be finalized immediately following approval of   
the transaction by existing Odwalla shareholders. The vote on the pending       
transaction is currently scheduled for April 25, 2000.                          

 Under terms of the merger agreement with Fresh Samantha and other
documents relating to this transaction, the following summarizes anticipated    
events as of the closing:                                                       

        -      Odwalla will exchange approximately 3.8 million shares of Odwalla
          common stock for all of the outstanding common and preferred
stock of Fresh Samantha.                          

    -      The holder of Odwalla's current Series A preferred stock will
               exchange its shares for 1,333,333 shares of Odwalla common stock.
          The Series A shareholder holds 1,074,666 shares of preferred
             stock as of November 27, 1999. The additional shares are issued
           in exchange for cancellation of the existing stock warrant to
         purchase 75,000 shares of common stock held by the Series A
          shareholder and as an inducement for early conversion of the
preferred stock to common stock.                  

    -      Odwalla will sell an additional $6.0 million of common stock,
             which represents approximately 961,000 shares, to two investors
through a private placement.                      

       The unaudited pro forma combined financial information on the following
pages combines Odwalla's balance sheet as of November 27, 1999, and the         
statements of operations for the year ended August 28, 1999, and for the        
thirteen weeks ended November 27, 1999, with the Fresh Samantha balance sheet as
of January 22, 2000, and the Fresh Samantha statements of operations for the    
year ended October 30, 1999, and for the twelve weeks ended January 22, 2000.   
These pro forma financial statements reflect certain adjustments, including the 
above anticipated closing events and adjustments to reflect the amortization of 
goodwill acquired. These adjustments are preliminary and are based on our best  
estimates. The unaudited pro forma combined condensed financial statements,     
including the notes thereto, are qualified in their entirety by reference to,   
and should be read in conjunction with, the historical consolidated financial   
statements of Odwalla (beginning on page F-2 of this proxy statement) and of    
Fresh Samantha (beginning on page F-20 of this proxy statement), including the  
notes thereto, which can be found elsewhere in this document.                   

    The unaudited pro forma combined condensed financial information set
forth below does not purport to represent what the combined results of          
operations or financial condition of Odwalla would actually have been if the    
Fresh Samantha acquisition and the other events noted above had in fact occurred
on the dates indicated or to project the future combined results of operations  
or financial condition of Odwalla.                                              

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             PRO FORMA COMBINED CONDENSED BALANCE SHEETS
             (UNAUDITED)
             AS OF NOVEMBER 27, 1999
              (In thousands, except per share amounts)

                                                        [Enlarge/Download Table]

                                                           Fresh              Pro Forma          
                                                Odwalla  Samantha  Combined  Adjustments    Total
                                                -------  --------  --------  -----------    -----
                                                                                                 
Current assets                                                                                   
     Cash, cash equivalents and short-                                                           
         term investments                       $ 4,618   $   265   $ 4,883   $ 6,000 a   $ 6,203
                                                                               (4,680)b          
     Trade accounts receivable                    5,955     3,033     8,988                 8,988
     Inventories                                  3,868     1,490     5,358                 5,358
     Prepaid expenses and other current assets    1,688        76     1,764                 1,764
     Deferred tax asset, current                  1,430         -     1,430                 1,430
                                                -------  --------  --------  --------      ------
             Total current assets                17,559     4,864    22,423     1,320      23,743

Plant, property and equipment, net               13,948     6,773    20,721     1,000 c    21,671
                                                                                  (50)e          

Goodwill, net                                     1,090         -     1,090    27,282 c    28,030
                                                                                 (342)e          
Other intangible assets, net                      1,049         -     1,049                 1,049
Other assets, noncurrent                            127       211       338                   338
                                                -------  --------  --------  --------     -------
             Total assets                       $33,773   $11,848   $45,621   $29,210     $74,831
                                                =======  ========  ========  ========     =======
Current liabilities                                                                              
     Accounts payable                           $ 7,181   $ 2,840   $10,021    $1,800 c   $11,821
     Accrued payroll and related items            1,468       659     2,127                 2,127
     Line of credit                               1,500         -     1,500                 1,500
     Other accruals                               1,600       329     1,929                 1,929
     Current maturities of capital lease                                                         
          obligations                                22       232       254                   254
     Current maturities of long-term debt           180     4,743     4,923    (4,680)b       243
                                                -------  --------  --------  --------     -------
             Total current liabilities           11,951     8,803    20,754    (2,880)     17,874

Capital lease obligations, less current                                                          
      maturities                                     11       499       510                   510
Long-term debt, less current maturities             581        22       603                   603
Other                                                 -        10        10                    10
                                                -------  --------  --------  --------     -------
             Total liabilities                   12,543     9,334    21,877    (2,880)     18,997
                                                -------  --------  --------  --------     -------

Mandatorily redeemable and convertible                                                           
     preferred stock                              7,718         -     7,718    (7,718)d        - 
                                                -------  --------  --------  --------     -------

(continued on next page)

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 PRO FORMA COMBINED CONDENSED BALANCE SHEETS (Continued)
 (UNAUDITED)
 AS OF NOVEMBER 27, 1999
(In thousands, except per share amounts)

                                                        [Enlarge/Download Table]

                                                         Fresh                Pro Forma             
                                             Odwalla    Samantha  Combined    Adjustments    Total  
                                             -------    --------  --------    -----------    -----  
                                                                                                    
Shareholders' equity                                                                                

     Preferred stock                               -          2          2         (2)c          -  
     Common stock                             29,751          3     29,754      6,000 a      74,432 
                                                                               28,996 c             
                                                                                   (3)c             
                                                                                9,685 d             
     Additional paid-in capital                   62     19,000     19,062    (19,000)c          -  
                                                                                  (62)d             
     Accumulated deficit                     (16,301)   (16,491)   (32,792)    16,491 c     (18,598)
                                                                               (1,905)d             
                                                                                 (392)e             
                                            --------   ---------  --------   --------      -------- 
Total shareholders' equity                    13,512      2,514     16,026     39,808        55,834 
                                            --------   ---------  --------   --------      -------- 
Total liabilities and shareholders' equity  $ 33,773   $ 11,848   $ 45,621   $ 29,210      $ 74,831 
                                            ========   =========  ========   ========      ======== 

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 PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
 (UNAUDITED)
 FOR THE YEAR ENDED AUGUST 28, 1999 (In thousands,
 except per share amounts)

                                                        [Enlarge/Download Table]

                                                          Fresh                  Pro Forma              
                                             Odwalla     Samantha   Combined     Adjustments    Total   
                                             -------     --------   --------     -----------  --------- 
                                                                                                        
Net sales                                   $  68,042   $  32,158   $ 100,200                 $ 100,200 

Cost of sales                                  35,542      16,888      52,430        $140 e      52,570 
                                             --------   ---------   ---------    --------     --------- 
     Gross profit                              32,500      15,270      47,770        (140)       47,630 
                                             --------    --------   ---------    --------     --------- 
Operating expenses                                                                                      
     Sales and distribution                    24,056      15,870      39,926          30 e      39,956 
     Marketing, general and administrative     10,555       5,820      16,375       1,394 e      17,769 
     Recall and related costs                     250           -         250                       250 
                                             --------    --------   ---------    --------     --------- 
             Total operating expenses          34,861      21,690      56,551       1,424        57,975 
                                             --------    --------   ---------    --------     --------- 
Loss from operations                           (2,361)     (6,420)     (8,781)     (1,564)      (10,345)

Other (expense) income, net                       (40)       (197)       (237)        140  f        (97)
                                             --------    --------   ---------    --------     --------- 
Loss before income taxes                       (2,401)     (6,617)     (9,018)     (1,424)      (10,442)

Income tax benefit                                359          40         399                       399 
                                             --------    --------   ---------    --------     --------- 
Net loss                                       (2,042)     (6,577)     (8,619)     (1,424)      (10,043)

Preferred stock dividend                        (267)           -        (267)        267 d           - 
                                             -------     --------   ---------    --------     --------- 
Net loss applicable to common                                                                           
     shareholders                           $ (2,309)   $  (6,577)  $  (8,886)  $  (1,157)    $ (10,043)
                                             =======     ========   =========    ========     ========= 
Net loss per share attributable to                                                                      
     common shareholders:                                                                               
         Basic and diluted                   $ (0.45)   $  (21.31)                            $   (0.90)
                                             =======     ========                             ========= 
Weighted average shares, basic and diluted     5,098          309                                11,204 
                                             =======     ========                             ========= 

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 PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
 (UNAUDITED)
FOR THE FIRST QUARTER ENDED NOVEMBER 27, 1999 
(In thousands, except per share amounts)

                                                        [Enlarge/Download Table]


                                                                     Fresh                 Pro Forma               
                                                          Odwalla   Samantha   Combined    Adjustments      Total  
                                                          -------   --------   --------    -----------    ---------
                                                                                                                   
Net sales                                                $ 16,769   $  8,731    $ 25,500                  $ 25,500 

Cost of sales                                               8,956      4,314      13,270      $   35 e      13,305 
                                                          -------   --------   ---------     -------     --------- 
     Gross profit                                           7,813      4,417      12,230         (35)       12,195 
                                                          -------   --------   ---------     -------     --------- 
Operating expenses                                                                                                 
     Sales and distribution                                 6,227      4,138      10,365          8 e       10,373 
     Marketing, general and administrative                  2,427      1,636       4,063        349 e        4,412 
                                                          -------   --------   ---------     ------      --------- 
             Total operating expenses                       8,654      5,774      14,428        357         14,785 
                                                          -------   --------   ---------     ------      --------- 
Loss from operations                                         (841)    (1,357)     (2,198)      (392)        (2,590)

Other (expense) income, net                                   (12)       (73)        (85)        75 f          (10)
                                                          -------   --------   ---------     ------      --------- 
Loss before income taxes                                     (853)    (1,430)     (2,283)      (317)        (2,600)

Income tax benefit                                            128          -         128                       128 
                                                          -------   --------   ---------     ------      --------- 
Net loss                                                     (725)    (1,430)     (2,155)      (317)        (2,472)

Preferred stock dividend                                     (213)         -        (213)       213 d            - 
                                                          -------   --------   ---------     -------     --------- 
Net loss applicable to common shareholders               $   (938)  $ (1,430)   $ (2,368)     $ (104)   $ (2,472)  
                                                          =======   ========   =========     =======     ========= 
Net loss per share attributable to common shareholders:                                                            
         Basic and diluted                               $  (0.18)  $  (4.63)                            $  (0.22) 
                                                          =======   ========                             ========= 
Weighted average shares, basic and diluted                  5,125        309                                11,232 
                                                          =======   ========                             ========= 

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 ODWALLA, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION                                                        

       The pro forma combined balance sheet assumes that the merger took place
November 27, 1999 and combines Odwalla's November 27, 1999, consolidated balance
sheet and Fresh Samantha's January 22, 2000, consolidated balance sheet.        

      The fiscal 1999 pro forma combined statement of operations assumes the
merger took place as of the beginning of fiscal 1999, and the first quarter     
fiscal 2000 pro forma combined statement of operations assumes the merger took  
place as of the beginning of the first quarter of fiscal 2000. For the fiscal   
1999 statement of operations, Odwalla's statement of operations for the year    
ended August 28, 1999, and Fresh Samantha's statement of operations for the year
ended October 30, 1999, are combined. Each of the financial statements consist  
of 52 week periods. For the first quarter of fiscal 2000 operations, Odwalla's  
statement of operations for the thirteen weeks ended November 27, 1999, and     
Fresh Samantha's statement of operations for the twelve weeks ended January 22, 
2000, are combined.                                                             

        On a combined basis, there were no material transactions between Odwalla
and Fresh Samantha during the periods presented. There are no material          
differences between the accounting policies of Odwalla and Fresh Samantha. The  
pro forma combined provision for income taxes may not represent the amounts that
would have resulted had Odwalla and Fresh Samantha filed consolidated income tax
returns during the periods presented.                                           

2. UNAUDITED PRO FORMA ADJUSTMENTS                                              

        The following adjustments were applied to the Odwalla and Fresh Samantha
historical consolidated financial statements to arrive at the unaudited pro     
forma combined condensed financial information. These adjustments are           
preliminary and are based on management's estimates of the value of the tangible
and intangible assets acquired. Based on the timing of the closing of the       
merger, the finalization of all estimated amounts, and other factors, the pro   
forma adjustments may differ materially from those presented in these unaudited 
pro forma combined condensed financial statements. A change in the pro forma    
adjustments would result in a reallocation of the purchase price affecting the  
values assigned to long-term tangible and intangible assets. The statements of  
operations effect of any changes will depend upon the nature and amount of the  
assets or liabilities adjusted.                                                 

        a. Reflects the private placement of $6.0 million of common stock at the
merger date.                                                                    

        b. Reflects the payment of Fresh Samantha's outstanding bank debt at the
close of the merger, as required under the merger agreement. Odwalla's line of  
credit is increased from $5.0 million to $10.0 million at the time of the merger
with Fresh Samantha in accordance with a commitment letter issued by Odwalla's  
bank in February 2000.                                                          

        c. Reflects the purchase accounting adjustment for the merger as follows
(amounts in thousands):                                                         

Merger cost:                                                    

                                                        [Enlarge/Download Table]
                                                                                                 
Issuance of 3,812,122 shares of common stock to Fresh Samantha shareholders                      
   valued for the pro forma financial statements at the average closing price for the            
   five days before and after February 2, 2000, the date of the merger announcement ....  $28,996

Direct transaction costs resulting from the merger.  The actual costs will be determined         
   at the closing of the merger and may differ from this estimate ......................    1,800
                                                                                          -------

   Total costs of the merger with the above assumptions ................................  $30,796
                                                                                          =======

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 ODWALLA, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Continued) 

Merger costs allocated to:                                                      

                                                        [Enlarge/Download Table]
                                                                                                          
         Elimination of Fresh Samantha outstanding common and preferred stock,                            
            additional paid in capital and deficit at the time of the closing,                            
            net. This adjustment recognizes the cost basis of the Fresh Samantha                          
            assets and liabilities acquired through the following                                         

            Elimination of Fresh Samantha preferred stock ....................................... $     2 
            Elimination of Fresh Samantha common stock ..........................................       3 
            Elimination of Fresh Samantha additional paid-in capital ............................  19,000 
            Elimination of Fresh Samantha deficit ............................................... (16,491)
                                                                                                  ------- 
            Net .................................................................................   2,514 

         Estimated increase in fair value of property and equipment acquired.  The actual amount          
            determined at the closing of the merger may differ from this amount .................   1,000 

         Goodwill related to the merger .........................................................  27,282 
                                                                                                  ------- 

         Total allocated costs of the merger .................................................... $30,796 
                                                                                                  ======= 

     d. Reflect the elimination of the Series A preferred stock, the                                      
cancellation of the existing Catterton-Simon Partners common stock warrant, and                           
the issuance of additional shares of common stock as an inducement for early                              
conversion of the preferred stock to common stock as at November 27, 1999.                                

         Elimination of Odwalla's mandatorily redeemable convertible preferred stock through              
            issuance of common stock in exchange ................................................ $ 7,718 
         Cancellation of the existing Catterton-Simon Partners common stock warrant .............      62 
         Issuance of 258,667 shares of common stock as an inducement for early conversion to              
            common stock based upon average Odwalla stock price for five days before and after            
            February 2, 2000, the merger announcement date ......................................   1,905 
                                                                                                  ------- 
         Net adjustment to common stock ......................................................... $ 9,685 
                                                                                                  ======= 

       No amount related to the issuance of additional shares as an inducement
for early conversion to common stock has been included in the unaudited pro     
forma combined condensed statements of operations for the year ended August 28, 
1999 and the quarter ended November 27, 1999 as it is non-recurring. The        
appropriate amount will be expensed in the period the acquisition is            
consummated.                                                                    

   In addition, the preferred stock dividend for each of the operating
periods presented has been eliminated in the pro forma combined condensed       
statements of operations as they would not have been incurred if the preferred  
stock had been converted into common stock as of the beginning of the periods   
shown.                                                                          

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 ODWALLA, INC.
NOTES TO UNAUDITED PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Continued) 

e. Reflect additional depreciation and amortization resulting from the
merger (amounts in thousands).                                                  

                                                        [Enlarge/Download Table]

                                                                                Year ended   Quarter ended
                                                                                 August 28,   November 27,
                                                                                    1999         1999     
                                                                                -----------  -------------
                                                                                                          
Odwalla intends to amortize the goodwill related to the merger using                                      
    the straight-line method.                                                                             

    Amortization assumption as if the merger had occurred at the beginning of                             
    the period shown .........................................................     $1,364       $  342    

Odwalla intends to allocate the estimated increase in fair value of property                              
    and equipment acquired to the individual assets.  For this  pro forma                                 
    information, we have assumed that the average life assigned to the                                    
    increase in fair value is five years.  The actual amounts may differ .....                            
    Depreciation calculation as if the merger occurred at the beginning of the                            
    period shown and assumes that, based upon historical information, the                                 
    allocation to cost of sales; sales and  distribution; and marketing,                                  
    general and administrative costs approximate 70%, 15% and 15%.  Actual                                
    allocations may differ ...................................................        200           50    
                                                                                   ------       ------    

Total additional amortization and depreciation expense using the above                                    
    assumptions as of the first date of the period shown .....................     $1,564       $  392    
                                                                                   ======       ======    

     f. Reflects reduction in interest expense assuming reduced borrowing due to
the private placement of $6.0 million of common stock at the merger date, a     
portion of which will be used to pay the outstanding balance of Fresh Samantha's
credit facility. In the unaudited pro forma combined condensed financial        
statements, the balance is assumed to be $4.9 million. The actual amount of the 
credit facility to be paid at the closing of the merger may be different and    
that difference could be material.                                              

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 PROPOSALS AT THE ANNUAL MEETING

PROPOSAL NO. 1 -- APPROVAL OF THE MERGER                                        

Upon consummation of the merger, each outstanding share of Fresh
Samantha capital stock will be converted into fully paid and nonassessable      
shares of Odwalla common stock and Fresh Samantha will become a wholly owned    
subsidiary of Odwalla. The following description of the material terms of the   
merger agreement is qualified in its entirety by reference to the merger        
agreement, a copy of which is attached hereto as Appendix A.                    

TERMS OF THE MERGER:                                                            

CONSIDERATION TO BE RECEIVED BY SECURITY HOLDERS                                

Upon consummation of the merger, each outstanding share of Fresh
Samantha capital stock will be converted into fully paid and nonassessable      
shares of Odwalla common stock. The number of shares of Odwalla common stock to 
be issued in the merger is based upon a percentage of the outstanding capital   
stock of Odwalla and rights to purchase the capital stock of Odwalla, other than
under Odwalla's 1997 Stock Option/Stock Issuance Plan, prior to the consummation
of the merger. The number of shares to be issued is subject to adjustment       
factors, including an adjustment factor for the actual working capital of each  
of Odwalla and Fresh Samantha on the anticipated date of the consummation of the
merger, as described below. No fractional share of Odwalla common stock will be 
issued pursuant to the merger. Any fractional shares shall be rounded to the    
nearest whole number.                                                           

        Fresh Samantha has five (5) different types of common stock and four (4)
different types of preferred stock. 10% of the shares of Odwalla common stock to
be issued in the merger will be allocated to the holders of the Fresh Samantha  
Class A-1, A-2 and A-3 common stock, and 90% of the shares of Odwalla common    
stock to be issued in the merger will be allocated to the holders of the Fresh  
Samantha Class L-1 and L-2 common stock and Class N-1, N-2, P-1 and P-2         
preferred stock. The shareholders of Fresh Samantha also have chosen to transfer
immediately prior to the consummation of the merger all of their shares of      
capital stock of Fresh Samantha to Samantha Investors, LLC, a Massachusetts     
limited liability company, and as a result Samantha Investors will be receiving 
the merger consideration on behalf of the shareholders of Fresh Samantha and    
will be a party to the merger agreement.                                        

    ADJUSTMENT TO MERGER CONSIDERATION DUE TO CHANGES IN WORKING CAPITAL

    Before the anticipated consummation of the merger, Odwalla and Fresh
Samantha will provide each other with their respective actual working capital as
of a given date and their projected working capital as of the consummation of   
the merger. The merger agreement contains a working capital "target" amount for 
each of Odwalla and Fresh Samantha, and subject to the detailed provisions of   
the merger agreement, the number of shares of Odwalla common stock to be issued 
in the merger may be increased or decreased if Odwalla and Fresh Samantha exceed
or fall short of their respective working capital target. For example, if both  
Odwalla and Fresh Samantha failed to meet their respective working capital      
target, then the number of shares of Odwalla common stock to be issued in the   
merger would be increased due to Odwalla's shortfall, but decreased due to Fresh
Samantha's shortfall. The terms of the merger agreement provide for a $1,000,000
"buffer" before the number of shares constituting the merger consideration will 
be increased or decreased, as the case may be, as a result of Fresh Samantha or 
Odwalla exceeding their respective working capital target. Please review the    
merger agreement for a complete explanation of the adjustment to the merger     
consideration.                                                                  

ESCROW                                                          

As the sole source of the indemnification obligations of the    
shareholders of Fresh Samantha and Samantha Investors (as more fully described  
below), 15% of the shares of Odwalla common stock issued in the merger will be  
placed in an escrow account and held for a period of one year pursuant to an    
escrow agreement. For a more complete discussion of the escrow agreement, please
see the section entitled "Escrow Agreement" on page 44.                         

FRESH SAMANTHA OPTIONS AND WARRANTS                             

    Prior to, and as a condition of, the consummation of the merger, the
Fresh Samantha stock option plan shall be terminated and all unexercised options
shall be cancelled. In addition, all warrants to purchase capital stock of Fresh
Samantha shall be cancelled. Concurrent with the consummation of the merger,    
Odwalla plans to issue options to                                               

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purchase shares of Odwalla common stock to those employees of Fresh Samantha    
holding unexercised Fresh Samantha options. To the extent Odwalla has           
insufficient unallocated options available, this commitment is subject to the   
approval by Odwalla shareholders of the increase in the number of shares of     
common stock authorized for issuance under the Odwalla 1997 Stock Option/Stock  
Issuance Plan.                                                                  

INDEMNIFICATION BY THE SHAREHOLDERS OF FRESH SAMANTHA AND SAMANTHA INVESTORS    

   Each representing party (whether a shareholder of Fresh Samantha or
Samantha Investors) making a representation, warranty or covenant in the merger 
agreement will be liable to Odwalla, its officers, directors, employees, agents 
and representatives for indemnification claims under the merger agreement to the
extent of each Fresh Samantha shareholder's pro rata portion of the escrow      
account established pursuant to the escrow agreement, as described below. The   
representing party's indemnification obligations relate to any damages which are
suffered or incurred by Odwalla, its officers, directors, employees, agents and 
representatives, directly or indirectly resulting from any breach of any        
representation or warranty made by Fresh Samantha or the representing party in  
the merger agreement or the failure of Fresh Samantha or the representing party 
to perform any covenants or obligations in the merger agreement. The liability  
of each Fresh Samantha shareholder shall not be limited to his, her or its pro  
rata share of the escrow account for damages resulting from any intentional     
fraud on the part of the shareholder.                                           

 The representations, warranties, covenants and obligations of the
parties under the merger agreement will survive the consummation of the merger  
and shall terminate on the first anniversary of the closing date of the merger. 
The representation regarding ownership of the shares of Fresh Samantha capital  
stock and any breach of a representation or warranty involving intentional      
fraud, in each case as set forth in the merger agreement, which will survive for
longer periods as set forth in the merger agreement.                            

    Odwalla may not make a claim for indemnification until the aggregate
amount of indemnifiable damages suffered by all indemnified parties exceeds a   
threshold of $175,000, at which point the indemnifying party or parties will    
indemnify the full amount of these claims and all claims thereafter.            

 The number of shares of Odwalla common stock to be released to an
indemnified party will be calculated by dividing the dollar amount of the       
damages incurred by the indemnified party or parties by the average of the      
closing price of the common stock of Odwalla on the Nasdaq Stock Market for the 
20 trading days ending on the last trading day prior to the closing date of the 
merger.                                                                         

OTHER PROVISIONS OF THE MERGER AGREEMENT                                        

REPRESENTATIONS AND WARRANTIES                                  

     The merger agreement contains representations and warranties by Fresh
Samantha, the shareholders of Fresh Samantha and Samantha Investors, relating   
to, among other things:                                                         

-       organization and related matters;                       

     -       Fresh Samantha's charter documents and its books and records;

-       Fresh Samantha's capital structure;                     

-       authority and binding nature of the merger and related  
agreements;                                     

-       non-contravention and consents;                         

-       intellectual property rights of Fresh Samantha;         

-       proceedings and orders;                                 

-       financial statements;                                   

-       title to assets;                                        

      -       contracts by which Fresh Samantha is bound or to which it is a
party;                                          

-       employees of Fresh Samantha;                            

-       compliance with legal requirements;                     

-       governmental authorizations;                            

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-       taxes and related matters;                              

-       securities law compliance and registration rights;      

-       finders and brokers;                                    

-       environmental compliance;                               

-       insurance;                                              

-       related party transactions;                             

-       absence of changes since October 30, 1999;              

-       powers of attorney;                                     

-       benefits plans and ERISA;                               

-       major suppliers;                                        

-       customers;                                              

-       full disclosure; and                                    

-       due diligence information.                              

      In addition, each shareholder of Fresh Samantha and Samantha Investors
makes additional representations and warranties with respect to their ownership 
of the capital stock of Fresh Samantha and their investment in Odwalla common   
stock, including that he, she or it:                                            

-       is an "accredited investor," as the term is defined or  
interpreted under the Securities Act of 1933;   

       -       by reason of his, her or its business and financial experience,
              he, she or it has the knowledge, sophistication and experience
          in financial and business matters and in making investment
               decisions of this type as to be able to evaluate the merits and
       risks of the investment in Odwalla and make an informed
              investment decision, protect his, her or its own interest, and
bear the economic risk of the investment;       

     -       will acquire the Odwalla common stock for investment for his,
              her or its own account, and not as a nominee or agent, and not
             with a view to, or any intention of, a resale or distribution
thereof;                                        

      -       is aware that the Odwalla common stock is not registered under
                the Securities Act of 1933 and/or any state securities laws; and

       -       has been given the opportunity to make a thorough investigation
          of the proposed activities of Odwalla and, upon request to
              Odwalla, has been furnished with materials relating to Odwalla
and its proposed activities.                    

        Each shareholder of Fresh Samantha and Samantha Investors also covenants
that he, she or it will observe and comply with the Securities Act of 1933, as  
now in effect and as from time to time amended, in connection with any offer,   
sale, pledge, transfer or other disposition of Odwalla common stock. In         
furtherance of the foregoing, and in addition to any restrictions contained in  
the merger agreement or the shareholder rights agreement, the shareholders of   
Fresh Samantha and Samantha Investors agree to not offer to sell, exchange,     
transfer, pledge, or otherwise dispose of any of the Odwalla common stock to be 
issued in the merger unless at the time at least one of the following is        
satisfied:                                                                      

 1.      a registration statement under the Securities Act of 1933
      covering the Odwalla common stock proposed to be sold,
               transferred or otherwise disposed of, describing the manner and
              terms of the proposed sale, transfer or other disposition, and
               conTaining a current prospectus, shall have been filed with the
               Securities and Exchange Commission and made effective under the
Securities Act of 1933;                         

        2.      the transaction shall be permitted pursuant to the provisions of
Rule 144 under the Securities Act of 1933;      

      3.      counsel representing the party, satisfactory to Odwalla, shall
           have advised Odwalla in a written opinion letter reasonably
               satisfactory to Odwalla and its counsel, and upon which Odwalla
        and its counsel may rely, that no registration under the
               Securities Act of 1933 would be required in connection with the
proposed sale, transfer or other disposition; or

   4.      an authorized representative of the Securities and Exchange
          Commission shall have rendered written advice to the party
         (sought by the party or counsel to the party, with a copy
            thereof and of all other related communications delivered to
       Odwalla) to the effect that the Securities and Exchange
Commission would                                

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                take no action, or that the staff of the Securities and Exchange
               Commission would not recommend that the Securities and Exchange
          Commission take action, with respect to the proposed sale,
transfer or other disposition if consummated.   

     Odwalla and Orange Acquisition Sub, Inc., its wholly owned subsidiary
formed for the purpose of consummating the merger, make representations and     
warranties relating to, among other things:                                     

-       organization and related matters;                       

-       capitalization;                                         

-       subsidiaries;                                           

-       authorization;                                          

-       valid issuance of the Odwalla common stock;             

-       consents;                                               

-       filings with the Securities and Exchange Commission and 
financial statements;                           

-       no changes since August 28, 1999;                       

-       compliance with laws;                                   

-       no conflict;                                            

-       litigation;                                             

-       tax returns and payments;                               

-       finders and brokers;                                    

-       registration rights;                                    

-       voting rights;                                          

-       employee matters; and                                   

-       investment representations.                             

CONDUCT PRIOR TO THE CONSUMMATION OF THE MERGER                 

        Fresh Samantha has agreed in the merger agreement that during the period
prior to the consummation of the merger, it will, among other things, conduct   
its operations exclusively in the ordinary course of business, in the same      
manner as its operations have been previously conducted, and will not take      
specified actions.                                                              

   The shareholders of Fresh Samantha and Samantha Investors also have
agreed in the merger agreement that during the period prior to the consummation 
of the merger, they will, among other things, not transfer any shares of capital
stock of Fresh Samantha (other than the transfer from the shareholders to       
Samantha Investors, as discussed above).                                        

   Finally, Odwalla has agreed in the merger agreement that during the
period prior to the consummation of the merger, it will, among other things,    
conduct its operations exclusively in the ordinary course of business, in the   
same manner as its operations have been previously conducted, and will not take 
specified actions. The merger agreement allows Odwalla to sell $5.0 million in  
Odwalla common stock to U.S. Equity Partners and $1.0 million in Odwalla common 
stock to Catterton-Simon Partners concurrent with the consummation of the       
merger. For a more detailed discussion of this additional issuance of Odwalla   
common stock, please see the section entitled "Stock Purchase Agreement" on page
45.                                                                             

       INCREASE IN ODWALLA'S CREDIT FACILITY AND REPAYMENT OF FRESH SAMANTHA'S
INDEBTEDNESS                                                                    

   Odwalla has agreed to use its best commercial efforts to expand its
current credit facility to a minimum of $10,000,000, and thereafter, concurrent 
with the consummation of the merger, satisfy all of Fresh Samantha's obligations
to Citizen's Bank of Massachusetts resulting from Fresh Samantha's revolving    
credit agreement with Citizen's Bank.                                           

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COVENANT NOT TO COMPETE                                         

     Two shareholders of Fresh Samantha, Douglas Levin and Michael Carter,
have agreed, pursuant to the terms of the merger agreement and contingent upon  
the consummation of the merger, not to compete with Odwalla or any affiliate of 
Odwalla for a period of two years following the consummation of the merger.     

CONDITIONS TO THE COMPLETION OF THE MERGER                      

        The merger agreement provides that the obligations of Odwalla and Orange
Acquisition Sub to effect the merger are subject to various conditions,         
including the following:                                                        

-       the representations and warranties of Odwalla and Orange
                Acquisition Sub shall have been true on and as of the closing of
             the merger with the same effect as though the representations
             and warranties had been made on and as of the closing (except
            for breaches which are not reasonably likely have a material
            adverse effect on Fresh Samantha), and the other party shall
              have performed in all material respects all obligations in the
                merger agreement and the other related agreements required to be
   performed at or prior to the closing of the merger;

        -       the delivery of duly executed copies of the escrow agreement and
shareholders' rights agreement;                 

     -       receipt of a legal opinion from counsel to Fresh Samantha and
shareholders;                                   

        -       receipt of the written resignations of the board of directors of
Fresh Samantha;                                 

-       receipt of written evidence of the termination of Fresh 
         Samantha's option plan and the cancellation of all option
              agreements and warrants to purchase the capital stock of Fresh
Samantha;                                       

-       approval of Fresh Samantha's working capital estimate;  

     -       as of the consummation of the merger, Fresh Samantha's actual
           working capital shall not be less than negative $5,250,000;

-       all corporate and other proceedings on the part of Fresh
               Samantha, Samantha Investors and shareholders of Fresh Samantha
shall have been properly taken;                 

      -       not more than 1% of the shares of Fresh Samantha capital stock
shall have dissented from the merger;           

-       all necessary consents shall have been obtained;        

       -       the consummation of the merger will not, directly or indirectly
        (with or without notice or lapse of time), contravene or
              conflict with or result in a violation of, or cause Odwalla to
               suffer a material adverse effect as a result of a change in any
         applicable legal requirement after the date of the merger
          agreement or any order issued after the date of the merger
             agreement, or any legal requirement or order that is proposed
       after the date of the merger agreement by or before any
governmental body;                              

     -       Odwalla shall have received a written opinion from Morrison &
               Foerster, LLP, its legal counsel, to the effect that the merger
              will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code;            

  -       concurrently with the closing of the merger or immediately
               thereafter, Odwalla shall have sold not less than $6,000,000 of
 its common stock on certain terms and conditions;

       -       any waiting period applicable to the consummation of the merger
        under the federal antitrust law of the Hart-Scott-Rodino
            Antitrust Improvement Act of 1976 shall have expired or been
terminated; and                                 

      -       not more than 5% of the shares of the capital stock of Odwalla
                outstanding on March 10, 2000 shall be "dissenting shares" under
         California law in connection with any vote of the Odwalla
shareholders in connection with the merger.     

     The merger agreement provides that the obligations of Fresh Samantha,
Samantha Investors and the shareholders of Fresh Samantha to effect the merger  
are subject to various conditions, including the following:                     

-       the representations and warranties of Odwalla and Orange
           Acquisition Sub, Inc. shall have been true on and as of the
        closing of the merger with the same effect as though the
             representations and warranties had been made on and as of the
            closing (except for breaches which are not reasonably likely
               have a material adverse effect on Odwalla), and the other party
 shall have performed in all material respects all

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         obligations in the merger agreement and the other related
              agreements required to be performed at or prior to the closing
of the merger;                                  

        -       the delivery of duly executed copies of the escrow agreement and
shareholders' rights agreement;                 

-       receipt of a legal opinion from counsel to Odwalla;     

-       approval of Odwalla's working capital estimate;         

      -       as of the consummation of the merger, Odwalla's actual working
capital shall not be less than $4,250,000;      

       -       all shares of Odwalla preferred stock shall have converted into
shares of common stock;                         

      -       receipt of written evidence of the cancellation of the warrant
        to purchase Odwalla common stock held by Catterton-Simon
Partners;                                       

-       all necessary consents shall have been obtained;        

       -       the consummation of the merger will not, directly or indirectly
        (with or without notice or lapse of time), contravene or
         conflict with or result in a violation of, or cause Fresh
                Samantha or its shareholders to suffer a material adverse effect
           as a result of a change in any applicable legal requirement
                after the date of the merger agreement or any order issued after
             the date of the merger agreement, or any legal requirement or
                order that is proposed after the date of the merger agreement by
or before any governmental body;                

       -       Fresh Samantha shall have received a written opinion from Ropes
             & Gray, its legal counsel, to the effect that the merger will
                constitute a reorganization within the meaning of Section 368(a)
of the Internal Revenue Code;                   

  -       concurrently with the closing of the merger or immediately
               thereafter, Odwalla shall have sold not less than $6,000,000 of
its common stock on some terms and conditions;  

       -       any waiting period applicable to the consummation of the merger
        under the federal antitrust law of the Hart-Scott-Rodino
            Antitrust Improvement Act of 1976 shall have expired or been
terminated; and                                 

      -       not more than 5% of the shares of the capital stock of Odwalla
          outstanding on the record date for Odwalla's shareholders'
            meeting shall be "dissenting shares" under California law in
       connection with any vote of the Odwalla shareholders in
connection with the merger.                     

TERMINATION OF THE MERGER AGREEMENT                             

      Odwalla or Fresh Samantha may terminate the merger agreement by mutual
consent. Additionally, either Odwalla or Fresh Samantha may terminate the merger
agreement if the conditions to the completion of the merger would not be        
satisfied because of a material breach of the merger agreement by the other     
party or a representation or warranty of the other party in the merger agreement
becomes materially untrue, either of which is incurable within ten business days
after written notice of the breach by the other party.                          

RELATED AGREEMENTS                                                              

SHAREHOLDERS' RIGHTS AGREEMENT                                  

       As a condition to each party's obligation to consummate the merger, the
Chief Executive of Odwalla and several former Fresh Samantha shareholders,      
including Bain, Samantha Investors, U.S. Equity Partners, Catterton-Simon       
Partners, Doug Levin and Michael Carter, will execute a shareholders' rights    
agreement. The shareholders' rights agreement grants the parties to the         
agreement rights to register their shares of Odwalla common stock, co-sale      
rights in the event another party sells its shares of Odwalla common stock and a
voting agreement to elect members of the board of directors of Odwalla. The     
shareholders' rights agreement also grants Odwalla a right of first offer with  
respect to transfers of common stock by the financial investors that are parties
to the agreement. The following is a summary of the material terms of the       
shareholders' rights agreement. Please review the shareholders' rights agreement
attached as Appendix B for a complete explanation of these rights and           
obligations.                                                                    

      Registration Rights. The parties to the shareholders' rights agreement
may request that Odwalla effect the registration of their shares of Odwalla     
common stock on a Form S-3 registration statement, provided that the gross      

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proceeds of the offering to which the request applies are expected to be at     
least $1,000,000. If Odwalla is not eligible to use a Form S-3 registration     
statement, then the shareholders may request that it use a Form S-1 or S-2      
registration statement, provided that the gross proceeds of the offering to     
which the request applies are expected to be at least $5,000,000. Promptly after
receipt of the notice, Odwalla is obligated to give written notice of the       
requested registration to all other shareholders who have registration rights   
with respect to their shares. Odwalla will then use its commercially reasonable 
best efforts to expeditiously effect the registration under the Securities Act  
of the 1933 of the subject shares of Odwalla common stock. In the event Odwalla 
is going to register the shares on a Form S-3 registration statement, it shall  
include additional disclosure in the registration statement and the prospectus  
used in connection with the registration statement as reasonably requested by   
the majority of the shareholders participating in the registration or, in the   
case of an underwritten offering, by the managing underwriter(s), to            
successfully market the Odwalla common stock offered in the registration. The   
right of the shareholders to request registration of their shares of common     
stock under the shareholders' rights agreement is subject to limitations,       
including that Odwalla is not obligated to effectuate more than two             
registrations on a Form S-1 or S-2 registration statement or any registration   
more than twice in a single year, or if the Chairman of the Board or the Chief  
Executive Officer of Odwalla delivers a certificate to the shareholders stating 
that in the good faith judgment of the board it would be seriously detrimental  
to Odwalla and its shareholders for the registration to be effected at that     
time, in which case Odwalla may defer the filing of the registration statement  
for a period of not more than 90 days.                                          

        The parties to the shareholders' rights agreement also have "piggy back"
rights in the event Odwalla elects to file a registration statement for its own 
account or for the account of any of its shareholders (unless the registration  
is in relation to employee compensation plans or transactions contemplated by   
Rule 145 of the Securities Act of 1933, as amended). In the event Odwalla       
decides to file this type of registration statement, it must notify the parties 
to the agreement 30 days prior to the projected filing date and offer the       
recipients of the notice the opportunity to include their respective shares in  
the registration. Those shareholders wishing to include their shares of Odwalla 
common stock in the registration must respond with 20 days.                     

       The registration rights of the shareholders described above are subject
to conditions and limitations, among them the right of the underwriters of an   
offering to limit the number of shares included in the registration. The        
registration rights terminate, with respect to a given shareholder, as of the   
date when all shares of common stock held by the shareholder may be sold        
pursuant to Rule 144 under the Securities Act of 1933 during any 90 day period. 

Right of First Offer. Upon execution of the shareholders' rights
agreement, Odwalla shall have a right of first offer with respect to transfers  
of stock held by the financial investors who are parties to the shareholders'   
rights agreement. If any of the investors wish to transfer all or a portion of  
their shares of Odwalla common stock, they must give Odwalla and the other      
financial investors a notice setting forth the price and number of shares. If   
Odwalla does not purchase the shares at the price offered within 45 days of the 
notice, then, subject to the co-sale rights described below, the party desiring 
to transfer its shares has 120 days from the expiration of the prior 45 day     
period to transfer its shares at a price not less than the price specified in   
the notice.                                                                     

   Odwalla's right of first offer is limited and does not apply to all
proposed transfers, including those to affiliates, family members and domestic  
partners of shareholders, transfers pursuant to a registration statement or     
through a broker and transfers that do not exceed 5% of the fully diluted common
stock of Odwalla. The right of first offer terminates upon a change in control  
of Odwalla or a sale of all or substantially all of Odwalla's assets.           

 Co-Sale Rights. In the event Odwalla does not purchase the shares
described in the paragraphs above, then the other financial investors that are  
signatories to the shareholders' rights agreement shall have the right to       
include a portion of the shares they own in the proposed transfer. If the       
proposed transferee does not wish to purchase all of the shares offered by the  
original transferor and those exercising co-sale rights, then the number of     
shares of all parties desiring to transfer their shares shall be reduced        
proportionately. The co-sale rights in favor of the financial investors are     
limited by, and terminate upon, the same circumstances as the right of first    
offer.                                                                          

Voting Agreement. All of the parties to the shareholders' rights
agreement agree, subject to some limitations, to vote their shares of Odwalla   
common stock to set the size of the board of directors of Odwalla and elect     
nominees to the board designated by specific major shareholders. Pursuant to the
terms of the shareholders' rights agreement, the board shall include the        
following:                                                                      

   -       one member nominated by Catterton-Simon Partners as long as
             Catterton-Simon Partners holds at least 5% of the outstanding
               common stock of Odwalla, who shall initially be Craig H. Sakin;

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    -       one member nominated by U.S. Equity Partners as long as U.S.
           Equity Partners holds at least 5% of the outstanding common
        stock of Odwalla, who shall initially be Ellis B. Jones;

       -       one member nominated by the Chief Executive Officer of Odwalla,
    who shall initially be D. Stephen C. Williamson; and

      -       two members nominated by Bain or Samantha Investors as long as
          Bain holds at least 20% of the outstanding common stock of
          Odwalla or one member nominated by Bain as long as Bain or
             Samantha Investors holds at least 5% but less than 20% of the
outstanding common stock of Odwalla.            

  In addition, if required by the National Association of Securities
Dealers to ensure the required number of independent directors on the board, the
board shall include:                                                            

     -       one member nominated by Bain or Samantha Investors as long as
          Bain holds at least 20% of the outstanding common stock of
Odwalla; and                                    

      -       one member nominated collectively by Odwalla's Chief Executive
           Officer, U.S. Equity Partners and Catterton-Simon Partners.

    Standstill. The financial investors also agree not to increase their
ownership percentage in Odwalla (other than as a result of the purchase of debt 
securities or an increase of 5% as a result of the purchase of publicly-traded  
equity securities), to solicit votes of the Odwalla shareholders against any    
matter recommended by the board of directors of Odwalla, or make an unsolicited 
offer to acquire Odwalla. These limitations on ownership are suspended if there 
is an acquisition proposal regarding Odwalla that is not instituted by the      
financial investors, a public announcement that Odwalla is "for sale," or the   
adoption of a plan of liquidation or dissolution by Odwalla's board of          
directors.                                                                      

        Lockup. Subject to the same permitted transfers under the right of first
offer and co-sale right, the shareholders agree not to transfer any shares of   
Odwalla common stock for a period of one year.                                  

ESCROW AGREEMENT                                                

       As a condition to each party's obligation to consummate the merger, all
of the shareholders of Fresh Samantha and Samantha Investors must execute an    
escrow agreement related to the deposit of shares of Odwalla common stock for   
the satisfaction of indemnification claims by Odwalla.                          

        General. On the closing date of the merger, Odwalla will deposit with an
escrow agent shares of Odwalla common stock equal to 15% of the aggregate merger
consideration received by Fresh Samantha shareholders to be held in an escrow   
account for a period of one year from the date of the deposit. Other than with  
respect to damages that result from the intentional fraud of a representing     
party to the merger agreement, the escrow account is the sole source of payments
to the indemnified parties under the merger agreement. The escrow agreement     
contains procedures for notification of claims for indemnification and for the  
settlement of disputes regarding amounts, if any, that may be owed.             

        Distribution of Escrow Fund. Five business days after the termination of
the escrow period, the escrow agent will distribute the shares remaining in the 
escrow account (other than amounts in dispute as of that date) to Samantha      
Investors or, in the event Samantha Investors has been dissolved, the           
shareholders of Fresh Samantha.                                                 

      Liability of Escrow Agent; Indemnification of Escrow Agent. The escrow
agent will not be liable for any act or omission, except for its own gross      
negligence or willful misconduct. The parties to the escrow agreement (other    
than the escrow agent) jointly and severally agree to indemnify and hold        
harmless the escrow agent (and any successor escrow agent) from and against any 
and all losses, liabilities, claims, actions, damages and expenses (including   
reasonable attorneys' fees and disbursements) arising out of and in connection  
with any dispute (other than a successful dispute based upon the gross          
negligence or willful misconduct of the escrow agent) arising out of the escrow 
agreement. Odwalla agrees to pay the escrow agent for the fees, charges and     
expenses for all services provided by the escrow agent pursuant to the escrow   
agreement.                                                                      

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STOCK PURCHASE AGREEMENT                                        

   As a condition to each party's obligation to consummate the merger,
Odwalla must sell not less than $6,000,000 of its common stock in accordance    
with terms set forth in the merger agreement. Odwalla and each of U.S. Equity   
Partners and Catterton-Simon Partners, executed a stock purchase agreement,     
dated February 11, 2000, pursuant to which U.S. Equity Partners will purchase   
800,641 shares of Odwalla common stock for $5.0 million and Catterton-Simon     
Partners will purchase 160,128 shares of Odwalla common stock for $1.0 million. 
The obligation of each of U.S. Equity Partners and Catterton-Simon Partners to  
purchase the stock is contingent upon, among other things, the closing of the   
merger on substantially the same terms as those agreed upon by the parties to   
the merger agreement.                                                           

VOTE REQUIRED                                                                   

       Neither the California General Corporation Law nor the Odwalla Articles
of Incorporation requires Odwalla to obtain shareholder approval of the merger. 
However, due to the number of shares of Odwalla common stock to be issued in the
merger, Nasdaq rules require Odwalla to obtain shareholder approval of the      
issuance of the shares. As a result, the approval of the merger and the issuance
of Odwalla common stock to Fresh Samantha shareholders requires the affirmative 
vote of the holders of a majority of the shares of Odwalla common stock and     
preferred stock voting together as a class present, or represented, and voting  
at the Odwalla annual meeting. Abstentions and broker non-votes will have no    
effect on the voting of the proposal.                                           

RECOMMENDATION OF THE BOARD                                                     

        The board of directors unanimously recommends a vote FOR approval of the
proposed merger and additional issuance of Odwalla common stock.                

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PROPOSAL NO. 2 -- APPROVAL OF THE AMENDMENT OF THE CERTIFICATE OF DESIGNATION OF
PREFERRED STOCK                             

    At the Odwalla annual meeting, Odwalla shareholders will be asked to
vote on the proposed amendment to the Certificate of Designation of preferred   
stock to permit the conversion of the Odwalla preferred stock held by           
Catterton-Simon Partners into Odwalla common stock based on a conversion ratio  
of 1.2407-to-1 rather than on the 1-to-1 conversion ratio set forth in the      
existing Certificate of Designation. Approval of the conversion of the Odwalla  
preferred stock held by Catterton-Simon Partners into common stock is a         
condition to the consummation of the merger. However, if the merger is not      
consummated, the Odwalla preferred stock will not be converted, even if the     
amendment to the Certificate of Designation is approved by the Odwalla          
shareholders.                                                                   

        Catterton-Simon Partners purchased 1,000,000 shares of Odwalla preferred
stock pursuant to a stock purchase agreement, dated as of January 29, 1999,     
between Odwalla and Catterton-Simon Partners. Under the terms of the agreement, 
the preferred stock is convertible on a 1-to-1 basis into common stock. In      
connection with the stock purchase agreement, Catterton-Simon Partners received 
a warrant, dated as February 10, 1999, to purchase 75,000 shares of Odwalla     
common stock at $10.00 per share. This warrant expires on February 10, 2006.    
Additionally, pursuant to the 8% annual dividend rights of the Odwalla preferred
stock, Catterton-Simon Partners has received dividends to date in the amount of 
74,666 shares of preferred stock, so that the aggregate number of shares of     
Odwalla preferred stock held by Catterton-Simon Partners is presently 1,074,666 
shares. There is no other holder of Odwalla preferred stock.                    

 Catterton-Simon Partners has the option, but is not obligated, to
convert its preferred stock to common stock at any time. In connection with the 
closing of the merger with Fresh Samantha, Odwalla has requested that           
Catterton-Simon Partners convert its Odwalla preferred stock to common stock and
cancel the warrant it holds to purchase 75,000 shares of Odwalla common stock.  
As an inducement to Catterton-Simon Partners for converting its shares of       
preferred stock and canceling the warrant, Odwalla's board of directors proposes
that the Certificate of Designation be amended to permit the conversion of the  
Odwalla preferred stock held by Catterton-Simon Partners into common stock based
on a conversion ratio of 1.2407-to-1, rather than on the 1-to-1 conversion ratio
set forth in the existing Certificate of Designation. This amendment would      
result in the 1,074,666 shares of preferred stock presently held by             
Catterton-Simon Partners converting into 1,333,333 shares of common stock.      

VOTE REQUIRED                                                                   

       The approval of the amendment to the Odwalla Certificate of Designation
requires the affirmative vote of the holders of a majority of the outstanding   
shares of Odwalla common stock and preferred stock voting together as a class   
entitled to vote at the Odwalla annual meeting. Abstentions and broker non-votes
will have the effect of a "NO" vote on the amendment to the Odwalla Certificate 
of Designation proposal.                                                        

RECOMMENDATION OF THE BOARD                                                     

    The Odwalla board of directors unanimously recommends a vote FOR the
adoption of the proposed amendment to the Certificate of Designation.           

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PROPOSAL NO. 3 -- APPROVAL OF THE AMENDMENT TO ODWALLA'S 1997 STOCK OPTION/STOCK
ISSUANCE PLAN                               

    At the Odwalla annual meeting, Odwalla shareholders will be asked to
vote on the proposed amendment and restatement of Odwalla's 1997 Stock          
Option/Stock Issuance Plan to increase the number of shares authorized for      
issuance thereunder from 1,648,475 shares to 2,148,475 shares. Approval of the  
amendment to the 1997 Stock Option/Stock Issuance Plan is not a condition to the
consummation of the merger, and the amendment to the 1997 Stock Option/Stock    
Issuance Plan will be implemented, if approved by Odwalla shareholders, even if 
the merger is not consummated.                                                  

The 1997 Stock Option/Stock Issuance Plan, which was approved by
Odwalla's shareholders at the 1997 annual meeting, provides for the issuance of 
stock options and stock awards covering up to 1,648,475 shares of Odwalla common
stock. Stock awards issued under the 1997 Stock Option/Stock Issuance Plan may  
be made in the form of stock options, stock grants or purchases. The Odwalla    
board has concluded that the number of shares authorized under the 1997 Stock   
Option/Stock Issuance Plan will not be sufficient to achieve Odwalla's          
objectives following the merger. In particular, immediately following the       
merger, Odwalla will have outstanding 11,231,985 shares of Odwalla common stock,
and will have approximately 300 additional employees. The Odwalla board has     
concluded that, given Odwalla's increased size as a result of the merger, an    
increase in the authorized number of shares under the 1997 Stock Option/Stock   
Issuance Plan is in the best interests of Odwalla and its shareholders. The     
increase will enable Odwalla to retain talented employees and to attract        
talented new employees by offering them participation in the 1997 Stock         
Option/Stock Issuance Plan. Management of Odwalla believes that without this    
incentive it will be unable to attract and retain the services of those         
individuals essential to Odwalla's growth and financial success.                

    THE ODWALLA BOARD HAS UNANIMOUSLY APPROVED THE AMENDMENT TO THE 1997
STOCK OPTION/STOCK ISSUANCE PLAN AND UNANIMOUSLY RECOMMENDS THAT HOLDERS OF     
SHARES OF ODWALLA COMMON STOCK VOTE FOR APPROVAL OF THE PROPOSAL.               

GENERAL DESCRIPTION                                                             

     The 1997 Stock Option/Stock Issuance Plan was approved by the Odwalla
shareholders in April 1997. A total of 1,648,475 shares of Odwalla common stock 
were initially reserved for issuance over the ten year term of the 1997 Stock   
Option/Stock Issuance Plan. Options granted under the 1997 Stock Option/Stock   
Issuance Plan may be either incentive stock options, as defined in Section 422  
of the Internal Revenue Code, or nonstatutory stock options. See "Certain       
Federal Income Tax Information" below for information concerning the tax        
treatment of both incentive stock options and nonstatutory stock options. A     
total of 1,648,475 shares are currently reserved for issuance under the 1997    
Stock Option/Stock Issuance Plan. As of February 29, 2000, options to purchase  
approximately 1,272,000 shares were outstanding under the 1997 Stock            
Option/Stock Issuance Plan, approximately 254,000 options to purchase shares had
been exercised under the 1997 Stock Option/Stock Issuance Plan, and             
approximately 221,000 shares remained reserved for issuance thereunder.         

SUMMARY OF 1997 STOCK OPTION/STOCK ISSUANCE PLAN                                

    The essential terms of the 1997 Stock Option/Stock Issuance Plan, as
proposed to be amended, are summarized below. This summary is not intended to be
a complete description of all terms of the 1997 Stock Option/Stock Issuance     
Plan. A copy of the 1997 Stock Option/Stock Issuance Plan will be furnished to  
any shareholder upon request. The request should be directed to the Secretary of
Odwalla at Odwalla's principal executive office.                                

    Structure. The 1997 Stock Option/Stock Issuance Plan will consist of
three separate equity incentive programs: (1) a Discretionary Option Grant      
Program under which eligible individuals in Odwalla's employ or service may, at 
the discretion of the plan administrator, be granted options to purchase shares 
of common stock, (2) a Stock Issuance Program under which these individuals may,
in the plan administrator's discretion, be issued shares of common stock        
directly and (3) an Automatic Option Grant Program under which eligible         
non-employee board members will automatically receive option grants to purchase 
shares of common stock at designated intervals over their period of board       
service. The principal features of each program are described below.            

     Administration. The Compensation Committee of the board will serve as
the initial plan administrator with respect to the Discretionary Option Grant   
Program and the Stock Issuance Program. However, one or more additional         

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board committees may be appointed to administer those programs with respect to  
designated classes of individuals in Odwalla's service. The term "plan          
administrator" as used in this summary will mean the Compensation Committee and 
any other appointed committee acting within the scope of its administrative     
authority under the 1997 Stock Option/Stock Issuance Plan. Administration of the
Automatic Option Grant Program will be self-executing in accordance with the    
express provisions of that program, and no plan administrator will exercise any 
discretion with respect to this program.                                        

    Eligibility. Officers and employees, non-employee board members, and
independent consultants and advisors in the service of Odwalla or any parent or 
subsidiary corporation (whether now existing or subsequently established) will  
be eligible to participate in the Discretionary Option Grant Program and the    
Stock Issuance Program. Only non-employee board members will be eligible to     
participate in the Automatic Option Grant Program.                              

   As of March 10, 2000, 6 executive officers, approximately 445 other
employees and 5 non-employee board members were eligible to participate in one  
or more of the programs under the 1997 Stock Option/Stock Issuance Plan.        

        Share Reserve. The maximum number of shares of common stock reserved for
issuance under the 1997 Stock Option/Stock Issuance Plan will be 2,148,475 if   
this proposal is adopted. The shares issuable under the 1997 Stock Option/Stock 
Issuance Plan may be made available either from Odwalla's authorized but        
unissued common stock or from common stock reacquired by Odwalla, including     
shares purchased in the open market. In addition, shares subject to any         
outstanding options under the 1997 Stock Option/Stock Issuance Plan that expire 
or terminate prior to exercise and any unvested shares reacquired by Odwalla    
pursuant to its repurchase rights under the 1997 Stock Option/Stock Issuance    
Plan will be available for subsequent issuance.                                 

   No one participant in the 1997 Stock Option/Stock Issuance Plan may
receive stock option grants, separately exercisable stock appreciation rights or
direct stock issuances for more than 300,000 shares of common stock in the      
aggregate per calendar year.                                                    

    Valuation. For purposes of establishing the option price and for all
other valuation purposes under the 1997 Stock Option/Stock Issuance Plan, the   
fair market value per share of common stock on any relevant date under the 1997 
Stock Option/Stock Issuance Plan will be the closing selling price per share of 
common stock on that date, as the price is reported on the Nasdaq National      
Market. The closing selling price of the common stock on March 10, 2000, was    
$7.938 per share.                                                               

DISCRETIONARY OPTION GRANT PROGRAM                                              

       The options granted under the Discretionary Option Grant Program may be
either incentive stock options under the federal tax laws or non-statutory      
options. Each granted non-statutory option will have an exercise price per share
not less than 85% of the fair market value per share of common stock on the     
option grant date, and no granted non-statutory option will have a term in      
excess of ten years. Each granted incentive stock option will have an exercise  
price per share not less than 100% of the fair market value per share of common 
stock on the option grant date, and no granted incentive stock option will have 
a term in excess of ten years. The shares subject to each option will generally 
vest in a series of installments over a specified period of service measured    
from the grant date.                                                            

     Upon cessation of service, the optionee will have a limited period of
time in which to exercise any outstanding option to the extent exercisable for  
vested shares. The plan administrator will have complete discretion to extend   
the period following the optionee's cessation of service during which his or her
outstanding options may be exercised and/or to accelerate the exercisability or 
vesting of these options in whole or in part. The discretion may be exercised at
any time while the options remain outstanding.                                  

     Stock Appreciation Rights. Two types of stock appreciation rights are
authorized for issuance under the Discretionary Option Grant Program: (1) tandem
rights, which require the option holder to elect between the exercise of the    
underlying option for shares of common stock and the surrender of the option for
an appreciation distribution and (2) limited rights, which would become         
exercisable upon the occurrence of a hostile take-over.                         

       The appreciation distribution payable by Odwalla upon the exercise of a
tandem stock appreciation right will be equal in amount to the excess of (1) the
fair market value (on the exercise date) of the shares of common stock in which 
the optionee is at the time vested under the surrendered option over (2) the    
aggregate exercise price payable for                                            

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the shares. The appreciation distribution may, at the plan administrator's      
discretion, be made in cash or in shares of common stock valued at fair market  
value on the exercise date.                                                     

       One or more officers or directors of Odwalla subject to the short-swing
profit restrictions of the Federal securities laws may, at the discretion of the
plan administrator, be granted limited stock appreciation rights in connection  
with their option grants under the Discretionary Option Grant Program. Each     
option with a limited stock appreciation right may be surrendered to Odwalla, to
the extent the option is exercisable for one or more vested option shares, upon 
the successful completion of a hostile tender offer for more than 50% of the    
total combined voting power of Odwalla's outstanding securities. In return, the 
optionee will be entitled to a cash distribution from Odwalla in an amount per  
surrendered option share equal to the excess of (1) the greater of (a) the fair 
market value per share of common stock on the date the option is surrendered to 
Odwalla in connection with a hostile tender offer or (b) the highest price per  
share of common stock paid in the tender offer over (2) the option exercise     
price per share. However, in the case of an incentive stock option surrendered  
in connection with a hostile tender offer, the optionees will be entitled to a  
cash distribution from Odwalla in an amount per surrendered option share not to 
exceed the excess of (1) the fair market value per share of common stock on the 
date the option is surrendered to Odwalla in connection with a hostile tender   
offer or (2) the option exercise price per share.                               

    Shares subject to stock appreciation rights exercised under the 1997
Stock Option/Stock Issuance Plan will not be available for subsequent issuance. 

STOCK ISSUANCE PROGRAM                                                          

       Shares may be issued under the Stock Issuance Program directly, without
any intervening stock option grant, in accordance with the following terms and  
conditions.                                                                     

  The purchase price per share will not be less than 85% of the fair
market value per share of common stock on the date the Committee authorizes the 
issuance. The issue price for the purchased shares may be paid cash, in shares  
of common stock valued at fair market value on the date of issuance, or by      
promissory note payable to Odwalla's order. The promissory note may, at the     
discretion of the Committee, be subject to cancellation over the participant's  
period of service. Shares may also be issued as a bonus for past services,      
without any cash or other payment required of the participant.                  

       The interest of a participant in the common stock issued under the Plan
may be fully and immediately vested upon issuance or may vest in one or more    
installments over the participant's service, as determined by the Committee. The
elements of the vesting schedule, including the effect disability or death is to
have upon vesting, are to be determined by the Committee at the time of         
issuance.                                                                       

      The participant may not sell or transfer any unvested shares of common
stock, other than permitted transfers by gift to family members or family       
trusts. Except for these transfer restrictions, the participant will have all   
the rights of a shareholder with respect to the unvested shares. Accordingly,   
the participant will have the right to vote these shares and to receive any cash
dividends or other distributions paid or made with respect to these shares.     

     In the event the participant should, while his or her interest in the
common stock remains unvested, (1) attempt to transfer (other than by           
permissible gift) any unvested common stock or (2) cease service with Odwalla,  
then Odwalla will have the right to repurchase from the individual, at the      
purchase price originally paid for the shares, the shares in which he or she has
not acquired a vested interest, and the individual will cease to have any       
shareholder rights with respect to the repurchased shares.                      

AUTOMATIC OPTION GRANT PROGRAM                                                  

   Under the Automatic Option Grant Program, each individual who first
become a non-employee board member at or after Odwalla's 1997 annual meeting,   
whether through election by the shareholders or appointment by the board, was   
automatically granted, at the time of initial election or appointment, a        
non-statutory option to purchase 5,000 shares of common stock, provided the     
individual was not previously in Odwalla's employ. In addition, on the date of  
each annual meeting, beginning with the 1997 annual meeting, each individual who
is to continue to serve as a non-employee board member, whether or not that     
individual is standing for re-election to the board at that particular annual   
meeting, will automatically be granted at that meeting a non-statutory option to
purchase 3,000 shares of common stock, provided the individual has served as a  
non-employee board member for at least six months. There will                   

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be no limit on the number of these 3,000-share option grants any one            
non-employee board member may receive over his or her period of board service,  
and non-employee board members who have previously served in Odwalla's employ   
will be fully eligible for one or more 3,000-share option grants.               

    Each option granted under the Automatic Option Grant Program will be
subject to the following terms and conditions:                                  

      -       The exercise price per share will be equal to 100% of the fair
             market value per share of common stock on the automatic grant
date.                                           

       -       Each option will have a maximum term equal to the lesser of (1)
           ten years measured from the grant date or (2) twelve months
following termination of board service.         

      -       Each option will be immediately exercisable for all the option
              shares, but any purchased shares will be subject to repurchase
          by Odwalla, at the exercise price paid per share, upon the
               optionee's cessation of board service prior to vesting in those
shares.                                         

      -       The shares subject to each initial 5,000 share grant will vest
                in four successive equal annual installments over the optionee's
                period of board service, with the first installment to vest upon
              the completion of one year of board service, measured from the
             automatic grant date. The shares subject to each annual 3,000
                share grant will vest upon the optionee's completion of one year
         of board service, measured from the automatic grant date.

     -       The shares subject to each outstanding automatic option grant
       will immediately vest should the optionee die or become
              permanently disabled while a board member or should any of the
            following events occur while the optionee continues in board
               service: (1) an acquisition of Odwalla by merger or asset sale;
                (2) the successful completion of a hostile tender offer for more
              than fifty percent (50%) of the total combined voting power of
        Odwalla's outstanding securities; or (3) a change in the
         majority of the board occasioned by one or more contested
elections for board membership.                 

    -       Upon the successful completion of a hostile tender offer for
          securities possessing more than fifty percent of the total
               combined voting power of Odwalla's outstanding securities, each
                outstanding automatic option grant may be surrendered to Odwalla
          for a cash distribution per surrendered option share in an
          amount equal to the excess of (1) the greater (a) the fair
                market value per share of common stock on the date the option is
                surrendered to Odwalla in connection with a hostile tender offer
              or (b) the highest price per share of common stock paid in the
            hostile tender offer over (2) the exercise price payable per
share.                                          

GENERAL PROVISIONS                                                              

        Vesting Acceleration. In the event that Odwalla is acquired by merger or
asset sale, each outstanding option under the Discretionary Option Grant Program
which is not to be assumed or replaced by the successor corporation will        
automatically accelerate in full, and all unvested shares issued under the      
Discretionary Option Grant and Stock Issuance Programs will immediately vest,   
except to the extent that option is assumed or replaced by, or Odwalla's        
repurchase rights with respect to the unvested shares are assigned to, the      
successor corporation. Any options assumed in connection with an acquisition    
may, at the plan administrator's discretion, be subject to immediate            
acceleration, and any unvested shares which do not vest at the time of the      
acquisition may be subject to full and immediate vesting, in the event the      
individual's service with Odwalla or the acquiring entity is subsequently       
terminated within a designated period following the acquisition. The plan       
administrator will have similar discretion to grant options that will become    
fully exercisable for all the option shares, and issue unvested shares that will
become fully vested, should the individual's service be terminated within a     
designated period following a hostile change in control of Odwalla (whether by  
successful tender offer for more than 50% of the total combined voting power of 
Odwalla's outstanding securities or by proxy contest for the election of board  
members). Each option outstanding under the Automatic Option Grant Program will 
automatically vest in full in the event of an acquisition of Odwalla by merger  
or asset sale or a hostile change in control of Odwalla.                        

        The acceleration of vesting in the event of a change in the ownership or
control of Odwalla may be seen as an anti-takeover provision and may have the   
effect of discouraging a merger proposal, a takeover attempt or other efforts to
gain control of Odwalla.                                                        

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 Financial Assistance. The plan administrator may institute a loan
program to assist one or more participants in financing the exercise of         
outstanding options or the purchase of shares under the 1997 Stock Option/Stock 
Issuance Plan through full-recourse interest-bearing promissory notes. However, 
the maximum amount of financing provided any participant may not exceed the cash
consideration payable for the issued shares plus all applicable taxes incurred  
in connection with the acquisition of the shares.                               

 Changes in Capitalization. In the event any change is made to the
outstanding shares of common stock by reason of any recapitalization, stock     
dividend, stock split, combination of shares, exchange of shares or other change
in corporate structure effected without Odwalla's receipt of consideration,     
appropriate adjustments will be made to (1) the maximum number and/or class of  
securities issuable under the 1997 Stock Option/Stock Issuance Plan, (2) the    
number and/or class of securities for which any one person may be granted stock 
options, separately exercisable stock appreciation rights and direct stock      
issuances under the 1997 Stock Option/Stock Issuance Plan per calendar year, (3)
the number and/or class of securities for which grants are subsequently to be   
made under the Automatic Option Grant Program to new and continuing non-employee
board members, and (4) the number and/or class of securities and the exercise   
price per share in effect under each outstanding option in order to prevent the 
dilution or enlargement of benefits thereunder.                                 

      Each outstanding option that is assumed in connection with a Corporate
Transaction will be appropriately adjusted to apply and pertain to the number   
and class of securities which would otherwise have been issued, in consummation 
of a Corporate Transaction, to the option holder had the option been exercised  
immediately prior to the Corporate Transaction. Appropriate adjustments will    
also be made to the option price payable per share and to the class and number  
of securities available for future issuance under the 1997 Stock Option/Stock   
Issuance Plan on both an aggregate and a per-participant basis.                 

    Special Tax Election. The plan administrator may, in its discretion,
provide one or more holders of outstanding non-statutory options under the      
Discretionary Option Grant Program with the right to have Odwalla withhold a    
portion of the shares of common stock otherwise issuable to these individuals in
satisfaction of the income and employment tax liability incurred by them in     
connection with the exercise of those options. Alternatively, the plan          
administrator may allow these individuals to deliver existing shares of common  
stock in satisfaction of the tax liability.                                     

       Amendment and Termination. The board may amend or modify the 1997 Stock
Option/Stock Issuance Plan in any or all respects whatsoever. However, some     
amendments may require shareholder approval pursuant to applicable laws and     
regulations.                                                                    

  Unless sooner terminated by the board, the 1997 Stock Option/Stock
Issuance Plan will in all events terminate on March 5, 2007. Any options        
outstanding at the time of termination will remain in force in accordance with  
the provisions of the instruments evidencing the grants.                        

CERTAIN FEDERAL INCOME TAX INFORMATION                                          

    The following summary of the U.S. federal income tax consequences of
1997 Stock Option/Stock Issuance Plan transactions is based upon U.S. federal   
income tax laws in effect on the date of this proxy statement. This summary does
not purport to be complete, and does not discuss foreign, state or local tax    
consequences.                                                                   

     Incentive Options. No taxable income is recognized by the optionee at
the time of the option grant, and no taxable income is generally recognized at  
the time the option is exercised. However, the difference between the fair      
market value of the shares on the exercise date and the exercise price paid for 
the shares is classified as an item of adjustment in the year of exercise for   
purposes of the alternative minimum tax. In addition, the optionee shall        
recognize taxable income in the year in which the purchased shares are sold or  
otherwise made the subject of disposition. For federal tax purposes,            
dispositions are divided into two categories: (1) qualifying and (2)            
disqualifying. The optionee makes a qualifying disposition of the purchased     
shares if the sale or other disposition of the shares is made after the optionee
has held the shares for more than two years after the grant date of the option  
and more than one year after the exercise date. If the optionee fails to satisfy
either of these two minimum holding periods prior to the sale or other          
disposition of the purchased shares, then a disqualifying disposition shall     
result.                                                                         

Upon a qualifying disposition of the shares, the optionee shall 
recognize long-term capital gain in an amount equal to the excess of (1) the    
amount realized upon the sale or other disposition of the purchased shares over 
(2) the exercise price paid for those shares. If there is a disqualifying       
disposition of the shares then the lesser of (1) the                            

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difference between the amount realized on disposition of the shares and the     
exercise price paid for those shares or (2) the difference between the fair     
market value of the shares on the exercise date and the exercise price paid for 
the shares shall be taxable as ordinary income. Any additional gain recognized  
upon the disposition shall be a capital gain.                                   

  If the optionee makes a disqualifying disposition of the purchased
shares, then Odwalla shall be entitled to an income tax deduction, for the      
taxable year in which the disposition occurs, equal to the amount of ordinary   
income recognized by the optionee. In no other instance shall Odwalla be allowed
a deduction with respect to the optionee's disposition of the purchased shares. 

    Nonstatutory Options. No taxable income is recognized by an optionee
upon the grant of a nonstatutory option. The optionee shall in general recognize
ordinary income in the year in which the option is exercised equal to the excess
of the fair market value of the purchased shares on the exercise date over the  
exercise price paid for the shares, and the optionee shall be required to       
satisfy the tax withholding requirements applicable to the income. Special      
provisions of the Internal Revenue Code apply to the acquisition of unvested    
shares of Odwalla common stock under a nonstatutory option. These special       
provisions are summarized below.                                                

   If the shares acquired upon exercise of the nonstatutory option are
subject to repurchase by Odwalla at the original exercise price in the event of 
the optionee's termination of service prior to vesting in those shares, then the
optionee shall not recognize any taxable income at the time of exercise but     
shall have to report as ordinary income, as and when Odwalla's repurchase right 
lapses, an amount equal to the excess of (1) the fair market value of the shares
on the date the repurchase right lapses with respect to those shares over (2)   
the exercise price paid for the shares.                                         

    The optionee may, however, elect under Section 83(b) of the Internal
Revenue Code to include as ordinary income in the year of exercise of the       
nonstatutory option an amount equal to the excess of (1) the fair market value  
of the purchased shares on the exercise date over (2) the exercise price paid   
for the shares. If the Section 83(b) election is made, the optionee shall not   
recognize any additional ordinary income as and when the repurchase right       
lapses.                                                                         

        Odwalla shall be entitled to an income tax deduction equal to the amount
of ordinary income recognized by the optionee with respect to the exercised     
nonstatutory option. In general, the deduction shall be allowed for the taxable 
year of Odwalla in which the ordinary income is recognized by the optionee.     

AMENDED PLAN BENEFITS                                                           

       Odwalla cannot now determine the number of options to be granted in the
future under the 1997 Stock Option/Stock Issuance Plan, as proposed to be       
amended, to all current executive officers as a group, all current members of   
the Odwalla board excluding current executive officers as a group or all        
employees (excluding current executive officers) as a group. The following table
sets forth information with respect to options granted under the 1997 Stock     
Option/Stock Issuance Plan during fiscal 1999:                                  

                                                                [Download Table]

                                                                WEIGHTED  
                                                                AVERAGE   
                                  OPTIONS    % OF TOTAL     EXERCISE PRICE
      IDENTITY OF GROUP           GRANTED  OPTIONS GRANTED     PER SHARE  
      -----------------           -------  ---------------  --------------
                                                                          
Executive officers as a group     400,000      89.1%           $   6.98   
Employees that are not executive                                          
     officers, as a group          34,750       7.8%           $   7.15   
Directors that are not executive                                          
     officers, as a group          14,000       3.1%           $   6.75   

VOTE REQUIRED                                                                   

The approval of the proposed amendment of the Odwalla 1997 Stock
Option/Stock Issuance Plan requires the affirmative vote of the holders of a    
majority of the shares of Odwalla common stock and preferred stock voting       
together as a class present, or represented, and voting at the Odwalla annual   
meeting. Abstentions and broker non-votes will have no effect on the voting of  
the proposal.                                                                   

RECOMMENDATION OF THE BOARD                                                     

        The board of directors unanimously recommends a vote FOR approval of the
proposed amendment of the Odwalla 1997 Stock Option/Stock Issuance Plan.        

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PROPOSAL NO. 4 -- ELECTION OF DIRECTORS                                         

   At the annual meeting of Odwalla shareholders, six directors, which
constitute the entire Odwalla board, are to be elected to serve until the next  
annual meeting of shareholders and until a successor for the director is elected
and qualified, or until the death, resignation, or removal of the director.     
However, if the merger agreement and the transactions contemplated by the merger
agreement are approved and the merger is consummated, then in accordance with   
the merger agreement and related agreements the Odwalla board of directors, at  
the effective time of the merger, will become a board consisting of seven       
members with terms lasting until the next annual meeting and until their        
successors have been duly elected and qualified. Martin S. Gans, Ranzell        
Nickelson, II and Greg A. Steltenpohl will resign as members of Odwalla's board 
of directors and, after the effective time of the merger, the seven members will
be D. Stephen C. Williamson, Andrew B. Balson, Richard Grubman, Ellis B. Jones, 
Mark E. Nunnelly, and Craig Sakin. An additional director will be named by Bain 
prior to the effective time of the merger. See "Management after the Merger" on 
page 26.                                                                        

        It is intended that the proxies will be voted for the six nominees named
below for election to Odwalla's board of directors unless authority to vote for 
any the nominee is withheld. There are six nominees, all of whom are currently  
directors of Odwalla. Each person nominated for election has agreed to serve if 
elected, and the board of directors has no reason to believe that any nominee   
will be unavailable or will decline to serve. In the event, however, that any   
nominee is unable or declines to serve as a director at the time of the annual  
meeting, the proxies will be voted for any nominee who is designated by the     
current board of directors to fill the vacancy. Unless otherwise instructed, the
proxyholders will vote the proxies received by them for the nominees named      
below. The six candidates receiving the highest number of the affirmative votes 
of the shares entitled to vote at the annual meeting will be elected directors  
of Odwalla. The proxies solicited by this proxy statement may not be voted for  
more than six nominees.                                                         

NOMINEES                                                                        

     Set forth below is information regarding the nominees to the board of
directors.                                                                      

                                                                [Download Table]

                                                              FIRST ELECTED
NAME                          POSITION WITH ODWALLA      AGE     DIRECTOR  
----                          ---------------------      ---  -------------
                                                                           
D. Stephen C. Williamson  Chairman of the Board          41       1992     
                            and Chief Executive Officer                    
Martin S. Gans (1)(2)     Director                       57       1992     
Richard Grubman (1)(2)    Director                       37       1997     
Ranzell Nickelson, II     Director                       55       1997     
Craig H. Sakin (1)(2)     Director                       39       1999     
Greg A. Steltenpohl       Director                       45       1985     

(1)     Member of the Audit Committee                                           

(2)     Member of the Compensation Committee                                    

      D. STEPHEN C. WILLIAMSON currently serves as Chairman of the Board and
as Chief Executive Officer, a position he has held since June 1996. Prior to    
that time, Mr. Williamson served as Co-Chairman of the Board and Co-Chief       
Executive Officer from January 1995 to June 1996 and as Chief Financial Officer 
of Odwalla from March 1991 to August 1996. Mr. Williamson also served as the    
Odwalla's President from May 1992 until January 1995. Mr. Williamson holds a    
B.A. degree in history from the University of California at Berkeley. He is also
Chairman of Avenal Land & Oil Company, a private investment company.            

      MARTIN S. GANS has been a director of Odwalla since December 1992. Mr.
Gans served as Executive Vice President and Chief Financial Officer of Sun World
International, Inc. from 1978 until 1987, and he was a partner at Touche Ross & 
Co., an accounting firm, from 1972 until 1978. Mr. Gans is a certified public   
accountant and holds a B.B.A. from the University of Miami and an M.B.A. from   
Northwestern University. Mr. Gans is also a director of several privately held  
companies.                                                                      

        RICHARD L. GRUBMAN has been a director of Odwalla since August 1997. Mr.
Grubman has been a Managing Director of Highfields Capital Management, LP since 
April 1998. Prior to this, Mr. Grubman was a Managing Director of Development   
Capital, LLC since January 1997 and a general partner of its affiliate,         
Corporate                                                                       

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Value Partners, LP, since November 1996. Mr. Grubman was also previously        
President of Sycamore Capital Management, Inc. From December 1992 to November   
1995, Mr. Grubman was a general partner of Lakeview Partners, L.P. During 1992, 
he was a vice president of Gollust, Tierney and Oliver, Incorporated. Mr.       
Grubman holds an A.B. degree in Art and Archaeology from Princeton University.  
He is also a director of the Children's Motility Disorder Foundation.           

  RANZELL "NICK" NICKELSON, II, has been a director of Odwalla since
August 1997. Since September 1999, Dr. Nickelson has been Senior Vice President 
at KPR Foods, a division of Foodbrands America, which is a subsidiary of Iowa   
Beef Processors. Dr. Nickelson has served as Director, International Food Safety
at IDEXX Laboratories, Inc. from October 1997 to September 1999. From 1996 to   
October 1997, he served as President of Red Mesa Microbiology, Inc. From 1991 to
1996, Dr. Nickelson was vice president, Silliker Laboratories Group, Inc. Dr.   
Nickelson served as a member of the National Advisory Committee on              
Microbiological Criteria for Foods and as Coordinator, Blue Ribbon Task Force on
E. coli O157:H7 for the National Live Stock and Meat Board. Dr. Nickelson holds 
a B.S. in Animal Science, a M.S. in Food Technology and a Ph.D. in Microbiology 
from Texas A&M University.                                                      

       CRAIG H. SAKIN has served as a director of Odwalla since February 1999.
Mr. Sakin has served as Managing Director of Catterton Partners, a group of     
affiliated venture capital funds, since August 1996. From November 1991 to      
August 1996, Mr. Sakin was Chairman of Gold Coast Beverage Distributors, a beer 
distribution company, and also served as the Chief Executive Officer during this
period. Mr. Sakin holds a B.S. degree from St. Lawrence University.             

     GREG A. STELTENPOHL, the founder of Odwalla, has served as a director
since Odwalla's inception and served as Chairman of the Board from June 1996    
until November 18, 1998. Mr. Steltenpohl is currently a consultant to Odwalla   
and other companies. Mr. Steltenpohl served as Co-Chairman of the Board and     
Co-Chief Executive Officer from January 1995 to June 1996. From Odwalla's       
incorporation in December 1985 until January 1995, Mr. Steltenpohl served as    
Chairman of the Board and Chief Executive Officer. In addition, Mr. Steltenpohl 
served as Odwalla's President from November 1985 until May 1992. Mr. Steltenpohl
holds a B.S. degree in environmental sciences from Stanford University.         

VOTE REQUIRED                                                                   

       The approval of the nominees as directors requires the affirmative vote
of the holders of a plurality of the shares of Odwalla common stock and         
preferred stock voting together as a class present, or represented at the       
Odwalla annual meeting.                                                         

RECOMMENDATION OF THE BOARD                                                     

        The board of directors unanimously recommends that shareholders vote FOR
election of all of the nominees for directors.                                  

BOARD MEETINGS AND COMMITTEES                                                   

  The board of directors held seven (7) meetings during fiscal 1999.
During fiscal 1999, each director, other than Mr. Nickelson, attended more than 
seventy-five percent (75%) of the aggregate of (1) the total number of meetings 
of the board of directors and (2) the total number of meetings held by all      
committees of the board on which the director served. There are no family       
relationships among executive officers or directors of Odwalla. The board of    
directors has an Audit Committee and a Compensation Committee.                  

  The Audit Committee of the board of directors held one (1) meeting
during fiscal 1999. The Audit Committee, which currently comprises directors    
Gans, Grubman and Sakin, recommends engagement of Odwalla's independent         
accountants, approves services performed by the accountants and reviews and     
evaluates Odwalla's accounting system and its system of internal controls.      

 The Compensation Committee of the board of directors held six (6)
meetings during fiscal 1999. The Compensation Committee, which currently        
comprises directors Gans, Grubman and Sakin, has overall responsibility for     
Odwalla's compensation policies and determines the compensation payable to      
Odwalla's executive officers, including their participation in Odwalla's        
employee benefit and stock option plans.                                        

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EXECUTIVE OFFICER AND DIRECTOR COMPENSATION                                     

SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION                  

    The following Summary Compensation Table sets forth the compensation
earned by Odwalla's current Chief Executive Officer and each of the three other 
most highly compensated executive officers in fiscal 1999 for services rendered 
in all capacities to Odwalla and its subsidiaries for the fiscal years ended    
August 31, 1997, August 29, 1998, and August 28, 1999.                          

SUMMARY COMPENSATION TABLE

                                                        [Enlarge/Download Table]

                                                                           Long-Term                   
                                                                          Compensation                 
                                         Annual Compensation                 Awards                    
                                                                           Securities                  
Name and Principal                                                          Underlying     All Other   
     Position                     Years          Salary          Bonus      Options(1)  Compensation(2)
------------------                -----         --------      ----------  ------------  ---------------
                                                                                                       
D. Stephen C. Williamson           1999         $185,000         $  --       160,000       $     --    
  Chairman of the Board and        1998         $159,375         $  --            --       $     --    
  Chief Executive Officer          1997         $139,312         $  --        70,000       $     --    

James R. Steichen                  1999         $169,577         $  --        70,000       $  1,081    
  Senior Vice President, Finance   1998         $160,154         $  --        25,000       $  1,131    
  and Chief Financial Officer      1997         $148,761         $  --        25,100       $    138    

Douglas L. Hrdlicka(3)             1999         $153,462         $  --        85,000       $     --    
  Former Senior Vice President,    1998         $     --         $  --            --       $     --    
  Sales & Distribution             1997         $     --         $  --            --       $     --    

Susan M. Kirmayer                  1999         $103,994         $  --        20,000       $    868    
  Vice President,                  1998         $ 90,462         $  --         9,000       $    727    
  Human Resources                  1997         $     --         $  --            --       $     --    

-----------------                                                               

(1)     The options listed in the table were granted under Odwalla's 1997 Stock 
Option/Stock Issuance Plan.                                     

(2)     Represents Odwalla's matching 401(k) plan contribution.                 

(3)     Mr. Hrdlicka resigned as Odwalla's Senior Vice President, Sales and     
Distribution in December 1999.                                  

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STOCK OPTIONS                                                   

     The following table contains information concerning the stock options
granted in fiscal 1999 to Odwalla's Chief Executive Officer and each of the     
three other most highly compensated executive officers of Odwalla for fiscal    
1999. No stock appreciation rights were granted to those individuals during the 
year.                                                                           

                                                        [Enlarge/Download Table]


                                                                                          Potential Realizable     
                                                  Individual Grant                           Value at Assumed      
                                      ----------------------------------------------          Annual Rates of      
                           Number of  Percent of Total                                              Stock          
                          Securities      Options                                           Price Appreciation     
                          Underlying      Granted         Exercise                          for Option Term(2)     
                            Options    to Employees in      Price          Expiration  ----------------------------
Name                        Granted      Fiscal Year    ($/Share)(1)          Date         5%                10%   
----                      ----------  ----------------  ------------        ---------  ----------        ----------
                                                                                                                   
D. Stephen C. Williamson   50,000(3)        11.14%          $7.18           12/18/08    $172,715        $  487,787 
                          110,000(4)        24.51%          $7.70            6/14/09    $407,249        $1,150,182 
James R. Steichen          30,000(3)         6.68%          $6.53           12/18/08    $123,219        $  312,262 
                           40,000(4)         8.91%          $7.00            6/14/09    $176,090        $  446,248 
Douglas L. Hrdlicka        75,000(3)        16.71%          $6.53           12/18/08    $308,048        $  780,655 
                           10,000(4)         2.23%          $7.00            6/14/09    $ 44,023        $  111,562 
Susan M. Kirmayer          20,000(4)         4.46%          $7.00            6/14/09    $ 88,045        $  223,124 

---------------                                                                 

(1)     The exercise price may be paid in cash, in shares of common stock valued
        at fair market value on the exercise date or through a cashless exercise
        procedure involving a same-day sale of the purchased shares. Odwalla may
   also finance the option exercise by loaning the optionee sufficient
        funds to pay the exercise price for the purchased shares and the Federal
      and state income and employment tax liability incurred by the optionee
in connection with the exercise.                                

(2)     There is no assurance provided to the option holder or any other holder 
     of Odwalla's securities that the actual stock price appreciation over
  the five- or 10-year option term will be at the 5% and 10% assumed
annual rates of compounded stock price appreciation.            

(3)     The options were granted under the Odwalla 1997 Stock Option/Stock      
       Issuance Plan on December 18, 1998, with a vesting commencement date of
        December 18, 1998, except Mr. Hrdlicka's vesting commencement date which
   is December 16, 1998. The options granted have a maximum term of 10
       years, all measured from the grant date, subject to earlier termination
       upon the optionee's cessation of service with Odwalla. All options will
   vest as to 1/36th of the shares each month, except that the options
        granted to Mr. Hrdlicka will vest as to 1/48th of the shares each month.

(4)     The options were granted under the Odwalla 1997 Stock Option/Stock      
       Issuance Plan on June 14, 1999, with a vesting commencement date of the
   same date. The options granted have a maximum term of 10 years, all
     measured from the grant date, subject to earlier termination upon the
      optionee's cessation of service with Odwalla. All options will vest as
to 1/36th of the shares each month.                             

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   AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION VALUES                                                                   

     The following table sets forth information concerning option holdings
for the 1999 fiscal year by Odwalla's Chief Executive Officer and each of the   
three other most highly compensated executive officers of Odwalla for fiscal    
1999. There were no option exercises during fiscal 1999. No stock appreciation  
rights were exercised during the year or were outstanding at the end of the     
year.                                                                           

                                                        [Enlarge/Download Table]

                                Number of Securities           Value of Unexercised         
                               Underlying Unexercised         in-the-Money Options at       
                                 Options at FY-End                   FY-End(1)              
                          -------------------------------  ---------------------------------
Name                      Exercisable       Unexercisable  Exercisable         Unexercisable
----                      -----------       -------------  -----------         -------------
                                                                                            
D. Stephen C. Williamson    156,054            178,946        $30,000            $    --    
James R. Steichen            37,044             83,056        $ 3,127            $10,943    
Douglas L. Hrdlicka          13,054             71,946        $ 5,862            $29,313    
Susan M. Kirmayer             6,361             22,639        $    --            $    --    

-----------                                                                     
(1)     Based on the fair market value of the shares at the end of the 1999     
        fiscal year ($7.00 per share) less the option exercise price payable for
those shares.                                                   

     EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
AGREEMENTS                                                                      

On December 21, 1999, D. Stephen C. Williamson, Odwalla's Chief 
Executive Officer, and James R. Steichen, Odwalla's Senior Vice President,      
Finance and Chief Financial Officer, entered into employment agreements with    
Odwalla that are effective until December 21, 2002. Thereafter, these agreements
are subject to three consecutive automatic one-year renewals. The agreements    
generally provide for:                                                          

     - an annual salary of $200,000 in the case of Mr. Williamson and $175,000
in the case of Mr. Steichen; and                                

     - the right to participate in and to receive those employee benefits that
  are generally provided to similarly situated employees at Odwalla.

   If Mr. Williamson's or Mr. Steichen's employment is terminated as a
result of any of the following occurrences, the terminated employee's salary and
benefits will cease:                                                            

-       death;                                                  

     -       a disability that prevents him from performing his duties for
six months;                                     

-       termination for cause; or                               

-       resignation without good reason.                        

       If Mr. Williamson or Mr. Steichen is terminated other than for cause or
is terminated in connection with a change of control or corporate transaction   
(as those terms are defined in Odwalla's 1997 Stock Option/Issuance Plan), the  
terminated employee is entitled to receive specified payments that are          
substantially equivalent to the remaining payments he would have received had he
remained employed through the term of his agreement. The terminated employee    
also would be entitled to reimbursement for the cost of acquiring health        
benefits through the term of his agreement. All stock options held by the       
terminated employee would automatically become vested and fully exercisable at  
the time his termination becomes effective. The total payments or benefits      
received by Mr. Williamson or Mr. Steichen from Odwalla resulting from          
termination in connection with a change of control or corporate transaction     
shall not exceed three times the terminated employee's annualized compensation  
minus $1.00.                                                                    

        If Mr. Williamson or Mr. Steichen resigns for good reason, the resigning
employee is entitled to received severance pay equal to his base salary for a   
period of twelve months. The resigning employee also would be entitled to       
reimbursement for the cost of acquiring health benefits for a period of twelve  
months.                                                                         

    In November 1998, Mr. Steltenpohl entered into a two-year consulting
agreement with Odwalla under which he will receive up to $300,000 during the    
term of the agreement.                                                          

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DIRECTOR COMPENSATION                                           

       Odwalla's non-employee directors currently receive $10,000 per year, in
addition to reimbursement for some expenses incurred in connection with         
attendance at board and committee meetings.                                     

  Under the Automatic Option Grant Program of the Odwalla 1997 Stock
Option/Stock Issuance Plan, each individual who first becomes a non-employee    
board member, whether through election by the shareholders or appointment by the
board, is automatically granted, at the time of the initial election or         
appointment, a non-statutory option to purchase 5,000 shares of common stock,   
provided the individual was not previously in Odwalla's employ. In addition, on 
the date of each annual meeting, each individual who is to continue to serve as 
a non-employee board member, whether or not that individual is standing for     
re-election to the board at that particular annual meeting, will automatically  
be granted at that meeting a non-statutory option to purchase 3,000 shares of   
common stock, provided the individual has served as a non-employee board member 
for at least six months. There is no limit on the number of these 3,000-share   
option grants any one non-employee board member may receive over his or her     
period of board service, and non-employee board members who have previously     
served in Odwalla's employ will be fully eligible for one or more 3,000-share   
option grants.                                                                  

       Each option granted under the Automatic Option Grant Program is subject
to the following terms and conditions:                                          

      1.      The exercise price per share will be equal to 100% of the fair
             market value per share of common stock on the automatic grant
date.                                           

       2.      Each option will have a maximum term equal to the lesser of (a)
           ten years measured from the grant date or (b) twelve months
following termination of board service.         

      3.      Each option will be immediately exercisable for all the option
              shares, but any purchased shares will be subject to repurchase
          by Odwalla, at the exercise price paid per share, upon the
               optionee's cessation of board service prior to vesting in those
shares.                                         

      4.      The shares subject to each initial 5,000 share grant will vest
                in four successive equal annual installments over the optionee's
                period of board service, with the first installment to vest upon
              the completion of one year of board service, measured from the
              automatic grant date. All of the shares subject to each annual
             3,000 share grant will vest upon the optionee's completion of
            one year of board service, measured from the automatic grant
date.                                           

     5.      The shares subject to each outstanding automatic option grant
       will immediately vest should the optionee die or become
              permanently disabled while a board member or should any of the
            following events occur while the optionee continues in board
               service: (a) an acquisition of Odwalla by merger or asset sale;
                (b) the successful completion of a hostile tender offer for more
        than 50% of the total combined voting power of Odwalla's
              outstanding securities; or (c) a change in the majority of the
             board occasioned by one or more contested elections for board
membership.                                     

    6.      Upon the successful completion of a hostile tender offer for
                securities possessing more than fifty percent (50%) of the total
               combined voting power of Odwalla's outstanding securities, each
                outstanding automatic option grant may be surrendered to Odwalla
          for a cash distribution per surrendered option share in an
             amount equal to the excess of (a) the greater of (1) the fair
                market value per share of common stock on the date the option is
                surrendered to Odwalla in connection with a hostile tender offer
              or (2) the highest price per share of common stock paid in the
            hostile tender offer over (b) the exercise price payable per
share.                                          

       Under the Automatic Option Grant Program described above, the following
options were granted to non-employee directors under the Odwalla 1997 Stock     
Option/Stock Issuance Plan in fiscal 1999: Mr. Gans, Mr. Grubman and Mr.        
Nickelson were each granted 3,000 shares of Odwalla common stock at an exercise 
price of $6.75 per share; Mr. Sakin was granted 5,000 shares of Odwalla common  
stock at an exercise price of $6.75 per share.                                  

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION     

  The Compensation Committee of the board of directors was formed on
October 26, 1993, and currently comprises Mr. Gans, Mr. Grubman and Mr. Sakin.  
None of these individuals were at any time during fiscal 1999, or at any other  
time, an officer or employee of Odwalla. No executive officer of Odwalla serves 
as a member of the board of directors or compensation committee of any other    
entity that has one or more executive officers serving as a member of Odwalla's 
board of directors or Compensation Committee.                                   

REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION  

       The Compensation Committee of the board of directors, subject to review
by the full board, is responsible for the establishment of remuneration         
arrangements for senior management and the administration of compensation and   
employee benefit plans. In addition, the Compensation Committee sets the base   
salary of Odwalla's executive officers, approves individual bonus programs for  
executive officers, and administers Odwalla's stock option plans under which    
grants may be made to executive officers and other key employees. The following 
is a summary of policies of the Compensation Committee that affect the          
compensation paid to executive officers, as reflected in the tables and text set
forth elsewhere in this document.                                               

  General Compensation Policy. The objectives of Odwalla's executive
compensation program are to motivate and retain current executives and to       
attract future ones. Odwalla's executive compensation program is designed to:   
(1) provide a direct and substantial link between Odwalla's performance and     
executive pay, (2) consider individual performance and accomplishments and      
compensate accordingly, and (3) determine Odwalla's position in the specialty   
beverage and food labor markets and be competitive in those labor markets.      
Odwalla's intent is to position its executive pay levels at the median of U.S.  
specialty beverage and food companies. The Committee also considers geographic  
location and companies that may compete with Odwalla in recruiting executive    
talent.                                                                         

Factors. The principal factors which the Compensation Committee 
considered in establishing the components of each executive officer's           
compensation package for fiscal 1999 are summarized below. The Compensation     
Committee may, however, in its discretion apply entirely different factors in   
setting executive compensation for future years.                                

    Base Salary. The base salary for each officer is set on the basis of
personal performance, the Compensation Committee's assessment of salary levels  
in effect for comparable positions with Odwalla's principal competitors, and    
internal comparability considerations. The weight given to each of these factors
may vary from individual to individual, and the Compensation Committee did not  
rely upon any specific compensation surveys for comparative compensation        
purposes. Instead, the Compensation Committee made its decisions as to the      
appropriate market level of base salary for each executive officer on the basis 
of its understanding of the salary levels in effect at companies with which     
Odwalla competes for executive talent. Base salaries will be reviewed on an     
annual basis, and adjustments will be made in accordance with the factors       
indicated above.                                                                

   Long-Term Incentive Compensation. Long-term incentives are provided
through stock option grants. The grants are designed to align the interests of  
the executive officers with those of the shareholders, and to provide each      
officer with a significant incentive to manage Odwalla from the perspective of  
an owner with an equity stake in the business. The stock option plan encourages 
long term retention and provides rewards to executives and other eligible       
employees commensurate with growth in shareholder value. It is the Committee's  
practice to grant options to purchase shares at the market price on the date of 
grant with a term of up to ten years. The options granted to Odwalla's executive
officers during fiscal 1999 will vest from the date of grant in thirty-six or   
forty-eight equal monthly installments. Accordingly, the options will provide a 
return to the executive officer only if he or she remains in Odwalla's employ   
and the market price of the underlying shares of common stock appreciates.      

   The number of shares subject to each option grant is set at a level
intended to create a meaningful opportunity for stock ownership based on the    
officer's current position with Odwalla, the base salary associated with that   
position, the size of comparable awards made to individuals in similar positions
within the industry, the individual's potential for increased responsibility and
promotion over the option term, and the individual's personal performance in    
recent periods. The Committee also takes into account the number of unvested    
options held by the executive offer in order to maintain an appropriate level of
equity incentive for that individual. However, the Committee does not adhere to 
any specific guidelines as to the relative option holdings of Odwalla's         
executive officers.                                                             

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       CEO Compensation. The compensation payable to Mr. Williamson, Odwalla's
Chief Executive Officer, was determined by the Compensation Committee. Mr.      
Williamson's base salary was set at a level which the board believed would be   
competitive with the base salary levels in effect for chief executive officers  
at similarly-sized companies within the industry. For the 1999 fiscal year, Mr. 
Williamson's compensation package was set by the Compensation Committee on the  
basis of the compensation policy summarized in this report.                     

       Compliance with Internal Revenue Code Section 162(m). Section 162(m) of
the Internal Revenue Code, enacted in 1993, generally disallows a tax deduction 
to publicly-held companies for compensation paid to executive officers, to the  
extent that compensation exceeds $1.0 million per officer in any year. The      
compensation paid to Odwalla's executive officers for fiscal 1999 did not exceed
the $1.0 million limit per officer, and it is not expected the compensation to  
Odwalla's executive officers for fiscal 1999 will exceed that limit. In         
addition, the Odwalla 1997 Stock Option/Stock Issuance Plan is structured so    
that any compensation deemed paid to an executive officer in connection with the
exercise of his or her outstanding options under the 1997 Stock Option/Stock    
Issuance Plan will qualify as performance-based compensation which will not be  
subject to the $1.0 million limitation.                                         

        Submitted by the Compensation Committee of Odwalla's Board of Directors:

             Richard Grubman, Board Member and Compensation Committee Chairman

          Martin S. Gans, Board Member and Compensation Committee Member

          Craig H. Sakin, Board Member and Compensation Committee Member

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PERFORMANCE GRAPH                                                               

         The following graph compares the cumulative total shareholder return on
Odwalla common stock with that of the Nasdaq Stock Market (U.S.) Index and the  
Russell 2000 Index. The comparison for each of the periods assumes that $100 was
invested on August 31, 1994 in Odwalla common stock including reinvestment of   
dividends. These indices, which reflect formulas for dividend reinvestment and  
weighing of individual stocks, do not necessarily reflect returns that could be 
achieved by individual investors.                                               

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* 
AMONG ODWALLA, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX 
AND THE RUSSELL 2000 INDEX

[PERFORMANCE GRAPH] 

* $100 INVESTED ON 8/31/94 IN STOCK OR INDEX -                                  
INCLUDING REINVESTMENT OF DIVIDENDS.                                        
FISCAL YEAR ENDING AUGUST 31.                                               

                                                                [Download Table]

                                          CUMULATIVE TOTAL RETURN              
                              -------------------------------------------------
                              8/94     8/95    8/96      8/97     8/98     8/99
                              ----     ----    ----      ----     ----     ----
                                                                               
ODWALLA, INC. ............... 100      240      218      150      120       96 
NASDAQ STOCK MARKET (U.S.) .. 100      135      152      212      200      371 
RUSSELL 2000 ................ 100      121      134      173      142      180 

      Notwithstanding anything to the contrary set forth in any of Odwalla's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, that might incorporate future filings,        
including this proxy statement, in whole or in part, the preceding Compensation 
Committee Report on Executive Compensation and the preceding Performance Graph  
shall not be incorporated by reference into any of these filings; nor shall the 
Report or graph be incorporated by reference into any future filings.           

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE                         

 Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires Odwalla's directors and executive officers, and persons who own more   
than ten percent of a registered class of Odwalla's equity securities, to file  
with the SEC initial reports of ownership and reports of changes in ownership of
common stock and other equity securities of Odwalla. Officers, directors and    
greater than ten percent shareholders are required by SEC regulations to furnish
Odwalla with copies of all Section 16(a) forms they file.                       

     To Odwalla's knowledge, based solely on a review of the copies of the
reports furnished to Odwalla and written representations that no other reports  
were required during the fiscal year ended August 28, 1999, all Section         

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16(a) filing requirements applicable to its officers, directors and greater than
ten percent beneficial owners for fiscal 1999 were complied with on a timely    
basis with the exception of the following late filings: (a) Mr. Williamson,     
Chief Executive Officer, inadvertently failed to file a Form 4 in a timely      
manner to report one transaction in April 1999; (b) Mr. Leaman, inadvertently   
failed to file a Form 3 in a timely manner upon becoming an executive officer of
Odwalla; (c) Mr. Sakin, inadvertently failed to file a Form 3 in a timely manner
upon becoming a director of Odwalla; (d) Mr. Hrdlicka, inadvertently failed to  
file a Form 3 in a timely manner upon becoming an executive officer of Odwalla. 

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF ODWALLA       

     The following table sets forth information regarding the ownership of
Odwalla common stock as of March 10, 2000, by (1) each director, (2) the Chief  
Executive Officer and each of the three other most highly compensated executive 
officers of Odwalla, determined for Odwalla's fiscal year ended August 28, 1999,
(3) all those known by Odwalla to be beneficial owners of more than five percent
of its common stock, and (4) all directors and executive officers as a group.   

                                                        [Enlarge/Download Table]

                                            Beneficial Ownership(1)   Beneficial Ownership(1)
                                                Common Stock only      Full Voting Rights(2) 
                                            ------------------------  -----------------------
                                            Number of     Percent of  Number of    Percent of
BENEFICIAL OWNER                             Shares(3)     Total(4)    Shares       Total    
----------------                            ----------    ----------  ---------    ----------
                                                                                             
Catterton-Simon Partners III, L.P.(5) ....         -            -     1,149,666      18.32%  
9 Greenwich Office Park                                                                      
Greenwich, CT 06830                                                                          

D. Stephen C. Williamson(6). .............   810,326        15.21%      810,326      12.66%  
c/o Odwalla, Inc.                                                                            
120 Stone Pine Road                                                                          
Half Moon Bay, CA 94019                                                                      

Greg A. Steltenpohl(7) ...................   694,682        13.17%      694,682      10.94%  
c/o Odwalla, Inc.                                                                            
120 Stone Pine Road                                                                          
Half Moon Bay, CA 94019                                                                      

Martin S. Gans(8) ........................   112,658         2.17%      112,658       1.80%  
Richard Grubman(9) .......................    38,215            *        38,215          *   
Ranzell Nickelson, II(10) ................    23,000            *        23,000          *   
Craig H. Sakin(11) .......................     1,250            *         1,250          *   
James R. Steichen(12) ....................    61,905         1.19%       61,905          *   
Douglas L. Hrdlicka(13) ..................    22,255            *        22,255          *   
Susan M. Kirmayer(14) ....................    13,355            *        13,355          *   

Directors and executive officers as                                                          
 a group (12 persons)(15) ...............  1,803,104        31.46%    1,803,104      31.46%  

---------------                                                                 
*      Less than one percent                                                  

(1)     This table is based upon information supplied by officers, directors and
    principal shareholders and Schedules 13D and 13G filed with the SEC.
        Unless otherwise indicated in the footnotes to this table and subject to
     community property laws applicable, Odwalla believes that each of the
     shareholders named in this table has sole voting and investment power
with respect to the shares indicated as beneficially owned.     

(2)     These columns include both common stock as described in Note 4, Series A
        preferred stock, and a warrant to purchase 75,000 shares of common stock
        held by Catterton-Simon Partners III, L.P. These columns represent total
voting rights at March 10, 2000, adjusted as required by rules  
   promulgated by the SEC (see Note 4 below), including the one-to-one
voting rights present in the Series A preferred stock.          

(3)     This column includes only common stock outstanding at March 10, 2000.   

(4)     Beneficial ownership is determined in accordance with the rules of the  
     SEC and generally includes voting or investment power with respect to
        securities. Shares of Odwalla common stock, subject to options currently
       exercisable or exercisable within 60 days of March 10, 2000, are deemed
outstanding for computing the                                   

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percentage of the person holding the options, but aren't deemed 
        outstanding for computing the percentage of any other person. Percentage
        of ownership is based on 5,125,761 shares of common stock outstanding on
March 10, 2000.                                                 

(5)     Includes the Series A preferred stock and the warrant to purchase 75,000
    shares of common stock held by Catterton-Simon Partners III, L.P., a
Delaware limited partnership.                                   

(6)     Includes 41,250 shares of common stock held by Alexandra Bowes, Mr.     
     Williamson's wife, and 194,851 shares held by Willy Juice Partners, a
       limited partnership of which Mr. Williamson is the general partner. Mr.
       Williamson disclaims beneficial ownership of shares held by Willy Juice
      Partners, except to the extent of his pecuniary interest therein. Also
      includes 202,109 shares of common stock subject to options exercisable
within 60 days of March 10, 2000.                               

(7)     Includes 214,453 shares of common stock held by Bonnie Bassett          
  Steltenpohl, Mr. Steltenpohl's wife, and 11,539 shares held by the
        Estate of Benita Johnson, of which Mr. Steltenpohl is the executor. Also
      includes 148,327 shares of common stock subject to options exercisable
within 60 days of March 10, 2000.                               

(8)     Includes 74,000 shares of common stock subject to options exercisable   
within 60 days of March 10, 2000.                               

(9)     Includes 34,667 shares of common stock subject to options exercisable   
      within 60 days of March 10, 2000, plus Mr. Grubman's interest in 1,548
shares of common stock held by Willy Juice Partners.            

(10)    Includes 23,000 shares of common stock subject to options exercisable   
within 60 days of March 10, 2000.                               

(11)    Excludes both 1,074,666 shares of Series A preferred stock and the      
warrant to purchase 75,000 shares of common stock held by       
       Catterton-Simon Partners III, L.P., a Delaware limited partnership. Mr.
      Sakin disclaims beneficial ownership of the shares and warrant held by
Catterton-Simon Partners III, L.P. Mr. Sakin is a manager of    
     Catterton-Simon Managing Partners III, L.L.C., the general partner of
Catterton-Simon Partners III, L.P. See Note 5.                  

(12)    Includes 61,905 shares of common stock subject to options exercisable   
within 60 days of March 10, 2000.                               

(13)    Includes 22,255 shares of common stock subject to options exercisable   
within 60 days of March 10, 2000.                               

(14)    Includes 13,055 shares of common stock subject to options exercisable   
within 60 days of March 10, 2000.                               

(15)    Includes 606,026 shares of common stock subject to options exercisable  
     within 60 days of March 10, 2000, and excludes the Series A preferred
      stock and warrants held by Catterton-Simon Partners III, L.P. of which
Mr. Sakin disclaims beneficial ownership.                       

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS OF ODWALLA                       

    In November 1998, Mr. Steltenpohl entered into a two-year consulting
agreement with Odwalla under which he will receive up to $300,000 during the    
term of the agreement.                                                          

 Mr. Steltenpohl is a 50% owner of the Davenport property at which
marketing offices and warehouse facilities were located (the "Davenport         
Property"). Odwalla leased the Davenport Property at a monthly rent of $9,320   
pursuant to a lease that was to expire in July 1999. Odwalla entered into an    
agreement to terminate the lease for this facility as of September 30, 1998 for 
a $10,000 cash payment and equipment valued at approximately $13,000. Odwalla   
believes that the rental terms, and subsequent early termination, of the        
Davenport Property lease were fair and reasonable and no less favorable than    
those that would be available to Odwalla in a transaction with an unaffiliated  
lessor.                                                                         

Odwalla's board of directors authorized Odwalla to enter into a 
consulting arrangement with a consulting company of which Dr. Nickelson is the  
President and subsequently with Dr. Nickelson directly. The contract was        
approved by a majority of disinterested directors and was entered into on       
standard industry terms. Payments to Dr. Nickelson under this arrangement were  
less than $10,000 in fiscal 1999.                                               

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PROPOSAL NO. 5 -- RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS                

 PricewaterhouseCoopers LLP served as Odwalla's independent public
accountants for fiscal 1999. Odwalla is asking the shareholders to ratify the   
selection of PricewaterhouseCoopers as Odwalla's independent public accountants 
for the fiscal year ending September 2, 2000. The affirmative vote of the       
holders of a majority of the shares represented and voting at the annual meeting
will be required to ratify the selection of PricewaterhouseCoopers.             

       In the event the shareholders fail to ratify the appointment, the Audit
Committee of the board of directors will consider it as a direction to select   
other auditors for the subsequent year. Even if the selection is ratified, the  
board in its discretion may direct the appointment of a different independent   
accounting firm at any time during the year if the board determines that the    
change would be in the best interest of Odwalla and its shareholders.           

       A representative of PricewaterhouseCoopers is expected to be present at
the annual meeting, will have the opportunity to make a statement if he or she  
desires to do so, and will be available to respond to appropriate questions.    

VOTE REQUIRED                                                                   

The approval of the ratification of the selection of            
PricewaterhouseCoopers as Odwalla's independent public accountants for the      
fiscal year ended September 2, 2000 requires the affirmative vote of the holders
of a majority of the shares of Odwalla common stock and preferred stock voting  
together as a class present, or represented, and voting at the Odwalla annual   
meeting. Abstentions and broker non-votes will have no effect on the voting of  
the proposal.                                                                   

RECOMMENDATION OF THE BOARD                                                     

       The board of directors unanimously recommends that Odwalla shareholders
vote FOR the proposal to ratify the selection of PricewaterhouseCoopers as      
Odwalla's independent public accountants for the fiscal year ending September 2,
2000.                                                                           

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 INFORMATION ABOUT ODWALLA

BUSINESS OF ODWALLA                                                             

OVERVIEW                                                                        

Odwalla's business is to provide easy access to great tasting   
nourishment. We are the leading branded all-natural, super-premium refrigerated 
juice company in the country, serving selected markets in the Western, Midwest, 
Mid-Atlantic and Southeastern regions of the United States. Odwalla's complete  
product line consists of more than 25 all-natural, super-premium juices and     
smoothies (including single-flavor and blended fruit- and vegetable-based juice 
products), all-natural meal replacement and dairy-free shakes, natural spring   
water and all-natural food bars. Our beverage product line appeals to many      
consumers because of the superior taste of minimally processed beverages and    
greater nutritional value compared to juice from concentrate or with artificial 
flavors.                                                                        

        We want to be the leading nourishment company in our existing and future
markets. We seek to achieve this objective by leading the industry in beverage  
and other food knowledge, optimizing quality through sourcing and production,   
controlling product access and distribution from production through retail,     
artful presentation, growing through geographic and product line expansion,     
leveraging our information systems, interacting with consumers and living our   
vision.                                                                         

        Odwalla's sourcing procedures and production methods enable us to create
products with high nutritional and flavor quality. The distribution of our      
products through both our own and other direct-store-delivery systems allows us 
to control product quality and presentation, as well as to develop relationships
with trade partners. We sell and distribute our products to over 3,800 retail   
locations, including supermarkets, specialty retailers, natural food stores,    
warehouse outlets, convenience stores and food service operators through our    
direct-store-delivery system.                                                   

Odwalla is committed to certain values -- nourishing consumers, 
shareholders and other stakeholder groups; environmental awareness; and support 
for the communities we serve. We believe that our products reflect these values.

PRODUCTS, DISTRIBUTION AND TRADE PARTNERS                                       

     Our current product line consists of single-flavor and blended fruit-
and vegetable-based juice products, dairy-free shakes, wholesome food bars and  
natural spring water. All of our juices are currently flash pasteurized and some
are produced on a seasonal basis. Our decision in November 1999 to minimally    
process all orange juice, some of which we previously did not flash pasteurize, 
may result in the loss of some trade partners and consumers who choose to       
purchase fresh citrus products. However, we believe that heightened food safety 
concerns expressed by trade partners and consumers, on-going government         
regulatory processing and labeling changes, and our ability to produce          
super-premium minimally processed products will offset potential sales declines 
over a period of time.                                                          

     Odwalla products are currently sold in Arizona, California, Colorado,
Georgia, Illinois, Louisiana, Maryland, Michigan, Minnesota, Nevada, New Jersey,
New Mexico, North Carolina, Oregon, Pennsylvania, Texas, Utah, Virginia,        
Washington state, Washington, D.C. area, and Wisconsin.                         

    On September 1, 1999, we introduced new branded, custom-designed 450
milliliter and 325 milliliter bottles made from recyclable, HDPE plastic. Our   
new bottle retains fresh fruit flavor notes better than our previous bottle and 
better than the bottles commonly used by our competitors. It also has a         
tamper-resistant, screw-on cap, which allows consumers to easily reseal their   
beverage while drinking Odwalla on-the-go. The characteristics of the new bottle
also extend the shelf-life of our products. We establish shelf-life standards   
for each product to maintain the flavor and nutritional integrity that consumers
associate with freshly produced fruit and vegetable beverages. The shelf-life of
Odwalla's fruit- and vegetable-based products is typically between 18 and 30    
days at the retail outlet. Although the cost of our new bottle is approximately 
50% greater than our prior bottle, we anticipate that the lengthened shelf-life 
and our distribution capabilities will offset the increased cost. Our food bars 
have a significantly longer shelf-life.                                         

       Our policy is to have all products removed from trade partners' shelves
on or before their Odwalla-established expiration date. In addition, because of 
our "day of production" quality standards, products reflect the seasonal changes
in fruit varieties in color and taste. Our production methods are designed to   
minimize the effect of processing on the fruit juice extracted. Our entire      
product line varies due to a significant component of seasonal ingredients,     
seasonal product usage, and the addition and deletion of products.              

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Our products are sold and distributed primarily through our     
direct-store-delivery system, which is serviced by route sales people who       
deliver and merchandise products to our trade partners. This                    
direct-store-delivery system is designed to allow us to optimally manage        
delivery schedules, efficiently control product mix, keep store shelves or our  
own coolers stocked with freshly prepared products and have a greater influence 
on determining in-store location and merchandising of our products.             

    At most direct-store-delivery accounts, we are responsible to stock,
order and merchandise our products at the point of sale, and we issue credits to
the trade partner for unsold product. This full service relationship allows us  
to avoid paying slotting fees for shelf space, as well as other handling fees,  
and to maintain control over our product merchandising at the point of sale. We 
provide a lesser degree of service to certain trade partners who are responsible
for stocking, ordering and merchandising Odwalla products. These trade partners 
don't receive credit for unsold products. Consumers can purchase our products at
supermarkets, specialty retail stores, natural food stores, convenience stores, 
warehouse outlets and institutional food service trade partners.                

      We also distribute our products through third party distributors. This
distribution channel, with merchandising support provided by the distributors'  
employees and/or our employees, provides an opportunity to expand product       
distribution in selected markets and still maintain relationships with trade    
partners. We sell directly to the third party distributors and they generally   
don't receive credit for unsold product.                                        

RAW MATERIALS                                                                   

      Producing and selling our minimally processed products entails special
requirements in ingredient sourcing, production, distribution and sales in order
to preserve and maximize the freshness and flavor quality of the products. We   
source and select fruits and vegetables to meet a variety of established        
criteria, including overall quality, flavor profile, variety, ripeness and other
factors. Processing of the fruit and vegetables is performed in a manner to     
capture and preserve various qualities of fresh flavors and consistency. Odwalla
has focused on each of these elements in an effort to achieve our goal of       
providing the safest, best tasting and most nutritious beverage and other       
products for consumers.                                                         

      Odwalla buys ingredients according to stringent specifications. Fruits
and vegetables, in particular, are purchased year-round or seasonally depending 
on the type of produce. Because various types of fruit and vegetable crops are  
harvested at different times of the year, we obtain and produce different juices
on a seasonal basis. Most of our fruits and vegetables are purchased in the open
market on a negotiated basis. Historically, oranges, apples, carrots and        
tangerines are the largest volume commodities we purchase. We have developed an 
extensive network of ingredient sourcing relationships over the years and rely  
on this network and new sources for the ingredients we need. Beginning in 1998, 
we contracted for a substantial portion of our fall apple needs through McAfee  
Apple Gardens, a California Central Valley grower using Good Agricultural       
Practices, field Hazard Analysis Critical Control Points plan and sustainable   
farming practices. We also farm a small orange ranch in California to have      
access to local fresh fruit in the early winter months. Recently, we began      
purchasing organic oats as a significant ingredient in our food bars. All of    
these key ingredients are subject to volatility in supply, price and quality    
that could seriously harm our business and results of operations. We are subject
to the same issues with our other ingredients as well.                          

  We also source a number of fruits, including tropical fruits, from
foreign suppliers in the form of frozen fruit puree. A puree is whole fruit that
has been processed, finely cut, heat treated, packed in a container and frozen. 
A puree is not a concentrate. Purees are combined with the freshly extracted and
flash pasteurized juices of other fruits in a number of our products. The purees
we purchase are heat treated to increase safety and meet government regulations.
Most purees are purchased under annual price contracts.                         

As with most agricultural products, the supply and price of raw 
materials we use can be affected by a number of factors beyond our control,     
including frost, drought, flood, hurricane and other natural disasters. Weather 
conditions, economic factors affecting growing decisions, various plant diseases
and pests will affect the condition and size of the crop. For example, the heavy
rains and flooding that occurred in California in the first and second quarters 
of fiscal 1995 resulted in higher costs of fruit and lower yields from the      
California orange crop in the last quarter of fiscal 1995 and the first quarter 
of fiscal 1996. We understand that the El Nino conditions and other weather     
patterns in the winter of 1997-1998 caused temporary shortages of certain       
tropical products. Additionally, significant events including the devastation   
caused by hurricanes in Honduras, Nicaragua and neighboring countries in 1998   
negatively impact the supply and pricing of certain ingredients.                

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  In December 1998, a freeze damaged citrus crops in the San Joaquin
Valley and other portions of California. This had a significant negative impact 
on the cost and yield of fresh citrus products we have used since the freeze.   
See "Management's Discussion and Analysis of Financial Conditions and Results of
Operations of Odwalla" beginning on page 73 for more information.               

COMPETITION                                                                     

       In a broad sense, our beverages compete with all beverages available to
consumers and our food bars compete with all food bars currently available. The 
natural foods market is highly competitive. It includes national, regional and  
local producers and distributors; many of them have greater resources than we   
do, and many of them have shelf-stable products that can be distributed with    
significantly less cost. We believe our niche is easily-accessed nourishing     
beverages in the refrigerated super premium juice, emerging dairy-free          
beverages, all-natural food bar and bottled water categories. We believe our    
direct competition in this market niche is currently from nationally, regionally
and locally focused juice producers, certain of which are owned by major        
beverage producers, nationally branded meal replacement beverage producers, food
and energy bar companies and premium bottled waters. Our direct competitors in  
the juice business are national brands including Just Squeezed, Tropicana,      
Minute Maid and Nantucket Nectars. Our juice products compete with regional     
brands including Naked Juice (owned by a large international company, Chiquita  
Brands International, Inc.) in Southern California and Colorado, Fresh          
Samantha's in the Northeast, Mid-Atlantic and Southeast sections of the United  
States and Fantasia in the Chicago and other Midwest market areas. As previously
discussed in this proxy statement, on February 2, 2000 we entered into a        
definitive agreement to merge with Fresh Samantha. Juice and smoothie bars      
including Jamba Juice are also competitors. In addition, a number of major      
supermarkets and other retail outlets squeeze and market their own brand of     
fresh juices that compete with the Company's products. A decision by Chiquita or
any other large company to focus on Odwalla's existing markets or target markets
could have a material adverse effect on our business and results of operations. 

       Our food bar products, which have been on the market since August 1998,
compete with several more established companies, including PowerBar, Balance Bar
and Clif Bar. While we believe that we compete favorably with our competitors on
factors including quality, nutritional integrity, food safety, merchandising,   
service, sales and distribution, multiple flavor categories, brand name         
recognition and loyalty, our products are typically sold at prices higher than  
most other competing beverage and bar products. Significant competitive pressure
from these or other companies could negatively impact our sales and results of  
operations.                                                                     

DEPENDENCE ON ONE OR A FEW MAJOR TRADE PARTNERS                                 

        Safeway, Inc. is our largest single account and accounted for 13% of our
fiscal 1999 sales. We spend considerable time to maintain a good relationship   
with Safeway and other significant accounts, but we can't offer any assurance   
that sales to significant accounts will not decrease or that these trade        
partners will not choose to replace our products with those of competitors. The 
loss of Safeway or other significant accounts or any significant decrease in the
volume of products purchased by their customers in the future would seriously   
harm our business and results of operations. Continuity of trade partner        
relationships is important, and events that impact our trade partners, including
labor disputes, may have an adverse impact on our results of operations.        

GOVERNMENT REGULATION                                                           

  The production and sales of beverages are subject to the rules and
regulations of various federal, state and local food and health agencies,       
including the U.S. Food and Drug Administration and California State Food and   
Drug. On September 8, 1998, the FDA regulations for fresh apple juice went into 
effect. The regulations for fresh-squeezed citrus juices were enacted in July   
1999. The FDA's ruling for citrus was to require all fresh juice processors to  
show a 5-log reduction in potential pathogens, 99.999% barrier, supported by a  
Hazard Analysis Critical Control Point plan, or the HACCP. All fresh juice      
processors which could not demonstrate a 5-log reduction were expected to label 
their product with a warning label on the bottle to alert consumers of the      
presence of unprocessed product. Because all products produced in our Dinuba,   
California, production facility are manufactured under a HACCP plan with        
validated critical control points, we are already in compliance with the FDA    
regulations for fresh apple juice and the FDA regulations for citrus juices, and
will not need to use warning labels on unpasteurized juice products.            

        However, due to an outbreak of Salmonellosis in another company's orange
juice earlier in 1999, the FDA has reconsidered the effectiveness of the        
proposed ruling. Regulators, industry representatives and scientists held a     
meeting during the summer of 1999 to discuss what regulation should become      
final. FDA officials emphasized their preference                                

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for a 5-log reduction in fresh juice from the time it is extracted until        
bottled. A validated HACCP plan currently does not have to include this         
requirement. The most effective way presented at the meeting to meet the newly  
discussed 5-log reduction in commercial production is flash pasteurization. In  
November 1999, this same processor of fresh-squeezed, non-pasteurized orange    
juice enacted another recall due to Salmonellosis concerns. Based upon          
discussions with members of the scientific community and informal discussions   
with FDA officials, we anticipate that flash pasteurization will be required.   

        Odwalla has been performing flash pasteurization for nearly three years.
All fresh-squeezed citrus used in our products blended with other ingredients   
(e.g., in our smoothie and nutritional product lines) has been flash            
pasteurized. During the past year, we began flash pasteurizing fresh-squeezed   
citrus products that are not further blended (e.g., grapefruit juice and our    
quencher products) and currently all juice products are flash pasteurized.      
Odwalla is ready for the anticipated FDA regulations and we don't anticipate    
significant additional costs to comply with current FDA regulations.            

     We are also subject to various federal, state and local environmental
laws and regulations that limit the discharge, storage, handling and disposal of
a variety of substances and by laws and regulations relating to workplace safety
and worker health, principally the Occupational Safety and Health Administration
Act, as well as similar state laws and regulations. We believe that we comply in
all material respects with these laws and regulations, although we cannot assure
you that future compliance with new laws or regulations will not have a material
adverse effect on our results of operations or financial condition. We did not  
incur any significant costs in fiscal 1999 to comply with environmental laws.   

EMPLOYEES                                                                       

     As of November 27, 1999, the end of the first quarter of fiscal 2000,
Odwalla had approximately 450 employees, 430 of whom were full-time employees.  
We don't have any collective bargaining agreements with our employees, and we   
believe employee relations are generally good.                                  

OTHER FACTORS AFFECTING ODWALLA'S BUSINESS                                      

    Risks associated with perishable products. Except for natural spring
water and food bars, Odwalla's products are flash pasteurized or heat treated   
and don't contain any preservatives. They have a limited shelf-life because of  
this. In order to maintain our "day-of-production" quality standards, we further
restrict the shelf-life of products through early expiration dates. The         
restricted shelf-life means that we don't have any significant finished goods   
inventory and our operating results are highly dependent on our ability to      
accurately forecast near term sales in order to adjust fresh fruit and vegetable
sourcing and production. We've historically experienced difficulties in         
accurately forecasting product demands and expect that challenge to continue.   
When we don't accurately forecast product demand, we are either unable to meet  
higher than anticipated demand or we produce excess inventory that cannot be    
profitably sold. In addition, most of our trade partners have the right to      
return any products that are not sold by their expiration date. Our inability to
meet higher than anticipated demand or excess production or significant amounts 
of product returns on any of our products could harm our business and results of
operations.                                                                     

       Cost sensitivity. Our profitability is highly sensitive to increases in
raw materials, labor and other operating costs. Unfavorable trends or           
developments concerning factors including inflation, raw material supply, labor 
and employee benefit costs, including increases in hourly wage and minimum      
unemployment tax rates, rent increases resulting from the rent escalation       
provisions in our leases, and the availability of hourly employees may also     
adversely affect our results. We've benefited in prior years from relatively    
favorable inflation rates and part-time labor supplies in our principal market  
areas. However, there is no assurance that these conditions will continue or    
that we will have the ability to control costs in the future. In fiscal 1999,   
for example, the cost for citrus products increased significantly due to the    
citrus crop freeze in California as discussed in the "Management's Discussion   
and Analysis of Financial Conditions and Results of Operations of Odwalla"      
beginning on page 73 of this proxy statement.                                   

        Product liability. Because our products are not irradiated or chemically
treated and are flash pasteurized, they are highly perishable and contain       
certain naturally occurring microorganisms. In addition to the recall associated
with the E. coli O157:H7 bacteria in 1996, from time to time we receive         
complaints from consumers regarding ill effects allegedly caused by our         
products. These past claims haven't resulted in any material liability to date, 
but there can be no assurance that we won't have future claims or that any      
claims associated with the recall in 1996 will not result in adverse publicity  
or monetary damages, either of which could seriously harm our business and      
results of operations.                                                          

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We currently maintain $52,000,000 in product liability insurance, which may not 
be sufficient to cover the cost of defense or related damages in the event of a 
significant product liability claim.                                            

        Orchard production. Historically, we've depended upon the fruit produced
from the trees of large orchards. These trees may become damaged, diseased or   
destroyed as a result of windstorms, pests or fungal disease. Additionally,     
there are types of controllable fungal diseases that can affect fruit production
although not fatal to the trees themselves. These types of fungal diseases are  
generally controllable with fungicides. However, we can't be sure that such     
control measures will continue to be effective. Any decrease in the supply of   
fresh fruit as a result of windstorms, pests or fungal disease could have a     
material adverse effect on our business and results of operations.              

 Geographic concentration. Our wholesale accounts and retail trade
partners have their largest concentration in Northern California, with most     
located in the metropolitan areas surrounding the San Francisco Bay. Due to this
concentration, natural disasters, including earthquakes, economic downturns and 
other conditions affecting Northern California may adversely affect our business
and results of operations.                                                      

Concentration of production capacity. Virtually all of our juice
production capacity is located at our Dinuba, California, facility. Because we  
maintain minimal finished goods inventory as part of our "day-of-production"    
production system, we could be unable to continue to produce beverages in the   
event that production at or transportation from Dinuba were interrupted by fire,
earthquakes, floods or other natural disasters, work stoppages, regulatory      
actions or other causes. Such an interruption would seriously harm our business 
and results of operations. Separate companies produce our dairy-free shakes,    
meal replacement beverages, spring water and food bars.                         

        Lack of diversification. Odwalla's business is vertically integrated and
centered around essentially one product, all-natural super-premium beverages,   
sold primarily through our direct-store-delivery system. Although we've added   
dairy-free shakes, meal replacement beverages, spring water and food bars, and  
are using more third party distributors, the risks associated with our focus on 
essentially one product are exemplified by the material adverse effect on our   
business and results of operations that resulted from the recall in October 1996
and from the impact of the California citrus freeze in December 1998. Any       
significant decrease in the consumption of beverages generally or specifically  
with respect to our products would have an adverse effect on our business and   
results of operations.                                                          

     Risks related to expansion. Continued growth depends in part upon our
ability to expand into new geographic areas, either through internal growth or  
by acquisition. Following the 1996 recall, management attention was primarily   
focused on restoring production and sales in our then-existing markets and      
dealing with legal and other company issues. This diverted our plans for        
expansion, for the most part, until fiscal 1998. Due to the extent of our       
operating losses in recent years, we currently anticipate limited expansion in  
fiscal 2000 beyond existing markets. There can be no assurance that we will     
expand into new geographic areas or continue to invest in newer markets or if   
such expansion or investment is undertaken that it will be successful or        
accomplished on a profitable basis. Demands on management and working capital   
costs associated with the recall as well as the perishability of our products   
and current reliance on the personnel-intensive direct-store-delivery system may
limit the ability, or increase the cost of, expansion into new regions.         
Furthermore, perceptions of the recall and consumer tastes vary by region and   
there can be no assurance that consumers located in other regions will be       
receptive to our products.                                                      

        We've expanded into certain markets, including the Pacific Northwest and
Colorado, through acquisitions of local juice manufacturers. Acquisitions       
involve a number of special risks, including the diversion of management's      
resources, issues related to the assimilation of the operations and personnel of
the acquired businesses, potential adverse effects on operating results and     
amortization of acquired intangible assets. In addition, gross margins may be   
negatively impacted to the extent that gross margins on acquired product lines  
are lower than Odwalla's average gross margins. If we seek and find attractive  
acquisition candidates, we may not be able to complete the transaction on       
acceptable terms, successfully integrate the acquisition into our operations, or
structure the acquisition so as not to have an adverse impact on our operations.

        Any plans to invest in new markets or to consider acquisitions may cause
us to seek additional financing that may be dilutive to current investors or    
result in a higher debt-to-equity ratio than would otherwise be the case. Any   
financing we obtain may not be on terms favorable to us, even if it is          
available.                                                                      

      Competition. Our direct competitors in the juice business are national
brands including Just Squeezed, Tropicana, Minute Maid and Nantucket Nectars.   
Our juice products compete with regional brands including Naked Juice (owned by 
a large international company, Chiquita Brands International, Inc.) in Southern 
California and                                                                  

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Colorado, Fresh Samantha's in the Northeast, Mid-Atlantic and Southeast sections
of the United States and Fantasia in the Chicago and other Midwest market areas.
Juice and smoothie bars including Jamba Juice are also competitors. In addition,
a number of major supermarkets and other retail outlets squeeze and market their
own brand of fresh juices that compete with the Company's products. A decision  
by Chiquita or any other large company to focus on Odwalla's existing markets or
target markets could have a material adverse effect on our business and results 
of operations. While we believe that we compete favorably with our competitors  
on factors including quality, nutritional integrity, food safety, merchandising,
service, sales and distribution, multiple flavor categories, brand name         
recognition and loyalty, our products are typically sold at prices higher than  
most other competing beverage and bar products. Significant competitive pressure
from these or other companies could negatively impact our sales and results of  
operations.                                                                     

    Quarterly fluctuations. Because the fruits and vegetables we use are
purchased in the open market on a negotiated basis, the price and availability  
of key ingredients may fluctuate on a quarterly basis. Consumers tend to        
establish certain buying patterns, and a disruption of those buying patterns may
result in a decline in sales. Other factors, including expansion into new       
markets, consummating an acquisition, costs of integrating acquired operations, 
price promotions of certain products, changes by our competitors, and           
introduction of new products, can result in fluctuations to sales and costs on a
quarterly basis.                                                                

     Intellectual property rights. We believe our trademarks, trade dress,
trade secrets and similar intellectual property are critical to Odwalla's       
success and we attempt to protect such property with registered and common law  
trademarks and copyrights, restrictions on disclosure and other actions to      
prevent infringement. We've licensed elements of our distinctive trademarks,    
trade dress and similar proprietary rights to third parties in the past and may 
continue this practice. While we attempt to ensure that the quality of our brand
is maintained by these third party licenses, we can't be sure that these third  
parties will not take actions that might seriously harm the value of our        
proprietary rights or the reputation of our products, either of which could have
a material adverse effect on our business. Product package and merchandising    
design and artwork are important to the success of Odwalla, and we intend to    
take action to protect against imitation of our products and packages and to    
protect our trademarks and copyrights as necessary. This action could be        
time-consuming, result in costly litigation and divert management personnel.    
Furthermore, there can be no assurance that we would be successful in such      
action. We don't currently have any patents.                                    

    Control by officers and directors. Odwalla's officers, directors and
their affiliates beneficially own, in the aggregate, approximately 23% of the   
outstanding shares of common stock. Through their holdings, these shareholders, 
acting together, would be able to significantly influence most matters requiring
shareholder approval, including the election of a majority of our board of      
directors. This control could have the effect of delaying, deferring or         
preventing a change of control of the Company.                                  

       Dependence on key personnel. Odwalla's success depends to a significant
extent upon the continued service of its senior management, including Stephen   
Williamson, our Chairman and Chief Executive Officer, and the loss of services  
from any of such key personnel could have a material adverse effect on our      
business or results of operations. Furthermore, our continued growth strategy   
depends on the ability to identify, recruit and retain key management personnel.
The competition for such employees is intense, and there can be no assurance we 
will be successful in such efforts. We are also dependent on our ability to     
continue to attract, retain and motivate production, distribution, sales,       
communications and other personnel.                                             

       Volatility of stock price. Odwalla's common stock price has, at certain
times, experienced significant price volatility. Announcements of developments  
related to our business, fluctuations in operating results, failure to meet     
securities analysts' expectations, general conditions in the fruit and vegetable
industries and the worldwide economy, announcements of innovations, new products
or product enhancements by us or our competitors, fluctuations in the level of  
cooperative development funding, acquisitions, changes in governmental          
regulations, developments in patents or other intellectual property rights and  
changes in our relationships with trade partners and suppliers could cause the  
price of our common stock to fluctuate substantially. In addition, in recent    
years the stock market in general, and the market for small capitalization      
stocks in particular, has experienced extreme price fluctuations which have     
often been unrelated to the operating performance of affected companies. Such   
fluctuations could adversely affect the market price of our common stock.       

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PROPERTIES OF ODWALLA                                                           

 Our production facility is in Dinuba, California, and consists of
approximately 100,000 square feet of production, office and cold storage space  
on a 13-acre parcel of land plus approximately 29 acres of land adjacent to the 
production facility. We own this property and believe we carry adequate property
insurance. Our administrative offices are located in Half Moon Bay, California. 
We also have distribution centers throughout California and in Phoenix, Arizona;
Denver, Colorado; Atlanta, Georgia; Landover, Maryland; Albuquerque, New Mexico;
Eugene and Portland, Oregon; Austin, Houston and Dallas, Texas; and Seattle,    
Washington. We lease all our facilities other than the Dinuba production        
facility.                                                                       

LEGAL PROCEEDINGS OF ODWALLA                                                    

        The following personal injury claims and legal proceedings seek monetary
damages and other relief relating to the recall in 1996, as discussed in Item 2 
"Management's Discussion and Analysis of Financial Condition and Results of     
Operations of Odwalla":                                                         

   1.      The McGregor Case: A personal injury lawsuit filed in Santa
            Clara County Superior Court, San Jose, California on June 2,
             1997 and served on June 16, 1997. There is no trial date set.

     2.      The Nixon Case: A personal injury lawsuit filed in Sacramento
            County Municipal Court, Sacramento, California on August 15,
1997. There is no trial date set.               

      3.      The Scott Case: A personal injury action lawsuit filed in King
                County Superior Court, Seattle, Washington, on October 14, 1999.
The case is set for trial on March 5, 2001.     

  The Company has one additional proceeding allegedly arising out of
product consumption prior to the recall in 1996:                                

        1.      The Shields Case: A personal injury lawsuit filed in King County
                Superior Court, Seattle, Washington, and served on or about July
       1, 1999. The case is set for trial on January 16, 2001.

 The following personal injury claim and legal proceeding has been
settled:                                                                        

     1.      The Lane Case: A personal injury lawsuit filed in King County
           Superior Court, Seattle, Washington, and served on or about
         April 26, 1999. The case was removed to the United States
               District Court in Seattle on May 25, 1999. The case was settled
 in February 2000 subject to final court approval.

We maintained commercial general liability insurance totaling   
$27,000,000 during the period for which the above claims are filed, including   
the recall. We have notified our insurance carrier of these events. At this     
time, we are unable to determine the potential liability from the remaining     
legal proceedings and claims. The recall-related legal proceedings settled to   
date were covered under our commercial general liability insurance policy and   
did not result in any additional costs to us.                                   

        On May 21, 1999, Odwalla filed a lawsuit in United States District Court
for the Eastern District of California in Fresno, California, against New       
Hampshire Insurance Company to seek recovery on our business interruption       
insurance claim filed as a result of the recall. The case does not have a trial 
date set.                                                                       

      We are subject to other legal proceedings and claims that arise in the
course of our business. We currently believe that the ultimate amount of        
liability, if any, for any pending actions (either alone or combined) will not  
materially affect our financial position, results of operations or liquidity.   
However, the ultimate outcome of any litigation is uncertain, and unfavorable   
outcomes could have a material negative impact on our results of operations and 
financial condition.                                                            

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SELECTED FINANCIAL DATA OF ODWALLA                                              

       The following table shows selected consolidated financial information
for Odwalla for the past five fiscal years. To better understand the information
in the table, investors should also read "Management's Discussion and Analysis  
of Financial Condition and Results of Operations of Odwalla" beginning on page  
73 of this proxy statement, and the Consolidated Financial Statements and Notes 
beginning on page F-2 of this proxy statement.                                  

                                                        [Enlarge/Download Table]

                                                                                     Year Ended August,                    
                                                              ------------------------------------------------------------ 
                                                                1995         1996          1997       1998          1999   
                                                              --------     --------     --------     --------     -------- 
                                                                            (in thousands, except per share data)          
                                                                                                                           
STATEMENT OF OPERATIONS DATA:                                                                                              
Net sales ................................................... $ 35,869     $ 59,197     $ 52,630     $ 59,088     $ 68,042 
Cost of sales ...............................................   18,425       29,889       27,650       29,236       35,542 
                                                              --------     --------     --------     --------     -------- 
Gross Profit ................................................   17,444       29,308       24,980       29,852       32,500 
Operating expenses:                                                                                                        
 Sales and distribution .....................................   11,588       20,236       22,465       20,282       24,056 
 Marketing ..................................................      891        2,179        2,919        2,696        2,908 
 General and administrative .................................    3,576        6,206        7,625        6,873        7,647 
 Recall and related costs ...................................       --           --        6,518        1,242          250 
                                                              --------     --------     --------     --------     -------- 
     Total operating expenses ...............................   16,055       28,621       39,527       31,093       34,861 
                                                              --------     --------     --------     --------     -------- 
Income (loss) from operations ...............................    1,389          687      (14,547)      (1,241)      (2,361)
Other income (expense), net .................................      108          346          210         (163)         (40)
                                                              --------     --------     --------     --------     -------- 
Income (loss) before income taxes ...........................    1,497        1,033      (14,337)      (1,404)      (2,401)
Income tax (expense) benefit ................................     (500)        (400)       1,901           25          359 
                                                              --------     --------     --------     --------     -------- 
Net income (loss) ...........................................      997          633      (12,436)      (1,379)      (2,042)
Preferred stock dividend ....................................       --           --           --           --         (267)
                                                              --------     --------     --------     --------     -------- 
Net income (loss) applicable to common shareholders ......... $    997     $    633     $(12,436)    $ (1,379)    $ (2,309)
                                                              ========     ========     ========     ========     ======== 
Basic net income (loss) applicable to common                                                                               
  shareholders per share .................................... $   0.24     $   0.13     $  (2.49)    $  (0.27)    $  (0.45)
                                                              ========     ========     ========     ========     ======== 

Diluted net income (loss) applicable to common                                                                             
   shareholders per share ................................... $   0.22     $   0.12     $  (2.49)    $  (0.27)    $  (0.45)
                                                              ========     ========     ========     ========     ======== 

                                                        [Enlarge/Download Table]

                                                                                    End of Fiscal Year                    
                                                              ------------------------------------------------------------
                                                                1995         1996         1997         1998         1999  
                                                              --------     --------     --------     --------     --------
                                                                                     (in thousands)                       
                                                                                                                          
BALANCE SHEET DATA:                                                                                                       
Cash, cash equivalents and                                                                                                
 short-term investments ..................................... $ 18,496     $ 12,413     $  3,225     $  3,191     $  7,369
Working capital .............................................   17,918       14,655        1,300        1,669        7,384
Total assets ................................................   35,481       37,700       31,006       29,350       35,305
Long-term liabilities .......................................      736          501          441          888          688
Mandatorily redeemable and convertible preferred stock ......       --           --           --           --        7,505
Total shareholders' equity ..................................   28,499       29,574       17,635       16,445       14,449

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      
OPERATIONS OF ODWALLA                                                           

    You should read the following discussion and analysis in conjunction
with Odwalla's and Fresh Samantha's consolidated financial statements and the   
"Unaudited Pro Forma Combined Condensed Financial Information" included         
elsewhere in this proxy statement. This proxy statement and the documents       
incorporated by reference into this proxy statement contain forward-looking     
statements with respect to future events and Odwalla's future financial         
performance. Actual results could differ significantly from those discussed in  
this proxy statement.                                                           

        Factors that could cause or contribute to such differences include those
set forth in the section entitled "Risk Factors" on page 12 of this proxy       
statement, as well as those discussed elsewhere in this proxy statement.        

OVERVIEW                                                                        

 In the Management's Discussion and Analysis section of this proxy
statement we are providing detailed information about our operating results and 
changes in financial position over the past three years and for the first       
quarter of fiscal 1999 and 2000. This section should be read in conjunction with
the Consolidated Financial Statements and related Notes beginning on page F-2 of
the financial statements attached to this proxy statement.                      

GENERAL BUSINESS                                                                

       Net sales in fiscal 1999 increased to $68.0 million, an increase of 15%
from $59.1 million of sales last year, which represents a record sales year for 
Odwalla. In fiscal 1999, we had growth in all of our geographic market areas,   
expanded our presence in markets we entered in fiscal 1998, and entered the     
Atlanta market. Our net loss for fiscal 1999 was $2.0 million or $.40 per share 
compared to a loss of $1.4 million or $0.27 per share in fiscal 1998. The most  
significant reason for the fiscal 1999 loss is the result of the December 1998  
California citrus freeze, which is discussed below. Net sales for the thirteen  
weeks ended November 27, 1999 increased to $16.8 million, an increase of 9.4%   
from $15.3 million of sales in the first quarter of fiscal 1999. In the first   
quarter of fiscal 2000, the citrus freeze of December 1998 continues as the most
significant reason for our net loss for the quarter.                            

       Our sales strength has come predominantly from continued penetration in
existing markets, sales of new products and expansion into new markets. We      
believe that continued recognition of the Odwalla brand and consumer attraction 
to our products, new product introductions, better store shelves placement,     
increased placement of branded in-store coolers, and increased delivery system  
support has contributed to our sales growth.                                    

        We experience quarterly fluctuations, some of which are significant, and
anticipate that these fluctuations will continue in future quarters. Some       
factors behind the fluctuations include:                                        

-       changes in the price or availability of raw materials,  
            particularly fruit products, due to seasonality, weather and
other factors;                                  

       -       new product introductions; costs of expansion into new markets,
            which can continue for many quarters beyond the market entry
date;                                           

  -       sales promotions; buying patterns of consumers; competitor
product introductions; and                      

-       overall economic trends influencing consumers.          

In addition, weather patterns impacting consumers, including    
unseasonably cool or rainy weather, can result in fewer sales to consumers and  
ultimately lower sales to trade partners and higher return credits if we haven't
been able to forecast and adjust for the change in consumer buying patterns.    
Additionally, while the direct-store-delivery system offers many benefits to us,
it is also an expensive and fairly fixed-cost distribution system. We have      
invested significantly in our production facility and management team; the      
benefit of this investment will result from higher volume of product through the
facility. Conversely, lower volume than expected will result in higher fixed    
costs as a percentage of sales. Finally, we may choose to reduce prices or      
increase spending in response to competition in some markets, which usually has 
a negative short-term effect on our results of operations.                      

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RESULTS OF OPERATIONS                                                           

     The following table sets forth, as a percentage of net sales, certain
statements of operations data for fiscal years 1997, 1998 and 1999 and for each 
of the thirteen week periods for each of November 28, 1998 and November 27,     
1999. These operating results are not necessarily indicative of the results for 
any future period.                                                              

                                                        [Enlarge/Download Table]

                                                                                     THIRTEEN WEEKS ENDED    
                                                                                 ----------------------------
                                                  YEAR ENDED AUGUST,             NOVEMBER 28,    NOVEMBER 27,
                                          -----------------------------------    ------------    ------------
                                          1997            1998           1999        1998           1999     
                                          -----          -----          -----       -----          -----     
                                                                                 (unaudited)     (unaudited) 
                                                                                                             
Net sales                                 100.0%         100.0%         100.0%      100.0%         100.0%    
Cost of sales                              52.5           49.5           52.2        49.8           53.4     
                                          -----          -----          -----       -----          -----     
Gross margin                               47.5           50.5           47.8        50.2           46.6     
Operating expenses                                                                                           
   Sales and distribution                  42.7           34.3           35.4        36.6           37.1     
   Marketing                                5.5            4.6            4.3         5.2            3.3     
   General and administrative              14.5           11.6           11.2        11.6           11.2     
   Recall and related costs                12.4            2.1            0.4         0.0            0.0     
                                          -----          -----          -----       -----          -----     
Income (loss) from operations             (27.6)          (2.1)          (3.5)       (3.2)          (5.0)    
Interest and other income (expense), net     .4            (.2)          (0.0)       (0.5)          (0.1)    
Income tax benefit                          3.6            0.0            0.5         0.6            0.8     
                                          -----          -----          -----       -----          -----     
Net income (loss)                         (23.6)%         (2.3)%         (3.0)%      (3.1)%         (4.3)%   
                                          =====          =====          =====       =====          =====     

   NET SALES. Net sales for fiscal 1999 increased 15% to $68.0 million
compared to $59.1 million in fiscal 1998, and increased 12% in fiscal 1998 from 
$52.6 million in fiscal 1997. Our 1999 sales increase, which occurred in all    
geographic regions, resulted primarily from (a) growth in existing markets and  
accounts and new products and (b) sales volume from new markets. Net sales are  
also impacted by our expanded use of third party distributors, which grew at    
about the same rate as our own direct-store-delivery business. Because we sell  
product to distributors at a wholesale price that is lower than the price to    
retail trade partners, our increased use of distributors will not produce the   
same net sales growth that would occur if the same number of products were sold 
to retail trade partners. Total sales in our newest markets, which include the  
Midwest, Mid-Atlantic and Atlanta markets, were about 6% of total sales and     
represent a significant increase from fiscal 1998 as we had just begun selling  
in these markets at that time. Our food bar business, which was introduced at   
the very end of fiscal 1998, was also an important factor in our growth in      
fiscal 1999 as food bar sales represented just less than 5% of our net sales in 
fiscal 1999. The sales increase in fiscal 1998, which occurred in all geographic
regions, resulted primarily from (a) new and returning products and (b) sales   
volume from new markets. Net sales in fiscal 1998 were also impacted by our     
expanded use of third party distributors.                                       

Net beverage and bar sales for the first quarter of fiscal 2000 
increased 10.7% to $16.7 million compared to $15.1 million in the first quarter 
of fiscal 1999. By-product sales were approximately $30,000 in fiscal 2000      
compared to $209,000 for the first quarter of fiscal 1999. The decrease in      
by-product sales resulted from our sale of the small by-product operation in    
late fiscal 1999. Total net sales for the first quarter of fiscal 2000 increased
9.4% to $16.8 million compared to $15.3 million for the same period last year.  
Our sales growth rate this quarter was about the same for both our              
direct-store-delivery and our distributor businesses. Total sales in our newest 
markets, which include the Midwest, Mid-Atlantic and Atlanta markets, were about
8% of total sales and represent a significant percentage increase from the first
quarter of fiscal 1999 as we had just begun selling in these newer markets at   
that time. Because we sell product to distributors at a wholesale price that is 
lower than the price to retail trade partners, our increased use of distributors
will not produce the same net sales growth that would occur if the same number  
of products were sold to retail trade partners. Our food bar business was also  
an important factor this quarter. Food bar sales rose 27% from the same quarter 
of last year, although food bar sales represented less than 5% of our net sales.

    On September 1, 1999, we introduced new branded, custom-designed 450
milliliter and 325 milliliter bottles made from recyclable, HDPE plastic. Our   
new bottle retains fresh fruit flavor notes better than our previous bottle and 
better than the bottles commonly used by our competitors. It also has a         
tamper-resistant, screw-on cap, which allows consumers to easily reseal their   
beverage while drinking Odwalla on-the-go. The characteristics of the new bottle
also extend the shelf-life of our products. At the same time, we began using a  
new bottling line designed to accommodate our new bottles. During the first     
quarter of fiscal 2000, we experienced problems in producing beverage products  
to meet sales orders during the initial introduction period. We also experienced
unexpected issues that caused some products to ferment and, ultimately, caused  
some bottles to bloat. These issues disrupted a consistent flow of product      
during the first part of the quarter. We believe that these issues negatively   
impacted sales in the quarter.                                                  

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       COST OF SALES. Cost of sales increased to $35.5 million or 52.2% of net
sales in fiscal 1999 compared to $29.2 million or 49.5% of net sales in fiscal  
1998. Cost of sales was $27.6 million or 52.5% of net sales in fiscal 1997.     
Gross margin decreased from 50.5% in fiscal 1998 to 47.8% in fiscal 1999 after  
increasing from 47.5% in fiscal 1997. In late December 1998, the San Joaquin    
Valley in central California experienced a citrus freeze that seriously damaged 
the navel orange crop. Other parts of California were also affected, but to a   
significantly lesser extent. The freeze also impacted the California Valencia   
orange crop and other citrus, which extended the impact throughout calendar year
1999. The immediate effect of the freeze was to increase the price of the fresh 
citrus we purchase, which continues currently. We also experienced poorer citrus
yields and some delay in fruit maturity. The freeze also caused us to be more   
reliant on citrus sources farther from our production facility than in prior    
years, which caused an increase in freight cost. Gross margin decreased         
primarily due to (a) unfavorable pricing and yield for ingredients, primarily   
citrus, and (b) increases in labor, due to poorer yields, and co-packing costs. 
The continued use of third party distributors also negatively affected gross    
margins. However, we believe that fiscal 1999 would have been profitable except 
for the impact of the citrus freeze.                                            

   The increase in gross margin in fiscal 1998 compared to fiscal 1997
resulted primarily from (a) favorable sourcing, pricing and yield for fruit and 
other ingredients, and (b) an increase in operating efficiency due to increased 
volume. Cost of sales as a percentage of net sales increased significantly      
following the recall (see recall and related costs on page 76 of this proxy     
statement) due to reduced production volume, especially from October 30, 1996   
through the second quarter of fiscal 1997, although this increase from          
historical levels continued through fiscal 1997.                                

      Cost of sales increased to $9.0 million in the first quarter of fiscal
2000 compared to $7.6 million for the same period during fiscal 1999. Gross     
margin as a percentage of net sales was 46.6% in the first quarter of fiscal    
2000, a decrease from 50.2% in the first quarter of fiscal 1999. Due to the     
citrus freeze discussed above, we continued to experience poorer citrus yields  
and some delay in fruit maturity. We also continued to rely on citrus sources   
farther from our production facility than in prior years, which caused an       
increase in freight costs. Gross margin decreased primarily due to (a)          
unfavorable pricing and yield for ingredients, primarily citrus, and (b)        
increases in labor, due to poorer yields, and co-packing costs.                 

    As a result of the citrus freeze, we have become more dependent upon
alternative and more expensive sources of fresh citrus supply than in prior     
years. We continue to use our extensive network of grower contacts to           
continually try to maintain our supply of fresh ingredients. The effect on      
orange and other ingredient costs to Odwalla beyond the impact of the citrus    
freeze is not yet fully determined, but we expect to continue to experience     
higher orange costs until the new crop is available in the second quarter 2000. 
The cost and quality of the new crop is not yet determined and could differ from
current prices, although we continue to experience higher than normal citrus    
costs in the second quarter of fiscal 2000.                                     

     We also incurred additional costs due to the issues involved with our
new bottle introduction, as noted above. The bottle introduction process        
increased labor and operating costs during the quarter as we worked through the 
production challenges.                                                          

  SALES AND DISTRIBUTION. Sales and distribution expenses were $24.1
million in fiscal 1999 compared to $20.3 million in fiscal 1998, and increased  
as a percentage of net sales to 35.4% from 34.3% in fiscal 1998. Sales and      
distribution expenses decreased as a percentage of net sales and in dollars in  
fiscal 1998 when compared to the 42.7% and $22.5 million in fiscal 1997.        
Expenses will continue to be affected as we seek to find the proper mix between 
third party distributors and our own direct-store-delivery system in a given    
market. The perishable nature of most of our products and our stringent service 
standards can make it difficult to find appropriate distributors in some        
markets. During fiscal 1999, we experienced a full year of costs in our newest  
markets. Expansion into markets serviced by our direct-store-delivery system,   
including the Washington, D.C. area, requires an investment for some initial    
period. We also began an investment in our national sales structure and in our  
direct-store-delivery sales and operational structure. We expect that this      
investment will result in efficiencies later in fiscal 2000. We expect to       
continue to have expansion costs as we enter new geographic markets.            

The fiscal 1998 expense decrease as a percentage of net sales as
compared to fiscal 1997, resulted from increased sales volume supported by a    
more fixed cost operations structure, which was offset by national and regional 
labor costs and an increase in our expansion efforts compared to fiscal 1997.   

      Sales and distribution expenses increased to $6.2 million in the first
quarter of fiscal 2000 compared to $5.6 million in the first quarter of fiscal  
1999, and increased as a percentage of net sales to 37.1% from 36.6% last year. 
The                                                                             

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increase, in absolute dollars and as a percentage of net sales, was due to      
increased national and regional labor costs and the increased costs of utilizing
a direct-store-delivery system in some of our newer markets that were previously
serviced with third party distributors. Future decisions regarding growth and   
expansion consistent with long-term strategic objectives may increase sales and 
distribution costs as a percentage of net sales. We continue to look for        
efficiencies in this part of our business. However, expansion into markets      
serviced by our direct-store-delivery system will require an investment for some
initial period. Expenses will also be affected as we seek to find the proper mix
between third party distributors and our own direct-store-delivery system in a  
given market. The perishable nature of most of our products and our stringent   
service standards can make it difficult to find appropriate distributors in some
markets.                                                                        

    MARKETING. Marketing expenses increased 8% to $2.9 million in fiscal
1999 compared to $2.7 million in fiscal 1998, and decreased 8% in fiscal 1998   
compared to $2.9 million in fiscal 1997. The increase in absolute dollars spent 
on marketing in fiscal 1999 was the result of increased product tastings, both  
in retail locations and sponsorships of community events, employing consultants 
and increased product research and development costs. In August 1999, Karen     
Lucas joined Odwalla as Vice President, Marketing. We expect that marketing     
expenses will increase during fiscal 2000, in absolute dollars and also as a    
percentage of net sales.                                                        

 The marketing expenditures decreased in absolute dollars and as a
percentage of net sales in fiscal 1998 primarily due to reduced executive       
payroll and operating expenses offset by an increase in advertising. We had     
increased marketing expenses in absolute dollars and as a percentage of net     
sales in fiscal 1997 to reinforce the existing consumer base and attract new    
consumers to our brand and products following the recall, expand outside        
communications, develop and launch new and newly formulated products and incur  
professional services related to consumer research.                             

       Marketing expenses decreased to $543,000 in the first quarter of fiscal
2000 compared to $796,000 in the first quarter of fiscal 1999. Most of the      
change from last year results from a change in marketing strategy which resulted
in fewer employees, decreased product tastings as we move to more strategic     
tastings, both in retail locations and at community events, and less            
advertising. However, we expect marketing expenses to increase in both dollars  
and as a percentage of net sales later in fiscal 2000.                          

    GENERAL AND ADMINISTRATIVE. General and administrative expenses were
$7.6 million in fiscal 1999 or 11.2% of net sales compared to $6.9 million or   
11.6% of net sales in fiscal 1998 and $7.6 million or 14.5% of net sales in     
fiscal 1997. In fiscal 1999, the increase resulted primarily from increased     
payroll in human resources, financial analysis and information technology       
personnel, increased recruiting and search firm costs, and consulting fees. In  
fiscal 1998, reductions in administrative payroll and consulting fees were the  
primary reasons for the decrease from fiscal 1997.                              

    General and administrative expenses increased to $1.9 million in the
first quarter of fiscal 2000 from $1.8 million in the first quarter of fiscal   
1999, and decreased as a percentage of net sales to 11.2% from 11.6% last year. 
The change was primarily due to an increase in employee recruitment fees and    
costs, and an increase in consulting fees. We don't expect general and          
administrative costs for the remainder of fiscal 2000 to increase significantly 
in absolute dollars when compared to the prior year. However, there can be no   
assurance that general and administrative costs will not increase significantly 
in absolute dollars. We will continue to invest in infrastructure, particularly 
in information systems and research and development, to allow for sustainable   
growth.                                                                         

      RECALL AND RELATED COSTS. On October 30, 1996, Odwalla was notified by
the State of Washington Environmental Health Services of an epidemiological link
between several cases of E. coli O157:H7 and Odwalla's apple juice products. We 
immediately implemented a recall of all Odwalla products containing apple juice.
We experienced a significant decline in sales immediately following the recall  
and we weren't able to immediately and significantly modify certain on-going    
production, distribution and other costs.                                       

 Odwalla also incurred significant direct costs as a result of the
recall, including advertising and public relations costs, legal and professional
fees, cost of the product recalled (including the labor and freight involved in 
the recall process), destruction of unsold product in inventory and packaging   
supplies, costs of leased sales and distribution equipment in excess of current 
volume requirements, costs of reformulating products and costs associated with  
the flash pasteurization process. Total recall and related costs in fiscal 1997 
were $6.5 million, including a $2.2 million charge to establish a reserve for   
future professional fees related to the recall, including legal fees. Under our 
arrangement with our insurance company, we pay a portion of the legal fees      
related to third party claims resulting from the recall and related claims. The 
reserve for professional fees is an estimate, and there can be no assurance that
the                                                                             

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reserve established will be adequate. We reviewed this charge during fiscal 1998
and, except for the settlement noted below, believed that the reserve           
established was adequate. In fiscal 1999, we reviewed available information,    
including recently filed claims, and added $250,000 to this reserve. We will    
continue to assess this liability and will make appropriate adjustments if      
circumstances change. Approximately $1.3 million of this reserve for            
professional fees remained at August 28, 1999.                                  

      Recall and related costs of $1.24 million in fiscal 1998 represent the
present value of the settlement with the U.S. government in connection with the 
grand jury investigation begun in fiscal 1997.                                  

        INTEREST AND OTHER EXPENSE (INCOME). Odwalla had net interest expense in
fiscal 1999 of $159,000 compared to net interest expense of $206,000 in fiscal  
1998 and net interest income of $173,000 in fiscal 1997. Gross interest income  
of $278,000, $160,000 and $322,000 in fiscal 1999, 1998 and 1997 resulted       
primarily from the remainder of the proceeds of the May 1996 public offering    
and, in 1999, the proceeds of the February 1999 Series A preferred stock        
offering. Gross interest expense of $437,000 in fiscal 1999, $366,000 in fiscal 
1998, and $149,000 in fiscal 1997 resulted primarily from interest on the line  
of credit established in May 1997, capital lease interest and other debt.       

        We had net interest and other expense of $12,000 in the first quarter of
fiscal 2000 compared to $73,000 in the first quarter of last year. The net      
interest expense resulted primarily from borrowings under the line of credit and
other existing debt for each quarter. Although we've invested the net proceeds  
of the Series A preferred stock offering funded in February 1999, we continue to
incur interest expense primarily from borrowings under our existing line of     
credit agreement and the imputed interest impact of the fiscal 1998 settlement  
with the U.S. government.                                                       

    INCOME TAX BENEFIT. The $359,000 income tax benefit for fiscal 1999,
$25,000 in 1998, and $1.9 million in 1997 resulted from the tax benefit         
associated with operating losses. The 15% effective tax rate in 1999 and 1998   
(after offsetting the impact of the non-deductible settlement with the U.S.     
government discussed previously for 1998) and the 13% effective tax rate in 1997
varies from the federal statutory tax rate primarily due to the effect of       
establishing a deferred tax asset valuation allowance. We recorded a valuation  
allowance for a portion of the net deferred tax asset due to uncertainty as to  
the ultimate realization of such assets. We will continue to assess the         
valuation allowance as additional information regarding the impact of the recall
on Odwalla's future profitability is available.                                 

      The $128,000 income tax benefit for the first quarter of 2000 resulted
from the tax benefit associated with reported net losses. In the first quarter  
of fiscal 1999, we recorded a $84,000 income tax benefit. The 15% effective tax 
rate in both 2000 and 1999 varies from the federal statutory tax rate primarily 
due to the effect of establishing a deferred tax asset valuation allowance. We  
recorded a valuation allowance for a portion of the net deferred tax asset due  
to uncertainty as to the ultimate realization of such assets. We will continue  
to assess the valuation allowance as additional information regarding our future
profitability becomes available.                                                

LIQUIDITY AND CAPITAL RESOURCES                                                 

      At August 28, 1999, we had working capital of $7.4 million compared to
working capital of $1.7 million at August 29, 1998. The increase resulted       
primarily from financing activities. At August 28, 1999, Odwalla had cash, cash 
equivalents and short term investments of $7.4 million compared to $3.2 million 
at the end of fiscal 1998.                                                      

      Net cash used in operating activities in fiscal 1999 was $1.3 million.
This consisted of the net loss plus depreciation, amortization and an increase  
in accounts payable, offset by increases in prepaid expenses, inventory and     
accounts receivable and decreases in other accrued expenses. Increases in       
accounts payable and accounts receivable are generally due to increased expense 
and sales volume compared to the same time period in fiscal 1998. The inventory 
increase represents acquisition of frozen raw materials during the summer of    
1999. Prepaid expenses increased primarily due to the timing of insurance       
payments, advances for future costs and refundable deposits and similar items.  
Accrued expenses, which includes the reserve for recall related professional    
fees, decreased primarily as we paid for previously accrued costs.              

       Net cash used in investing activities for fiscal 1999 was $6.5 million.
This consisted principally of transferring funds to short-term investments and  
capital expenditures for production equipment at the Dinuba plant and, to a     
lesser extent, computer equipment and coolers. Net cash provided by financing   
activities for fiscal 1999 was $7.2 million. This consisted principally of      
proceeds from the sale of Series A preferred stock and from common stock option 
exercises offset by payments of long-term debt and capital lease obligations.   

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        At November 28, 1999, we had working capital of $5.6 million compared to
working capital of $7.4 million at August 28, 1999. The decrease resulted       
primarily from cash used for capital asset purchases and to reduce our line of  
credit. At November 28, 1999, we had cash and cash equivalents and short-term   
investments of $4.6 million, compared to $7.4 million at August 28, 1999.       

    Net cash used in operating activities in the first thirteen weeks of
fiscal 2000 was $223,000. This consisted of the net loss plus depreciation and  
amortization and the increase in accounts payable and accrued payroll and       
related items, offset by an increase in inventories and prepaid expenses and a  
decrease in other accrued liabilities. Net cash used in investing activities in 
the first thirteen weeks of fiscal 2000 was $1.2 million, consisting primarily  
of capital expenditures for production equipment at the Dinuba plant, display   
coolers and, to a lesser extent, computer equipment. The expenditures were      
partially offset by the sale of short-term investments. Net cash used in        
financing activities in the first thirteen weeks of fiscal 2000 was $912,000,   
consisting primarily of the reduction on our outstanding line of credit.        

       We had purchase commitments for the future delivery of raw materials as
of August 28, 1999, approximately $2.1 million of which are under contracts and 
are expected to be completed by August 2000.                                    

     We've used, and expect to continue to use, both operating and capital
lease financing to obtain refrigeration coolers used in selling our products,   
computer and communication equipment, and production assets, primarily          
equipment. We are currently discussing additional lease lines with several      
companies, although we don't have any commitments from a leasing company and    
there can be no assurance that we will obtain the requested commitment. If we   
don't obtain adequate lease or other financing, our ability to obtain needed    
equipment may negatively impact our operations. At August 28, 1999, we owed     
$43,000 for capital lease obligations, primarily related to leasing of          
production equipment and delivery vehicles.                                     

On January 7, 1999, we signed an agreement with Catterton-Simon 
Partners, a Delaware limited partnership, to sell 1,000,000 shares of Odwalla   
Series A preferred stock at $8.00 per share. The Series A preferred stock       
receives an 8% annual dividend which is payable in either cash or additional    
Series A preferred stock, at our election. The dividend is payable              
semi-annually. All Series A preferred stock is convertible on a one-for-one     
basis into Odwalla common stock (a) upon a request by Catterton-Simon Partners  
at any time after July 6, 1999, and (b) automatically upon the earlier of (1) an
acquisition of Odwalla by another company, either for cash or publicly traded   
stock, at a price in excess of $12.00 per share, (2) the average trading price  
of Odwalla common stock exceeding $12.00 per share for 20 consecutive trading   
days, or (3) January 7, 2002. Holders of Series A preferred stock are entitled  
to preferential payment, in the event of any liquidation of Odwalla, in an      
amount equal to the greater of $8.00 per share, plus any accrued but unpaid     
dividends, or the amount due each holder of common stock. The minimum           
liquidation preference is $8.6 million at August 28, 1999. Catterton-Simon      
Partners also received a warrant to purchase 75,000 shares of Odwalla common    
stock at $10.00 per share. The warrant expires in seven years. This transaction 
was funded and closed in February 1999. We also paid fees and issued a warrant  
to our financial advisor in connection with this transaction. The warrant is for
24,806 shares of common stock at an exercise price approximating $6.45 per share
and expires in five years. Total costs of the transaction approximate $700,000, 
including the financial advisor fees other than the warrant described above,    
reimbursement of certain costs of Catterton-Simon Partners and other transaction
costs. On June 14, 1999, our board of directors declared a stock dividend of    
33,333 Series A preferred stock shares for the Series A shareholder. The        
dividend was paid June 30, 1999. In December 1999, our board of directors       
declared a stock dividend of 41,333 Series A preferred stock shares for the     
Series A shareholder. The dividend was paid on December 31, 1999.               

     In May 1997, we entered into a loan and security agreement with Coast
Business Credit which provided a revolving line of credit up to $5.0 million.   
Our borrowings were limited to 85% of eligible accounts receivable plus up to   
$500,000 for new capital equipment. Eligible accounts receivable were defined in
the security agreement and generally represented all trade accounts receivable  
less balances that were delinquent. We paid monthly interest on borrowings at   
prime plus 1.5%, which was 9.75% at August 28, 1999. During 1999, we borrowed   
only under the receivable line. If we borrowed under the equipment line, we     
would pay interest only for the first three months and then pay monthly interest
and principal payments using a 45 month amortization schedule. The security     
agreement contained certain restrictions, including the ability to borrow       
additional funds, pay dividends, purchase or otherwise acquire Odwalla stock, or
encumber or sell Odwalla assets. The interest rate changed to prime plus 2% if  
our adjusted net worth, as defined, was less than $14 million. We were required 
to pay interest on $2.0 million whether or not we borrowed that amount and,     
accordingly, we had borrowed approximately $2.3 million under the receivable    
line at August 28, 1999. All of our assets were pledged as collateral under the 
security agreement.                                                             

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    In September 1999, we entered into a revolving credit agreement with
Imperial Bank and paid the balance then outstanding under, and terminated, the  
security agreement with Coast Business Credit. The credit agreement provides a  
revolving credit facility up to $5.0 million. The first $2.0 million of         
borrowings do not require separate borrowing base reporting. Borrowings over    
$2.0 million and up to $5.0 million are limited to 80% of eligible accounts     
receivable. The credit agreement defines eligible accounts receivable which     
generally represents all trade accounts receivable less delinquent balances.    
Interest is payable monthly at either the prime interest rate plus 1% or the    
Eurodollar rate plus 3.5%. The interest rate to be incurred is selected by      
Odwalla at the inception of each loan and may be changed during the period in   
which the borrowed amount is outstanding in accordance with provisions included 
in the credit agreement. The initial term of the credit agreement is for three  
years.                                                                          

       All of our assets are pledged as collateral under the credit agreement.
We are also required to meet certain covenants, including maintenance of certain
financial, leverage, and debt service coverage ratios, and certain tangible net 
worth. The credit agreement also contains certain business restrictions,        
including the ability to borrow additional funds, limitations on capital        
expenditures in excess of certain amounts, restrictions on the payment of cash  
dividends, sale or purchase of Odwalla stock, ability to encumber or sell       
Odwalla assets, and limitations on other business transactions without prior    
approval from the lender. As of November 27, 1999, we were not in compliance    
with covenants requiring certain leverage and debt service coverage ratios. We  
requested our lender to waive the specific November 27, 1999 covenant violations
and, in January 2000, the lender granted the requested waiver.                  

     The increased costs associated with recovering from the impact of the
recall, our plans to invest in certain new market areas, and general corporate  
needs may cause us to seek additional financing that may be dilutive to current 
investors or result in a higher debt-to-equity ratio than would otherwise be the
case. Any financing we obtain may not be on terms favorable to us, even if it is
available.                                                                      

Odwalla maintains insurance coverage for product recall, product
adulteration, lost income and other first party business risks. The claim we    
submitted to our insurance carriers for product recall costs and for business   
losses incurred due to the recall was denied for substantially all of the       
amounts claimed. On May 21, 1999, Odwalla filed a lawsuit in United States      
District Court for the Eastern District of California in Fresno, California,    
against New Hampshire Insurance Company to seek recovery on our business        
interruption insurance claim. The case does not have a trial date set. The      
amount and timing of proceeds, if any, from the claims and any future insurance 
claims cannot be presently determined.                                          

        Based upon information currently available, we believe that our existing
cash and cash equivalents and our current and anticipated borrowing capability  
will be adequate to meet our obligations as they become due in the next 12      
months.                                                                         

YEAR 2000                                                                       

       Many existing computer systems use only the last two digits to identify
a year. Consequently, beginning in the year 2000, many systems may not recognize
the difference in a year that begins with "20" instead of "19." This, as well as
other date related processing issues, may cause systems to fail or malfunction  
unless corrected.                                                               

    We began taking steps to identify and address our internal Year 2000
issues in 1998. Our internal team, with executive sponsorship, consisted of both
internal and external personnel. We reviewed certain systems, including         
information systems, handheld computer systems, production systems and          
non-information systems including phones and we modified certain systems as we  
believed necessary. We addressed the readiness of key third parties with which  
we have relationships, including suppliers and distributors. Our Year 2000 team 
completed its work and, through January 2000, we have not experienced any       
significant Year 2000 issues.                                                   

 Year 2000 costs incurred to date have not been material. We don't
believe that additional costs will be material. We believe we dedicated adequate
resources toward attaining Year 2000 readiness, but there is no assurance that  
we will be successful in our efforts to address all Year 2000 issues. As with   
all companies, we also rely on other more widely used entities including        
government agencies, public utilities and other external forces common to       
business and industry. Consequently, if such entities were to experience Year   
2000 failures, this could disrupt our ability to conduct ongoing operations.    

   We have not developed a contingency plan in the event we experience
potential failures and do not currently intend to develop such a plan.          

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    The above discussion regarding costs, risks and estimated completion
dates for the Year 2000 is based on our best estimates given information that is
currently available, and is subject to change. As we continue to study this     
issue, we may discover that actual results will differ materially from the      
estimates noted above.                                                          

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK OF ODWALLA           

 INTEREST RATE RISK. It is our policy not to enter into derivative
financial instruments. We do not currently have any significant foreign currency
exposure since we do not transact business in foreign currencies. Due to this,  
we did not have significant overall currency exposure at November 27, 1999, the 
end of the first quarter of fiscal 2000.                                        

       FOREIGN CURRENCY RATE RISK. As almost all of our sales and expenses are
denominated in U.S. dollars, we have experienced only insignificant foreign     
exchange gains and losses to date, and we do not expect to incur significant    
gains and losses. We do not engage in foreign currency hedging activities.      

MARKET FOR ODWALLA'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS              

     Odwalla's common stock began trading on the Nasdaq SmallCap Market in
December 1993 at the time of our initial public offering. Since May 18, 1995,   
Odwalla common stock has traded on the Nasdaq National Market under the symbol  
"ODWA." The following table shows the range of high and low closing sales prices
reported on the Nasdaq National Market for the periods indicated.               

                                                                [Download Table]

                                                      HIGH               LOW  
                                                    -------            -------
                                                                              
FISCAL YEAR ENDED AUGUST 29, 1998                                             
  First Quarter                                     $ 11.00            $ 7.375
  Second Quarter                                    $  8.75            $ 5.625
  Third Quarter                                     $ 10.25            $  7.50
  Fourth Quarter                                    $12.875            $  9.00

FISCAL YEAR ENDED AUGUST 28, 1999                                             
  First Quarter                                     $10.625            $  7.00
  Second Quarter                                    $  8.00            $ 5.875
  Third Quarter                                     $  9.00            $ 5.438
  Fourth Quarter                                    $  8.00            $  6.25

FISCAL YEAR ENDING SEPTEMBER 2, 2000                                          
  First Quarter                                     $ 7.469            $  4.75
  Second Quarter                                    $  9.00            $ 4.813
  Third Quarter (through March 10, 2000)            $ 8.438            $ 7.875

On February 1, 2000, the last trading day prior to the public   
announcement of the merger agreement, the closing sale price of Odwalla common  
stock as reported by Nasdaq was $6.875 per share.                               

DIVIDEND POLICY                                                                 

 Odwalla has never paid any cash dividends on its common stock and
currently anticipates that it will retain all future earnings for use in its    
business and does not anticipate paying any cash dividends in the foreseeable   
future.                                                                         

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INFORMATION ABOUT FRESH SAMANTHA

BUSINESS OF FRESH SAMANTHA                                                      

OVERVIEW                                                                        

Fresh Samantha is the creator, manufacturer and distributor of  
all-natural super-premium refrigerated juices. It produces and sells            
approximately 20 blends of juices, depending on the season, which are           
distributed to selected markets along the Eastern Seaboard from Maine to Florida
from a single production facility in Saco, Maine. Certain of the citrus juices  
sold by Fresh Samantha are co-packed by vendors and sold under a Fresh Samantha 
label. Fresh Samantha has ten regional distribution facilities, where finished  
product is stored for local distribution. Fresh Samantha's products include     
classic juices, including orange juice and grapefruit juice, smoothies and other
nutritionally fortified juice products. Fresh Samantha continually introduces   
and test markets new drink lines and formulations in an effort to better serve  
its customers.                                                                  

      Fresh Samantha's products have traditionally been distributed by Fresh
Samantha-employed route sales representatives using a direct store delivery     
system and a fleet of owned and leased heavy duty refrigerated trucks and       
smaller delivery vehicles. Fresh Samantha's products are available in           
delicatessens, supermarkets, natural food stores, convenience stores, warehouse 
outlets and selected restaurants. Fresh Samantha has recently entered into      
independent distributor agreements with third parties for specific geographic   
areas, including an agreement with Odwalla to distribute Fresh Samantha products
in the Washington D.C. area. Fresh Samantha employs regional managers to oversee
distribution in particular market areas. Fresh Samantha's sales volume is in    
large part dependent on the efforts of its regional managers, sales managers,   
and route sales representatives.                                                

SELECTED HISTORICAL FINANCIAL DATA OF FRESH SAMANTHA                            

     The following table shows selected consolidated financial information
for Fresh Samantha for the past five fiscal years. To better understand the     
information in the table, investors should also read "Management's Discussion   
and Analysis of Financial Condition and Results of Operations of Fresh Samantha"
beginning on page 82 of this proxy statement, and the Consolidated Financial    
Statements and Notes beginning on page F-20 of this proxy statement.            

                                                        [Enlarge/Download Table]

                                                                                                         12 weeks ended     
                                                                                                   -------------------------
                                                       Year Ended October,                         January 23,   January 22,
                                ----------------------------------------------------------------   -----------   -----------
                                  1995          1996          1997          1998          1999        1999           2000   
                                --------      --------      --------      --------      --------    --------      --------  
                               (unaudited)   (unaudited)   (unaudited)                             (unaudited)   (unaudited)
                                                          (in thousands, except per share data)                             
                                                                                                                            
STATEMENT OF OPERATIONS DATA:                                                                                               
Net sales ...................   $  1,662      $  3,194      $  7,180      $ 15,708      $ 32,158    $  4,208      $  8,731  
Cost of sales ...............      1,210         1,911         4,011         8,895        16,888       2,391         4,314  
                                --------      --------      --------      --------      --------    --------      --------  
Gross Profit ................        452         1,283         3,169         6,813        15,270       1,817         4,417  
Operating expenses:                                                                                                         
 Sales and distribution .....        138           600         1,474         4,149        15,870       2,182         4,138  
 Marketing, general                                                                                                         
    and administrative ......        320           618         1,379         2,564         5,820         719         1,636  
                                --------      --------      --------      --------      --------    --------      --------  
     Total operating expenses        458         1,218         2,853         6,713        21,690       2,901         5,774  
                                --------      --------      --------      --------      --------    --------      --------  
Income (loss) from operations         (6)           65           316           100        (6,420)     (1,084)       (1,357) 
Other income (expense), net .        (16)           (3)         (107)         (269)         (197)          9           (73) 
                                --------      --------      --------      --------      --------    --------      --------  
Income (loss) before                                                                                                        
 income taxes ...............        (22)           62           209          (169)       (6,617)     (1,075)       (1,430) 
Income tax (expense) benefit           3           (21)         (110)           51            40          40            --  
                                --------      --------      --------      --------      --------    --------      --------  
Net income (loss) ...........   $    (19)     $     41      $     99      $   (118)     $ (6,577)   $ (1,035)     $ (1,430) 
                                ========      ========      ========      ========      ========    ========      ========  
Basic net income (loss) per                                                                                                 
 common share ...............   $  (1.73)     $   3.73      $   9.00      $  (2.55)     $ (21.31)   $  (3.35)     $  (4.63) 
                                ========      ========      ========      ========      ========    ========      ========  
Diluted net income (loss) per                                                                                               
 common share ...............   $  (1.73)     $   3.73      $   9.00      $  (2.55)     $ (21.31)   $  (3.35)     $  (4.63) 
                                ========      ========      ========      ========      ========    ========      ========  
Cash dividends per                                                                                                          
 common share ...............   $     --      $     --      $     --      $     --      $     --    $     --      $     --  
                                ========      ========      ========      ========      ========    ========      ========  

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                                                        [Enlarge/Download Table]


                                                               Year Ended October,                         12 weeks ended
                                          --------------------------------------------------------------     January 22, 
                                           1995          1996          1997          1998         1999          2000     
                                          ------       --------      --------      --------     --------      --------   
                                        (unaudited)  (unaudited)    (unaudited)                              (unaudited) 
                                                                                                                         
BALANCE SHEET DATA:                                                                                                      
Cash and cash equivalents .............   $     --     $     39      $    100      $  2,440     $    463      $    265   
Working capital .......................         43          (54)         (301)        2,628       (2,781)       (3,939)  
Total assets ..........................        485        1,033         2,362         6,936       12,728        11,848   
Long-term liabilities .................        229          422           639           356          610           531   
Total shareholders' equity ............         80          121           220         4,776        3,944         2,514   

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      
OPERATIONS OF FRESH SAMANTHA                                                    

OVERVIEW                                                                        

     In this Management's Discussion and Analysis section we are providing
detailed information about Fresh Samantha's operating results and changes in    
financial position over the past three years and for the first quarter of its   
fiscal 1999 and 2000. This section should be read in conjunction with the Fresh 
Samantha Consolidated Financial Statements and related Notes beginning on page  
F-20 of this proxy statement.                                                   

GENERAL BUSINESS                                                                

    In fiscal 1999, Fresh Samantha had record sales of $32.2 million. It
experienced sales growth in all of its geographic market areas, expanded its    
presence in markets entered in fiscal 1998, and entered the Atlanta, Georgia,   
Miami, Florida and Raleigh, North Carolina markets. Substantially all of this   
sales growth came from increased volume. In early January 2000, Fresh Samantha  
withdrew from the Atlanta market as sales in that market had not met            
expectations.                                                                   

        Fresh Samantha's net loss for fiscal 1999 was $6.6 million compared to a
loss of $118,000 in fiscal 1998. The significant fiscal 1999 loss resulted      
primarily from advertising, marketing, promotions and market expansion costs    
incurred to increase sales and market presence and a significant increase in its
management infrastructure to support growth in fiscal 1999 and in the future.   
Rapid growth strained the existing management structure and required Fresh      
Samantha to restructure management to meet the needs of a larger enterprise.    
Fresh Samantha does not anticipate significant geographic expansion in fiscal   
2000, as it solidifies its presence in existing markets.                        

  Fresh Samantha's sales increases came predominantly from continued
penetration in existing markets and expansion into new markets. Currently, no   
single customer accounts for more than 7% of Fresh Samantha's sales volume.     
Fresh Samantha believes that continued recognition of the Fresh Samantha brand  
and consumer attraction to its products, new product introductions, improved    
store shelf placement, increased placement of branded in-store coolers, and     
increased delivery system support have contributed to Fresh Samantha's sales    
growth. Continued sales increases are likely to require increased marketing     
expense.                                                                        

Fresh Samantha experiences quarterly fluctuations, sometimes    
significant, in its sales and resulting income and management anticipates that  
these fluctuations will continue in future quarters. Factors behind the         
fluctuations include:                                                           

 -       changes in the price of raw materials, particularly fruit
        products, due to seasonality, weather and other factors;

       -       costs associated with new product introductions, expansion into
new markets and sales promotions;               

-       buying patterns of consumers;                           

   -       competitor product introductions and pricing decisions; and

-       overall economic trends influencing consumers.          

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     In addition, unseasonably cool or rainy weather can result in reduced
consumer demand and higher return credits. Anticipating and managing these      
factors continues to be a significant challenge facing Fresh Samantha's         
management.                                                                     

     While management believes that Fresh Samantha's direct store delivery
system offers significant benefits over other distribution systems, it is also  
an expensive and high fixed cost distribution system. As a result, a small      
fluctuation in sales can have a significant impact on Fresh Samantha's income.  

To some extent, Fresh Samantha juice products compete with all  
beverages. The market for orange and other fruit juice products is highly       
competitive and dominated by major international companies with well established
brands and significant financial resources and marketing budgets. Even in the   
niche of super-premium refrigerated juices and juice products, Fresh Samantha   
faces competition from several national and regional producers, some of whom    
have significant brand awareness and superior resources to market their         
products.                                                                       

The production and sale of beverages are subject to significant 
regulation by various federal, state and local governmental agencies. Fresh     
Samantha began pasteurizing all of the juice products produced in Saco in 1998  
in response to anticipated regulations subsequently promulgated by the U.S. Food
and Drug Administration. Co-packed products were all pasteurized by August 1999.
From time to time, proposals are made for new laws and regulations that might   
impact the beverage industry. It is impossible to predict whether any such      
proposal will be adopted, or if adopted, the impact of such proposal on Fresh   
Samantha.                                                                       

     On March 2, 2000, Fresh Samantha was notified that the Teamsters have
filed a petition for an election with the National Labor Relations Board in     
which they are seeking to become the exclusive representative for a group of six
employees at the Pennsauken, New Jersey, distribution center.                   

RESULTS OF OPERATIONS                                                           

     The following table sets forth, as a percentage of net sales, certain
statements of operations data for fiscal years 1997, 1998 and 1999 and for each 
of the twelve week periods ending January 23, 1999 and January 22, 2000. These  
operating results are not necessarily indicative of the results for any future  
period.                                                                         

                                                        [Enlarge/Download Table]


                                                                                      TWELVE WEEKS ENDED    
                                                     YEAR ENDED OCTOBER,           -------------------------
                                          ---------------------------------------  JANUARY 23,   JANUARY 22,
                                               1997          1998         1999        1999          2000    
                                             -------       --------     ---------   --------     ---------  
                                           (unaudited)                            (unaudited)   (unaudited) 
                                                                                                            
Net sales                                     100.0%        100.0%       100.0%      100.0%        100.0%   
Cost of sales                                  55.9          56.6         52.5        56.8          49.4    
                                               ----         -----        -----       -----         -----    
Gross margin                                   44.1          43.4         47.5        43.2          50.6    
Operating expenses                                                                                          
   Sales and distribution                      20.5          26.4         49.4        51.9          47.4    
   Marketing, general and administrative       19.2          16.3         18.1        17.1          18.7    
                                              -----         -----        -----       -----         -----    
Income (loss) from operations                   4.4           0.6        (20.0)      (25.8)        (15.5)   
Interest and other income (expense), net       (1.5)         (1.7)        (0.6)        0.2          (0.8)   
Income tax benefit (expense)                   (1.5)          0.3          0.1         1.0           0.0    
                                             -------       ------      -------      ------        ------    
Net income (loss)                               1.4%         (0.8)%      (20.5)%     (24.6)%       (16.4)%  
                                             =======       ========      =======    ======        ======    

    NET SALES. Net sales for fiscal 1999 increased 105% to $32.2 million
compared to $15.7 million in fiscal 1998, and increased 119% in fiscal 1998 from
$7.2 million in fiscal 1997. Fresh Samantha's 1999 sales increase, which        
occurred in all geographic regions, resulted primarily from (a) growth in       
existing markets through same store sales increases and the addition of new     
accounts, (b) sales from new geographic markets and (c) new products. Total     
sales in Fresh Samantha's newest markets in the Southeast were about 5.0% of    
total sales. Total 1999 sales in markets entered in fiscal 1998 were about 18.8%
of total sales. The sales increase in fiscal 1998, which occurred in all        
geographic regions, resulted primarily from (a) sales volume from new markets   
and (b) growth in existing markets.                                             

       Net sales for the first quarter of fiscal 2000 increased 107.5% to $8.7
million, compared to sales of $4.2 million in the first quarter of fiscal 1999. 
The sales increase resulted from growth in existing markets.                    

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      COST OF SALES. Cost of sales increased to $16.9 million in fiscal 1999
compared to $8.9 million in fiscal 1998, but decreased as a percentage of net   
sales from 56.6% to 52.5%. Cost of sales was $4.0 million or 55.9% of net sales 
in fiscal 1997. Gross margins increased from 43.4% in fiscal 1998 to 47.5% in   
fiscal 1999 after decreasing from 44.1% in fiscal 1997. In mid-fiscal 1999,     
Fresh Samantha completed a $1.2 million plant improvement project financed      
through operating leases. The project allowed Fresh Samantha to receive citrus  
in tanker quantities of approximately 5,500 gallons per delivery, rather than   
hand processing individual gallon containers, and thereby to lower citrus raw   
material cost and receiving and blending labor costs. During 1998, Fresh        
Samantha experienced unfavorable citrus prices. Gross margins in fiscal 1999    
increased over 1998 due primarily to (a) favorable pricing and yield for        
ingredients, primarily citrus, (b) decreases in labor, due to the tanker        
project, and (c) a reduction in co-packing costs. Fresh Samantha obtains almost 
all citrus from Florida processors and Fresh Samantha was not significantly     
impacted by the December 1998 citrus freeze which damaged California citrus     
crops. Fresh Samantha's practice is to contract with at least two suppliers for 
each of its major ingredients and management believes that replacement suppliers
are available for each of its major ingredients at comparable prices to those   
charged by existing suppliers. For the most part, Fresh Samantha's suppliers are
located in the United States. Contracts with non-U.S. suppliers are denominated 
in U.S. dollars to eliminate any currency risk to Fresh Samantha.               

   The decrease in gross margin in fiscal 1998 compared to fiscal 1997
resulted primarily from (a) unfavorable pricing for fruit and other ingredients,
primarily citrus, (b) increased co-packing costs and (c) increased labor costs  
as a result of higher wages offset by increases in efficiency.                  

      Cost of sales increased to $4.3 million in the first quarter of fiscal
2000 compared to $2.4 million in the first quarter of fiscal 1999. Gross margin 
as a percentage of net sales also increased to 50.6% in the first quarter of    
fiscal 2000 compared to 43.2% in the same quarter of the prior year. The gross  
margin percent increase resulted primarily from reduced raw material costs,     
primarily citrus, and a reduction in labor costs due to technology improvements 
in Fresh Samantha's production facility.                                        

  SALES AND DISTRIBUTION. Sales and distribution expenses were $15.9
million in fiscal 1999 compared to $4.1 million in fiscal 1998, and increased as
a percentage of net sales to 49.4% from 26.4%. Sales and distribution expenses  
increased as a percentage of net sales and in dollars in fiscal 1998 when       
compared to 20.5% and $1.5 million in fiscal 1997. Fresh Samantha's sales       
strategy for fiscal 1999 required an investment in brand building and in        
geographic growth to insure that Fresh Samantha was the first premium juice     
company to market in all large metropolitan locations along the eastern         
seaboard. During fiscal 1999, Fresh Samantha entered the Southeast markets of   
Raleigh, North Carolina, Atlanta, Georgia, and Miami, Florida and also          
experienced a full year of costs in the markets entered during fiscal 1998.     
Expansion into markets serviced by Fresh Samantha's direct store delivery system
requires a significant initial investment. During fiscal 1999, Fresh Samantha   
relocated to larger distribution centers in its Washington, D.C., and New York  
City regions at significant cost due to lease termination costs and the need to 
install new cooler facilities at the new distribution centers. Fresh Samantha   
also began an investment in its national sales structure and direct store       
delivery sales and operational structure during fiscal 1999. Fresh Samantha also
added several key positions to develop a national sales strategy aimed at       
increasing market share in large grocery chains and national food service       
providers.                                                                      

The fiscal 1998 expense increase as a percentage of net sales as
compared to fiscal 1997, resulted from (a) increased accounts in existing       
markets and (b) further expansion efforts into new markets which required an    
initial infrastructure investment.                                              

      Sales and distribution costs for the first quarter of fiscal 2000 were
$4.1 million or 47.4% of net sales compared to $2.2 million or 51.9% in the     
first quarter of fiscal 1999. This improvement as a percentage of net sales is  
due primarily to the addition of new market sales volume and increased          
penetration in existing markets, allowing the prior period infrastructure       
investment to be utilized more efficiently.                                     

MARKETING, GENERAL AND ADMINISTRATIVE. Marketing, general and   
administrative expenses were $5.8 million in fiscal 1999 or 18.1% of net sales  
compared to $2.6 million or 16.3% of net sales in fiscal 1998 and $1.4 million  
or 19.2% of net sales in fiscal 1997. In fiscal 1999, the increase resulted     
primarily from increased payroll in all areas, including human resources,       
financial analysis, marketing and information technology personnel, increased   
recruiting and search firm costs, and consulting fees. The increase in          
administrative infrastructure was necessary to support the sales growth         
strategy. The 1999 increase also resulted from Fresh Samantha's first           
advertising campaign, focused on the major markets on the East Coast.           

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In the first quarter of fiscal 2000, marketing, general and     
administrative costs increased to $1.6 million or 18.7% of net sales compared to
$720,000 or 17.1% in the first quarter of fiscal 1999. The increase resulted    
primarily from increased payroll in all areas and an increase in Fresh          
Samantha's administrative infrastructure.                                       

        INTEREST AND OTHER EXPENSE (INCOME). Fresh Samantha had interest expense
in fiscal 1999 of $219,000 compared to interest expense of $167,000 in fiscal   
1998 and interest expense of $98,000 in fiscal 1997. The increase in 1999 and   
1998 compared to the prior year resulted primarily from interest on the line of 
credit established during fiscal 1998, capital lease interest as additional     
assets were financed through leasing, and other debt. Interest income was not   
significant in any of the years presented. Fresh Samantha also incurred other   
expense net of $14,000 in 1999, $102,000 in 1998 and $9,000 in 1997. Other      
expense in fiscal 1998 resulted primarily from a loss on the disposal of        
production assets.                                                              

In the first quarter of fiscal 2000, interest expense of $90,000
resulted from the line of credit, capital leases and other debt. In the first   
quarter of fiscal 1999, interest expense of $11,000 was primarily due to capital
leases and other debt and was offset by $21,000 of interest income following the
equity investment late in the fourth quarter of fiscal 1998.                    

  INCOME TAX BENEFIT. The $40,000 and $51,000 income tax benefit for
fiscal 1999 and 1998 results from the tax benefit associated with operating     
losses. The 1% and 30% effective tax rate in 1999 and 1998 varies from the      
federal statutory tax rate primarily due to the effect of establishing a        
deferred tax asset valuation allowance. Fresh Samantha recorded a valuation     
allowance for a portion of the net deferred tax asset due to uncertainty as to  
the ultimate realization of such assets. Fresh Samantha will continue to assess 
the valuation allowance as additional information regarding its future          
profitability is available. The $110,000 income tax expense in fiscal 1997      
approximates the federal and state statutory tax rates.                         

       The $0 and $40,000 income tax benefit for the first quarter of 2000 and
1999 resulted from the tax benefit associated with reported net losses. The 0%  
and 4% effective tax rate in both 2000 and 1999 varies from the federal         
statutory tax rate primarily due to the effect of establishing a deferred tax   
asset valuation allowance. Fresh Samantha recorded a valuation allowance for a  
portion of the net deferred tax asset due to uncertainty as to the ultimate     
realization of such assets. Management will continue to assess the valuation    
allowance as additional information regarding Fresh Samantha's future           
profitability is available.                                                     

LIQUIDITY AND CAPITAL RESOURCES                                                 

    At October 30, 1999, Fresh Samantha had a working capital deficit of
$2.8 million compared to working capital of $2.6 million at October 31, 1998.   
The $5.4 million decrease resulted primarily from operating losses and capital  
expenditures and was funded by draws on Fresh Samantha's credit facility and a  
September 1999 equity issuance resulting in gross proceeds of $6.0 million. At  
October 30, 1999, Fresh Samantha had cash and cash equivalents of $463,000      
compared to $2.4 million at the end of fiscal 1998.                             

      Net cash used in operating activities in fiscal 1999 was $5.7 million.
This consisted of the net loss reduced by depreciation and amortization and an  
increase in accounts payable, offset by increases in accounts receivables and   
inventories. Increases in accounts payable, accounts receivable and raw material
inventories are generally due to increased expense and sales volume compared to 
the same time period in fiscal 1998.                                            

       Net cash used in investing activities for fiscal 1999 was $5.0 million.
This consisted principally of capital expenditures for in-store coolers,        
leasehold improvements at distribution centers and the Saco, Maine, production  
facility, and, to a lesser extent, expenditures for computer equipment and      
production equipment. Fresh Samantha now operates a single production plant     
although some of its juices are co-packed by others under a Fresh Samantha      
label. In anticipation of future sales growth, Fresh Samantha contracted for the
construction of an additional office facility near its Saco plant and entered   
into a ten-year lease for the facility. Because of the merger and reduced growth
projections, Fresh Samantha does not anticipate the need to occupy the new      
facility and is attempting to locate a subtenant for the space. If unable to    
find a subtenant able to make lease payments sufficient to cover its obligations
on the new building, Fresh Samantha will continue to be obligated to make       
payments of up to $140,000 per year under its lease obligations.                

  Net cash provided by financing activities for fiscal 1999 was $8.8
million. This consisted principally of proceeds from the sale of preferred stock
and debt proceeds. Fresh Samantha expects to continue to meet its cash needs    
through the end of May 2000 from operations and its existing credit facility.   

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    At January 22, 2000, Fresh Samantha had a working capital deficit of
$3.9 million compared to a working capital deficit of $2.8 million at October   
30, 1999. The decrease in working capital resulted primarily from operating     
losses. At January 22, 2000, Fresh Samantha had cash and cash equivalents of    
$265,000 compared to $463,000 at the end of fiscal 1999.                        

    Net cash used in operating activities in the first quarter of fiscal
2000 was $1.3 million. This consisted of the net loss reduced by depreciation   
and amortization, a decrease in accounts receivable and an increase in other    
accrued liabilities and accrued payroll and related items, offset by a decrease 
in accounts payable.                                                            

     Net cash used in investing activities for the first quarter of fiscal
2000 was $73,000, which consisted principally of capital expenditures for       
computer equipment and production equipment. Net cash provided by financing     
activities for the first quarter of fiscal 2000 was $1.2 million, consisting    
principally of debt proceeds.                                                   

       Fresh Samantha has used, and expects to continue to use, both operating
and capital lease financing to obtain refrigeration coolers used in selling its 
products, computer and communication equipment, and production assets, primarily
equipment. Fresh Samantha is in the process of converting from a manual         
inventory control system to a system in which each route sales representative   
would have a hand-held device to record deliveries and buy-backs. Fresh Samantha
is currently discussing additional lease lines with several companies, although 
Fresh Samantha does not have any leasing company commitments and there can be no
assurance that Fresh Samantha will obtain the requested commitments. If Fresh   
Samantha is unable to obtain adequate lease or other financing, and are unable  
to obtain needed equipment, this may negatively impact operations. At October   
30, 1999, Fresh Samantha had $941,000 in capital lease obligations and other    
debt, primarily related to leasing of production equipment and delivery         
vehicles.                                                                       

   On September 17, 1998 Fresh Samantha entered into an agreement with
certain investment funds affiliated with Bain and one other investor pursuant to
which Fresh Samantha issued shares of various newly created classes of equity,  
and existing shareholders disposed of a portion of their holdings. Fresh        
Samantha realized proceeds of $5.5 million, of which (a) approximately $2.0     
million was used to repay all outstanding amounts under the then existing line  
of credit and selected other note payable arrangements, (b) approximately       
$816,000 was used to pay recapitalization related costs and (c) the remainder of
approximately $2.3 million was invested in money market funds and subsequently  
used to fund operations.                                                        

     In 1999, Fresh Samantha issued preferred stock to the Bain-affiliated
investors and one additional investor for $6 million. The proceeds from the sale
of the preferred stock were used to reduce bank debt, pay transaction costs and 
fund continuing growth.                                                         

In 1997 and 1998, Fresh Samantha's existing debt consisted of a 
revolving line of credit available from a lender secured by eligible accounts   
receivable. Borrowings were limited to 70% of accounts receivable not exceeding 
sixty days, up to $500,000. Also outstanding during fiscal 1997 and 1998 were   
various notes, vehicle loans, and stockholder loans secured by inventories,     
property, plant & equipment, and vehicles.                                      

        In January 1999, Fresh Samantha entered into a loan agreement with a new
lender and paid the balance then outstanding under, and terminated, its existing
revolving line of credit. The loan agreement provided a three year revolving    
line of credit up to $4.0 million. Borrowings under the loan agreement were     
limited to 80% of eligible accounts receivable plus up to 60% for new capital   
equipment. Fresh Samantha was in violation of certain financial covenants under 
the Loan Agreement at October 30, 1999 and, on January 10, 2000, Fresh Samantha 
and the lender amended the loan agreement in order to modify the covenants and  
otherwise address such violations.                                              

     The amended loan agreement provides for revolving loan advances up to
the lesser of the applicable revolving commitment, or the sum of 70% of eligible
accounts receivable, plus 40% of the sum of capital expenditures financed by    
revolving loan advances and all other capital expenditures incurred in fiscal   
1999 and 2000, plus $1.6 million prior to the Reduction Date (the earlier of May
31, 2000 or the date at which one or more of the Bain-affiliated investors makes
a capital contribution to Fresh Samantha of at least $3.0 million). The         
applicable revolving commitment amount is $6.0 million through and including the
reduction date, and $4.0 million thereafter. All of Fresh Samantha's assets are 
pledged as collateral under the amended agreement. The amended agreement        
requires Fresh Samantha to meet certain covenants, including maintenance of     
certain financial, leverage, and debt service coverage ratios, and certain      
tangible net worth. The amended agreement also contains certain business        
restrictions, including the ability to borrow additional funds, limitations on  
capital expenditures in excess of certain amounts, restrictions on the payment  
of cash                                                                         

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distributions, sale or purchase of Fresh Samantha stock, ability to encumber or 
sell Fresh Samantha assets, and limitations on other business transactions      
without prior approval from the lender.                                         

As a condition to the amended agreement, the lender required the
Bain-affiliated investors to provide the lender with a letter of credit in the  
amount of $3.0 million which could be drawn in the event the Bain-affiliated    
investors did not make a $3.0 million capital contribution to Fresh Samantha on 
or before May 31, 2000. The Bain-affiliated investors are not obligated to make 
such a capital contribution. If the Bain-affiliated investors do not make the   
capital contribution and the letter of credit is drawn, Fresh Samantha would be 
obligated to reimburse the Bain-affiliated investors $3.0 million pursuant to a 
reimbursement agreement entered into at the time of the amended agreement. If   
the letter of credit is drawn, Fresh Samantha does not anticipate having        
sufficient cash to satisfy its obligations under the reimbursement agreement.   

 In the event Fresh Samantha makes certain prepayments on the debt
evidenced by the amended agreement, a prepayment premium equal to 1.25% of the  
revolving commitment will be required. Additionally, if there is a significant  
change in ownership, Fresh Samantha is required to pay the lender a termination 
fee equal to 0.25% of the excess of the value of Fresh Samantha over $33.5      
million. It is anticipated that amounts owed under the amended agreement will be
repaid as a result of the merger, which as currently contemplated would also    
qualify as a significant ownership change entitling the lender to the           
termination fee. In the event that the merger triggers both of these fees, the  
lender is entitled to receive the greater of the two fees, but not both.        

       The increased costs associated with Fresh Samantha's plans to expand in
its new market areas and general corporate needs may cause it to seek additional
financing that may be dilutive to current investors or result in a higher       
debt-to-equity ratio than would otherwise be the case. Any financing Fresh      
Samantha obtains may not be on terms favorable to it, even if such financing is 
available.                                                                      

        Based upon information currently available, management of Fresh Samantha
believes that its existing cash and cash equivalents and its current and        
anticipated borrowing capability will be adequate to meet its obligations as    
they become due in the next twelve months, except as noted above with respect to
the potential obligation to repay the Bain-affiliated investors in the event of 
a draw on the letter of credit.                                                 

YEAR 2000                                                                       

       Many existing computer systems use only the last two digits to identify
a year. Consequently, beginning in the year 2000, many systems may not recognize
the difference in a year that begins with "20" instead of "19." This, as well as
other date related processing issues, may cause systems to fail or malfunction  
unless corrected.                                                               

    Through January 2000, Fresh Samantha had not experienced significant
Year 2000 issues and Year 2000 costs incurred to date have not been material.   
Fresh Samantha has not developed a contingency plan in the event it experiences 
failures related to Year 2000 in the future and does not currently intend to    
develop such a plan.                                                            

MARKET FOR FRESH SAMANTHA'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS       

  Fresh Samantha is a privately held company and as such there is no
public market for its stock. Fresh Samantha has never paid any cash dividends on
its common stock and currently anticipates that it will retain all future       
earnings for use in its business and does not anticipate paying any cash        
dividends in the foreseeable future.                                            

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 OTHER MATTERS

SHAREHOLDER PROPOSALS                                                           

        Proposals of shareholders that are intended to be presented at Odwalla's
annual meeting of shareholders for the fiscal 2000 year must be received by     
September 2, 2000, to be included in the proxy statement and proxy relating to  
that meeting.                                                                   

OTHER BUSINESS

        The board of directors knows of no other business that will be presented
for consideration at the annual meeting. If other matters are properly brought  
before the annual meeting, however, it is the intention of the persons named in 
the accompanying proxy to vote the shares represented thereby on the matters in 
accordance with their best judgment.                                            

                               BY ORDER OF THE BOARD OF DIRECTORS,

                   /s/ KATHARIN BARR HOGEN

               KATHARIN BARR HOGEN
     Secretary

March 16, 2000                                                                  

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 ODWALLA, INC.

 INDEX TO FINANCIAL DATA

                                                        [Enlarge/Download Table]

                                                                                       PAGE 
                                                                                       ---- 
ODWALLA, INC.                                                                               
-------------                                                                               
                                                                                            
     Report of independent accountants...................................................F-2
     Consolidated Balance Sheets, August 29, 1998, August 28, 1999 and                      
         November 27, 1999...............................................................F-3
     Consolidated Statements of Operations, three years in the period ended                 
         August 28, 1999 and thirteen weeks in the periods ended November 28, 1998          
         and November 27, 1999...........................................................F-4
     Consolidated Statements of Changes in Shareholders' Equity, three years in the         
         period ended August 28, 1999 and thirteen weeks in the periods ended               
         November 27, 1999...............................................................F-5
     Consolidated Statements of Cash Flows, three years in the period ended                 
         August 28, 1999 and thirteen weeks in the periods ended November 28, 1998          
         and November 27, 1999...........................................................F-6
     Notes to Consolidated Financial Statements..........................................F-7

FRESH SAMANTHA, INC.                                                                        
--------------------                                                                        

     Report of independent accountants..................................................F-20
     Consolidated Balance Sheets, October 31, 1998, October 30, 1999 and                    
         January 22, 2000...............................................................F-21
     Consolidated Statements of Operations, three years in the period ended                 
          October 30, 1999 and twelve weeks in the periods ended January 23,                
          1999 and January 22, 2000.....................................................F-22
     Consolidated Statements of Changes in Shareholders' Equity, three years in the         
         period ended October 30, 1999 and twelve weeks in the period                       
         ended January 22, 2000.........................................................F-23
     Consolidated Statements of Cash Flows, three years in the period ended                 
         October 30, 1999 and twelve weeks in the periods ended January 23, 1999            
         and January 22, 2000...........................................................F-24
     Notes to Consolidated Financial Statements.........................................F-26

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 REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and                                                   
Shareholders of Odwalla, Inc.                                                   

In our opinion, the accompanying consolidated balance sheets and the related    
consolidated statements of operations, of changes in shareholders' equity and of
cash flows present fairly, in all material respects, the financial position of  
Odwalla, Inc. and its subsidiary at August 28, 1999 and August 29, 1998, and the
results of their operations and their cash flows for each of the three years in 
the period ended August 28, 1999, in conformity with generally accepted         
accounting principles. These financial statements are the responsibility of the 
Company's management; our responsibility is to express an opinion on these      
financial statements based on our audits. We conducted our audits of these      
statements in accordance with generally accepted auditing standards which       
require that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit    
includes examining, on a test basis, evidence supporting the amounts and        
disclosures in the financial statements, assessing the accounting principles    
used and significant estimates made by management, and evaluating the overall   
financial statement presentation. We believe that our audits provide a          
reasonable basis for the opinion expressed above.                               

PricewaterhouseCoopers LLP                                                      

San Francisco, California                                                       
October 26, 1999                                                                

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 ODWALLA, INC.
 CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                     AUGUST 29,    AUGUST 28,   NOVEMBER 27, 
                                                                        1998         1999           1999     
                                                                     ----------    ----------   ------------ 
                                                                                                 (unaudited) 
                                                                                                             
Current assets                                                                                               
     Cash and cash equivalents                                         $   3,191     $  2,581       $    281 
     Short term investments                                                    -        4,788          4,337 
     Trade accounts receivable, less allowance for doubtful                                                  
         accounts of $588, $631 and $700                                   5,491        6,072          5,955 
     Inventories                                                           3,044        3,718          3,868 
     Prepaid expenses and other current assets                               796        1,530          1,688 
     Deferred tax asset, current                                           1,164        1,358          1,430 
                                                                     -----------   ----------   ------------ 

            Total current assets                                          13,686       20,047         17,559 
                                                                     -----------   ----------   ------------ 

Plant, property and equipment, net                                        13,135       12,877         13,948 
                                                                     -----------   ----------   ------------ 

Other assets                                                                                                 
     Goodwill, net                                                         1,225        1,117          1,090 
     Covenants not to compete, net                                           606          497            470 
     Deferred tax asset, non-current                                         366          520            579 
     Other noncurrent assets                                                 332          247            127 
                                                                     -----------   ----------   ------------ 
                Total other assets                                         2,529        2,381          2,266 
                                                                     -----------   ----------   ------------ 

                Total assets                                           $  29,350     $ 35,305       $ 33,773 
                                                                     ===========   ==========   ============ 

Current liabilities                                                                                          
     Accounts payable                                                  $   5,339     $  6,876       $  7,181 
     Accrued payroll and related items                                     1,091        1,142          1,468 
     Line of credit                                                        2,044        2,319          1,500 
     Other accruals                                                        2,963        2,126          1,600 
     Current maturities of capital lease obligations                         159           28             22 
     Current maturities of long-term debt                                    421          172            180 
                                                                     -----------   ----------   ------------ 

            Total current liabilities                                     12,017       12,663         11,951 

Capital lease obligations, less current maturities                             6           15             11 
Long-term debt, less current maturities                                      882          673            581 
                                                                     -----------   ----------   ------------ 

Total liabilities                                                         12,905       13,351         12,543 
                                                                     -----------   ----------   ------------ 
Commitments and contingencies (Note 3)                                                                       

Mandatorily redeemable and convertible preferred stock                                                       
     Series A, no par value, shares authorized, 5,000,000; shares issued                                     
         and outstanding, 1,033,333 at August 28 and November 27, 1999.                                      
         Liquidation preference minimum, $8,600,000 at                                                       
         August 28 and November 27, 1999                                       -        7,505          7,718 
                                                                     -----------   ----------   ------------ 

Shareholders' equity                                                                                         
     Common stock, no par value, shares authorized, 15,000,000;                                              
         shares issued and outstanding, 5,061,000,                                                           
         5,125,000 and 5,126,000                                          29,499       29,750         29,751 
     Additional paid-in capital                                                -           62             62 
     Accumulated deficit                                                 (13,054)     (15,363)       (16,301)
                                                                     -----------   ----------   ------------ 

Total shareholders' equity                                                16,445       14,449         13,512 
                                                                     -----------   ----------   ------------ 

Total liabilities and shareholders' equity                             $  29,350     $ 35,305       $ 33,773 
                                                                     ===========   ==========   ============ 

          See accompanying notes to consolidated financial statements.                                       

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 ODWALLA, INC.

 CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                          YEAR ENDED                     THIRTEEN WEEKS ENDED    
                                            --------------------------------------   ----------------------------
                                                                                     NOVEMBER 28,    NOVEMBER 27,
                                              1997           1998           1999         1998           1999     
                                            --------       --------       --------   ------------    ------------
                                                                                      (unaudited)     (unaudited)
                                                                                                                 
Net sales                                   $ 52,630       $ 59,088       $ 68,042     $ 15,332       $ 16,769   

Cost of sales                                 27,650         29,236         35,542        7,636          8,956   
                                            --------       --------       --------     --------       --------   

    Gross profit                              24,980         29,852         32,500        7,696          7,813   
                                            --------       --------       --------     --------       --------   

Operating expenses                                                                                               
    Sales and distribution                    22,465         20,282         24,056        5,613          6,227   
    Marketing                                  2,919          2,696          2,908          796            543   
    General and administrative                 7,625          6,873          7,647        1,777          1,884   
    Recall and related costs                   6,518          1,242            250           --             --   
                                            --------       --------       --------     --------       --------   

            Total operating expenses          39,527         31,093         34,861        8,186          8,654   
                                            --------       --------       --------     --------       --------   

Loss from operations                         (14,547)        (1,241)        (2,361)        (490)          (841)  

Other (expense) income, net                      210           (163)           (40)         (73)           (12)  
                                            --------       --------       --------     --------       --------   

Loss before income taxes                     (14,337)        (1,404)        (2,401)        (563)          (853)  

Income tax benefit                             1,901             25            359           84            128   
                                            --------       --------       --------     --------       --------   

Net loss                                     (12,436)        (1,379)        (2,042)        (479)          (725)  

Preferred stock dividend                          --             --           (267)          --           (213)  
                                            --------       --------       --------     --------       --------   

Net loss applicable to common shareholders  $(12,436)      $ (1,379)      $ (2,309)    $   (479)      $   (938)  
                                            ========       ========       ========     ========       ========   

Basic net loss applicable to common                                                                              
    shareholders per share                  $  (2.49)      $  (0.27)      $  (0.45)    $  (0.09)      $  (0.18)  
                                            ========       ========       ========     ========       ========   

Shares used in per share amounts               4,988          5,045          5,098        5,062          5,125   
                                            ========       ========       ========     ========       ========   

Diluted net loss applicable to common                                                                            
    shareholders  per share                 $  (2.49)      $  (0.27)      $  (0.45)    $  (0.09)      $  (0.18)  
                                            ========       ========       ========     ========       ========   

Shares used in per share amounts               4,988          5,045          5,098        5,062          5,125   
                                            ========       ========       ========     ========       ========   

See accompanying notes to consolidated financial statements 

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 ODWALLA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                      Common Stock                                              
                                                  ---------------------    Additional     Accumulated           
                                                  Shares        Amount   Paid-in Capital    deficit      Total  
                                                  ------       --------  ---------------  -----------  -------- 
                                                                                                                
Balance, September 1, 1996                        4,945        $ 28,813                    $    761    $ 29,574 

   Exercise of common stock options,                                                                            
      including related tax benefits                 79             497                          --         497 
   Net loss for the year                             --              --                     (12,436)    (12,436)
                                                  ------       --------      -------      -----------  -------- 

Balance, August 31, 1997                          5,024          29,310                     (11,675)     17,635 

   Exercise of common stock options                  37             189                          --         189 
   Net loss for the year                             --              --                      (1,379)     (1,379)
                                                  ------       --------      -------      -----------  -------- 

Balance, August 29, 1998                          5,061          29,499                     (13,054)     16,445 

   Exercise of common stock options                  64             251                          --         251 
   Issuance of stock warrants in connection with                                                                
      preferred stock                                --              --      $    62             --          62 
   Preferred Stock dividend                          --              --           --           (267)       (267)
   Net loss for the year                             --              --           --         (2,042)     (2,042)
                                                  ------       --------      -------      -----------  -------- 

Balance, August 28, 1999                          5,125          29,750           62        (15,363)     14,449 

   Exercise of common stock options (unaudited)       1               1                          --           1 
   Preferred Stock dividend (unaudited)              --              --           --           (213)       (213)
   Net loss for the period (unaudited)               --              --           --           (725)       (725)
                                                  ------       --------      -------      -----------  -------- 

Balance, November 27, 1999 (unaudited)            5,126        $ 29,751      $    62       $(16,301)   $ 13,512 
                                                  =====        ========      =======      ===========  ======== 

See accompanying notes to consolidated financial statements.

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ODWALLA, INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                      YEAR ENDED                    THIRTEEN WEEKS ENDED     
                                                        --------------------------------------   ----------------------------
                                                                                                 NOVEMBER 28,    NOVEMBER 27,
                                                          1997           1998           1999         1998            1999    
                                                        --------       --------       --------   ------------    ------------
                                                                                                 (unaudited)     (unaudited) 
                                                                                                                             
Cash flows from operating activities                                                                                         
   Net loss                                             $(12,436)      $ (1,379)      $ (2,042)   $   (479)      $   (725)   
   Adjustments to reconcile net loss to net                                                                                  
      cash provided by (used in) operating activities:                                                                       
         Depreciation                                      1,936          2,084          2,130         524            532    
         Amortization                                        273            251            220          55             54    
         US government settlement                             --          1,242             --          --             --    
         Deferred taxes                                   (1,198)           (25)          (348)        (86)          (131)   
         Gain on sale of assets                              (25)           (50)          (141)         83             --    
         Changes in assets and liabilities                                                                                   
            Trade accounts receivable                        692           (881)          (581)        106            117    
            Inventories                                     (615)           866           (675)       (145)          (150)   
            Refundable income taxes                         (660)           660             --          --             --    
            Prepaid expenses and other current assets        234            (67)          (734)       (104)          (158)   
            Other noncurrent assets                           16             77             81          13            133    
            Accounts payable                                  87            (57)         1,537         254            305    
            Accrued payroll and related items                167           (172)            51         351            326    
            Other accrued liabilities                      3,357         (1,001)          (837)       (420)          (526)   
            Income taxes payable                            (281)            --             --          --             --    
                                                        --------       --------       --------    --------       --------    
Net cash provided by (used in) operating activities       (8,453)         1,548         (1,339)        152           (223)   
                                                        --------       --------       --------    --------       --------    

Cash flows from investing activities                                                                                         
   Capital expenditures                                   (3,016)        (1,422)        (2,401)       (378)        (1,616)   
   (Purchase) proceeds from short-term                                                                                       
      investments, net                                     5,430          1,008         (4,788)         --            451    
   Proceeds from sale of assets                              145            130            673          --             --    
                                                        --------       --------       --------    --------       --------    
Net cash provided by (used in) investing activities        2,559           (284)        (6,516)       (378)        (1,165)   
                                                        --------       --------       --------    --------       --------    

Cash flows from financing activities                                                                                         
   Principal payments under long-term debt                  (153)          (301)          (457)       (115)           (84)   
   Net borrowings under line of credit                     2,014             31            274         (58)          (819)   
   Payments of obligations under capital leases             (222)          (209)          (123)        (54)           (10)   
   Issuance of mandatorily redeemable and convertible                                                                        
       preferred stock                                        --             --          7,300          --             --    
   Issuance of common stock                                  497            189            251          --              1    
                                                        --------       --------       --------    --------       --------    
Net cash provided by (used in) financing                                                                                     
    activities                                             2,136           (290)         7,245        (227)          (912)   
                                                        --------       --------       --------    --------       --------    

Net increase (decrease) in cash and cash equivalents      (3,758)           974           (610)       (453)        (2,300)   

Cash and cash equivalents, beginning of period             5,975          2,217          3,191       3,191          2,581    
                                                        --------       --------       --------    --------       --------    

Cash and cash equivalents, end of period                $  2,217       $  3,191       $  2,581    $  2,738       $    281    
                                                        ========       ========       ========    ========       ========    

Cash paid during the year for:                                                                                               
   Interest                                             $    123       $    315       $    437                               
   Income taxes                                         $    203       $      1       $      2                               

Noncash investing and financing activities: During 1997, we purchased property  
in Half Moon Bay by assuming a $230,000 mortgage and $45,000 of assessment      
bonds. In 1998, we entered into a settlement with the US government, as         
discussed in Note 3, which requires us to pay $1.5 million over a five-year     
period.                                                                         

See accompanying notes to consolidated financial statements.

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 ODWALLA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

  The Company. Odwalla, Inc.'s ("Odwalla" or "Company") business is to provide
easy access to great tasting nourishment. We are the leading branded            
all-natural, super-premium juice company in the country, serving selected       
markets in the Western, Midwest, Mid-Atlantic and Southeastern regions of the   
United States. Odwalla's complete product line consists of more than 25         
all-natural, super-premium juices and smoothies (including single-flavor and    
blended fruit and vegetable based juice products), all-natural meal replacement 
and dairy-free shakes, natural spring water and all-natural food bars.          

Basis of presentation and principles of consolidation. The accompanying   
consolidated financial statements include the accounts of the Company and its   
wholly owned subsidiary, Odwalla Canada, Inc. We have eliminated all significant
intercompany balances and transactions. Beginning September 1, 1997, we changed 
our annual reporting periods to the 52 or 53 week period ending on the Saturday 
nearest August 31. The change doesn't materially impact the comparability of    
information presented in these financial statements. All references to years    
refer to the Company's fiscal year. In these financial statements, our fiscal   
years ended August 31, 1997, August 29, 1998 and August 28, 1999.               

  Interim Financial Statements. The accompanying consolidated balance sheet of
Odwalla and its subsidiary at November 27, 1999 and the related consolidated    
statements of operations and of cash flows for the thirteen week periods ended  
for each of November 28, 1998 and November 27, 1999 have not been audited by    
independent accountants. However, in management's opinion, they include all     
adjustments (which include only normal recurring adjustments) necessary for a   
fair presentation of the financial position and the results of operations for   
the periods presented. The statements have been prepared pursuant to the rules  
and regulations of the Securities and Exchange Commission. Accordingly, certain 
information and footnote disclosure normally included in financial statements   
prepared in conformity with generally accepted accounting principles have been  
condensed or omitted pursuant to such rules and regulations. The operating      
results for the interim periods are not necessarily indicative of results to be 
expected for an entire year.                                                    

   Use of estimates. To comply with generally accepted accounting principles, we
make estimates and use assumptions that affect the amounts reported in the      
financial statements and disclosures made in the accompanying notes. Our most   
significant estimates are related to the collectibility of accounts receivable, 
reserves for products to be returned, reserves for inventory that may not be    
useable and reserves for legal fees related to claims and litigation. We also   
use estimates to determine the carrying value of goodwill and purchased         
intangibles. Actual results may differ from our estimates.                      

Cash, cash equivalents and short term investments. We consider all        
investments with an initial maturity of three months or less at the date of     
purchase to be cash equivalents. Both cash equivalents and short term           
investments are considered available-for-sale securities and are reported at    
amortized cost, which approximates fair value. The following schedule summarizes
the estimated fair value of our cash, cash equivalents and short-term           
investments (in thousands):                                                     

                                                                [Download Table]

                                   AUGUST 29,    AUGUST 28,    NOVEMBER 27,
                                       1998          1999          1999    
                                   ----------    ----------    ------------
                                                                (unaudited)
                                                                           
Cash and cash equivalents:                                                 
  Cash                               $1,092        $  249        $   65    
  Cash equivalents                    2,099         2,332           216    
                                     ------        ------        ------    
                                     $3,191        $2,581        $  281    
                                     ======        ======        ======    

Short term investments                                                     
  U. S. government securities        $   --        $4,788        $4,337    
                                     ======        ======        ======    

Interest earned on cash, cash equivalents and short-term investments was  
$159,000 and $278,000 in 1998 and 1999.                                         

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 ODWALLA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Inventories. Inventories are valued at the lower of cost (first-in,       
first-out) or market (net realizable value). Our inventories consist of the     
following (in thousands):                                                       

                                                                [Download Table]

                                   AUGUST 29,    AUGUST 28,   NOVEMBER 27,
                                      1998          1999          1999    
                                   ----------    ----------   ------------
                                                              (unaudited) 
                                                                          
Raw materials                       $1,755        $2,433        $2,140    
Packaging supplies and other           485           629           921    
Inventory deposits                     223            --            --    
Finished product                       581           656           807    
                                    ------        ------        ------    
 Total                              $3,044        $3,718        $3,868    
                                    ======        ======        ======    

Plant, property, equipment and depreciation. Plant, property and equipment
are stated at the lower of cost or, if impaired, the fair value at date of      
impairment. We calculate depreciation and amortization using the straight-line  
method over the estimated useful lives of the assets. For leasehold             
improvements, the amortization period is the shorter of the estimated useful    
life or the remaining lease term. Amortization of assets under capital leases is
based upon the shorter of the lease term or useful life of the leased asset and 
is included with depreciation expense.                                          

Estimated useful lives that we use are as follows:                        

                                                                [Download Table]
                                                                 
Buildings and building improvements ..............  7 to 35 years

Leasehold improvements............................  3 to 15 years

Machinery and equipment...........................  3 to 15 years

Vehicles..........................................        5 years

Other.............................................   3 to 7 years

Property and equipment consisted of the following (in thousands):         

                                                                [Download Table]

                                                AUGUST 29,  AUGUST 28,  NOVEMBER 27,
                                                   1998        1999         1999    
                                                ----------  ----------  ------------
                                                                        (unaudited) 
                                                                                    
Land                                             $  1,046    $    618     $    618  
Buildings and building improvements                 7,205       7,220        7,220  
Leasehold improvements                              2,490       1,397        1,401  
Machinery and equipment                             7,054       7,485        7,977  
Vehicles                                              538         625          797  
Other                                               3,179       4,280        5,228  
                                                 --------    --------    ---------  
                                                   21,512      21,625       23,241  
Less accumulated depreciation and amortization     (8,377)     (8,748)      (9,293) 
                                                 --------    --------    ---------  

Plant, property and equipment, net               $ 13,135    $ 12,877     $ 13,948  
                                                 ========    ========     ========  

Goodwill and covenants not to compete. We record goodwill when the cost of
net assets we acquire exceeds their fair value. Goodwill is amortized on a      
straight-line basis over a 15-year period. We regularly perform reviews to      
determine if the carrying value of the assets is impaired. The reviews look for 
the existence of facts or circumstances, either internal or external, which     
indicate the carrying value of the asset cannot be recovered. No such impairment
has been indicated to date. If there is impairment in the future, we will       
measure the amount of the loss based on undiscounted expected future cash flows 
from the impaired assets. The cash flow calculations would be based on          
management's best estimates, using appropriate assumptions and projections at   
the time.                                                                       

   We entered into covenants not to compete when we acquired certain businesses.
The cost is amortized on a straight-line basis over the life of the agreements, 
currently 5 to 10 years.                                                        

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 ODWALLA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Goodwill and covenants not to compete consisted of the following (in      
thousands):                                                                     

                                                                [Download Table]

                                     AUGUST 29,      AUGUST 28,
                                        1998            1999   
                                     ----------      ----------
                                                               
Goodwill                              $ 1,620         $ 1,620  
Accumulated amortization                 (395)           (503) 
                                      -------         -------  
Net                                   $ 1,225         $ 1,117  
                                      =======         =======  

Covenants not to compete              $ 1,100         $   990  
Accumulated amortization                 (494)           (493) 
                                      -------         -------  
Net                                   $   606         $   497  
                                      =======         =======  

   Concentration of credit risk. Odwalla operates a multi-faceted business, both
manufacturing and distribution. Many circumstances could have an unfavorable    
impact on our operating results. Examples include unfavorable weather impact on 
raw materials, changes in government regulations, changes in consumer demands or
the emergence of significant competitors. A significant portion of our business 
and our customers are currently concentrated in Northern California.            

We are also subject to risks related to our significant trade accounts    
receivable, although our customer base is generally diversified in each of our  
market areas due to the number of accounts that we service. We perform ongoing  
evaluations of customer credit to reduce the risk associated with accounts      
receivable. We maintain reserves for estimated credit losses, based on specific 
customers, historical trends and other information, and those losses have       
historically been within our expectations.                                      

One customer represented approximately 12%, 13% and 13% of sales in 1997, 
1998, and 1999.                                                                 

Revenue recognition. We recognize sales when products are delivered to our
customers. Most of our sales are through our own direct-store-delivery system.  
We usually guarantee that sales through our direct-store-delivery system will be
sold to consumers and we record a reserve for products estimated to be returned.
Most of our sales to independent distributors are not guaranteed.               

 Earnings per share. Basic earnings per share is computed using the weighted
average number of common shares outstanding during the period. Diluted earnings 
per share is computed using the weighted average number of common and dilutive  
common equivalent shares outstanding during the period. Common equivalent shares
consist of the shares issuable upon the exercise of stock options and warrants  
under the treasury stock method.                                                

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 The following table shows the computation of basic and diluted earnings per
share, in thousands except per share data:                                      

                                                        [Enlarge/Download Table]

                                                                                            THIRTEEN WEEKS ENDED    
                                                                                           ------------------------ 
                                                               YEAR ENDED                  NOV. 28,       NOV. 27,  
                                                --------------------------------------    ---------      ---------- 
                                                   1997           1998           1999        1998           1999    
                                                --------       --------       --------    ---------      ---------- 
                                                                                         (unaudited)     (unaudited)
                                                                                                                    
Basic:                                                                                                              
  Weighted average common shares outstanding       4,988          5,045          5,098       5,062          5,125   
  Net loss                                      $(12,436)      $ (1,379)      $ (2,042)   $   (479)      $   (725)  
  Net loss attributable to common shareholders  $(12,436)      $ (1,379)      $ (2,309)   $   (479)      $   (938)  
  Per share amount, attributable to common                                                                          
   shareholders                                 $  (2.49)      $  (0.27)      $  (0.45)   $  (0.09)      $  (0.18)  

Diluted:                                                                                                            
  Weighted average common shares outstanding       4,988          5,045          5,098       5,062          5,125   
  Shares used in per share amounts                 4,988          5,045          5,098       5,062          5,125   
  Net loss                                      $(12,436)      $ (1,379)      $ (2,042)   $   (479)      $   (725)  
  Net loss attributable to common shareholders  $(12,436)      $ (1,379)      $ (2,309)   $   (479)      $   (938)  
  Per share amount, attributable to common                                                                          
   shareholders                                 $  (2.49)      $  (0.27)      $  (0.45)   $  (0.09)      $  (0.18)  

  We had no dilutive common equivalent shares during fiscal 1997, 1998 or 1999
or in either of the thirteen week periods presented due to the reported net     
loss.                                                                           

    Reclassifications. To conform with new classifications in our fiscal
1999 financial statement presentation, we reclassified certain prior year       
expenses. The primary reclassification was an increase ($419,000 for fiscal     
1997, $396,000 for fiscal 1998 and $50,000 for the thirteen weeks ended November
28, 1998) in sales and distribution costs and a corresponding decrease in       
general and administrative expenses.                                            

2.      DEBT                                                                    

LINE OF CREDIT                                                                  

     In May 1997, we entered into a Loan and Security Agreement ("Security
Agreement") with a lender which provided a revolving line of credit up to $5.0  
million. Our borrowings were limited to 85% of eligible accounts receivable     
("Receivable Line") plus up to $500,000 for new capital equipment ("Equipment   
Line"). Eligible accounts receivable were defined in the Security Agreement and 
generally represented all trade accounts receivable less balances that were     
delinquent. We paid monthly interest on borrowings at prime plus 1.5%, which was
9.75% at August 28, 1999. During 1999, we borrowed only under the Receivable    
Line. If we borrowed under the Equipment Line, we would pay interest only for   
the first three months and then pay monthly interest and principal payments     
using a 45 month amortization schedule.                                         

    The Security Agreement contained certain restrictions, including the
ability to borrow additional funds, pay dividends, purchase or otherwise acquire
Company stock, or encumber or sell Company assets. The interest rate changed to 
prime plus 2% if our adjusted net worth, as defined, was less than $14 million. 
We were required to pay interest on $2 million whether or not we borrowed that  
amount and, accordingly, we had borrowed approximately $2.3 million under the   
Receivable Line at August 28, 1999. All of our assets were pledged as collateral
under the Security Agreement.                                                   

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  Also in May 1997, we entered into a separate Loan Agreement ("Loan
Agreement") with another party to provide a $1.0 million facility under the same
terms noted for the Security Agreement. The Loan Agreement expired in May 1998. 
We also issued a warrant for 7,000 shares of common stock at $12.50 per share   
(fair market value at issue date) under the Loan Agreement. The fair value of   
the warrant, which expires in May 2002, is not significant to these financial   
statements.                                                                     

        In September 1999, we entered into a Revolving Credit Agreement ("Credit
Agreement") with a new lender and paid the balance then outstanding under, and  
terminated, the Security Agreement. The Credit Agreement provides a revolving   
credit facility up to $5.0 million. The first $2.0 million of borrowings do not 
require separate borrowing base reporting. Borrowings over $2.0 million and up  
to $5.0 million are limited to 80% of eligible accounts receivable. The Credit  
Agreement defines eligible accounts receivable which generally represents all   
trade accounts receivable less delinquent balances. Interest is payable monthly 
at either the prime interest rate plus 1% or the Eurodollar rate plus 3.5%. The 
interest rate to be incurred is selected by Odwalla at the inception of each    
loan and may be changed during the period in which the borrowed amount is       
outstanding in accordance with provisions included in the Credit Agreement. The 
initial term of the Credit Agreement is for three years.                        

       All of our assets are pledged as collateral under the Credit Agreement.
We are also required to meet certain covenants, including maintenance of certain
financial, leverage, and debt service coverage ratios, and certain tangible net 
worth. As of November 27, 1999, we were not in compliance with covenants        
requiring certain leverage and debt service coverage ratios. We requested our   
lender to waive the specific November 27, 1999 covenant violations and, in      
January 2000, the lender granted the requested waiver. The Credit Agreement also
contains certain business restrictions, including the ability to borrow         
additional funds, limitations on capital expenditures in excess of certain      
amounts, restrictions on the payment of cash dividends, sale or purchase of     
Company stock, ability to encumber or sell Company assets, and limitations on   
other business transactions without prior approval from the lender.             

LONG-TERM DEBT                                                                  

        As part of our plea agreement with the U.S. government discussed in Note
3, we agreed to pay $1.5 million over a five-year period, without interest.     
Generally accepted accounting principles require that we impute interest, which 
means that we record the obligation on a discounted basis and charge the income 
statement with interest expense (in this situation, at 9.5% per year) over the  
five-year period. The discounted amount recorded in July 1998 was $1,242,000.   
The U.S. government may file a lien on all of our assets under the plea         
agreement but, if they do, has agreed to allow the Security Agreement holder    
(subsequently modified to substitute the Credit Agreement holder) to retain     
priority interest in our assets.                                                

        In October 1996, we assumed a $230,000 mortgage and $45,000 of Half Moon
Bay assessment bonds when we purchased land adjacent to our Half Moon Bay       
administrative offices. Mortgage terms include interest at 8.75% per annum and  
monthly principal and interest payments until maturity in 1999 when the         
remaining balance of approximately $220,000 was due. The Half Moon Bay          
assessment bonds bear interest at 7% per annum and require annual principal and 
interest payments to 2006. In 1999, we sold this property and were relieved of  
both the mortgage and assessment bond obligations.                              

     The carrying value of debt approximates its fair value except that we
carry the value of the U.S. government debt at cost less imputed interest, as   
discussed above, as there is no reasonable way to evaluate this non-interest    
bearing obligation.                                                             

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The following summarizes long-term debt (in thousands):         

                                                                [Download Table]

                                        AUGUST 29,     AUGUST 28,
                                            1998          1999   
                                        ----------     ----------
                                                                 
Mortgage on Half Moon Bay property        $  221        $   --   
U.S. government obligation                  1040           845   
Bonds on Half Moon Bay property               42            --   
                                          ------        ------   
                                           1,303           845   
Less current portion                         421           172   
                                          ------        ------   
                                          $  882        $  673   
                                          ======        ======   

3.      COMMITMENTS AND CONTINGENCIES                                           

OPERATING AND CAPITAL LEASES                                                    

      Odwalla leases office space, branch distribution facilities, equipment
and vehicles under various operating leases, including the related party lease  
described below. These leases expire at various dates through 2007 and many     
facility leases contain renewal options. Most property leases require us to pay 
utilities, property taxes and common maintenance costs. Total operating lease   
rent expense was $5.5 million, $5.5 million and $5.6 million for the years ended
in 1997, 1998 and 1999. Odwalla also leases some furniture, equipment and       
vehicles under capital leases expiring through 2001.                            

        The following table lists property under capital leases by major classes
(in thousands):                                                                 

                                                                [Download Table]

                                                AUGUST 29,      AUGUST 28,
                                                    1998            1999  
                                                ----------      ----------
                                                                          
Machinery and equipment                          $   971         $   183  
Vehicles                                             140             108  
Other                                                 84              41  
                                                 -------         -------  
                                                   1,195             332  
Less accumulated amortization                       (638)           (267) 
                                                 -------         -------  

Net leased equipment under capital leases        $   557         $    65  
                                                 =======         =======  

          Future net minimum lease payments under existing capital and operating
leases as of August 28, 1999, are as follows (in thousands):                    

                                                                [Download Table]

                                                    CAPITAL         OPERATING 
YEAR ENDING IN AUGUST                                LEASES           LEASES  
---------------------                               -------        -----------
                                                                              
2000                                                $   31           $ 4,999  
2001                                                    15             3,675  
2002                                                    --             1,605  
2003                                                    --             1,268  
2004                                                    --               889  
Thereafter                                              --               753  
                                                    -------          -------  
                                                        46           $13,189  
Less amount representing interest                       (3)                   
                                                    -------                   
Present value of net minimum lease payments             43                    
Less current maturities                                (28)                   
                                                    -------                   
Long-term portion                                   $   15                    
                                                    =======                   

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   We occasionally sublease portions of our leased facilities to third
parties under short-term agreements. We earned $73,000, $54,000 and $26,000     
under sublease agreements in 1997, 1998 and 1999.                               

RELATED PARTY LEASE                                                             

      Our storage facility and offices in Davenport, California, were leased
from a partnership of which Mr. Steltenpohl, a member of our Board of Directors,
is a significant partner. We entered into an agreement to terminate our lease   
for this facility as of September 30, 1998, which represented an early          
termination, for a $10,000 cash payment and certain equipment valued at         
approximately $13,000. We paid approximately $112,000 in rent for this facility 
in both 1997 and 1998.                                                          

RAW MATERIAL CONTRACTS                                                          

       We had purchase commitments for the future delivery of raw materials as
of August 28, 1999, approximately $2.1 million of which are under contracts and 
are expected to be completed by August 2000.                                    

RECALL AND RELATED COSTS                                                        

    On October 30, 1996, Odwalla was notified by the State of Washington
Environmental Health Services of an epidemiological link between several cases  
of E. coli O157:H7 and Odwalla's apple juice products. We immediately           
implemented a recall (the "Recall") of all Odwalla products containing apple    
juice.                                                                          

       Twenty-two personal injury claims and legal proceedings have been filed
against Odwalla seeking monetary damages and other relief relating to the       
Recall. There was also one legal proceeding alleging fraudulent business acts   
and practices relating to the recall products. Twenty of these claims and       
proceedings have been settled. In addition, approximately 600 other claims for  
damages resulting from the Recall were presented to our insurance carrier and   
approximately 595 of those claims have been settled. We also received two claims
in fiscal 1999 allegedly arising out of product consumption prior to the Recall.
Settlement of the personal injury legal proceedings and claims was covered under
our insurance policy. At this time, we are unable to determine the potential    
liability from the remaining legal proceedings and claims. We believe our       
insurance coverage is adequate to cover such claims and legal proceedings, but  
the ultimate outcome of any litigation is uncertain and we cannot be certain    
that insurance coverage will be adequate. Litigation can also have an adverse   
impact on a company, regardless of the outcome, due to defense costs, diversion 
of management resources and other factors.                                      

        In early 1997, Odwalla was informed that it was the subject of a federal
grand jury investigation (Eastern District of California) concerning the E. coli
O157:H7 incident and related issues. In July 1998, in connection with the       
investigation, we entered into a misdemeanor plea agreement with the U.S.       
government, concerning 16 shipments in October 1996 of unpasteurized apple juice
from a single contaminated batch. As part of the plea agreement, Odwalla agreed 
to pay, over a period of five years, $1.25 million to the U.S. government and   
$250,000 to three non-profit organizations involved with advancing the cause of 
food safety. We also agreed, as part of the conditions attached to a five-year  
term of unsupervised Court probation, to develop and implement a HACCP plan and 
to undertake other measures related to food safety. The net present value of the
payments of $1.24 million was recorded as a Recall and related cost in fiscal   
1998.                                                                           

 Odwalla also incurred significant direct costs as a result of the
Recall, including advertising and public relations costs, legal and professional
fees, cost of the product recalled (including the labor and freight involved in 
the recall process), destruction of unsold product in inventory and packaging   
supplies, costs of leased sales and distribution equipment in excess of current 
volume requirements, costs of reformulating products and costs associated with  
the flash pasteurization process. Total Recall and related costs in fiscal 1997 
were $6.5 million, including a $2.2 million charge to establish a liability for 
future professional fees related to the Recall. Under our arrangement with our  
insurance company, we pay a portion of the legal fees related to third party    
claims resulting from the Recall and related claims. The reserve for            
professional fees is an estimate, and there can be no assurance that the actual 
reserved liability                                                              

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established will be adequate. We reviewed this charge during fiscal 1998 and,   
except for the settlement noted below, believed that the reserve established was
adequate. In fiscal 1999, we reviewed available information, including recently 
filed claims, and added $250,000 to this reserve. We will continue to assess    
this liability and will make appropriate adjustments if circumstances change.   
Approximately $1.3 million of this reserve for professional fees remained at    
August 28, 1999.                                                                

Odwalla maintains insurance coverage for product recall, product
adulteration, lost income and other first party business risks. The claim we    
submitted to our insurance carriers for product recall costs and for business   
losses incurred due to the Recall was denied for substantially all of the       
amounts claimed. On May 21, 1999, Odwalla filed a lawsuit in United States      
District Court for the Eastern District of California in Fresno, California,    
against New Hampshire Insurance Company to seek recovery on our business        
interruption insurance claim. The case does not have a trial date set. The      
amount and timing of proceeds, if any, from the claims and any future insurance 
claims cannot be presently determined.                                          

4.      MANDATORILY REDEEMABLE AND CONVERTIBLE PREFERRED STOCK                  

    Series A Preferred Stock. On January 7, 1999, we signed an agreement
with Catterton-Simon Partners III, L.P. ("Catterton-Simon"), a Delaware limited 
partnership, to sell 1,000,000 shares of Odwalla Series A Preferred Stock       
("Series A Stock") at $8.00 per share. The Series A Stock receives an 8% annual 
dividend which is payable in either cash or additional Series A Stock, at our   
election. The dividend is payable semi-annually. All Series A Stock is          
convertible on a one-for-one basis into Odwalla common stock (a) upon a request 
by Catterton-Simon at any time after July 6, 1999, and (b) automatically upon   
the earlier of (i) an acquisition of Odwalla by another company, either for cash
or publicly traded stock, at a price in excess of $12.00 per share, (ii) the    
average trading price of Odwalla common stock exceeding $12.00 per share for 20 
consecutive trading days, or (iii) January 7, 2002. Holders of Series A Stock   
are entitled to preferential payment, in the event of any liquidation of        
Odwalla, in an amount equal to the greater of $8.00 per share, plus any accrued 
but unpaid dividends, or the amount due each holder of common stock. The minimum
liquidation preference was $8.6 million at August 28, 1999. Catterton-Simon also
received a warrant to purchase 75,000 shares of Odwalla common stock at $10.00  
per share. The warrant expires in seven years. This transaction was funded and  
closed in February 1999.                                                        

  We also paid fees and issued a warrant to our financial advisor in
connection with this transaction. The warrant is for 24,806 shares of common    
stock at an exercise price approximating $6.45 per share and expires in five    
years. Total costs of the transaction approximate $700,000, including the       
financial advisor fees other than the warrant described above, reimbursement of 
certain costs of Catterton-Simon and other transaction costs.                   

     On June 14, 1999, our Board of Directors declared a stock dividend of
33,333 Series A Preferred Stock shares for the Series A shareholder. The        
dividend was paid June 30, 1999. In December 1999, our Board of Directors       
declared a stock dividend of 41,333 Series A Preferred Stock shares for the     
Series A shareholder. The dividend was paid December 31, 1999.                  

5.      SHAREHOLDERS' EQUITY                                                    

  Warrants. The underwriters of Odwalla's initial public offering in
December 1993 were issued warrants to purchase 105,000 shares of common stock at
$7.20 per share. These warrants expired in December 1998. We also issued two    
warrants in connection with the Series A Preferred Stock financing described    
above. One warrant was issued for 75,000 shares of common stock at $10.00 per   
share expiring in February 2006. The other warrant was issued for 24,806 shares 
of common stock at $6.45 per share expiring in February 2004.                   

     Stock Option Plans. Under the 1993 Stock Option Plan, incentive stock
options could be granted to employees and nonstatutory stock options could be   
granted to employees, directors or consultants. In December 1994, the Board of  
Directors adopted the 1994 Non-Employee Directors' Stock Option Plan            
("Directors' Plan") and, in January 1995, the                                   

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shareholders approved this plan. Incentive options may be granted at an exercise
price not less than 100% of fair market value on the grant date; nonstatutory   
options may be granted at an exercise price not less than 85% of fair market    
value on the grant date. The options generally vest one-sixtieth per month from 
the grant date, although approximately 85,000 outstanding nonstatutory options  
vested immediately on the grant date. Directors' Plan options may be granted at 
an exercise price not less than 100% of fair market value and generally vest    
quarterly over a five-year period. In general, options terminate ten years from 
date of grant.                                                                  

       In April 1997, Odwalla's shareholders approved the 1997 Stock Incentive
Plan ("1997 Plan") which replaced both the Stock Option Plan and the Directors' 
Plan. The 1997 Plan consists of three programs: (i) a Discretionary Option Grant
Program ("Discretionary Program"), (ii) a Stock Issuance Program ("Stock        
Program"), and (iii) an Automatic Option Grant Program ("Automatic Program"). A 
total of 1,648,475 shares of common stock are reserved for issuance under the   
1997 Plan, which includes all outstanding options under the Stock Option Plan   
and Directors' Plan.                                                            

The Discretionary Program allows us to issue both incentive and 
non-qualified stock options, at an exercise price not less than 100% of fair    
market value on the grant date, which expire ten years or less from the grant   
date; vesting is generally in a series of installments measured from the grant  
date. The Stock Program allows us to issue common stock directly for cash,      
promissory note or for past services with no cash payment; vesting may be       
immediate or in one or more installments. The Automatic Program awards 5,000    
shares of common stock to each non-employee Board member upon initial election  
or appointment and 3,000 shares of common stock at each annual shareholders     
meeting. Awards under the Automatic Program are made at an exercise price equal 
to the closing fair market value of the Company's common stock on the award     
date, will have a maximum term of ten years from the grant date and vest in     
annual installments over a four year period at the 5,000 share award level and  
after one year for the 3,000 share award level. Under all programs of the 1997  
Plan, accelerated vesting provisions apply in certain situations.               

The activity under the above plans was as follows:              

                                                        [Enlarge/Download Table]

                              SHARES AVAILABLE    OPTIONS    OPTION PRICE   WEIGHTED AVERAGE
                                  FOR GRANT     OUTSTANDING    PER SHARE    PRICE PER SHARE 
                              ----------------  -----------  ------------   ----------------
                                                                                            
Balance at September 1, 1996       358,202        865,874     $3.33-$22.28      $ 10.30     

Additional shares reserved         450,000             --                                   
Options granted                   (533,329)       533,329    $10.25-$13.75      $ 11.49     
Options exercised                       --        (78,163)    $3.33-$10.25      $  6.11     
Options canceled                   422,205       (422,205)    $3.33-$22.28      $ 16.64     
                                  --------      ---------                                   
Balance at August 31, 1997         697,078        898,835     $3.33-$13.75      $  8.59     

Options granted                   (491,915)       491,915     $7.88-$12.50      $ 10.36     
Options exercised                       --        (35,182)    $3.90-$10.62      $  5.38     
Options canceled                   114,919       (114,919)    $3.33-$13.75      $ 10.51     
                                  --------      ---------                                   
Balance at August 29, 1998         320,082      1,240,649     $3.33-$13.75      $  9.18     

Options granted                   (448,750)       448,750     $5.44-$10.06      $  6.74     
Options exercised                       --        (66,070)     $3.33-$3.90      $  3.89     
Options canceled                   195,476       (195,476)    $3.33-$13.75      $ 10.42     
                                  --------      ---------                                   
Balance at August 28, 1999          66,808      1,427,853     $3.33-$13.75      $  8.56     
                                  ========      =========                                   

        We follow Accounting Principles Board Opinion 25 ("APB 25"), "Accounting
for Stock Issued to Employees," in accounting for stock-based compensation.     
Accordingly, we are not required to record compensation expense when stock      
options are granted to employees, as long as the exercise price is not less than
the fair market value of the stock when the option is granted. All options that 
we have granted were at exercise prices at or above fair market                 

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value of the common stock. In October 1995, the FASB issued SFAS 123,           
"Accounting for Stock-Based Compensation." Although SFAS 123 allows us to       
continue to follow the present APB 25 guidelines, we are required to disclose   
pro forma net income (loss) and net income (loss) per share as if we had adopted
the new statement. The pro forma impact of applying SFAS 123 in fiscal 1997,    
1998 and 1999 is not likely to be representative of the pro forma impact in     
future years.                                                                   

   We have elected to use the Black-Scholes model to estimate the fair
value of options granted. This valuation model was developed for use in         
estimating the fair value of traded options that have no vesting restrictions   
and are fully transferable. This model requires the input of highly subjective  
assumptions including the expected stock price volatility. Because our employee 
stock options have characteristics significantly different from those of traded 
options, and because changes in the subjective input assumptions can materially 
affect this estimate, we believe the Black-Scholes model does not necessarily   
provide a reliable single measure of fair value of our employee stock options.  
Inputs used for the valuation model are as follows for 1997, 1998 and 1999:     
dividend yield of 0% for all years; expected volatility of 5.1%, 5.2% and 4.5%  
for all years; risk-free interest rates of 6.0%, 6.1% and 5.4%; and expected    
lives approximating 5 years for all years.                                      

        Had the fair value of the options been calculated in accordance with FAS
123, net income (loss) would have been $(13,293,000), $(1,786,000) and          
$(2,367,000) and net income (loss) per share would have been $(2.66), $(0.35)   
and $(0.46) for fiscal 1997, 1998 and 1999.                                     

      There were 457,569, 682,498 and 790,940 options exercisable at the end
of fiscal 1997, 1998 and 1999. The weighted average exercise price of options   
exercisable at the end of 1997, 1998 and 1999 was $8.54, $8.05 and $8.70 per    
share. At August 28, 1999, a total of approximately 1,648,475 shares of common  
stock have been reserved for issuance under the Company's stock option plans.   

       The following table summarizes information about options outstanding at
August 28, 1999:                                                                

                                                                [Download Table]

                               Weighted Average  Weighted               Weighted 
     Range of                      Remaining      Average                Average 
     Exercise       Number        Contractual    Exercise    Number     Exercise 
       Price      Outstanding    Life (years)      Price   Exercisable    Price  
----------------  -----------  ----------------  --------  -----------  ---------
                                                                                 
  $3.33 - $7.00     514,544          7.4          $ 6.12     271,439     $ 5.68  
$7.184 - $10.625    722,901          8.1          $ 9.43     400,247     $ 9.74  
 $11.28 - $13.75    190,408          3.3          $11.83     119,254     $12.07  
                  ---------                                ---------             
                  1,427,853          7.2          $ 8.56     790,940     $ 8.70  
                  =========                                =========             

6.      EMPLOYEE BENEFIT PLAN                                                   

 Odwalla matches 10% of each employee's contribution to our 401(k)
Employee Benefit Plan ("Plan"). Odwalla contributions to the Plan approximated  
$46,000, $45,000 and $52,000 in 1997, 1998 and 1999.                            

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7.      TAXES ON INCOME                                                         

Deferred income taxes reflect the net tax effects of temporary  
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. We provide a   
valuation allowance against certain deferred tax assets due to the uncertainty  
of whether we will ultimately realize their benefit.                            

        Deferred tax assets consist principally of the following (in thousands):

                                                                [Download Table]

                                    AUGUST 29,     AUGUST 28,
                                        1998          1999   
                                    ----------     ----------
                                                             
Reserves and accruals                $ 1,475       $   901   
Net operating loss carryforward        3,613         4,873   
Tax credits                               61            62   
Property, plant and equipment           (237)         (234)  
Inventories                               28            25   
Other                                     --           293   
                                     -------       -------   
                                       4,940         5,920   
Less valuation allowance              (3,410)       (4,042)  
                                     -------       -------   
Net deferred tax asset               $ 1,530       $ 1,878   
                                     =======       =======   

        The Company's effective tax rate differs from the federal statutory rate
as follows:                                                                     

                                                                [Download Table]

                                                    YEAR ENDED          
                                            ----------------------------
                                            1997       1998       1999  
                                            ----       ----       ----  
                                                                        
Federal statutory tax rate                   (34)%      (34)%      (34)%
State income taxes                            (5)        (5)        (5) 
Deferred tax asset valuation allowance        25         12         25  
Benefit of net operating loss carryback       (5)        --         --  
Permanent differences and other                5         25         (1) 
Taxes for prior periods                        1         --         --  
                                             ---        ---        ---  
                                             (13)%       (2)%      (15)%
                                             ===        ===        ===  

   The permanent differences in fiscal 1998 results primarily from the
settlement with the U.S. government described previously.                       

Taxes on income consisted of the following (in thousands):                      

                                                                [Download Table]

                                               YEAR ENDED              
                                   ----------------------------------- 
                                     1997          1998          1999  
                                   -------       -------       ------- 
                                                                       
Current:                                                               
    Federal                        $  (660)      $    --       $    -- 
    State                               --            --            -- 
                                   -------       -------       ------- 
                                      (660)           --            -- 
                                   -------       -------       ------- 
Deferred:                                                              
    Federal                         (3,970)          (68)         (860)
    State                             (641)            3          (131)
                                   -------       -------       ------- 
                                    (4,611)          (65)         (991)
                                   -------       -------       ------- 
                                    (5,271)          (65)         (991)
Change in valuation allowance        3,370            40           632 
                                   -------       -------       ------- 

                                   $(1,901)      $   (25)      $  (359)
                                   =======       =======       ======= 

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 ODWALLA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At August 29, 1999, we had federal and state net operating loss 
carryforwards of $12.7 million and $14.5 million, respectively, which expire    
between 2002 and 2018.                                                          

      During 1997, we recognized tax savings from deductions associated with
our stock option plans in the amount of $1,000. There were no tax savings in    
1998 and 1999. These benefits are recorded as an increase in shareholders'      
equity.                                                                         

8.      RELATED PARTY TRANSACTIONS                                              

       We retained a current board member for consulting services and incurred
fees of $40,000, $27,500 and $9,000 in 1997, 1998 and 1999. Odwalla incurred    
consulting fees of $29,000 during 1997 by utilizing a company owned by one of   
our former directors.                                                           

9.      OTHER (EXPENSE) INCOME, NET                                             

 Other (expense) income consisted of the following (in thousands):

                                                                [Download Table]

                            YEAR ENDED                THIRTEEN WEEKS ENDED    
                  -----------------------------   ----------------------------
                                                  NOVEMBER 28,    NOVEMBER 27,
                   1997        1998        1999       1998          1999      
                  -----       -----       -----   ------------    ------------
                                                                              
                                                  (unaudited)      (unaudited)
Interest income   $ 322       $ 160       $ 278      $  40         $  68      
Interest expense   (149)       (366)       (437)      (109)          (80)     
Other                37          43         119         (4)           --      
                  -----       -----       -----      -----         -----      

                  $ 210       $(163)      $ (40)     $ (73)        $ (12)     
                  =====       =====       =====      =====         =====      

         Included in other income for 1999 is a gain of $145,000 on the sale
of land adjacent to our administrative offices in Half Moon Bay, California.    

10.     ALLOWANCE FOR DOUBTFUL ACCOUNTS                                         

        The following summarizes activity in the allowance for doubtful accounts
for the years shown (in thousands):                                             

                                                                [Download Table]

                                                             YEAR ENDED           
                                                    ----------------------------- 
                                                     1997       1998        1999  
                                                    -----       -----       ----- 
                                                                                  
Allowance for doubtful accounts, beginning of year  $ 306       $ 592       $ 588 
Bad debt expense for the year                         659         258         360 
Accounts receivable written off during the year      (373)       (262)       (317)
                                                    -----       -----       ----- 

Allowance for doubtful accounts, end of year        $ 592       $ 588       $ 631 
                                                    =====       =====       ===== 

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 ODWALLA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.     SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)                           

(In thousands, except per share data)                                           

                                                                [Download Table]

                                             Net income (loss)   Basic and diluted  
                                               attributable      net income (loss)  
                Net     Gross    Net income     to common     attributable to common
               Sales    Profit     (loss)      shareholders   shareholders per share
1997         --------  --------  ----------  ---------------  ----------------------
----                                                                                
                                                                                    
1st Quarter  $ 14,101  $  7,097   $ (4,844)      $ (4,844)        $  (0.98)         
2nd Quarter    11,257     4,830     (3,042)        (3,042)           (0.61)         
3rd Quarter    13,685     6,566     (1,820)        (1,820)           (0.36)         
4th Quarter    13,587     6,487     (2,730)        (2,730)           (0.54)         
             --------  --------   --------       --------                           

             $ 52,630  $ 24,980   $(12,436)      $(12,436)        $  (2.49)         
             ========  ========   ========       ========         ========          

1998                                                                                
----                                                                                
1st Quarter  $ 14,150  $  7,039   $   (175)      $   (175)        $  (0.03)         
2nd Quarter    14,192     6,949       (274)          (274)           (0.05)         
3rd Quarter    15,446     7,974        140            140             0.03          
4th Quarter    15,300     7,889     (1,070)        (1,070)           (0.21)         
             --------  --------   --------       --------                           

             $ 59,088  $ 29,852   $ (1,379)      $ (1,379)        $  (0.27)         
             ========  ========   ========       ========         ========          

1999                                                                                
----                                                                                
1st Quarter  $ 15,332  $  7,696   $   (479)      $   (479)        $  (0.09)         
2nd Quarter    16,342     7,333       (817)          (817)           (0.16)         
3rd Quarter    19,124     9,048       (279)          (279)           (0.05)         
4th Quarter    17,244     8,419       (467)          (734)           (0.14)         
             --------  --------   --------       --------                           

             $ 68,042  $ 32,500   $ (2,042)      $ (2,309)        $  (0.45)         
             ========  ========   ========       ========         ========          

2000                                                                                
----                                                                                
1st Quarter  $ 16,769  $  7,813   $   (725)      $   (938)        $  (0.18)         

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             REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Shareholders of                                   
Fresh Samantha, Inc.                                                            

In our opinion, the accompanying consolidated balance sheets and the related    
consolidated statements of operations, of changes in shareholders' equity and of
cash flows present fairly, in all material respects, the consolidated financial 
position of Fresh Samantha, Inc. and Subsidiary as of October 30, 1999 and      
October 31, 1998, and the consolidated results of their operations and their    
cash flows for the years then ended, in conformity with generally accepted      
accounting principles. These financial statements are the responsibility of the 
Company's management; our responsibility is to express an opinion on these      
financial statements based on our audits. We conducted our audits of these      
statements in accordance with generally accepted auditing standards which       
require that we plan and perform the audit to obtain reasonable assurance about 
whether the financial statements are free of material misstatement. An audit    
includes examining, on a test basis, evidence supporting the amounts and        
disclosures in the financial statements, assessing the accounting principles    
used and significant estimates made by management, and evaluating the overall   
financial statement presentation. We believe that our audits provide a          
reasonable basis for the opinion expressed above.                               

PricewaterhouseCoopers LLP                                                      
Portland, Maine                                                                 

December 22, 1999                                                               
except for Note 6,                                                              
as to which the date is                                                         
January 10, 2000                                                                

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FRESH SAMANTHA, INC.
 CONSOLIDATED BALANCE SHEETS
 (IN THOUSANDS, EXCEPT SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                              OCTOBER 31,  OCTOBER 30,  JANUARY 22,
                                                                                 1998         1999         2000    
                                                                              -----------  -----------  -----------
                                                                                                        (unaudited)
                                                                                                                   
Current assets                                                                                                     
    Cash and cash equivalents                                                   $ 2,440      $   463      $   265  
    Trade accounts receivable, net of allowance                                                                    
       of $27, $488 and $550                                                      1,337        3,444        3,033  
    Inventories                                                                     455        1,482        1,490  
    Prepaid expenses and other current assets                                        95            4           76  
    Refundable income taxes                                                          47           --           --  
    Deferred tax asset, current                                                      58           --           --  
                                                                                -------      -------      -------  
          Total current assets                                                    4,432        5,393        4,864  

Plant, property and equipment, net                                                2,483        7,130        6,773  
Other assets, noncurrent                                                             21          205          211  
                                                                                -------      -------      -------  
             Total assets                                                       $ 6,936      $12,728      $11,848  
                                                                                =======      =======      =======  
Current liabilities                                                                                                
    Accounts payable                                                            $ 1,298      $ 3,758      $ 2,840  
    Accrued payroll and related items                                               193          502          659  
    Accrued workers' compensation insurance                                          93           14           --  
    Short-term borrowings                                                           102           --           --  
    Other accruals                                                                   26          174          329  
    Current maturities of capital lease obligations                                  62          228          232  
    Current maturities of long-term debt                                             30        3,498        4,743  
                                                                                -------      -------      -------  
          Total current liabilities                                               1,804        8,174        8,803  

Capital lease obligations, less current maturities                                  189          569          499  
Long-term debt, less current maturities                                              44           31           22  
Deferred income taxes                                                                98           --           --  
Other                                                                                25           10           10  
                                                                                -------      -------      -------  
Total liabilities                                                                 2,160        8,784        9,334  
                                                                                -------      -------      -------  

Commitments and contingencies                                                                                      

Shareholders' equity                                                                                               
    Preferred stock:                                                                                               
       Class N-1, 160,000 shares authorized at $.01 par, 140,702 shares                                            
          issued and outstanding; liquidation preference $3,869,305                  --            1            1  
       Class N-2, 80,000 shares authorized at $.01 par, 77,480 shares                                              
          issued and outstanding; liquidation preference $2,130,700                  --            1            1  
    Common stock:                                                                                                  
       Class L-1, 50,000 shares authorized at $.01 par, 21,713 shares                                              
          issued and outstanding                                                     --           --           --  
       Class L-2, 50,000 shares authorized at $.01 par, 9,151 shares                                               
          issued and outstanding                                                     --           --           --  
       Class A-1 and A-2, 5,125,000 shares authorized at $.01 par, no shares                                       
          issued Class A-3, 1,125,000 shares authorized at $.01 par, 277,768                                       
          shares issued and outstanding                                               3            3            3  
    Additional paid-in capital                                                   13,002       19,000       19,000  
    Accumulated deficit                                                          (8,229)     (15,061)     (16,491) 
                                                                                -------      -------      -------  
Total shareholders' equity                                                        4,776        3,944        2,514  
                                                                                -------      -------      -------  
Total liabilities and shareholders' equity                                      $ 6,936      $12,728      $11,848  
                                                                                =======      =======      =======  

See accompanying notes to consolidated financial statements.

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FRESH SAMANTHA, INC.

 CONSOLIDATED STATEMENTS OF OPERATIONS
 (IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                        [Enlarge/Download Table]

                                                                                            TWELVE WEEKS ENDED     
                                                        YEAR ENDED OCTOBER              ---------------------------
                                           ------------------------------------------   JANUARY 23,     JANUARY 22,
                                               1997           1998             1999        1999            2000    
                                           -----------       -------         --------   -----------     -----------
                                           (unaudited)                                  (unaudited)     (unaudited)
                                                                                                                   
Net sales                                     $7,180         $15,708         $ 32,158     $ 4,208         $ 8,731  

Cost of sales                                  4,011           8,895           16,888       2,391           4,314  
                                              ------         -------         --------     -------         -------  

    Gross profit                               3,169           6,813           15,270       1,817           4,417  
                                              ------         -------         --------     -------         -------  

Operating expenses                                                                                                 
    Sales and distribution                     1,474           4,149           15,870       2,182           4,138  
    Marketing, general and administrative      1,379           2,564            5,820         719           1,636  
                                              ------         -------         --------     -------         -------  

          Total operating expenses             2,853           6,713           21,690       2,901           5,774  
                                              ------         -------         --------     -------         -------  

Income (loss) from operations                    316             100           (6,420)     (1,084)         (1,357) 

Other (expense) income, net                     (107)           (269)            (197)          9             (73) 
                                              ------         -------         --------     -------         -------  

Income (loss) before income taxes                209            (169)          (6,617)     (1,075)         (1,430) 

Income tax (expense) benefit                    (110)             51               40          40              --  
                                              ------         -------         --------     -------         -------  

Net income (loss)                             $   99         $  (118)        $ (6,577)    $(1,035)        $(1,430) 
                                              ======         =======         ========     =======         =======  

Basic net income (loss) per share             $ 9.00         $ (2.55)        $ (21.31)    $ (3.35)        $ (4.63) 
                                              ======         =======         ========     =======         =======  

Shares used in per share amounts                  11              46              309         309             309  
                                              ======         =======         ========     =======         =======  

Diluted net income (loss) per share           $ 9.00         $ (2.55)        $ (21.31)    $ (3.35)        $ (4.63) 
                                              ======         =======         ========     =======         =======  

Shares used in per share amounts                  11              46              309         309             309  
                                              ======         =======         ========     =======         =======  

See accompanying notes to consolidated financial statements.

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FRESH SAMANTHA, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                             Preferred Stock                              Common Stock           
                                           ---------------------------------------------------  ---------------------------------
                                              Class N-1         Class N-2         Series A         Class A            Class B    
                                           ---------------   ---------------   ---------------  ---------------   ---------------
                                           Shares   Amount   Shares   Amount   Shares   Amount  Shares   Amount   Shares   Amount
                                           ------   ------   ------   ------   ------   ------  ------   ------   ------   ------
                                                                                                                                 
Balance, October 26, 1996 (unaudited)                                            200      $ 2       1      $--      10       $-- 

Net income (unaudited)                                                                                                           
                                                                                ----      ---     ---      ---     ---       --- 

Balance, October 25, 1997                                                        200        2       1       --      10        -- 

Exchange of preferred stock                                                                                                      
  for Class B shares                                                            (200)      (2)                      --        -- 
Exchange of shares                                                                                 (1)      --     (10)       -- 
Issuance of warrants related to                                                                                                  
  Class A-3 shares                                                                                                               
Issuance of common stock related to                                                                                              
  recapitalization, net of issuance costs                                                                                        
Redemption of common stock                                                                                                       
Distribution to shareholders                                                                                                     
Net loss                                                                                                                         
                                                                                ----      ---     ---      ---     ---       --- 

Balance, October 31, 1998                                                         --       --      --       --      --        -- 

Issuance of preferred stock, net                                                                                                 
  of issuance costs                          141      $1        77      $1                                                       

Net loss                                                                          --       --      --       --      --        -- 
                                             ---     ---       ---     ---      ----      ---     ---      ---     ---       --- 

Balance, October 30, 1999                    141       1        77       1        --       --      --       --      --        -- 

Net loss (unaudited)                                                                                                             
                                             ---     ---       ---     ---      ----      ---     ---      ---     ---       --- 
Balance, January 22, 2000                                                                                                        
  (unaudited)                                141      $1        77      $1        --      $--      --      $--      --       $-- 
                                             ===     ===       ===     ===      ====      ===     ===      ===     ===       === 

                                                        [Enlarge/Download Table]

                                                              Common Stock                                                       
                                           ---------------------------------------------------              Accumulated          
                                              Class A-3         Class L-1         Class L-2     Additional   Retained            
                                           ---------------   ---------------   ---------------   Paid-in     Earnings            
                                           Shares   Amount   Shares   Amount   Shares   Amount   Capital     (Deficit)    Total  
                                           ------   ------   ------   ------   ------   ------  ----------  -----------  --------
                                                                                                                                 
Balance, October 26, 1996 (unaudited)                                                            $     8     $    111     $  121 

Net income (unaudited)                                                                                             99         99 
                                                                                                 -------     --------     ------ 

Balance, October 25, 1997                                                                              8          210        220 

Exchange of preferred stock                                                                                                      
  for Class B shares                                                                                   2           --         -- 
Exchange of shares                           695      $ 7                                             (7)          --         -- 
Issuance of warrants related to                                                                                                  
  Class A-3 shares                                                                                     1           (1)        -- 
Issuance of common stock related to                                                                                              
  recapitalization, net of issuance costs                        22     $--        9      $--     13,000         (816)    12,184 
Redemption of common stock                  (417)      (4)                                            (2)      (7,494)    (7,500)
Distribution to shareholders                                                                                      (10)       (10)
Net loss                                                                                                         (118)      (118)
                                            ----      ---       ---     ---      ---      ---    -------     --------     ------ 

Balance, October 31, 1998                    278        3        22      --        9       --     13,002       (8,229)     4,776 

Issuance of preferred stock, net                                                                                                 
  of issuance costs                                                                                5,998         (255)     5,745 

Net loss                                      --       --        --      --       --       --         --       (6,577)    (6,577)
                                            ----      ---       ---     ---      ---      ---    -------     --------     ------ 

Balance, October 30, 1999                    278        3        22      --        9       --     19,000      (15,061)     3,944 

Net loss (unaudited)                                                                                           (1,430)    (1,430)
                                            ----      ---       ---     ---      ---      ---    -------     --------     ------ 
Balance, January 22, 2000                                                                                                        
  (unaudited)                                278      $ 3        22     $--        9      $--    $19,000     $(16,491)    $2,514 
                                            ====      ===       ===     ===      ===      ===    =======     ========     ====== 

See accompanying notes to consolidated financial statements.

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FRESH SAMANTHA, INC.

 CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                                    TWELVE WEEKS ENDED    
                                                                  YEAR ENDED OCTOBER            --------------------------
                                                       --------------------------------------   JANUARY 23,    JANUARY 22,
                                                          1997           1998          1999        1999           2000    
                                                       -----------     --------       --------  -----------    -----------
                                                       (unaudited)                              (unaudited)    (unaudited)
                                                                                                                          
Cash flows from operating activities                                                                                      
   Net income (loss)                                      $  99        $  (118)       $(6,577)    $(1,035)       $(1,430) 
   Adjustments to reconcile net loss to net                                                                               
     cash provided by (used in) operating activities:                                                                     
        Depreciation                                        165            320          1,222         219            441  
        Amortization                                         --             39              1          --             --  
        Deferred taxes                                      111             (4)           (40)          7             --  
        (Gain) loss on sale of assets                         9             82             (3)         --            (11) 
        Changes in assets and liabilities                                                                                 
          Trade accounts receivable                        (454)          (607)        (2,107)         38            411  
          Inventories                                      (186)          (172)        (1,026)         43             (8) 
          Refundable income taxes                            --            (47)            47          --             --  
          Prepaid expenses and other current assets         (65)           (75)            91          25            (72) 
          Other noncurrent assets                            25             (8)          (150)        (35)            (6) 
          Accounts payable                                  513            565          2,459        (256)          (918) 
          Accrued payroll and related items                  19            123            310        (152)           157  
          Accrued workers' compensation                                                                                   
            Insurance                                        --             64            (79)        (93)           (14) 
          Other accrued liabilities                         189              5            148         303            155  
          Other long-term liabilities                        --             13            (14)         --             --  
          Income taxes payable                               --            (48)            --          --             --  
                                                          -----        -------        -------     -------        -------  
Net cash provided by (used in) operating                                                                                  
     activities                                             425            132         (5,718)       (936)        (1,295) 
                                                          -----        -------        -------     -------        -------  

Cash flows from investing activities                                                                                      
   Capital expenditures                                    (689)        (1,489)        (5,075)       (914)           (99) 
   Proceeds from sale of assets                               7             --             46          --             26  
                                                          -----        -------        -------     -------        -------  
Net cash used in investing activities                      (682)        (1,489)        (5,029)       (914)           (73) 
                                                          -----        -------        -------     -------        -------  

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FRESH SAMANTHA, INC.

 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(IN THOUSANDS)

                                                        [Enlarge/Download Table]

                                                                                           TWELVE WEEKS ENDED   
                                                          YEAR ENDED OCTOBER           -------------------------
                                                 -----------------------------------   JANUARY 23,   JANUARY 22,
                                                     1997        1998          1999       1999          2000    
                                                 -----------    ------       -------   -----------   -----------
                                                 (unaudited)                           (unaudited)   (unaudited)
                                                                                                                
Cash flows from financing activities                                                                            
   Principal payments under long-term debt           (123)      (1,664)         (166)         --           --   
   Proceeds from long-term debt                       347          722         3,385         690        1,236   
   Net borrowings under line of credit                 94           --            --        (102)          --   
   Debt issuance costs                                 --           --           (35)         --           --   
   Payments of obligations under capital leases        --          (35)         (159)        164          (66)  
   Redemption of common stock                          --       (7,500)           --          --           --   
   Distribution to shareholders                        --          (10)           --          --           --   
   Transaction expenses                                --         (816)         (255)         --           --   
   Issuance of preferred stock                         --           --         6,000          --           --   
   Issuance of common stock                            --       13,000            --          --           --   
                                                    -----       ------       -------     -------       ------   
Net cash provided by financing activities             318        3,697         8,770         752        1,170   
                                                    -----       ------       -------     -------       ------   

Net increase (decrease) in cash and cash                                                                        
   equivalents                                         61        2,340        (1,977)     (1,098)        (198)  

Cash and cash equivalents, beginning of period         39          100         2,440       2,440          463   
                                                    -----       ------       -------     -------       ------   

Cash and cash equivalents, end of period            $ 100       $2,440       $   463     $ 1,342       $  265   
                                                    =====       ======       =======     =======       ======   

Cash paid during the year for:                                                                                  
   Interest                                         $  89       $  179       $   201                            

Noncash investing and financing activities: We entered into capital lease       
obligations for vehicle and equipment leases totaling $182 and $705 in 1998 and 
1999. In addition, we financed equipment acquisitions of $577, $102 and $133 in 
1997, 1998 and 1999.                                                            

See accompanying notes to consolidated financial statements.

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

      The Company. Fresh Samantha, Inc. ("Fresh Samantha" or "Company") is a
creator, manufacturer and distributor of all-natural super-premium refrigerated 
juices. The Company delivers 19 blends of juices to selected markets along the  
Eastern Seaboard from Maine to Florida. The Company's products include classic  
juices, such as orange juice and grapefruit juice, smoothies and other          
nutritionally fortified juice products.                                         

  Principles of Consolidation. The consolidated financial statements
include the accounts of Fresh Samantha, Inc. and its subsidiary, Fresh Samantha 
Juice Bars, Inc. Upon consolidation, all significant intercompany accounts and  
transactions have been eliminated.                                              

Fiscal Year. The Company's fiscal year is a fifty-two week or   
fifty-three week period ending on the last Saturday of October.                 

   Interim Financial Statements. The accompanying consolidated balance
sheet of Fresh Samantha and its subsidiary at January 22, 2000 and the related  
consolidated statements of operations and of cash flows for the twelve week     
periods ended for each of January 23, 1999 and January 22, 2000 have not been   
audited by independent accountants. However, in management's opinion, they      
include all adjustments (which include only normal recurring adjustments)       
necessary for a fair presentation of the financial position and the results of  
operations for the periods presented. The statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission.         
Accordingly, certain information and footnote disclosure normally included in   
financial statements prepared in conformity with generally accepted accounting  
principles have been condensed or omitted pursuant to such rules and            
regulations. The operating results for the interim periods are not necessarily  
indicative of results to be expected for an entire year.                        

       Cash and Cash Equivalents. The Company invests its excess cash in money
market funds, which are valued at amortized cost, which approximates market     
value. These investments are subject to minimal credit and market risk. We      
consider all highly liquid investments with a maturity of 90 days or less when  
purchased to be cash equivalents.                                               

       Inventories. Inventories are stated at the lower of cost or market with
cost determined on a first-in first-out (FIFO) basis.                           

       Plant, Property and Equipment. Plant, property and equipment are stated
at cost, less accumulated depreciation and amortization. The cost of additions  
and improvements are capitalized, while maintenance and repairs are charged to  
expense when incurred. Depreciation and amortization are provided on the        
straight-line basis over the shorter of the estimated useful life of the asset  
or the lease term.                                                              

   Other Assets. Other assets consist principally of deposits and debt
issuance costs. Debt issuance costs are amortized over the term of the debt.    

Income Taxes. Fresh Samantha accounts for income taxes under the
liability method in accordance with Statement of Financial Accounting Standards 
("SFAS") No. 109, "Accounting for Income Taxes."                                

      Revenue Recognition. Revenue is recognized when products are delivered
to our customers. The product is distributed directly to customers stores by    
Company drivers. We provide our customers the right of return for products under
certain circumstances and record a reserve for products estimated to be         
returned. The reserves for estimated product returns at October 31, 1998 and    
October 30, 1999 and were approximately $9,800 and $120,000, and are included in
the allowances amounts of $26,900 and $488,200 in the accompanying balance      
sheets at October 31, 1998 and October 30, 1999.                                

      Advertising Costs. Advertising costs are expensed as incurred. For the
years ended October 30, 1999 and October 31, 1998, the Company incurred         
advertising expenses of approximately $1,145,000 and $629,000.                  

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       Concentration of Risk. We are subject to a concentration of credit risk
with respect to trade accounts receivable. However, this concentration is       
mitigated by the diversification of our customer base within the areas we       
distribute our products and by the number of customers.                         

   We are engaged in the manufacturing and distribution of fresh juice
products and, therefore, are subject to certain risks that could have an        
unfavorable impact on operations, including an unfavorable weather impact on raw
materials, changes in government regulations, changes in consumer demands and   
the emergence of significant competitors. A significant portion of Fresh        
Samantha's business and customers are concentrated in New England and along the 
Eastern Seaboard.                                                               

      Our raw materials consist primarily of fruit, fruit juices, purees and
vegetables. The Company makes the majority of our purchases from a select number
of suppliers that management has judged to be of high quality. Although         
concentrating purchasing with few suppliers, management believes that other     
suppliers could provide the raw materials with similar quality on comparable    
terms. However, an extended interruption in the supply of any of the raw        
materials used in the Company's products, or reduction in the materials'        
quality, would have an adverse effect on the Company's business and results of  
operations.                                                                     

      Fair Value of Financial Instruments. The recorded amounts for cash and
cash equivalents, accounts receivable, accounts payable, accrued payroll and    
related items and other accrued expenses approximate fair value due to the      
short-term nature of these financial instruments. The fair value of amounts     
outstanding under our notes payable and capital lease arrangements approximates 
their recorded values in all material respects, as determined by discounting    
future cash flows at current market interest rates as of October 31, 1998 and   
October 30, 1999.                                                               

     Use of Estimates. The financial statements are prepared in conformity
with generally accepted accounting principles and, accordingly, include amounts 
that are based on management's best estimates and judgments. Actual results     
could differ from these estimates.                                              

  Earnings per share. Basic earnings per share is computed using the
weighted average number of common shares outstanding during the period. Diluted 
earnings per share is computed using the weighted average number of common and  
dilutive common equivalent shares outstanding during the period. Common         
equivalent shares consist of the shares issuable upon the exercise of stock     
options and warrants under the treasury stock method.                           

       The following table shows the computation of basic and diluted earnings
per share, in thousands except per share data:                                  

                                                        [Enlarge/Download Table]

                                                                                    TWELVE WEEKS ENDED   
                                                      YEAR ENDED OCTOBER           --------------------- 
                                              ----------------------------------   JAN. 23,      JAN 22, 
                                                 1997         1998        1999      1999          2000   
                                              -----------    ------      -------   --------      ------- 
                                              (unaudited)                               (unaudited)      
                                                                                                         
Basic:                                                                                                   
  Weighted average common shares outstanding        11           46          309       309           309 
  Net income (loss)                              $  99       $ (118)     $(6,577)  $(1,035)      $(1,430)
  Per share amount, attributable to common                                                               
     shareholders                                $9.00       $(2.55)     $(21.31)  $ (3.35)      $ (4.63)
Diluted:                                                                                                 
  Weighted average common equivalent                                                                     
     shares outstanding                             11           46          340       309           537 
  Shares used in per share amounts                  11           46          309       309           309 
  Net income (loss)                              $  99       $ (118)     $(6,577)  $(1,035)      $(1,430)
  Per share amount, attributable to common                                                               
     shareholders                                $9.00       $(2.55)     $(21.31)  $ (3.35)      $ (4.63)

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      We had no dilutive common equivalent shares during fiscal 1998 or 1999
or in either of the twelve week periods presented due to the reported net loss. 

   Reclassifications. To conform with new classifications in the first
quarter of fiscal 2000 financial statement presentation, we reclassified certain
prior periods expenses. The primary reclassification was between sales and      
distribution costs and general and administrative expenses.                     

2. CASH AND CASH EQUIVALENTS                                                    

  Cash and cash equivalents consist of the following (in thousands):

                                                                [Download Table]

                            OCTOBER 31,  OCTOBER 30,  JANUARY 22,
                               1998         1999         2000    
                            -----------  -----------  -----------
                                                      (unaudited)
                                                                 
Cash                          $  136        $380         $262    
Cash equivalents               2,304          83            3    
                              ------        ----         ----    
                              $2,440        $463         $265    
                              ======        ====         ====    

      Interest earned on cash and cash equivalents was $5,000 and $36,000 in
1998 and 1999.                                                                  

3. INVENTORIES                                                                  

Our inventories consist of the following (in thousands):        

                                                        [Enlarge/Download Table]

                                                       OCTOBER 31,  OCTOBER 30,  JANUARY 22,
                                                          1998         1999         2000    
                                                       -----------  -----------  -----------
                                                                                 (unaudited)
                                                                                            
Raw materials, including packaging and other supplies     $378        $  890       $1,206   
Finished product                                            77           592          284   
                                                          ----        ------       ------   
  Total                                                   $455        $1,482       $1,490   
                                                          ====        ======       ======   

4. PLANT, PROPERTY AND EQUIPMENT                                                

Estimated useful lives that we use are as follows:              

                                                                [Download Table]
                                                                               
Leasehold improvements.................... shorter of useful life or lease term
Machinery and equipment...................                        5 to 10 years
Motor vehicles............................                              5 years

        Plant, property and equipment consisted of the following (in thousands):

                                                        [Enlarge/Download Table]

                                                OCTOBER 31,  OCTOBER 30,  JANUARY 22,
                                                    1998        1999         2000    
                                                -----------  -----------  -----------
                                                                          (unaudited)
                                                                                     
Leasehold improvements                             $  303      $ 1,504      $ 1,556  
Machinery and equipment                             2,507        6,746        6,784  
Motor vehicles                                        318          669          608  
                                                   ------      -------      -------  
                                                    3,128        8,919        8,948  
Less accumulated depreciation and amortization       (645)      (1,789)      (2,175) 
                                                   ------      -------      -------  
Plant, property and equipment, net                 $2,483      $ 7,130      $ 6,773  
                                                   ======      =======      =======  

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5. SHORT-TERM BORROWINGS                                                        

        The Company obtains financing from certain of our vendors for certain of
our machinery and equipment purchases. Such financing is obtained through       
arrangements whereby the amount of the individual payments for the equipment are
determined based on a quantity of raw material purchases from the vendor        
multiplied by a specific dollar amount as defined in the agreement. The terms of
the agreements are generally one year in length and require the payment of      
interest on the outstanding principal balance at a rate of 15% per annum. At the
end of the term, the remaining principal and any accrued and unpaid interest    
thereon is due and payable to the vendor. At October 30, 1999, the Company has  
paid the vendors in full.                                                       

6. LONG-TERM DEBT                                                               

Long-term notes payable balances are as follows:                

                                                        [Enlarge/Download Table]

                                                                              OCTOBER 31,   OCTOBER 30,
                                                                                 1998          1999    
                                                                              -----------   -----------
                                                                                   (in thousands)      
                                                                                                       
Variable rate (9% at October 30, 1999) revolving credit agreement (1)                         $3,385   

Non interest-bearing notes, monthly principal payments ranging from                                    
  $500 to $10,000, with maturity dates ranging from February 2000                                      
  to March 2002.                                                                                  87   

Note payable at a fixed rate of 8.4% per annum, monthly principal and                                  
  interest payments of $402 starting in August 1999 through July 2002.                                 
  The note is collateralized by the underlying motor vehicle.                                     12   

Note payable at a fixed rate of 10.98% per annum, monthly principal and                                
  interest payments of $695 through February 2001. The note is                                         
  collateralized by the underlying motor vehicle.                                $ 16             10   

Note payable at a fixed rate of 11.60% per annum, monthly principal                                    
  and interest payments of $554 through July 2001.  The note is                                        
  collateralized by the underlying motor vehicle.                                  16             11   

Notes payable at fixed rates ranging from 9.49% to 11.10% per annum, monthly                           
  principal and interest payments ranging from $224 to $475, with maturity                             
  dates ranging from August 2000 to November 2001. The notes are                                       
  collateralized by the underlying motor vehicles and equipment.                   42             24   
                                                                                 ----        -------   
                                                                                   74          3,529   
  Less:  current portion                                                          (30)        (3,498)  
                                                                                 ----        -------   
  Long-term debt, excluding current portion                                      $ 44        $    31   
                                                                                 ====        =======   

      The aggregate long-term maturities of the notes payable are as follows
(in thousands):                                                                 

                                                                [Download Table]
                      
2000           $ 3,498
2001                24
2002                 7
               -------
               $ 3,529

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) On January 21, 1999, the Company entered into a revolving credit and loan   
agreement with a bank (the "Agreement"). This Agreement was subsequently
amended on September 27, 1999. The Company was in violation of certain  
    covenants under this agreement at October 31, 1999. On January 10, 2000, the
    Company amended this agreement in order to remedy these covenant violations.
   The Amended Agreement provides for revolving loan advances ("Revolving Loan
  Advances") up to the lesser of the applicable Revolving Commitment, or the
sum of 70% of eligible accounts receivable, as defined in the Agreement,
plus 40% of the sum of capital expenditures financed by Revolving Loan  
    Advances and all other capital expenditures incurred in fiscal 1999 and 2000
    ("Formula Capital Expenditures"), plus $1,600,000 during the period from the
  date of the note to the Reduction Date (the earlier of May 31, 2000 or the
 date at which Bain Capital, Inc. makes a capital contribution of at least
$3,000,000). The applicable Revolving Commitment amount is $6,000,000   
through and including the Reduction Date and $4,000,000 thereafter.     
  Revolving Loan Advances will bear interest, payable monthly, at the bank's
   prime lending rate, or the prime rate published in the Wall Street Journal,
  plus three-quarters of one percent (0.75%). All outstanding Revolving Loan
    Advances and accrued and unpaid interest are payable in full on February 28,
2001. If not paid in full on the due date, whether stated or by         
acceleration, interest on unpaid balances shall thereafter be payable on
    demand at a rate equal to 4.75% above the Prime Rate in effect. In the event
the Company makes certain prepayments, as defined in the Agreement, a   
prepayment premium equal to one and one-quarter percent (1.25%) of the  
 Revolving Commitment will be applied. In addition, upon the occurrence of
either or both of a Significant Change in Ownership and/or a Credit     
Termination, as defined in the Agreement, the Company shall pay a       
   Termination Fee equal to one-quarter percent (0.25%) of the Appraised Value
of the Company greater than $33,500,000.                                

The proceeds of the Note shall be used by the Company solely for working
capital and equipment financing needs. The Company must maintain an     
  operating account at the Lender's place of business, and the Company shall
deposit all revenues into the operating account. The Lender may in its  
discretion debit the operating account for the payments of interest,    
principal and other costs from time to time under the terms of the Loan 
Documents.                                                              

A Letter of Credit was issued in favor of the Lender in the minimum     
   principal amount of $3,000,000 and bearing an expiration date of no earlier
  than June 30, 2000. The Letter of Credit may be drawn by the Lender (i) if
   any default shall occur and/or (ii) if, by May 31, 2000, Bain Capital shall
not have made a cash capital contribution to the Company.               

    The Agreement contains certain affirmative, negative and financial covenants
    which require the Company, among other things, to maintain minimum quarterly
   net revenues, tangible net worth, net income, cash flow to debt service and
    total liabilities to tangible net worth ratios, as defined in the Agreement.
The Agreement also contains cross-default provisions and all borrowings 
under the Agreement are cross-collateralized.                           

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7. OPERATING AND CAPITAL LEASES                                                 

        The Company leases certain property consisting of production facilities,
offices, branch distribution facilities, equipment and motor vehicles under     
operating leases. These leases expire at various dates through 2009 and many    
facility leases contain renewal options. Most property leases require the       
Company to pay utilities, property taxes and common maintenance costs. The      
Company also leases various machinery and equipment and motor vehicles under    
capital leases expiring through 2004.                                           

       Following is an analysis of property and equipment under capital leases
by major class as of October 30, 1999 (in thousands):                           

                                                                [Download Table]
                                               
Machinery and equipment                  $  600
Motor vehicles                              403
                                         ------
                                          1,003
Less accumulated amortization               177
                                         ------
                                         $  826
                                         ======


        Depreciation of assets under capital leases was $40,268 and $118,301 for
the years ended October 31, 1998 and October 30, 1999.                          

       As of October 30, 1999, future net minimum lease payments under capital
leases and future minimum rental payments required under operating leases are as
follows:                                                                        

                                                                [Download Table]

                                            CAPITAL       OPERATING
FISCAL YEAR ENDING                           LEASES        LEASES  
------------------                          -------       ---------
                                                                   
        2000                                   $289        $ 2,907 
        2001                                    270          2,843 
        2002                                    202          2,647 
        2003                                    135          2,475 
        2004                                     32          1,878 
  Thereafter                                      -          4,095 
                                               ----        ------- 
                                                928        $16,845 
                                                           ======= 
Less amount representing interest               131                
                                               ----                
Present value of net minimum lease payments     797                
Less current maturities                         228                
                                               ----                
Long-term portion                              $569                
                                               ====                

       For the years ended October 31, 1998 and October 30, 1999, rent expense
amounted to $1,189,000 and $3,130,000.                                          

8. SHAREHOLDERS EQUITY:                                                         

 On September 17, 1998, the Company entered into an agreement (the
"Recapitalization Agreement") with a group of outside investors affiliated with 
Bain Capital, Inc. ("Bain") and with its existing stockholders ("Existing       
Stockholders"). Pursuant to the terms of the Recapitalization Agreement, a      
series of transactions (the "Recapitalization"), which are summarized below,    
were completed to effect the recapitalization of the Company.                   

    (i)   The Company amended its articles of incorporation to authorize
             five new classes of common stock as follows: (1) 4,000,000 shares
        of Class A-1 common stock; (2) 1,125,000 shares of Class A-2
             common stock; (3) 1,125,000 shares of Class A-3 common stock; (4)
50,000 shares of Class L-1 common stock             

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FRESH SAMANTHA, INC.

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            and (5) 50,000 shares of Class L-2 common stock. All new classes
of common stock have a par value of $.01 per share. 

    (ii)  Each of the Existing Stockholders' 1,000 shares of outstanding
         Class A common stock and 10,200 shares of outstanding Class B
             common stock were exchanged for 62 shares of the Class A-3 common
             stock and warrants. Subsequent to the exchange, 694,400 shares of
Class A-3 common stock were outstanding;            

      (iii) The Company issued to Bain 12,527 shares of the Class L-1 common
       stock and 5,280 shares of the Class L-2 common stock for an
aggregate purchase price of $7,500,000;             

 (iv)  The proceeds of $7,500,000 were used to redeem the Existing
              Stockholders of 416,632 shares of the outstanding Class A-3 common
      stock. The redeemed shares were canceled and are no longer
              outstanding. Subsequent to the redemption, 277,768 shares of Class
A-3 common stock were outstanding;                  

        (v)   The Company issued to Bain an additional 9,186 shares of the Class
            L-1 common stock and an additional 3,871 shares of the Class L-2
       common stock for an aggregate purchase price of $5,500,000.
             Subsequent to this additional purchase, outstanding shares of the
          Class L-1 and Class L-2 common stock totaled 21,713 and 9,151;

       (vi)  The proceeds of $5,500,000 were used to (1) repay all outstanding
              amounts under the Company's existing line of credit and other note
           payable arrangements totaling approximately $1,970,000, (2) pay
            Recapitalization related costs of approximately $816,000 and (3)
    fund operations. The remaining proceeds from the sale of
  additional shares of Class L-1 and L-2 common stock of
              approximately $2,304,000 were invested in money market funds as of
October 31, 1998.                                   

        At October 30, 1999, the Company has three classes of outstanding common
stock, Class L-1, Class L-2 and Class A-3. The significant features of these    
classes of common stock as reflected in the Company's Amended and Restated      
Articles of Incorporation are as follows:                                       

Voting Rights                                                   

    Each share of Class A common stock shall be entitled to one vote per
share and each share of Class L common stock is entitled to the number of votes 
per share equal to the Class L conversion factor then in effect (23.4005 at     
October 30, 1999).                                                              

Board of Directors                                              

       The holders of outstanding shares of Class A-1 and L-1 common stock are
entitled to elect three directors, the holders of outstanding shares of Class   
A-2 and Class L-2 common stock are entitled to elect one director and the       
holders of outstanding Class A-3 common stock are entitled to elect three       
directors. If the number of directors exceeds seven, the holders of outstanding 
shares of Class A-1 and L-1 common stock will be entitled to elect the remaining
directors up to a maximum of 15 directors.                                      

Distributions                                                   

 The holders of the outstanding shares of Class L common stock are
entitled to all distributions, including distributions in the event of a        
complete or partial liquidation of the Company or upon a sale of all or         
substantially all of the business assets, until the holders have received an    
aggregate amount equal to the outstanding shares of Class L common stock        
multiplied by the Class L base amount ($421.20 at October 30, 1999) per share   
plus an amount necessary to generate an internal rate of return on the          
investment in Class L common stock of 9% per annum, compounded quarterly. All   
holders of common stock are entitled to receive remaining distributions ratably 
based on the number of shares held once the holders of the Class L common stock 
have received their required distributions.                                     

Mandatory Conversion of Class A Common Stock                    

        Upon a vote by the Board of Directors, each outstanding share of Class A
common stock other than Class A-1 common stock will automatically convert into  
one share of Class A-1 common stock upon an initial public offering of          

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the Company's common stock ("IPO"). However, the vote will not be effective     
prior to an IPO. Subsequent to the conversion, all classes of Class A common    
stock other than Class A-1 will be retired, cancelled and removed from the      
Company's authorized capital and the holders of Class A-1 common stock will be  
entitled to elect the entire Board of Directors.                                

Optional Conversion of Class L Common Stock                     

       At any time at the option of the holders of the Class L-1 and Class L-2
common stock, each outstanding share of Class L-1 and Class L-2 common stock may
be converted into a number of shares of Class A-1 and Class A-2, respectively,  
based on the Class L conversion factor then in effect (23.4005 at October 31,   
1999). However, if there has been an automatic conversion of Class A common     
stock to Class A-1 common stock as a result of an IPO, the shares of Class L-2  
common stock will convert into shares of Class A-1 common stock. Subsequent to  
the optional conversion, the Class L common stock will be retired, cancelled and
removed from the Company's authorized capital.                                  

Stockholders Agreement                                          

      In connection with the Recapitalization, the Existing Stockholders and
Bain entered into a Stockholders Agreement. The Stockholders Agreement          
establishes agreements with respect to voting, restrictions on the transfer of  
shares of common stock and rights of the stockholders to request registration   
under the Securities Act of 1933 in the event of an IPO.                        

Preferred Stock                                                 

        On September 10, 1999, the Company amended its Articles of Incorporation
and authorized one hundred sixty thousand (160,000) shares of Class N-1         
Preferred Stock and eighty thousand (80,000) shares of Class N-2 Preferred Stock
(Class N Shares, respectively), each having a par value of $0.01 per share. In  
the event of distributions, the holders of Class N Shares will receive the same 
priority of Class L Common Stock as a single and separate class and, with       
respect to the Class N Shares, are entitled to all distributions, including     
distributions in the event of a complete or partial liquidation of the Company  
or upon a sale of all or substantially all of the business assets, until the    
holders have received an aggregate amount equal to the outstanding shares of    
Class N preferred stock multiplied by the Class N Base Amount ($27.50 at October
30, 1999) per share. At any time at the option of the holders of the Class N-1  
and Class N-2 preferred stock, each outstanding share of Class N-1 and Class N-2
preferred stock may be converted in to an equal number of Class A-1 and Class   
A-2 common stock, respectively. However, if there has been an automatic         
conversion of Class A common stock to Class A-1 common stock as a result of an  
IPO, the shares of Class N-2 preferred stock will convert into shares of Class  
A-1 common stock. Subsequent to the optional conversion, the Class N preferred  
stock will be retired, cancelled and removed from the Company's authorized      
capital.                                                                        

       In addition, the stockholders amended their Stockholders' Agreement. In
connection with this amendment the Company issued $6,000,000 of Class N         
Convertible Preferred Stock, par value $.01 per share (the "Class N Stock"). The
Class N preferred stock consisted of 140,702 and 77,480 shares of Class N-1 and 
Class N-2, respectively.                                                        

Stock Options                                                   

     On April 1, 1999, the Company adopted its 1999 Stock Option Plan. The
purpose of this Plan is to provide selected employees of the Company with       
additional incentives to contribute to the success of the Company and to        
attract, reward and retain employees of outstanding ability. The Plan reserves  
for issuance a maximum of 200,000 shares of Class A-3 common stock. The Plan    
allows the granting of both incentive stock options and non-qualified stock     
options. Options vest ratably over a five year period, but generally none are   
exercisable until at least one year following the grant and all expire after ten
years in the event they are not exercised.                                      

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

       Stock option activity for the year ended October 30, 1999 is as follows
(in thousands except per share amounts):                                        

                                                                [Download Table]

                                                          Weighted Average
                                              Options      Exercise Price 
                                              -------     ----------------
                                                                          
Balance at October 31, 1998                      --               --      

Granted                                          48           $18.00      
Forfeited                                       (16)          $18.00      
                                                ---                       

Balance at October 30, 1999                      32           $18.00      
                                                ===                       

Options exercisable at October 30, 1999          10           $18.00      
                                                ===                       

   The weighted average remaining contractual life of these options is
approximately 10 years. Exercise price for options outstanding at October 30,   
1999 is $18.00.                                                                 

     As permitted under SFAS 123, the Company follows APB 25 in accounting
for stock-based awards to employees. Under APB 25, we have not recognized any   
compensation expense with respect to such awards, since the exercise price of   
the stock options awarded are equal to the fair market value of the underlying  
security on the grant date.                                                     

   Had compensation costs for the stock options issued under the Stock
Option Plan been determined based on the grant date fair values as required by  
SFAS No. 123, our net loss would have been increased to the pro forma amounts   
indicated below (in thousands except per share amounts):                        

                                                                [Download Table]

                 1999                      1999
             Net loss  Basic net loss per share
             --------  ------------------------
                                               
As reported  $(6,577)          $21.31          

Pro forma    $(6,656)          $21.57          

    Fair value was estimated using the minimum-value method, a risk-free
interest rate of 6% and an expected life of 10 years.                           

Warrants                                                        

      In connection with the Recapitalization and the exchange of the former
Class A and Class B common stock for Class A-3 common stock, the Existing       
Stockholders entered into an agreement (the "Warrant Agreement") whereby they   
obtained warrants to purchase additional shares of Class A-3 common stock at an 
initial exercise price of $.01 per share upon the occurrence of (1) a sale of   
all or substantially all of the assets of the Company, (2) any transaction after
which Bain ceases to own a majority of the voting stock of the Company and (3)  
an IPO. The additional shares to be purchased are to be determined in accordance
with a formula outlined in the Warrant Agreement, but not to exceed 142,354     
shares. Based on the formula for calculating the additional shares, the benefit 
to be derived by the Existing Stockholders from these warrants is substantially 
limited. As a result, management has valued these warrants at an aggregate      
nominal value of $1,000 and has recorded their value as a charge to accumulated 
deficit and a credit to additional paid-in capital.                             

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9. RELATED PARTY TRANSACTIONS                                                   

  During 1998, the Company entered into various transactions with an
affiliated company, Down East Sunsprouts, Inc. ("Down East Sunsprouts"). Prior  
to fiscal 1998, Down East Sunsprouts was wholly-owned by Fresh Samantha but was 
subsequently spun off to the Existing Shareholders of the Company. The fiscal   
1998 transactions between the related parties included purchases of inventory   
from one another as well as Fresh Samantha's incurring payroll and other        
operating costs on behalf of Down East Sunsprouts. At October 31, 1998, Fresh   
Samantha had a $12,000 net receivable from Down East Sunsprouts relating to the 
fiscal 1998 transactions which is included in prepaid expenses and other current
assets in the accompanying balance sheet. The amount was paid in full by Down   
East Sunsprouts subsequent to year end. Subsequent to Fresh Samantha's fiscal   
1998 year end, Down East Sunsprouts was sold to a third party. Sales to and     
purchases from Down East Sunsprouts amounted to approximately $15,900 and       
$13,700 for the year ending October 31, 1998.                                   

10. EMPLOYEE BENEFIT PLAN                                                       

The Company sponsors the Fresh Samantha, Inc. 401(k) defined    
contribution plan (the "Plan"). The Plan covers all employees who meet the      
initial eligibility requirements, as defined in the Plan document, and who      
continue to provide at least 1,000 hours of service during the Plan year.       
Participants in the Plan may contribute up to 15% of their pre-tax compensation 
in any one Plan year subject to the Internal Revenue Service limitation. The    
Company may elect to match the participants' contributions based on a matching  
contribution formula using a contribution percentage determined at the Company's
discretion. Plan participants vest in Company matching contributions ratably    
over a five year period in accordance with a graduated vesting schedule. Under  
the Plan, the Company, at its sole discretion, may also elect to make additional
contributions on behalf of the participants. All employer matching contributions
due to the plan for fiscal 1999 had been paid as of October 30, 1999. The       
Company charged approximately $35,000 and $46,000 to expense for this Plan for  
the years ended October 31, 1998 and October 30, 1999.                          

11. INCOME TAXES                                                                

Deferred income taxes reflect the net tax effects of temporary  
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. The significant
components of the Company's deferred tax assets and liabilities are as follows  
(in thousands):                                                                 

                                                        [Enlarge/Download Table]

                                                                  OCTOBER 31,  OCTOBER 30,
                                                                     1998         1999    
                                                                  -----------  -----------
                                                                                          
Deferred tax assets                                                                       
  Net operating loss carryover                                       $ 35        $ 2,298  
  Expenses not currently deductible                                    58            278  
  Alternative minimum tax credit                                       30             31  
                                                                     ----        -------  
                                                                      123          2,607  
                                                                     ----        -------  

Deferred tax liabilities                                                                  
  Tax over book depreciation                                          163            124  
                                                                     ----        -------  
                                                                      163            124  
                                                                     ----        -------  

Net deferred tax assets (liabilities) before valuation allowance      (40)         2,483  

Less valuation allowance                                               --         (2,483) 
                                                                     ----        -------  
Net deferred tax asset (liabilities)                                 $(40)       $    --  
                                                                     ====        =======  

  Due to the uncertainty of future taxable income, the Company fully
reserved for its net deferred tax assets.                                       

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

    The Company will have remaining federal and state net operating loss
carryforwards of approximately $5,660,000 expiring in fiscal years 2000 through 
2019. The net operating loss carryforwards are available to offset future       
federal and state taxable income.                                               

Income tax benefit consists of the following (in thousands):    

                                                                [Download Table]

                                                YEAR ENDED OCTOBER       
                                      -----------------------------------
                                          1997          1998         1999
                                      -----------       ----         ----
                                      (unaudited)                        
                                                                         
Federal:                                                                 
    Current                              $ (37)         $ 58          $--
    Deferred                               (46)           (2)          32
                                         -----          ----          ---
                                           (83)           56           32
                                         -----          ----          ---
State:                                                                   
    Current                                (12)           10           --
    Deferred                               (15)          (15)           8
                                         -----          ----          ---
                                           (27)           (5)           8
                                         -----          ----          ---
Total income tax (expense) benefit       $(110)         $ 51          $40
                                         =====          ====          ===

    The provision for income taxes is different from the amount computed
using the applicable statutory federal income tax rate of 34%, with the         
differences summarized as follows (in thousands):                               

                                                                [Download Table]

                                                    YEAR ENDED OCTOBER       
                                            ---------------------------------
                                                1997       1998       1999   
                                            -----------   ------    ---------
                                            (unaudited)                      
                                                                             
Tax benefit at statutory rates                 $ (34)      $58       $ 2,250 
Adjustment due to:                                                           
    Change in valuation allowance                  -         -        (2,483)
    Other                                        (76)       (7)          273 
                                               -----       ---       ------- 
Total income tax (expense) benefit             $(110)      $51       $    40 
                                               =====       ===       ======= 

12. OTHER (EXPENSE) INCOME, NET                                                 

 Other (expense) income consisted of the following (in thousands):

                                                                [Download Table]

                                                              TWELVE WEEKS ENDED    
                              YEAR ENDED OCTOBER           -------------------------
                  --------------------------------------   JANUARY 23,   JANUARY 22,
                      1997           1998           1999      1999          2000    
                  -----------       -----          -----   -----------   -----------
                  (unaudited)                              (unaudited)   (unaudited)
                                                                                    
Interest income      $  --          $   5          $  36      $ 21          $ --    
Interest expense       (98)          (172)          (219)      (11)          (90)   
Other                   (9)          (102)           (14)       (1)           17    
                     -----          -----          -----      ----          ----    
                     $(107)         $(269)         $(197)     $  9          $(73)   
                     =====          =====          =====      ====          ====    

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FRESH SAMANTHA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13. ALLOWANCE FOR DOUBTFUL ACCOUNTS AND PRODUCT RETURNS                         

        The following summarizes activity in the allowance for doubtful accounts
and product returns for the years shown (in thousands):                         

                                                        [Enlarge/Download Table]

                                                                YEAR ENDED OCTOBER          
                                                      ------------------------------------- 
                                                         1997           1998          1999  
                                                      -----------       ----          ----- 
                                                      (unaudited)                           
                                                                                            
Allowance for doubtful accounts and product returns,                                        
    beginning of year                                     $ --          $ 23          $  27 
Bad debt expense and change in allowance for product                                        
     returns for the year                                   45            21            483 
Accounts receivable written off during the year            (22)          (17)           (22)
                                                          ----          ----          ----- 
Allowance for doubtful accounts and product returns,                                        
     end of year                                          $ 23          $ 27          $ 488 
                                                          ====          ====          ===== 

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APPENDICES

                                                                [Download Table]
                                                                              
Appendix A .................................... Agreement and Plan of Merger  
Appendix B .................................... Shareholders' Rights Agreement
Appendix C .................................... Opinion of W.R. Hambrecht + Co

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                                                                      APPENDIX A
================================================================================

AGREEMENT AND PLAN OF MERGER

by and among

 ODWALLA, INC.
a California corporation

FRESH SAMANTHA, INC.
 a Maine corporation

 and

ORANGE ACQUISITION SUB, INC.
 a Maine corporation

Dated as of February 2, 2000

================================================================================

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 TABLE OF CONTENTS

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1. The Merger; Effective Time...........................................................1  

   1.1    The Merger....................................................................1  

   1.2    Effective Time of the Merger..................................................1  

   1.3    The Merger Consideration......................................................1  

   1.4    Working Capital Adjustment....................................................2  

   1.5    Escrow........................................................................3  

2. Purchaser and the Surviving Corporation..............................................3  

   2.1    The Surviving Corporation.....................................................3  

3. Treatment of Shares..................................................................3  

   3.1    Exchange of Shares............................................................3  

   3.2    Mechanics of Exchange.........................................................4  

   3.3    No Further Rights in Stock....................................................5  

   3.4    Closing.......................................................................5  

   3.5    Supplementary Action..........................................................5  

   3.6    Termination of Stockholders Agreement.........................................5  

4. Closing Conditions...................................................................5  

   4.1    Conditions Precedent to Obligations of the Purchaser                             
          and Merger Sub................................................................5  

   4.2    Conditions Precedent to Obligations of the Company and                           
          the Selling Shareholders......................................................7  

5. Representations and Warranties of the Company and the Selling                           
   Shareholders.........................................................................9  

   5.1    Organization; Good Standing; Qualification....................................9  

   5.2    Articles of Incorporation and Bylaws; Records.................................9  

   5.3    Capitalization...............................................................10  

   5.4    Authority; Binding Nature of Agreements......................................10  

   5.5    Non-Contravention; Consents..................................................11  

   5.6    Intellectual Property........................................................12  

   5.7    Proceedings; Orders..........................................................13  

   5.8    Financial Statements.........................................................13  

   5.9    Title to Assets..............................................................13  

   5.10   Contracts....................................................................14  

   5.11   Employees....................................................................15  

   5.12   Compliance with Legal Requirements...........................................15  

   5.13   Governmental Authorizations..................................................15  

   5.14   Tax Matters..................................................................16  

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   5.15   Securities Laws Compliance; Registration Rights..............................17  

   5.16   Finders and Brokers; Fees....................................................17  

   5.17   Environmental Compliance.....................................................17  

   5.18   Insurance....................................................................17  

   5.19   Related Party Transactions...................................................18  

   5.20   Absence of Changes...........................................................18  

   5.21   Powers of Attorney...........................................................19  

   5.22   Benefit Plans; ERISA.........................................................19  

   5.23   Major Suppliers..............................................................21  

   5.24   Customers....................................................................21  

   5.25   Full Disclosure..............................................................21  

   5.26   Due Diligence Information....................................................21  

   5.27   Proxy Statement..............................................................21  

   5.28   The Selling Shareholders; Investment Intent and                                  
          Restrictions.................................................................21  

6. Representations and Warranties of the Purchaser and Merger Sub......................23  

   6.1    Organization; Good Standing; Qualification...................................23  

   6.2    Capitalization...............................................................24  

   6.3    Subsidiaries.................................................................24  

   6.4    Authorization................................................................24  

   6.5    Valid Issuance of the Stock..................................................25  

   6.6    Governmental and Third-Party Consents........................................25  

   6.7    SEC Filings; Financial Statements............................................25  

   6.8    No Changes...................................................................26  

   6.9    Compliance with Laws.........................................................26  

   6.10   Compliance with Other Instruments; No Conflict...............................26  

   6.11   Litigation...................................................................26  

   6.12   Tax Returns and Payments.....................................................27  

   6.13   Finders and Brokers; Fees....................................................27  

   6.14   Rights of Registration.......................................................27  

   6.15   Voting Rights................................................................27  

   6.16   Labor Relations and Employee Matters.........................................27  

   6.17   No Other Agreements to Sell the Assets or Capital Stock                          
          of the Purchaser.............................................................28  

   6.18   Investment Representations...................................................28  

   6.19   Proxy Statement..............................................................28  

7. Pre-Closing Covenants of the Company and the Selling                                    
   Shareholders........................................................................28  

   7.1    Access and Investigation.....................................................28  

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    7.2    Operation of Company Business................................................29  

    7.3    Representing Party Actions...................................................30  

    7.4    Filings and Consents.........................................................31  

    7.5    Notification; Updates to Company Disclosure Schedule.........................31  

    7.6    No Negotiation...............................................................31  

    7.7    Best Efforts.................................................................32  

8.  Pre-Closing Covenants of the Purchaser..............................................32  

    8.1    Access and Investigation.....................................................32  

    8.2    Filings and Consents.........................................................32  

    8.3    Operation of Purchaser Business..............................................33  

    8.4    Notification; Updates to Purchaser Disclosure Schedule.......................34  

    8.5    Best Efforts.................................................................34  

    8.6    Grant of Purchaser Options...................................................34  

    8.7    Repayment of Indebtedness....................................................34  

    8.8    Board of Directors...........................................................35  

9.  Other Agreements....................................................................35  

    9.1    Increase of Purchaser Credit Facility........................................35  

    9.2    Proxy Statement; Other Filings...............................................35  

    9.3    Meeting of Purchaser Shareholders............................................36  

    9.4    Confidentiality..............................................................36  

    9.5    Public Disclosure............................................................36  

    9.6    No Inconsistent Action.......................................................37  

    9.7    Covenant Not To Compete; Non-Solicitation....................................37  

    9.8    The LLC......................................................................37  

    9.9    Transfer of LLC Interests and Purchaser Stock................................38  

    9.10   Antitrust Laws...............................................................38  

10. Termination.........................................................................38  

    10.1   Termination Events...........................................................38  

    10.2   Termination Procedures.......................................................38  

    10.3   Effect of Termination........................................................39  

    10.4   Exclusivity of Termination Rights............................................39  

11. Indemnification, etc................................................................39  

    11.1   Survival of Representations and Covenants....................................39  

    11.2   Indemnification of the Purchaser; Limits on Purchaser                            
           Obligations..................................................................39  

    11.3   No Contribution..............................................................40  

    11.4   Defense of Third Party Claims................................................40  

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    11.5   Sole Remedy..................................................................41  

    11.6   Indemnification of Persons Other than the Indemnitees........................41  

12. Miscellaneous.......................................................................41  

    12.1   Further Assurances...........................................................41  

    12.2   Fees and Expenses............................................................41  

    12.3   Attorneys' Fees..............................................................42  

    12.4   Transfer Taxes...............................................................42  

    12.5   Governing Law; Arbitration...................................................42  

    12.6   Successors and Assigns.......................................................42  

    12.7   Entire Agreement.............................................................42  

    12.8   Separability.................................................................42  

    12.9   Amendments...................................................................43  

    12.10  Notices......................................................................43  

    12.11  Publicity and Use of Confidential Information................................46  

    12.12  Counterparts.................................................................46  

    12.13  Delays or Omissions; Waivers.................................................46  

    12.14  Remedies Cumulative; Specific Performance....................................46  

    12.15  Headings.....................................................................47  

    12.16  Construction.................................................................47  

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AGREEMENT AND PLAN OF MERGER

      THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as
of February 2, 2000, by and among ODWALLA, INC., a California corporation (the  
"Purchaser"), FRESH SAMANTHA, INC., a Maine corporation (the "Company"), ORANGE 
ACQUISITION SUB, INC., a Maine corporation and a wholly-owned subsidiary of     
Purchaser (the "Merger Sub"), the Company and Merger Sub sometimes being        
hereinafter collectively referred to as the "Constituent Corporations," SAMANTHA
INVESTORS, LLC, a Massachusetts limited liability company (the "LLC"), and the  
individuals and Entities listed on Schedule I attached hereto. Certain          
capitalized terms in this Agreement are defined in Exhibit A.                   

RECITALS

A.  The Board of Directors of Purchaser, Merger Sub and the Company each
    have determined that it is in the best interests of their respective
      shareholders for the Purchaser to acquire the Company by the merger of
       the Merger Sub with and into the Company upon the terms, and subject to
the conditions, set forth herein (the "Merger").                

B.  For federal income tax purposes, it is intended that the Merger     
      constitute a reorganization under the provisions of Section 368 of the
    Internal Revenue Code of 1986, as amended (the "Code") and that this
   Agreement shall constitute a plan of reorganization for purposes of
Section 368 of the Code.                                        

 AGREEMENT

        The Purchaser, the Company, the Merger Sub and the Selling Shareholders,
intending to be legally bound, agree as follows:                                

1.      THE MERGER; EFFECTIVE TIME.                                             

1.1 THE MERGER.                                                 

       Subject to the terms and conditions of this Agreement, at the Effective
Time (as defined in Section 1.2 hereof), Merger Sub shall be merged with and    
into the Company, the Company shall be the surviving corporation in such Merger 
(the "Surviving Corporation"), and the separate existence of Merger Sub shall   
thereupon cease. The Merger shall have the effects set forth in Sections 902    
through 910 of the Maine Code. Without limiting the generality of the foregoing,
and subject thereto, at the Effective Time all property, rights, powers,        
privileges and franchises of Merger Sub shall vest in the Company as the        
Surviving Corporation, and all debts, liabilities and duties of Merger Sub shall
become the debts, liabilities and duties of the Surviving Corporation.          
Immediately following the Effective Time, the Surviving Corporation shall be a  
wholly-owned subsidiary of Purchaser.                                           

1.2 EFFECTIVE TIME OF THE MERGER.                               

      The Merger shall become effective upon the completion of the filing of
properly executed Articles of Merger with the Secretary of State of the State of
Maine, which filing shall be made as soon as practicable on the Closing Date    
upon satisfaction or waiver of the conditions set forth in Section 4. When used 
in this Agreement, the term "Effective Time" with respect to the Merger shall   
mean the date and time at which such Articles of Merger have been accepted for  
filing by the Secretary of State of the State of Maine.                         

1.3 THE MERGER CONSIDERATION.                                   

     (a) Each Holder shall receive a portion of the Merger
Consideration in consideration of the shares of Company Stock held by such      
Holder as more fully set forth in Section 3.1.                                  

     (b) For purposes of this Agreement, "Aggregate Merger
Consideration" shall be equal to the number of shares of Purchaser Stock        
determined by dividing (i) the number of shares of Purchaser Stock which, as    

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of immediately prior to the Effective Time, are either (A) issued and           
outstanding (excluding any shares of Purchaser Stock actually issued by the     
Purchaser as contemplated in the last paragraph of Section 8.3) or (B) issuable 
upon the exercise, exchange or conversion of any outstanding warrants, options, 
convertible or exchangeable securities or other rights to acquire Purchaser     
Stock other than options issued under the Purchaser's 1997 Stock Option Plan, in
each case, whether or not currently exercisable, by (ii) 1.7027. By way of      
example and for the avoidance of doubt, if (i) the Effective Time were 9:00 a.m.
San Francisco time on January 27, 2000, (ii) 258,667 additional shares of       
Purchaser Stock had been issued, and (iii) the Catterton Warrant had been       
cancelled, then the Aggregate Merger Consideration would be 3,812,122 shares of 
Purchaser Stock.                                                                

1.4 WORKING CAPITAL ADJUSTMENT.                                 

       (a) Not later than seven (7) business days prior to the
anticipated Closing Date:                                                       

                      (i) the Purchaser shall provide the Company with (A) a
statement of Pre-Closing Working Capital prepared by the Purchaser, together    
with all supporting work papers therefor, and (B) a good faith estimate of the  
Purchaser's Working Capital as of the anticipated Closing Date prepared by the  
Purchaser, together with all supporting work papers therefor; and               

                       (ii) the Company shall provide the Purchaser with (A) a
statement of Pre-Closing Working Capital prepared by the Company, together with 
all supporting work papers therefor, and (B) a good faith estimate of the       
Company's Working Capital as of the anticipated Closing Date prepared by the    
Company, together with all supporting work papers therefor.                     

    Upon receipt of a statement of the other party's Pre-Closing Working
Capital and estimate of Working Capital as of the anticipated Closing Date, the 
Company together with the Company's advisors and the Purchaser together with the
Purchaser's advisors shall promptly review the information provided by the other
party. Each of the Company and the Purchaser and their respective advisors shall
provide written notice to the other at least two (2) business days prior to the 
anticipated Closing Date if they dispute the information provided by the other  
party. If either or both parties provide notice of a dispute, the parties shall 
confer promptly and cooperate in good faith to resolve any such dispute.        

                (b) If a party does not provide timely notice of a dispute, such
party will be deemed to have accepted and approved the other party's estimate.  
If either or both parties provide notice of a dispute, the parties shall confer 
promptly and cooperate in good faith to resolve any such dispute. The estimate  
provided by the Purchaser (as adjusted if necessary to resolve any              
aforementioned dispute) shall be referred to as the Purchaser's "Actual Working 
Capital." The estimate provided by the Company (as adjusted if necessary to     
resolve any aforementioned dispute) shall be referred to as the Company's       
"Actual Working Capital."                                                       

         (c) If the Actual Working Capital of Purchaser and/or the
Company exceeds its respective Working Capital Target, then the "Working Capital
Excess" of Purchaser and/or the Company, as the case may be, shall be equal to  
the amount, if any, by which (i) the applicable Actual Working Capital minus the
net proceeds of any Equity Sale of the applicable party exceeds (ii) the Working
Capital Target of the applicable party plus One Million Dollars ($1,000,000).   

         (d) If the Working Capital Target of Purchaser and/or the
Company exceeds its respective Actual Working Capital, then the "Working Capital
Shortfall" of Purchaser and/or the Company, as applicable, shall be equal to the
amount, if any, by which the Working Capital Target of the applicable party     
exceeds the Actual Working Capital of the applicable party.                     

                (e) The Aggregate Merger Consideration shall be (i) increased by
a number of shares of Purchaser Stock equal to (A) the sum of the Purchaser     
Working Capital Shortfall and the Company Working Capital Excess, if any,       
divided by (B) the Average Purchaser Stock Price on the Closing Date, and (ii)  
decreased by a number of shares of Purchaser Stock equal to (A) the sum of the  
Purchaser Working Capital Excess and the Company Working Capital Shortfall, if  
any, divided by (B) the Average Purchaser Stock Price on the Closing Date.      

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The Aggregate Merger Consideration, as adjusted pursuant to this clause (e),    
shall be referred to as the "Merger Consideration."                             

1.5 ESCROW.                                                     

           (a) As the sole source for the payment of each Representing
Party's indemnification obligations set forth herein (except as provided        
otherwise in the last sentence of Section 11.2(a)), the Purchaser will deliver  
to the Escrow Agent under an escrow agreement (the "Escrow Agreement") in       
substantially the form attached hereto as Exhibit B, a number of shares equal to
fifteen percent (15%) of each Holder's allocable portion of the Merger          
Consideration determined in accordance with Section 3.1(b) (in the aggregate,   
the "Holdback Amount").                                                         

             (b) Each Selling Shareholder's Pro Rata Share of the Holdback
Amount shall provide the sole source for the payment of such Selling            
Shareholder's indemnification obligations set forth herein (except as provided  
otherwise in the last sentence of Section 11.2(a)).                             

2.      PURCHASER AND THE SURVIVING CORPORATION.                                

2.1 THE SURVIVING CORPORATION.                                  

        The initial Articles of Incorporation, Bylaws, directors and officers of
the Surviving Corporation shall be as set forth in the Plan of Merger attached  
hereto as Exhibit C.                                                            

3.      TREATMENT OF SHARES.                                                    

3.1 EXCHANGE OF SHARES.                                         

              (a) At the Effective Time, by virtue of the Merger and without
any action on the part of the holders thereof, the shares of Merger Sub common  
stock, $.001 par value, which shall be outstanding immediately prior to the     
Effective Time of the Merger, shall be converted into the number of shares of   
common stock of the Surviving Corporation equal to the number of shares of      
common stock of Merger Sub then outstanding.                                    

(b) Subject to Section 1.5, each share of:      

                       (i) Company Class A Stock outstanding immediately prior
to the Effective Time (other than Treasury Shares as set forth below) shall, at 
the Effective Time, by virtue of the Merger and without any action on the part  
of the Holder thereof, be converted into the right to receive a portion of the  
Merger Consideration equal to the number of shares of Purchaser Stock derived by
obtaining the quotient of (A) ten percent (10%) of the Merger Consideration     
divided by (B) the number of shares of Company Class A Stock; and               

                      (ii) Company Class L Stock and Company Preferred Stock
outstanding immediately prior to the Effective Time (other than Treasury Shares 
as set forth below) shall, at the Effective Time, by virtue of the Merger and   
without any action on the part of the Holder thereof, be converted into the     
right to receive a portion of the Merger Consideration equal to the number of   
shares of Purchaser Stock derived by obtaining the quotient of (A) ninety       
percent (90%) of the Merger Consideration multiplied by the Preference Amount of
such share divided by (B) the aggregate Preference Amount of all such           
outstanding shares;                                                             

provided, that, in no event shall the aggregate number of shares of Purchaser   
Stock issued as the Merger Consideration be increased by the operation of this  
Section 3.1(b).                                                                 

                      (c) At the Effective Time, by virtue of the Merger and
without any action on the part of the Holder thereof, each share of Company     
Common Stock and Company Preferred Stock held in the treasury of the Company    
(the "Treasury Shares"), and each such share of Company Common Stock and Company
Preferred Stock held by the Purchaser or any subsidiary of the Purchaser        
immediately prior to the Effective Time, shall be canceled and retired and cease
to exist, and no consideration shall be given in exchange therefor.             

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           (d) At the Effective Time, eighty five percent (85%) of the
portion of the Merger Consideration determined in accordance with Section 3.1(b)
shall be delivered to each Holder upon the surrender of the certificates        
formerly representing the Stock in accordance with Section 3.2 of this          
Agreement.                                                                      

                (e) No fraction of a share of Purchaser Stock shall be issued in
the Merger. Any such fractional shares shall be rounded to the nearest whole    
number.                                                                         

                (f) The issuance of shares of Purchaser Stock in connection with
the Transactions will not be registered under the Securities Act. Such shares   
may not be transferred or resold thereafter, except in compliance with the terms
of this Agreement and the other Transactional Agreements and following          
registration under the Securities Act or in reliance on an exemption from       
registration under the Securities Act.                                          

3.2 MECHANICS OF EXCHANGE.                                      

              (a) As of the Effective Time, each Holder shall be entitled to
surrender the certificate or certificates, which immediately prior to the       
Effective Time represented the Stock (the "Certificates"), to the Purchaser on  
behalf of the Surviving Corporation for cancellation in exchange for such       
Holder's allocable portion of the Merger Consideration, fifteen percent (15%) of
which Merger Consideration shall be deposited with the Escrow Agent as provided 
in Section 1.5. It shall be a condition of delivery of the Merger Consideration 
that (i) the Certificates surrendered by the Holders shall be in proper form for
cancellation by the Purchaser and (ii) the Holders shall have provided the      
Purchaser with evidence that all transfer or similar Taxes required by reason of
the surrender of such Holder's Certificates, if any, have been paid by such     
Holders.                                                                        

        (b) From and after the Effective Time, there shall be no
transfers of the Stock on the stock transfer books of the Company. If, after the
Effective Time, Certificates formerly representing the Stock are presented to   
the Purchaser for payment, they shall be cancelled and exchanged for the        
applicable portion of the Merger Consideration in accordance with the procedures
set forth in this Section.                                                      

              (c) At or prior to the Effective Time of the Merger, Purchaser
shall deliver to the Escrow Agent shares of Purchaser Stock in an aggregate     
amount equal to the Holdback Amount.                                            

      (d) If any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Holder thereof   
claiming such Certificate to be lost, stolen or destroyed, the Purchaser will   
issue or cause to be issued in exchange for such lost, stolen or destroyed      
Certificate the portion of the Merger Consideration for which the shares of     
Stock represented by the Certificate are exchangeable in accordance with this   
Section 3. When authorizing such issuance in exchange therefor, the Purchaser   
may, in its discretion and as a condition precedent to the issuance thereof,    
require the Holder to give the Purchaser a bond in such sum as it may direct as 
indemnity, or such other form of indemnity, as it shall direct, against any     
claim that may be made against the Purchaser with respect to the Certificate    
alleged to have been lost, stolen or destroyed.                                 

             (e) The Purchaser and the Surviving Corporation may, at their
option, appoint a bank or trust company selected by the Purchaser to act as     
exchange agent in connection with the Transactions.                             

               (f) If any certificate for Purchaser Stock is to be issued in a
name other than that in which the Certificate surrendered in exchange therefor  
is registered, it shall be a condition of such exchange that the person         
requesting such exchange shall (i) pay to the Purchaser any transfer or other   
Taxes required by reason of the issuance of certificates for such securities in 
a name other than that of the registered holder of the Certificate surrendered, 
or (ii) establish to the satisfaction of the Purchaser that such Tax has been   
paid or is not applicable.                                                      

               (g) Notwithstanding anything in this Agreement to the contrary,
neither the Purchaser nor any other party hereto shall be liable to a holder of 
shares of Stock for any portion of the Merger Consideration, or dividend on     
shares of Purchaser Stock issued as part of the Merger Consideration, delivered 
to a public official pursuant to applicable escheat laws following the passage  
of time specified therein.                                                      

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3.3 NO FURTHER RIGHTS IN STOCK.                                 

     All securities received by each Holder pursuant to this Agreement and
the Escrow Agreement shall be deemed to have been delivered and received in full
satisfaction of all rights pertaining to such Holder's shares of Stock. Except  
as otherwise provided by law, at the Effective Time, the Holders shall cease to 
have any rights with respect to shares of Stock, and their sole right shall be  
to receive the Merger Consideration.                                            

3.4 CLOSING.                                                    

       The closing of the Transactions (the "Closing") shall take place at the
offices of Morrison & Foerster LLP, 425 Market Street, San Francisco, California
94105-2482 at 9:00 a.m., local time, on the later of (x) April 26, 2000 or (y)  
the fifth (5th) business day after the day on which all of the conditions set   
forth in Sections 4.1 and 4.2 hereof are satisfied or waived (or the applicable 
party receives reasonable assurances that such conditions will have been        
satisfied by such fifth (5th) business day), or at such other date, time and    
place as the parties shall otherwise agree (the date of such Closing, the       
"Closing Date").                                                                

3.5 SUPPLEMENTARY ACTION.                                       

   If at any time after the Effective Time, any further assignments or
assurances in law or any other things are necessary or desirable to vest or to  
perfect or confirm of record in the Surviving Corporation the title to any      
property or rights of either Constituent Corporation, or otherwise to carry out 
the provisions of this Agreement, the officers and directors of the Surviving   
Corporation are hereby authorized and empowered on behalf of the Constituent    
Corporations, in the name of and on behalf of either Constituent Corporation as 
appropriate, to execute and deliver any and all things necessary or proper to   
vest or to perfect or confirm title to such property or rights in the Surviving 
Corporation, and otherwise to carry out the purposes and provisions of this     
Agreement.                                                                      

3.6 TERMINATION OF STOCKHOLDERS AGREEMENT.                      

 By executing this Agreement, each of the Company and each Selling
Shareholder hereby agrees that from and after the Effective Time, the Amended   
and Restated Stockholders Agreement, dated as of September 10, 1999, by and     
among the Company and the Selling Shareholders (as it may be amended, restated  
or otherwise modified from time to time, the "Company Stockholders Agreement")  
shall terminate and be of no further force and effect and that no party thereto 
shall have any further rights or obligations thereunder.                        

4.      CLOSING CONDITIONS.                                                     

        4.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER AND MERGER SUB.

     The Purchaser's and Merger Sub's obligations to consummate the Merger
and to take the other actions required to be taken by the Purchaser and Merger  
Sub at the Closing are subject to the satisfaction, at or prior to the Closing, 
of each of the following conditions (any of which may be waived by the          
Purchaser, in whole or in part, in accordance with Section 12.13):              

              (a) the representations and warranties made by (i) the Company
in Section 5 hereof and in each other Transactional Agreement and (ii) the      
Representing Parties in Section 5.28 hereof, in each other Transactional        
Agreement and in the Rights Agreement shall be true and accurate in all respects
as of the Closing Date as though made on and as of the Closing Date, except for 
the breach or inaccuracy of any such representations or warranties that is not  
reasonably likely to have a Material Adverse Effect on the Company;             

                (b) all covenants and agreements contained in this Agreement, in
any other Transactional Agreement or in the Rights Agreement to be observed by  
the LLC, Selling Shareholders and/or the Company on or prior to the Closing     
shall have been performed or complied with in all material respects;            

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        (c) the Selling Shareholders, the LLC or the Company, as
applicable, shall have delivered the following documents to the Purchaser:      

                      (i) the Escrow Agreement, duly executed by the Selling
Shareholders and the LLC;                                                       

                       (ii) a shareholders' rights agreement, duly executed by
the Representing Parties who shall be parties thereto and substantially in the  
form of Exhibit D attached hereto (the "Rights Agreement");                     

                   (iii) the legal opinion of Ropes & Gray, counsel to
certain of the Selling Shareholders, dated the Closing Date, in substantially   
the form of Exhibit E;                                                          

                      (iv) the legal opinion of Verrill & Dana, LLP, counsel
to the Company, dated the Closing Date, in substantially the form of Exhibit F; 

                     (v) the legal opinion of Drummond Woodsum & MacMahon,
counsel to certain of the Selling Shareholders, dated the Closing Date, in      
substantially the form of Exhibit G;                                            

                      (vi) a certificate (the "Company Closing Certificate")
executed on behalf of the Company by a senior executive officer of the Company, 
dated as of the Closing Date, (A) certifying to the satisfaction of the         
conditions specified in Sections 4.1(a) and (b) with respect to the Company, (B)
certifying that the Stock is not a United States real property interest within  
the meaning of Section 897 of the Code, and has not been a United States real   
property interest for the five-year period ending as of the Closing Date, and   
(C) setting forth the capitalization of the Company as of immediately prior to  
the Effective Time in the manner set forth in Section 5.3;                      

                      (vii) a certificate (the "Selling Shareholders Closing
Certificate") of each Selling Shareholder and the LLC, where applicable, dated  
as of the Closing Date, and certifying to the satisfaction of the conditions    
specified in Sections 4.1(a) and (b) with respect to such Selling Shareholder or
the LLC, where applicable;                                                      

                     (viii) the written resignations of the members of the
Company Board;                                                                  

                (ix) written evidence reasonably satisfactory to
Purchaser of the cancellation of the Company Warrants;                          

                   (x) written evidence reasonably satisfactory to the
Purchaser that any Person who shall become a party to the Company Stockholders  
Agreement after the date of this Agreement shall have agreed to the termination 
of the Company Stockholders Agreement as of the Effective Time; and             

                    (xi) written evidence reasonably satisfactory to the
Purchaser of (A) the termination of the Company's 1999 Stock Option Plan, and   
(B) the cancellation of all option agreements and other rights to purchase the  
capital stock of the Company issued thereunder (other than Company Options which
shall have been exercised);                                                     

           (d) the Purchaser shall have approved the Company's Working
Capital estimate as contemplated in Section 1.4(b) (which approval shall not be 
unreasonably withheld) and the Company's Actual Working Capital shall be not    
less than negative Five Million Two Hundred Fifty Dollars (-$5,250,000);        

                (e) to the reasonable satisfaction of Purchaser and its counsel,
the offer and sale of the Purchaser Stock pursuant to the terms of this         
Agreement shall comply with an exemption from registration under the Securities 
Act and/or any applicable federal or state securities laws and regulations;     

               (f) all corporate and other proceedings required to be taken on
the part of the Company, the LLC and the Selling Shareholders in connection with
this Agreement, the Transactional Agreements and the Transactions, and all      
documents incident thereto, shall be reasonably satisfactory in form and in     
substance to the Purchaser and its counsel;                                     

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               (g) not more than one percent (1%) of the shares of Stock shall
dissent from the Merger;                                                        

                (h) each of the Consents identified or required to be identified
in Part 5.5(b) of the Company Disclosure Schedule shall have been obtained and  
shall be in full force and effect;                                              

            (i) there shall have been no event or circumstance after the
date of this Agreement that is reasonably likely to have a Material Adverse     
Effect on the Company;                                                          

               (j) there shall not have been commenced or expressly threatened
by any Person other than the Purchaser, the Company, the Selling Shareholders or
their respective Affiliates any Proceeding which is reasonably likely to result 
in the issuance of any judgment, Order, decree or injunction by a court of      
competent jurisdiction that would prevent consummation of the Transactions or   
cause the Transactions to be rescinded following consummation;                  

             (k) no Person other than a holder of Company Stock or Company
Options shall have made or expressly threatened any material claim asserting    
that such Person (i) may be the holder or the beneficial owner of, or may have  
the right to acquire or to obtain beneficial ownership of, any capital stock or 
other securities of the Company, and (ii) may be entitled to all or any material
portion of the Merger Consideration;                                            

              (l) neither the consummation nor the performance of any of the
Transactions will, directly or indirectly (with or without notice or lapse of   
time), contravene or conflict with or result in a violation of, or cause the    
Purchaser to suffer a Material Adverse Effect as a result of (i) a change in any
applicable legal requirement after the date of this Agreement or any Order      
issued after the date of this Agreement, or (ii) any legal requirement or Order 
that is proposed after the date of this Agreement by or before any Governmental 
Body;                                                                           

            (m) the Purchaser shall have received a written opinion from
Morrison & Foerster, LLP, in substantially the form attached hereto as Exhibit  
H, to the effect that the Merger will constitute a reorganization within the    
meaning of Section 368(a) of the Code. In rendering such opinion, Morrison &    
Foerster, LLP shall be entitled to receive and rely upon representations of     
officers of the Purchaser and the Company as to such matters as they may        
reasonably request;                                                             

                (n) the Purchaser shall have received reasonable assurances that
debt financing on terms at least as favorable or more favorable to Purchaser    
than those terms in the Bank Term Sheet shall be available to the Purchaser at  
the Effective Time;                                                             

                (o) Concurrently with the Closing or immediately thereafter, the
Purchaser shall have sold not less than six million dollars ($6,000,000) of     
Purchaser Stock upon terms and conditions at least as favorable or more         
favorable to Purchaser than those set forth in Exhibits L-1 and L-2;            

             (p) the issuance by Purchaser of the Merger Consideration and
(unless the Purchaser and the Company mutually agree not to submit this         
Agreement and the Merger to the shareholders of Purchaser for approval) this    
Agreement and the Merger shall have been duly approved and adopted by the       
requisite vote under applicable law of the shareholders of the Purchaser and    
Merger Sub;                                                                     

            (q) any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated; and             

              (r) not more than five percent (5%) of the shares of Purchaser
Stock outstanding on the record date for the Purchaser Shareholders' Meeting    
shall be "dissenting shares" under California law in connection with any vote of
the shareholders of Purchaser in connection with the Transactions.              

      4.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND THE SELLING
SHAREHOLDERS.                                                                   

     The Company's and the Selling Shareholders' obligations to consummate
the Merger and to take the other actions required to be taken by the Company and
the Selling Shareholders at the Closing, are subject to the                     

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satisfaction, at or prior to the Closing, of each of the following conditions   
(any of which may be waived by the Company in the determination of the Company  
on behalf of the Company and the Selling Shareholders, in whole or in part, in  
accordance with Section 12.13):                                                 

                (a) the representations and warranties made by the Purchaser and
Merger Sub in Section 6 hereof and in each other Transactional Agreement, and   
the representations and warranties made by the Purchaser and each shareholder of
Purchaser who is a party thereto in the Rights Agreement, shall be true and     
accurate in all respects as of the Closing Date as though made on and as of the 
Closing Date, except for the breach or inaccuracy of any such representations or
warranties that is not reasonably likely to have a Material Adverse Effect on   
the Purchaser;                                                                  

                (b) all covenants and agreements contained in this Agreement, in
any other Transactional Agreement or in the Rights Agreement to be observed by  
the Purchaser, Merger Sub and/or any shareholder of the Purchaser on or prior to
the Closing shall have been performed or complied with in all material respects;

              (c) the Purchaser shall have delivered the following documents
to the Selling Shareholders and/or the Company, as the case may be:             

              (i) the Escrow Agreement, duly executed by the
Purchaser;                                                                      

               (ii) the Rights Agreement, duly executed by the
Purchaser and each shareholder of the Purchaser who shall be a party thereto;   

           (iii) a certificate (the "Purchaser Closing
Certificate") executed on behalf of the Purchaser by a senior executive officer 
of the Purchaser, dated as of the Closing Date, (A) certifying to the           
satisfaction of the conditions specified in Sections 4.2(a) and (b), and (B)    
setting forth the capitalization of the Purchaser as of immediately prior to the
Effective Time in the manner set forth Section 6.2;                             

                   (iv) the legal opinion of Morrison & Foerster, LLP,
counsel to the Purchaser and Merger Sub, dated the Closing Date, in             
substantially the form of Exhibit I;                                            

           (d) the Company shall have approved the Purchaser's Working
Capital estimate as contemplated in Section 1.4(b) (which approval shall not be 
unreasonably withheld) and the Purchaser's Actual Working Capital shall be not  
less than Four Million Two Hundred Fifty Thousand Dollars ($4,250,000);         

                (e) all shares of Purchaser Preferred Stock shall have converted
into shares of Purchaser Stock;                                                 

              (f) written evidence reasonably satisfactory to the Company of
the cancellation of the Catterton Warrant;                                      

              (g) neither the consummation nor the performance of any of the
Transactions will, directly or indirectly (with or without notice or lapse of   
time), contravene or conflict with or result in a violation of, or cause the    
Company or the Selling Shareholders to suffer a Material Adverse Effect as a    
result of (i) a change in any applicable legal requirement after the date of    
this Agreement or any Order issued after the date of this Agreement, or (ii) any
legal requirement or Order that is proposed after the date of this Agreement by 
or before any Governmental Body;                                                

            (h) there shall have been no event or circumstance after the
date of this Agreement that is reasonably likely to have a Material Adverse     
Effect on the Purchaser;                                                        

               (i) there shall not have been commenced or expressly threatened
by any Person other than the Purchaser, the Company, the Selling Shareholders or
their respective Affiliates any Proceeding which is reasonably likely to result 
in the issuance of any judgment, Order, decree or injunction by a court of      
competent jurisdiction which would prevent consummation of the Transactions or  
cause the Transactions to be rescinded following consummation;                  

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                (j) the Company shall have received a written opinion from Ropes
& Gray in substantially the form attached hereto as Exhibit J, to the effect    
that the Merger will constitute a reorganization within the meaning of Section  
368(a) of the Code. In rendering such opinion, Ropes & Gray shall be entitled to
receive and rely upon representations of officers of the Purchaser and the      
Company as to such matters as they may reasonably request;                      

             (k) the issuance by Purchaser of the Merger Consideration and
(unless the Purchaser and the Company mutually agree not to submit this         
Agreement and the Merger to the shareholders of Purchaser for approval) this    
Agreement and the Merger shall have been duly approved and adopted by the       
requisite vote under applicable law of the shareholders of the Purchaser and    
Merger Sub;                                                                     

            (l) each consent and other item identified or required to be
identified in Part 6.6 of the Purchaser Disclosure Schedule shall have been     
obtained and shall be in full force and effect;                                 

                (m) the Purchaser shall have received reasonable assurances that
debt financing on terms at least as favorable or more favorable to Purchaser    
than those terms in the Bank Term Sheet shall be available to the Purchaser at  
the Effective Time;                                                             

                (n) concurrently with the Closing or immediately thereafter, the
Purchaser shall have sold not less than six million dollars ($6,000,000) of     
Purchaser Stock upon terms and conditions at least as favorable or more         
favorable to Purchaser than those set forth in Exhibits L-1 and L-2;            

            (o) any waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated; and             

              (p) not more than five percent (5%) of the shares of Purchaser
Stock outstanding on the record date for the Purchaser Shareholders' Meeting    
shall be "dissenting shares" under California law in connection with any vote of
the shareholders of Purchaser in connection with the Transactions.              

5.      REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLING           
SHAREHOLDERS.                                                   

       Except as specifically set forth in the disclosure schedule provided by
the Company and attached hereto as Schedule II (the "Company Disclosure         
Schedule"), the parts of which are numbered to correspond to the Section numbers
of this Agreement, the Company hereby represents and warrants to the Purchaser  
(and only with respect to Section 5.28, each Selling Shareholder or, if         
applicable, the LLC, represents and warrants, solely as to itself, to the       
Purchaser) as follows:                                                          

5.1 ORGANIZATION; GOOD STANDING; QUALIFICATION.                 

        (a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maine, is duly     
qualified to conduct business and is in good standing under the laws of each    
jurisdiction in which the nature of its business or the ownership or leasing of 
its properties requires such qualification. The Company has the requisite       
corporate power and authority to own and operate its properties and assets, and 
to carry out the provisions hereof and thereof, and to carry on its business as 
currently conducted.                                                            

     (b) The Company has no subsidiaries and does not own,
beneficially or otherwise, any shares or other securities of, or any other      
direct or any other indirect interest of any nature in, any Entity.             

5.2 ARTICLES OF INCORPORATION AND BYLAWS; RECORDS.              

                (a) The Company has made available to the Purchaser accurate and
complete copies of:                                                             

                       (i) the Company's Articles of Incorporation and Bylaws,
including all amendments thereto, as presently in effect;                       

          (ii) the stock records of the Company; and

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                       (iii) the minutes and other records of the meetings and
other proceedings (including any actions taken by written consent or otherwise  
without a meeting) of the shareholders of the Company, the Company Board and all
committees of the Company Board.                                                

There have been no meetings or other proceedings of the shareholders of the     
Company, the Company Board or any committee of the Company Board that are not   
memorialized in such minutes or other records, the absence of which would have a
Material Adverse Effect on the Company.                                         

         (b) The Company has never conducted any business under or
otherwise used, for any purpose or in any jurisdiction, any fictitious name,    
assumed name, trade name or other name, other than the names listed on Part 5.2 
of the Company Disclosure Schedule.                                             

              (c) There has not been any material violation of the Company's
Articles of Incorporation or Bylaws or of any resolution adopted by the         
Company's shareholders, the Company Board or any committee of the Company Board.

5.3 CAPITALIZATION.                                             

            (a) As of the date of this Agreement, the authorized capital
stock of the Company consists of four million (4,000,0000) shares of Class A-1  
Common Stock, par value $0.01 per share, none of which are issued and           
outstanding, one million one hundred twenty five thousand (1,125,000) shares of 
Class A-2 Common Stock, par value $0.01 per share, none of which are issued and 
outstanding, one million one hundred twenty five thousand (1,125,000) shares of 
Class A-3 Common Stock, par value $0.01 per share, of which two hundred         
seventy-seven thousand seven hundred seventy (277,770) are issued and           
outstanding, fifty thousand (50,000) shares of Class L-1 Common Stock, par value
$0.01 per share, of which twenty one thousand seven hundred thirteen (21,713)   
shares are issued and outstanding, fifty thousand (50,000) shares of Class L-2  
Common Stock, par value $0.01 per share, of which nine thousand one hundred     
fifty one (9,151) shares are issued and outstanding, one hundred sixty thousand 
(160,000) shares of Class N-1 Preferred Stock, par value $0.01 per share, of    
which one hundred forty thousand seven hundred and two (140,702) shares are     
issued and outstanding, and eighty thousand (80,000) shares of Class N-2        
Preferred Stock, par value $0.01 per share, of which seventy seven thousand four
hundred eighty (77,480) shares are issued and outstanding. No other shares of   
capital stock are issued or outstanding. All issued and outstanding shares of   
the Company's capital stock have been duly authorized and validly issued, are   
fully paid and nonassessable, and have been issued in full compliance with all  
applicable securities laws and other applicable legal requirements. Part 5.3(a) 
of the Company Disclosure Schedule accurately sets forth (i) the names of the   
employees/consultants who have been granted Company Options and the names of the
individuals who have been issued Company Warrants; (ii) the number of Company   
Options held by such employee/consultant as of the date of this Agreement, if   
any; and (iii) the number of the Company Warrants issued to such individual.    

(b) There is no:                                

                      (i) outstanding subscription, option, call, warrant or
right (whether or not currently exercisable) to acquire any shares of the       
capital stock or other securities of the Company;                               

                        (ii) outstanding security, instrument or obligation that
is or may become convertible into or exchangeable for any shares of the capital 
stock or other securities of the Company; or                                    

                   (iii) to the Knowledge of the Company, condition or
circumstance that may directly or indirectly give rise to or provide a basis for
a claim by any Person to the effect that such Person is entitled to acquire or  
receive any shares of capital stock or other securities of the Company.         

5.4 AUTHORITY; BINDING NATURE OF AGREEMENTS.                    

      The Company has the corporate power and authority to enter into and to
perform its obligations under this Agreement and the other Transactional        
Agreements to which it is or is contemplated to be a party, and the execution,  

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delivery and performance by the Company of this Agreement and such Transactional
Agreements have been duly authorized by all necessary action on the part of the 
Company Board and its shareholders. This Agreement and the other Transactional  
Agreements constitute, or upon execution and delivery will constitute, the      
legal, valid and binding obligations of the Company, enforceable against the    
Company in accordance with their respective terms, except to the extent that    
enforceability may be limited by applicable bankruptcy, reorganization,         
insolvency, moratorium or other laws affecting the enforcement of creditor's    
rights generally and by general principles of equity regardless of whether such 
enforceability is considered in a proceeding in law or equity.                  

5.5 NON-CONTRAVENTION; CONSENTS.                                

              (a) The execution and delivery of this Agreement and the other
Transactional Agreements, and the consummation of the Transactions, by the      
Company will not, directly or indirectly (with or without notice or lapse of    
time):                                                                          

                     (i) contravene, conflict with or result in a material
violation of (A) the Company's Articles of Incorporation or Bylaws, or (B) any  
resolution adopted by the Company Board or any committee thereof or the         
shareholders of the Company;                                                    

                 (ii) to the Knowledge of the Company, contravene,
conflict with or result in a violation of, or give any Governmental Body or     
other Person the right to challenge any of the Transactions or to exercise any  
remedy or obtain any relief under, any legal requirement or any Order to which  
the Company or any assets owned or used by it are subject, in each case where   
such conflict or remedy would be reasonably likely to have a Material Adverse   
Effect on the Company;                                                          

                  (iii) to the Knowledge of the Company, contravene,
conflict with or result in a material violation of any of the terms or          
requirements of, or give any Governmental Body the right to revoke, withdraw,   
suspend, cancel, terminate or modify, any Governmental Authorization that is    
held by the Company or any of its employees or that would otherwise be          
reasonably likely to have a Material Adverse Effect on the Company;             

                      (iv) contravene, conflict with or result in a material
violation or material breach of, or material default under, any Material Company
Contract;                                                                       

                   (v) give any Person the right to any payment by the
Company or give rise to any acceleration or change in the award, grant, vesting 
or determination of options, warrants, rights, severance payments or other      
contingent obligations of any nature whatsoever of the Company in favor of any  
Person, in any such case as a result of the change in control of the Company or 
otherwise resulting from the Transactions;                                      

                (vi) result in the imposition or creation of any
material encumbrance upon or with respect to any asset owned or used by the     
Company; or                                                                     

                    (vii) require the Company to make any filing with or
give any notice to, or obtain any Consent from, any Person in connection with   
the execution and delivery of this Agreement and the other Transactional        
Agreements or the consummation or performance of any of the Transactions.       

           (b) Other than the filings and submissions that the Company
shall make under the HSR Act in connection with the Transactions, the Company   
will not be required to make any filing with or give any notice to, or obtain   
any Consent from, any Person in connection with the execution and delivery of   
this Agreement or the consummation or performance of any of the Transactions,   
except for filings, the failure of which to make, and Consents, the failure of  
which to obtain, are not reasonably likely to have a Material Adverse Effect on 
the Company.                                                                    

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5.6 INTELLECTUAL PROPERTY.                                      

            (a) Part 5.6 of the Company Disclosure Schedule sets forth a
complete list of all patents, registered and material unregistered trademarks,  
registered copyrights, registered maskworks, registered and material            
unregistered trade names and registered and material unregistered service marks,
and any applications therefor in respect of any of the foregoing, included in   
the Company's Proprietary Assets, and specifies, where applicable, the          
jurisdictions in which each such Proprietary Asset has been issued or registered
or for which an application for such issuance and registration has been filed,  
including the respective registration or application numbers and the names of   
all registered owners. Part 5.6 of the Company Disclosure Schedule also sets    
forth a complete list of all material licenses, sublicenses and other agreements
as to which the Company is a party and pursuant to which the Company or any     
other Person is authorized to use any of the Company's Proprietary Assets       
(excluding end-user licenses granted to end-users in the ordinary course of     
business that permit use of software products without a right to modify,        
distribute or sublicense the same), and includes the identity of all parties    
thereto, a description of the nature and subject matter thereof, the applicable 
royalty and the term thereof. The Company is not in violation of any license,   
sublicense or agreement described on such list except such violations as do not 
materially impair the Company's rights under such license, sublicense or        
agreement, and except for such violations as would not, individually or in the  
aggregate, be reasonably likely to have a Material Adverse Effect on the        
Company. Except for any consents to transfer required under any Material Company
Contract, the execution and delivery of this Agreement by the Company, and the  
consummation of the transactions contemplated hereby, (i) will not cause the    
Company to be in material violation or default under any such license,          
sublicense or agreement, (ii) will not entitle any other party to any such      
license, sublicense or agreement to terminate or modify such license, sublicense
or agreement or (iii) will not require the Company to repay any funds already   
received by it from a third party, except, in each case or in the aggregate,    
where such action(s) would not be reasonably likely to have a Material Adverse  
Effect on the Company.                                                          

               (b) The Company has all right, title and interest in and to and
is (i) the sole and exclusive owner or (ii) the licensee of (free and clear of  
any liens or encumbrances), the Company's Proprietary Assets, and has sole and  
exclusive rights (and is not contractually obligated to pay any compensation to 
any third party in respect thereof) to the use thereof or the material covered  
thereby.                                                                        

              (c) No claims with respect to the Company's Proprietary Assets
have been asserted or, to the Knowledge of the Company, are threatened by any   
Person for any bona fide claims: (i) to the effect that the manufacture, sale,  
licensing or use of any of the products of the Company as now manufactured,     
sold, licensed or used or proposed for manufacture, sale, licensing or use by   
the Company infringes on any third party's Proprietary Assets; (ii) against the 
use by the Company of its Proprietary Assets in its business as currently       
conducted; or (iii) challenging the ownership by the Company, validity or       
enforceability of any of the Company's Proprietary Assets, except in each case  
or in the aggregate, where such claims which would not be reasonably likely to  
have a Material Adverse Effect on the Company. To the Company's Knowledge, all  
registered patents, trademarks, service marks and copyrights held by the        
Company, if any, are valid and subsisting.                                      

         (d) To the Knowledge of the Company, there is no material
unauthorized use, infringement or misappropriation of any of the Company's      
Proprietary Assets by any third party, including any employee or former employee
of the Company, except where such action would not be reasonably likely to have 
a Material Adverse Effect on the Company.                                       

               (e) None of the Company's Proprietary Assets are subject to any
outstanding decree, order, judgment, or stipulation restricting in any manner   
the licensing thereof by the Company.                                           

              (f) The Company has not entered into any agreement under which
the Company is restricted from selling, licensing or otherwise distributing any 
of its products to any class of customers, in any geographic area, during any   
period of time or in any segment of the market.                                 

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5.7 PROCEEDINGS; ORDERS.                                        

         (a) There is no pending Proceeding, and, to the Company's
Knowledge, no Person has threatened to commence any Proceeding:                 

               (i) to which the Company is a party and that is
reasonably likely to have a Material Adverse Effect on the Company; or          

                    (ii) that challenges, or that may have the effect of
preventing, delaying, making illegal or otherwise interfering with, any of the  
Transactions or the Company's ability to comply with or perform its obligations 
and covenants under the Transactional Agreements, and, to the Knowledge of the  
Company, no event has occurred, and no claim, dispute or other condition or     
circumstance exists, that might directly or indirectly give rise to or serve as 
a basis for the commencement of any such Proceeding.                            

                (b) The Company has made available to the Purchaser accurate and
complete copies of all pleadings, correspondence and other written materials to 
which the Company has access that relate to the Proceedings identified in Part  
5.7(a) of the Company Disclosure Schedule, if any.                              

                (c) There is no Order to which the Company, or any of the assets
owned or used by the Company, is subject, except where such Order would not be  
reasonably likely to have a Material Adverse Effect on the Company.             

             (d) To the Company's Knowledge, no officer or employee of the
Company is subject to any Order that prohibits such officer or employee from    
engaging in or continuing any conduct, activity or practice relating to the     
Company's business.                                                             

5.8 FINANCIAL STATEMENTS.                                       

          (a) The Company has delivered to the Purchaser the audited
balance sheet of the Company as of October 30, 1999, and the related audited    
statements of operations, changes in shareholders' equity and cash flows of the 
Company for the period ended October 30, 1999, together with the notes thereto  
(collectively, the "Financial Statements"), which are attached as Exhibit K.    

             (b) The Financial Statements (i) were prepared from the books
and records of the Company, (ii) present fairly the financial position of the   
Company as of the date thereof and the results of operations and cash flows for 
the period then ended, and (iii) were prepared in accordance with GAAP applied  
on a consistent basis (except as may be indicated therein or in the notes or    
schedules thereto) and in all material respects with the published rules and    
regulations of the SEC.                                                         

               (c) As of the date of this Agreement, the Company has and as of
the Closing Date will have no Liabilities in excess of Fifty Thousand Dollars   
($50,000), individually or in the aggregate, not reflected in the Financial     
Statements.                                                                     

5.9 TITLE TO ASSETS.                                            

          (a) The Company owns, and has good and valid title to, all
assets purported to be owned by it, free and clear of any material encumbrances,
except for Permitted Liens.                                                     

             (b) Part 5.9(b) of the Company Disclosure Schedule identifies
all equipment, furniture, fixtures, improvements and other tangible assets owned
by the Company with a book value over Twenty-Five Thousand Dollars ($25,000),   
and sets forth the original cost and book value of each of said assets.         

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               (c) Except as would not be reasonably likely to have a Material
Adverse Effect on the Company, each asset identified in Part 5.9(b) of the      
Company Disclosure Schedule:                                                    

                       (i) is free of material defects and deficiencies and in
good condition and repair, consistent with its age and intended use (ordinary   
wear and tear excepted); and                                                    

     (ii) is adequate for its current use.

              (d) The Company does not own any real property or any interest
in real property, except for the interests created under the real property      
leases identified in Part 5.9(d) of the Company Disclosure Schedule (the "Leased
Premises"). Part 5.9(d) of the Company Disclosure Schedule lists the premises   
covered by said leases.                                                         

           (e) All leases pursuant to which the Company leases real or
personal property are in good standing and are valid and effective in accordance
with their respective terms and, to the Knowledge of the Company, there exists  
no default thereunder.                                                          

5.10 CONTRACTS.                                                 

                (a) Part 5.10 of the Company Disclosure Schedule identifies each
Material Company Contract. The Company has made available to the Purchaser      
accurate and complete copies of all Material Company Contracts, including all   
amendments thereto.                                                             

            (b) Each Material Company Contract is currently valid and in
full force and effect, and is enforceable by the Company in accordance with its 
terms, except to the extent that (i) enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting the  
enforcement of creditor's rights generally and by general principles of equity  
regardless of whether such enforceability is considered in a proceeding in law  
or equity, or (ii) the failure of any such Material Company Contract to be valid
and in full force and effect is not reasonably likely to have a Material Adverse
Effect on the Company.                                                          

        (c) (i) The Company is not in material default under any
Material Company Contract, (ii) to the Knowledge of the Company, no Person has  
violated or breached, or declared or committed any material default under, any  
Material Company Contract; and (iii) the Company has not waived any of its      
rights under any Material Company Contract.                                     

            (d) (i) The Company is not party to any Contract pursuant to
which it has guaranteed, insured or may otherwise become liable for, and none of
its assets are pledged to secure, the performance or payment of any obligation  
or other Liability of any other Person; and (ii) the Company is not a party to  
or bound by any material joint venture agreement, partnership agreement,        
profit-sharing agreement, cost-sharing agreement, loss-sharing agreement or     
similar Contract.                                                               

          (e) No Person is renegotiating any material amount paid or
payable to the Company under any Material Company Contract (individually or in  
the aggregate) or any other material term or provision of any Material Company  
Contract.                                                                       

              (f) Part 5.10(f) of the Company Disclosure Schedule identifies
and provides an accurate and complete description of each proposed Material     
Company Contract (i) as to which any bid, offer, written proposal, term sheet or
similar document has been submitted to or received by the Company and is        
outstanding, and (ii) that involves obligations in excess of Twenty-Five        
Thousand Dollars ($25,000).                                                     

              (g) No party to any Material Company Contract has notified the
Company to the effect that the Company has failed to perform a material         
obligation thereunder.                                                          

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5.11 EMPLOYEES.                                                 

              (a) Part 5.11(a) of the Company Disclosure Schedule contains a
list of all employees of the Company as of January 25, 2000 and their respective
titles and annualized compensation.                                             

              (b) Part 5.11(b) of the Company Disclosure Schedule contains a
list of individuals who were performing services for the Company business as of 
November 30, 1999 and were classified as "consultants" or "independent          
contractors," and the respective compensation of each such "consultant" or      
"independent contractor."                                                       

                (c) The Company has no collective bargaining agreements or union
contracts with any of its employees, nor has the Company ever been party to any 
collective bargaining agreement. To the Knowledge of the Company, there is no   
labor union organizing activity pending or threatened with respect to the       
Company.                                                                        

               (d) The Company has not received any written notice that any of
its employees or consultants with whom the Company has contracted is in         
violation of any term of any employment contract, proprietary information       
agreement or any other agreement relating to the right of any such individual to
be employed by, or to contract with, the Company because of the nature of the   
business to be conducted by the Company. To the Knowledge of the Company, no    
employee, or any group of employees, key to the operation of the Company's      
business after the Closing Date has given notice of his, her or its intent to   
terminate his, her or its employment with the Company.                          

                (e) Except for the Company Employment Agreements, the employment
of each of the Company's employees is terminable at will and the Company has not
granted to any employee, in writing or verbally, the right to any material      
compensation or other severance payments following termination of employment    
with the Company or (except in the Ordinary Course of Business) under any other 
circumstances.                                                                  

5.12 COMPLIANCE WITH LEGAL REQUIREMENTS.                        

        Except for legal requirements relating to Taxes, securities regulations,
environmental protection, and employee benefits plans (which are addressed in   
Sections 5.14, 5.15, 5.17, and 5.22, respectively):                             

     (a) The Company is in full compliance with each legal
requirement that is applicable to it or to the conduct of its business or the   
ownership or use of any of its assets.                                          

            (b) The Company has not received any written notice from any
Governmental Body or any other Person regarding (i) any actual, alleged,        
possible or potential violation of, or failure to comply with, any legal        
requirement by the Company, or (ii) any actual, alleged, possible or potential  
obligation on the part of the Company to undertake, or to bear all or any       
portion of the cost of, any cleanup or any remedial, corrective or response     
action of any nature, except, in each case, to the extent any such noncompliance
or obligation is not reasonably likely to result in a Material Adverse Effect on
the Company.                                                                    

5.13 GOVERNMENTAL AUTHORIZATIONS.                               

                (a) Part 5.13 of the Company Disclosure Schedule identifies each
Governmental Authorization held by the Company. The Company has made available  
to the Purchaser accurate and complete copies of all such Governmental          
Authorizations, including all renewals thereof and all amendments thereto. Each 
Governmental Authorization identified or required to be identified in Part 5.13 
of the Company Disclosure Schedule is valid and in full force and effect, except
to the extent the failure of such Governmental Authorization(s), either         
individually or in the aggregate, to be in full force and effect is not         
reasonably likely to have a Material Adverse Effect on the Company.             

              (b) The Governmental Authorizations identified in Part 5.13 of
the Company Disclosure Schedule constitute all the Governmental Authorizations  
necessary (i) to enable the Company to conduct its business in the manner in    
which its business is currently being conducted, and (ii) to permit the Company 
to own and use its                                                              

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assets in the manner in which they are currently owned and used, except, in     
either case, where the failure to obtain such Government Authorizations would   
not be reasonably likely to have a Material Adverse Effect on the Company.      

5.14 TAX MATTERS.                                               

               (a) Each Tax required to have been paid by the Company (whether
pursuant to any Tax Return or otherwise) has been duly paid in full on a timely 
basis. Any Tax required to have been withheld or collected by the Company has   
been duly withheld and collected, and (to the extent required) each such Tax has
been paid to the appropriate Governmental Body. The Company has complied in all 
material respects with all information reporting and backup withholding         
requirements, including maintenance of required records with respect thereto, in
connection with amounts paid or owing to any employee, creditor, independent    
contractor or other third party.                                                

               (b) All Tax Returns required to be filed by or on behalf of the
Company with any Governmental Body with respect to any taxable period ending    
after December 31, 1996 and on or before the Closing Date ("Company Returns")   
have been or will be filed when due. The Company has made available to the      
Purchaser copies of all Company Returns filed by or on behalf of the Company    
prior to the Closing Date.                                                      

            (c) The Company's liability for unpaid Taxes for all periods
ending on or before the date of the Financial Statements does not, in the       
aggregate, exceed the amount of the current liability accruals for Taxes        
(excluding reserves for deferred taxes) reported in the Financial Statements.   
The Company has established, in the Ordinary Course of Business, reserves       
adequate for the payment of all Taxes for the period from October 30, 1999      
through the Closing Date, and the Company shall have disclosed the estimated    
dollar amount of such reserves to the Purchaser on or prior to the Closing Date.

             (d) To the Knowledge of the Company, Part 5.14 of the Company
Disclosure Schedule identifies each examination or audit of any Company Return  
that has been conducted by any Governmental Body since January 1, 1997. The     
Company has made available to the Purchaser copies of all audit reports and     
similar documents (to which the Company has access) relating to Company Returns.
No extension or waiver of the limitation period applicable to any of the Company
Returns has been granted by the Company.                                        

             (e) No claim or other Proceeding has been asserted in writing
against or with respect to the Company in respect of any Tax. The Company has   
not entered into or become bound by any agreement or consent pursuant to Section
341(f) of the Code. The Company has never been in a "consolidated group" within 
the meaning of Treasury Regulations Section 1.1502-1(h) other than a group, the 
common parent of which was the Company, and is not liable for Taxes incurred by 
any individual, trust, other corporation, partnership or any other Entity either
as a transferee or successor or pursuant to Treasury Regulations Section        
1.1502-6, or pursuant to any other provision of federal, territorial, state,    
local or foreign law or regulations other than a group, the common parent of    
which was the Company. Except as set forth in Part 5.14 of the Company          
Disclosure Schedule, the Company is not a party to any joint venture,           
partnership or other arrangement or contract which could be treated as a        
partnership for United States federal income tax purposes. None of the assets of
the Company (i) directly or indirectly secures any debt the interest on which is
tax exempt under Section 103(a) of the Code or (ii) is "tax exempt use property"
within the meaning of Section 168(h) of the Code. The Company has not           
participated in an international boycott as defined in Code Section 999. The    
Company does not have a "permanent establishment," as defined in any applicable 
Tax treaty or convention of the United States of America, or fixed place of     
business in any foreign country.                                                

                (f) The Company is not party to any agreement, plan, arrangement
or other Contract covering any employee or independent contractor or former     
employee or independent contractor of the Company that, individually or         
collectively, could give rise directly or indirectly to the payment of any      
amount that would not be deductible pursuant to Section 280G of the Code by     
reason of the Transactions. The Company is not, and has never been, a party to  
or bound by any tax indemnity agreement, tax-sharing agreement, tax allocation  
agreement or similar Contract, and has not otherwise assumed the tax liability  
of any other Person under contract.                                             

             (g) As of the date of this Agreement, to the Knowledge of the
Company, the Company has no net operating losses or other tax attributes        
presently subject to limitation under Code Section 382, 383 or 384, or the      
federal consolidated return regulations, other than any limitations arising from
the Transactions.                                                               

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5.15 SECURITIES LAWS COMPLIANCE; REGISTRATION RIGHTS.           

      The Company has complied with all federal and state securities laws in
connection with all offers and sales of securities issued by the Company prior  
to the date of this Agreement. The Company has not heretofore granted any other 
purchaser of its securities the right to require the Company to register any    
securities under the Securities Act.                                            

5.16 FINDERS AND BROKERS; FEES.                                 

              (a) Neither the Company nor any person acting on behalf of the
Company has engaged any finder, broker, intermediary or any similar person in   
connection with the Transactions.                                               

        (b) The Company has not entered into a contract or other
agreement that provides that a fee shall be paid to any Person or Entity if the 
Transactions are consummated.                                                   

5.17 ENVIRONMENTAL COMPLIANCE.                                  

    The Company is and, to the Knowledge of the Company, has been at all
times in compliance in all material respects with all Environmental Laws.       

5.18 INSURANCE.                                                 

                (a) Part 5.18 of the Company Disclosure Schedule sets forth each
insurance policy maintained by or at the expense of, or for the direct or, to   
the Knowledge of the Company, indirect benefit of, the Company.                 

                (b) To the extent available to the Company, the Company has made
available to the Purchaser copies of all of the insurance policies identified in
Part 5.18 of the Company Disclosure Schedule (including all renewals thereof and
endorsements thereto) and binders relating thereto.                             

          (c) As of the date of this Agreement, each of the policies
identified in Part 5.18 of the Company Disclosure Schedule is in full force and 
effect. All of the information contained in the applications submitted in       
connection with said policies was (at the times said applications were          
submitted) accurate and complete in all material respects. The consummation of  
the Transactions will not cause any of such policies, or any renewals or        
replacements thereof to terminate, and the Company has paid all premiums due,   
and has otherwise performed all of its obligations, under each policy to which  
it is a party or that provides coverage to it or any of its directors or        
officers in connection with their performance of services to the Company, except
where the failure to perform such obligations or pay premiums is not reasonably 
likely to have a Material Adverse Effect on the Company.                        

            (d) There is no pending claim under or based upon any of the
policies identified in Part 5.18 of the Company Disclosure Schedule, and no     
event has occurred, and, to the Knowledge of the Company, no condition or       
circumstance exists, that might (with or without notice or lapse of time)       
directly or indirectly give rise to or serve as a basis for any such claim.     

(e) The Company has not received:               

                    (i) any written notice regarding the cancellation or
invalidation of any of the policies identified in Part 5.18 of the Company      
Disclosure Schedule or regarding any adjustment in the amount of the premiums   
payable with respect to any of said policies; or                                

                (ii) any written notice regarding any refusal of
coverage under, or any rejection of any claim under, any of the policies        
identified in Part 5.18 of the Company Disclosure Schedule.                     

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5.19 RELATED PARTY TRANSACTIONS.                                

              (a) No Related Party has, and no Related Party has at any time
since October 30, 1999, had any direct or indirect material interest of any     
nature in any material asset of the Company (other than through ownership of    
shares of Stock) or any Company Contract.                                       

             (b) No Related Party is, or has at any time since October 30,
1999, been, indebted to the Company for any amount.                             

              (c) Since October 30, 1999, no Related Party has entered into,
or has had any direct or indirect material financial interest in, any Company   
Contract, transaction or business dealing of any nature involving the Company.  

              (d) No Related Party is competing or has threatened to compete
in any manner, or has at any time since October 30, 1999, competed or threatened
to compete in any manner, directly or indirectly, with the Company in any market
served by the Company.                                                          

5.20 ABSENCE OF CHANGES.                                        

From the date of the Financial Statements:                      

          (a) there has not been any change in the business, assets,
liabilities, financial condition, prospects or operating results of the Company,
from that reflected in the Financial Statements, except changes in the Ordinary 
Course of Business and such other changes that individually or collectively have
not had a Material Adverse Effect on the Company;                               

                (b) the Company has not declared, accrued, set aside or paid any
dividend or made any other distribution in respect of any shares of capital     
stock (except during the Pre-Closing Period to the extent permitted under       
Section 7.2(g));                                                                

                (c) the Company has not amended its Articles of Incorporation or
Bylaws and has not effected or been a party to any merger, consolidation, or    
sale of all or substantially all of its assets or similar transaction;          

                (d) the Company has not made or committed to make any individual
capital expenditure in excess of Fifty Thousand Dollars ($50,000) other than as 
set forth on Schedule IV;                                                       

          (e) the Company has not pledged or hypothecated any of its
material assets or otherwise permitted any of its material assets to become     
subject to any encumbrance other than Permitted Liens;                          

               (f) the Company has not made any loan or advance to any Person,
other than for expense reimbursement purposes or in the Ordinary Course of      
Business;                                                                       

  (g) the Company has not paid any bonus or made any
profit-sharing or similar payment to, or increased the amount of the wages,     
salary, commissions, fringe benefits or other compensation or remuneration      
payable to, any of its directors, officers or employees other than in the       
Ordinary Course of Business;                                                    

              (h) there has been no resignation or termination of employment
of any officer or key employee of the Company;                                  

             (i) there has been no borrowing or agreement to borrow by the
Company or material change in the contingent obligations of the Company by way  
of guaranty, endorsement, indemnity, warranty or otherwise or grant of a        
mortgage or security interest in any property of the Company;                   

     (j) the Company has not discharged any encumbrance or
discharged, paid or forgiven any indebtedness or other Liability in excess of   
Twenty Five Thousand Dollars ($25,000), individually or in the                  

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aggregate, except for (i) accounts payable that have been discharged or paid in 
the Ordinary Course of Business, and (ii) indebtedness to Citizens Bank of      
Massachusetts;                                                                  

                (k) the Company has not changed any of its methods of accounting
or accounting practices in any respect except as required under GAAP;           

             (l) the Company has not received notice that there has been a
loss or cancellation of any order by any customer of the Company that would be  
reasonably likely to have a Material Adverse Effect on the Company; and         

                (m) the Company has not agreed, committed or offered (in writing
or otherwise), to take any of the actions referred to in clauses (b) through (l)
above.                                                                          

5.21 POWERS OF ATTORNEY.                                        

The Company has not given a power of attorney to any Person.    

5.22 BENEFIT PLANS; ERISA.                                      

              (a) Except for such Plans as would not be reasonably likely to
have a Material Adverse Effect on the Company, Part 5.22 of the Company         
Disclosure Schedule lists (i) all "employee benefit plans" within the meaning of
Section 3(3) of ERISA, (ii) all employment agreements, including any individual 
benefit arrangement, policy or practice with respect to any current or former   
employee or director of the Company or Member of the Controlled Group or any of 
their dependents, and (iii) all other employee benefit, bonus or other incentive
compensation, stock option, stock purchase, stock appreciation, severance pay,  
lay-off or reduction in force, change in control, sick pay, vacation pay, salary
continuation, retainer, leave of absence, educational assistance, service award,
employee discount, fringe benefit plans, arrangements, policies or practices,   
which the Company or any Member of the Controlled Group maintains, contributes  
to or has any obligation to or liability for (collectively, the "Plans").       

                (b) None of the Plans is a Defined Benefit Plan, and neither the
Company nor any Member of the Controlled Group has ever sponsored, maintained or
contributed to, or ever been obligated to contribute to, a Defined Benefit Plan 
that could reasonably be expected to result in a material amount of liability   
under Title IV of ERISA.                                                        

              (c) None of the Plans is a Multiemployer Plan, and neither the
Company nor any Member of the Controlled Group has ever contributed to, or ever 
been obligated to contribute to, a Multiemployer Plan that could reasonably be  
expected to result in a material amount of liability under Title IV of ERISA.   

              (d) The Company does not maintain or contribute to any welfare
benefit plan that provides health benefits to an employee after the employee's  
termination of employment or retirement except as required under Section 4980B  
of the Code and Sections 601 through 608 of ERISA.                              

               (e) Each Plan that is an "employee benefit plan," as defined in
Section 3(3) of ERISA, complies by its terms and in operation with the          
requirements provided by any and all statutes, orders or governmental rules or  
regulations currently in effect and applicable to the Plan, including ERISA and 
the Code, except where the failure to comply would not be reasonably likely to  
have a Material Adverse Effect on the Company.                                  

               (f) All reports, forms and other documents required to be filed
with any government entity with respect to any Plan (including summary plan     
descriptions, Forms 5500 and summary annual reports) have been timely filed and 
are accurate, except where the failure to file timely or where an inaccuracy    
would not be reasonably likely to have a Material Adverse Effect on the Company.

             (g) Each Plan intended to qualify under Section 401(a) of the
Code is the subject of a favorable determination letter issued by the Internal  
Revenue Service or, in the case of a prototype Plan, a favorable opinion        

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letter issued by the Internal Revenue Service with respect to the prototype Plan
upon which the Company may rely. To the Company's Knowledge, nothing has        
occurred since the date of the Internal Revenue Service's favorable             
determination letter that could adversely affect the qualification of the Plan  
and its related trust, except for such occurrences, either individually or in   
the aggregate, that would not be reasonably likely to have a Material Adverse   
Effect on the Company.                                                          

              (h) All contributions owed for all periods ending prior to the
Closing Date (including periods from the first day of the current plan year to  
the Closing Date) under any Plan have been or will be made prior to the Closing 
Date by the Company in accordance with past practice and the recommended        
contribution in any applicable actuarial report, except where the failure to    
make such payments would not be reasonably likely to have a Material Adverse    
Effect on the Company.                                                          

               (i) All insurance premiums have been paid in full, subject only
to normal retrospective adjustments in the ordinary course, with regard to the  
Plans for plan years ending on or before the Closing Date, except where the     
failure to make such payments would not be reasonably likely to have a Material 
Adverse Effect on the Company.                                                  

(j) With respect to each Plan:                  

                     (i) no prohibited transactions (as defined in Section
406 or 407 of ERISA or Section 4975 of the Code) have occurred for which an     
exemption is not available that could reasonably be expected to result in a     
material amount of liability to the Company;                                    

                   (ii) to the Knowledge of the Company, no actions or
claims (other than routine claims for benefits made in the ordinary course of   
Plan administration for which Plan administrative review procedures have not    
been exhausted) are pending, or, to the Knowledge of the Company, threatened or 
imminent against or with respect to the Plan, any employer who is participating 
(or who has participated) in the Plan or any fiduciary (as defined in Section   
3(21) of ERISA) of the Plan that could reasonably be expected to result in a    
material amount of liability to the Company;                                    

                     (iii) to the Knowledge of the Company, no facts exist
which could give rise to any such action or claim; and                          

                (iv) the Plan provides that it may be amended or
terminated at any time.                                                         

              (k) Neither the Company nor any Member of the Controlled Group
has any Plan-related liability or is threatened with any liability (whether     
joint or several) (i) for any excise tax imposed by Section 4971, 4975, 4976,   
4977 or 4979 of the Code, or (ii) for a fine under Section 502 of ERISA that    
could reasonably be expected to result in a material amount of liability to the 
Company.                                                                        

              (l) All the "group health plans" (as defined in Section 607(1)
or 733(a)(1) of ERISA or Section 4980B(g)(2) of the Code) that are part of the  
Plans listed in the Company Disclosure Schedule are in material compliance with 
the continuation of group health coverage provisions contained in Section 4980B 
of the Code and Sections 601 through 608 of ERISA.                              

           (m) Copies of all documents creating or evidencing any Plan
listed in the Company Disclosure Schedule, and all reports, forms and other     
documents required to be filed with any governmental entity (including summary  
plan descriptions, Forms 5500 and summary annual reports for all plans subject  
to ERISA), have been delivered or made available to Purchaser. There are no     
negotiations, demands or proposals that are pending or have been made which     
concern matters now covered, or that would be covered, by any Plan listed in the
Company Disclosure Schedule.                                                    

          (n) All expenses and liabilities relating to contributions
required by law and the terms of the Plans described in the Company Disclosure  
Schedule have been, and on the Closing Date will be, fully and properly         

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accrued on the Company's books and records and disclosed in accordance with GAAP
and in Plan financial statements.                                               

5.23 MAJOR SUPPLIERS.                                           

       Part 5.23 of the Company Disclosure Schedule lists the ten (10) largest
suppliers of the Company on the basis of cost of goods or services purchased for
the most recent fiscal year. No such supplier has ceased or materially reduced  
its sales or provision of services to the Company since the beginning of the    
fiscal year ended October 30, 1999 or, to the Knowledge of the Company, has     
threatened to cease or materially reduce such sales or provision of services    
after the date hereof.                                                          

5.24 CUSTOMERS.                                                 

       Part 5.24 of the Company Disclosure Schedule accurately identifies, and
provides an accurate and complete list of the revenues received from, each      
customer or other Person that accounted for more than Two Hundred Thousand      
Dollars ($200,000) of the gross revenues of the Company for the fiscal year     
ended October 30, 1999. The Company has not received any notice or other        
communication from any customer or other Person indicating that such customer or
such other Person identified in Part 5.24 of the Company Disclosure Schedule may
cease dealing with the Company or may otherwise reduce the volume of business   
transacted by such Person with the Company below historical levels.             

5.25 FULL DISCLOSURE.                                           

  Neither this Agreement (including the Company Disclosure Schedule,
Schedule IV and Schedule VI-A), the Rights Agreement nor any of the other       
Transactional Agreements, contains any untrue statement of material fact; and   
such documents, taken as a whole, do not omit any material fact Known to the    
Company necessary to make any of the representations, warranties or other       
statements or information contained therein when read collectively not          
misleading.                                                                     

5.26 DUE DILIGENCE INFORMATION.                                 

   The Company has made available to the Purchaser and the Purchaser's
representatives full and complete access to all of the Company's records and    
other documents and data, and has produced all documents and related materials  
in response to the reasonable requests of Purchaser.                            

5.27 PROXY STATEMENT.                                           

       None of the information heretofore or hereafter supplied by the Company
or the Selling Shareholders for inclusion or incorporation by reference in the  
Proxy Statement (as defined in Section 9.2 hereof) will, at the date the Proxy  
Statement is mailed to the shareholders of the Purchaser, at the time of the    
shareholders meeting of the Purchaser (the "Purchaser Shareholders' Meeting") in
connection with the transactions contemplated hereby or as of the Effective     
Time, contain any untrue statement of a material fact or omit any material fact 
required to be stated therein or necessary in order to make the statements      
therein, in light of the circumstances under which they are made, not           
misleading. Notwithstanding the foregoing, neither the Company nor any Selling  
Shareholder makes any representation or warranty with respect to any information
supplied by any Person other than the Company or such Selling Shareholder, as   
applicable, that is contained in the foregoing document.                        

  5.28 THE SELLING SHAREHOLDERS; INVESTMENT INTENT AND RESTRICTIONS.

   Each Selling Shareholder and the LLC (each, a "Representing Party")
severally represents and warrants, solely as to itself, as follows:             

             (a) Such Selling Shareholder owns, and, after the transfer of
the Stock to the LLC by the Selling Shareholders prior to the Effective Time,   
the LLC will own, beneficially and of record, that number of shares of Company  
Class A Stock, Company Class L Stock and/or Company Preferred Stock specified   
opposite such Selling                                                           

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Shareholder's name on Schedule I attached hereto, free and clear of any         
encumbrances. Such Selling Shareholder has delivered to the Purchaser copies of 
the stock certificate(s) evidencing the Stock.                                  

             (b) Such Representing Party has the absolute and unrestricted
right, power and authority to enter into and to perform his, her or its         
respective obligations under this Agreement, the other Transactional Agreements 
and the Rights Agreement to which he is contemplated to be a party. This        
Agreement, the other Transactional Agreements and the Rights Agreement          
constitute, or upon execution and delivery will constitute, the legal, valid and
binding obligations of such Representing Party, enforceable against him in      
accordance with their respective terms, except to the extent that enforceability
may be limited by applicable bankruptcy, reorganization, insolvency, moratorium 
or other laws affecting the enforcement of creditor's rights generally and by   
general principles of equity regardless of whether such enforceability is       
considered in a proceeding in law or equity.                                    

              (c) To the Knowledge of such Representing Party, the execution
and delivery of this Agreement, the other Transactional Agreements and the      
Rights Agreement, and the consummation of the Transactions, by such Representing
Party will not, directly or indirectly (with or without notice or lapse of      
time), contravene, conflict with or result in a violation of, or give any       
Governmental Body or other Person the right to challenge any of the Transactions
or to exercise any remedy or obtain any relief under, any legal requirement or  
any Order to which such Representing Party is subject.                          

             (d) There is no pending Proceeding to which such Representing
Party is a party, and, to the Knowledge of such Representing Party, no Person   
has threatened to commence any such Proceeding, that challenges, or that may    
have the effect of preventing, delaying or making illegal, any of the           
Transactions or such Representing Party's ability to comply with or perform his 
obligations and covenants under the Transactional Agreements.                   

            (e) To the Knowledge of such Representing Party, there is no
proposed Order that, if issued or otherwise put into effect, may have a Material
Adverse Effect on the ability of such Representing Party to comply with or      
perform any covenant or obligation under this Agreement and the other           
Transactional Agreements.                                                       

                (f) Neither such Representing Party nor any Person acting on his
behalf has negotiated with any finder, broker, intermediary or any similar      
person in connection with the Transactions.                                     

               (g) All information regarding such Representing Party that such
Representing Party has furnished to the Purchaser or any of its representatives 
is accurate and complete in all material respects.                              

             (h) The Selling Shareholders are the only Members of the LLC.

          (i) Such Representing Party has the capacity and financial
capability to comply with and perform all his covenants and obligations under   
this Agreement, and each of the other Transactional Agreements. The Merger      
Consideration allocable to such Representing Party represents reasonably        
equivalent value for such Representing Party's Stock.                           

    With respect to the Purchaser Stock, each Representing Party further
represents and warrants as follows:                                             

               (j) Such Representing Party is an "accredited investor" as that
term is defined in Rule 501(a) of Regulation D of the Securities Act.           

          (k) Such Representing Party, by reason of his business and
financial experience has such Knowledge, sophistication and experience in       
financial and business matters and in making investment decisions of this type  
that he is capable of (i) evaluating the merits and risks of an investment in   
the Purchaser Stock and making an informed investment decision, (ii) protecting 
his own interest and (iii) bearing the economic risk of such investment. If such
Representing Party retained a purchaser's representative with respect to the    
investment in Purchaser Stock that may be made hereby then such Representing    
Party shall, prior to or at the Closing, (i) acknowledge in writing such        
representation and (ii) cause such representative to deliver a certificate to   
Purchaser containing such representations as are reasonably requested by        
Purchaser.                                                                      

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              (l) Such Representing Party, to the extent it is acquiring the
Purchaser Stock, is doing so for investment for such Representing Party's own   
account, not as a nominee or agent and not with the view to, or any intention   
of, a resale or distribution thereof, in whole or in part, or the grant of any  
participation therein. Such Representing Party understands that the Purchaser   
Stock has not been registered under the Securities Act or state securities laws 
by reason of a specific exemption from the registration provisions of the       
Securities Act and applicable state securities laws that depends upon, among    
other things, the bona fide nature of the investment intent and the accuracy of 
such Representing Party's representations as expressed in this Agreement.       

               (m) In addition to the restrictions contained in this Agreement
and the Rights Agreement, such Representing Party will observe and comply with  
the Securities Act and the rules and regulations promulgated thereunder, as now 
in effect and as from time to time amended, in connection with any offer, sale, 
pledge, transfer or other disposition of Purchaser Stock. In furtherance of the 
foregoing, and in addition to any restrictions contained in this Agreement or   
the other Transactional Agreements, such Representing Party will not offer to   
sell, exchange, transfer, pledge, or otherwise dispose of any of the Purchaser  
Stock unless at such time at least one of the following is satisfied:           

                     (i) a registration statement under the Securities Act
covering the Purchaser Stock proposed to be sold, transferred or otherwise      
disposed of, describing the manner and terms of the proposed sale, transfer or  
other disposition, and containing a current prospectus, shall have been filed   
with the SEC and made effective under the Securities Act;                       

                        (ii) such transaction shall be permitted pursuant to the
provisions of Rule 144 promulgated under the Securities Act;                    

                   (iii) counsel representing such Representing Party,
satisfactory to Purchaser, shall have advised Purchaser in a written opinion    
letter reasonably satisfactory to Purchaser and its counsel, and upon which     
Purchaser and its counsel may rely, that no registration under the Securities   
Act would be required in connection with the proposed sale, transfer or other   
disposition; or                                                                 

                       (iv) an authorized representative of the SEC shall have
rendered written advice to such Representing Party (sought by such Representing 
Party or counsel to such Representing Party, with a copy thereof and of all     
other related communications delivered to Purchaser) to the effect that the SEC 
would take no action, or that the staff of the SEC would not recommend that the 
SEC take action, with respect to the proposed sale, transfer or other           
disposition if consummated.                                                     

             (n) Such Representing Party understands that an investment in
the Purchaser Stock involves substantial risks. Such Representing Party has had 
an opportunity to ask questions of and receive answers from the Purchaser, or   
from a person or persons acting on the Purchaser's behalf, concerning the terms 
and conditions of this investment.                                              

6.      REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND MERGER SUB.         

       Except as specifically set forth in the disclosure schedule provided by
the Purchaser and the Merger Sub and attached hereto as Schedule III (the       
"Purchaser Disclosure Schedule"), the parts of which are numbered to correspond 
to the Section numbers of this Agreement, the Purchaser and Merger Sub, jointly 
and severally, hereby represent and warrant to the Selling Shareholders as      
follows:                                                                        

6.1 ORGANIZATION; GOOD STANDING; QUALIFICATION.                 

          (a) The Purchaser is a corporation duly organized, validly
existing, and in good standing under the laws of the State of California, has   
all requisite corporate power and authority to own and operate its properties   
and assets, to lease the property or assets it operates as lessee and to carry  
on its business as described in the Purchaser SEC Reports filed on or prior to  
the date of this Agreement (the "Existing Purchaser SEC Reports"), to execute   
and deliver this Agreement and the other Transactional Agreements, to issue and 
sell the Purchaser Stock in or as a result of the Merger, and to carry out the  
provisions of this Agreement and the other Transactional                        

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Agreements. The Purchaser is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which the character of 
the property owned or leased or the nature of the business transacted by it     
makes qualification necessary, except where the failure to be so qualified would
not have or could not reasonably be expected to have a Material Adverse Effect  
on the Purchaser.                                                               

           (b) The Merger Sub is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Maine, has all    
requisite corporate power and authority to own and operate its properties and   
assets, to lease the property or assets it operates as lessee and to carry on   
its business as currently conducted, to execute and deliver this Agreement and  
the other Transactional Agreements, and to carry out the provisions of this     
Agreement and the other Transactional Agreements.                               

6.2 CAPITALIZATION.                                             

     As of January 27, 2000, the authorized capital stock of the Purchaser
consisted of (i) 15,000,000 shares of Purchaser Stock, of which: (A) 5,125,761  
shares were issued and outstanding, (B) 1,351,865 shares were reserved for      
issuance upon the exercise of outstanding options under the Purchaser's stock   
option plans, (C) 106,806 were reserved for issuance pursuant to the exercise of
the Warrants (as defined below), and (D) 1,265,319 shares were reserved for     
issuance upon conversion of the Series A Preferred Stock; and (ii) 5,000,000    
shares of Purchaser Preferred Stock, of which 1,265,319 had been designated     
Series A Preferred Stock, of which 1,074,666 shares were issued and outstanding.
The outstanding shares of Purchaser Preferred Stock and Purchaser Stock have    
been duly authorized and validly issued in compliance with applicable federal   
and state securities laws, are fully paid and nonassessable, conform to the     
descriptions thereof in the Existing Purchaser SEC Reports, and were not issued 
in violation of or subject to (i) any preemptive rights or other rights to      
subscribe for or to purchase securities or (ii) any liens, preferential rights, 
priorities, claims, options, charges or other encumbrances or restrictions,     
other than those created by (A) the Certificate of Determination filed in       
connection with the issuance of the Purchaser Preferred Stock, (B) the          
Investors' Rights Agreement (the "Original Rights Agreement"), dated as of      
January 29, 1999, by and between the Purchaser and Catterton-Simon Partners III,
L.P. ("Catterton"), (C) the Warrant dated January 29, 1999 issued to Catterton  
to purchase 75,000 shares of Purchaser Common Stock (the "Catterton Warrant"),  
(D) the Warrant dated February 9, 1999 issued to Hambrecht & Quist LLC to       
purchase 24,806 shares of Purchaser Stock (the "H&Q Warrant"), and (E) the      
Warrant dated May 21, 1997 issued to Sand Hill Capital LLC to purchase 7,000    
shares of Purchaser Stock (the "Sand Hill Warrant" and collectively with the    
Catterton Warrant and the H&Q Warrant, the "Warrants"). Except for (i) the      
rights and conversion of the Purchaser Preferred Stock, (ii) the options to     
purchase 1,351,865 shares of Purchaser Stock granted under the Purchaser's stock
option plans, (iii) the Warrants, and (iv) the rights granted pursuant to the   
Original Rights Agreement, there are no outstanding securities convertible into 
or exchangeable for capital stock of the Purchaser or any options, warrants,    
rights (including conversion or preemptive rights, rights of first refusal, "tag
along" rights, rights of co-sale or any similar right), agreements or contracts 
for the purchase, subscription to or acquisition of any shares of its capital   
stock from the Purchaser, or contracts, commitments, agreements, understandings 
or arrangements of any kind to which the Purchaser or any such holder of capital
stock is a party relating to the issuance of any capital stock of the Purchaser,
any such convertible or exchangeable securities or any such options, warrants or
rights. The issuance of Purchaser Stock in the Transactions will not result in  
any adjustment to the number of shares issuable or the purchase price,          
conversion or exchange rate applicable to any option, warrant, convertible or   
exchangeable security or similar right of the Purchaser.                        

6.3 SUBSIDIARIES.                                               

  Except for the Merger Sub, the Purchaser does not currently own or
control, directly or indirectly, any interest in any other corporation,         
association, or other business entity. The Purchaser is not a participant in any
joint venture, partnership or similar arrangement.                              

6.4 AUTHORIZATION.                                              

        The Purchaser and Merger Sub each have the requisite corporate power and
authority to enter into this Agreement and the other Transactional Agreements   
and to perform their respective obligations hereunder and thereunder. The       
execution and delivery of this Agreement and the other Transactional Agreements 
and the consummation by the Purchaser and the Merger Sub of the transactions    
contemplated hereby and thereby, including                                      

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the issuance of the Purchaser Stock have been duly authorized by all necessary  
corporate action on the part of the Purchaser and Merger Sub, as the case may be
(other than approval of the Transactions by the shareholders of Purchaser). All 
corporate action necessary for the authorization, execution and delivery of this
Agreement and the other Transactional Agreements, the performance of all        
obligations of the Purchaser and Merger Sub hereunder and thereunder at the     
Closing and the authorization, and issuance of the Purchaser Stock being issued 
pursuant to the Merger has been taken or will be taken prior to the Closing     
Date. This Agreement and the other Transactional Agreements constitute or will  
constitute as of the Closing Date valid and legally binding obligations of the  
Purchaser and Merger Sub, enforceable against the Purchaser and Merger Sub in   
accordance with their respective terms, except (i) as limited by applicable     
bankruptcy, insolvency, reorganization, moratorium, and other laws of general   
application affecting enforcement of creditors' rights generally, and (ii) as   
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.                                            

6.5 VALID ISSUANCE OF THE STOCK.                                

The Purchaser Stock to be issued to the Selling Shareholders in 
connection with the Merger, when issued and delivered in accordance with the    
terms of this Agreement and the other Transactional Agreements for the          
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than          
restrictions on transfer under this Agreement, the other Transactional          
Agreements and the Rights Agreement.                                            

6.6 GOVERNMENTAL AND THIRD-PARTY CONSENTS.                      

  No consent, approval, qualification, order or authorization of, or
filing with, any local, state, or federal governmental authority or approval or 
consent of any third-party is required on the part of the Purchaser in          
connection with the Purchaser's execution, delivery, or performance of this     
Agreement and the other Transactional Agreements, and the offer, sale or        
issuance of the Purchaser Stock, except for (i) the approval by the shareholders
of Purchaser of the matters set forth in Section 9.3, and (ii) the filings and  
submissions that the Purchaser shall make under the HSR Act.                    

6.7 SEC FILINGS; FINANCIAL STATEMENTS.                          

      The Purchaser has timely filed with the SEC and made available to each
Selling Shareholder or its representatives all forms (other than Forms 3, 4 or 5
filed on behalf of Affiliates of the Purchaser), reports and documents required 
to be filed by the Purchaser with the SEC since January 1, 1997 (collectively,  
the "Purchaser SEC Reports"). The Purchaser SEC Reports (i) at the time filed,  
complied with the applicable requirements of the Securities Act, and the rules  
thereunder, and the Exchange Act, and the rules thereunder, as the case may be, 
and (ii) did not at the time they were filed (or if amended or superseded by a  
filing prior to the date of this Agreement, then on the date of such filing)    
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements      
therein, in the light of the circumstances under which they were made, not      
misleading. To the Knowledge of the Purchaser, the SEC has not issued an order  
preventing or suspending the use of any Purchaser SEC Report, nor instituted    
proceedings for that purpose. The Purchaser meets the eligibility requirements  
set forth in Section I.A. of the General Instructions for the Use of Form S-3   
under the Securities Act.                                                       

      Each of the financial statements (including, in each case, any related
notes and schedules) contained in the Purchaser SEC Reports, including any such 
Purchaser SEC Report filed Pre-Closing Period, complied with the applicable     
published rules and regulations of the SEC with respect thereto, was prepared in
accordance with GAAP applied on a consistent basis throughout the periods       
involved (except as may be indicated in the notes to such financial statements  
or, in the case of unaudited statements, as permitted by Form 10-Q under the    
Exchange Act) and fairly presented the financial position of the Purchaser at   
the respective dates and the results of operations and cash flows of the        
Purchaser for the periods indicated, and all adjustments necessary for a fair   
presentation of results for such periods have been made, except that the        
unaudited interim financial statements were or are subject to normal and        
recurring year-end adjustments which were not or are not expected to be material
in amount.                                                                      

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6.8 NO CHANGES.                                                 

Since August 28, 1999:                                          

          (a) there has not been any change in the business, assets,
liabilities, financial condition, prospects or operating results of the         
Purchaser, from that reflected in the Purchaser's financial statements contained
in the Purchaser's Annual Report on Form 10-K for the fiscal year ended August  
28, 1999, except changes in the Ordinary Course of Business that individually or
collectively have not had a Material Adverse Effect on the Purchaser;           

               (b) there has not been any damage, destruction or loss, whether
or not covered by insurance having a Material Adverse Effect on the Purchaser;  

               (c) the Purchaser has not entered into any material transaction
(other than the Transactions) not referred to in the Existing Purchaser SEC     
Reports; and                                                                    

           (d) the Purchaser has no Liabilities except for Liabilities
reflected in the Existing Purchaser SEC Reports or incurred in the Ordinary     
Course of Business consistent with past practices.                              

6.9 COMPLIANCE WITH LAWS.                                       

The Purchaser now holds all Governmental Authorizations that are
necessary for the conduct of its business, other than where the failure to hold 
such Governmental Authorization is not reasonably likely to have a Material     
Adverse Effect on the Purchaser. Other than as set forth in the Existing        
Purchaser SEC Reports, the Purchaser has complied with, is not in violation of  
and has not received any notices of violation or noncompliance and, to the      
Knowledge of the Purchaser, has no reason to believe that any presently existing
circumstances would result in any violation with respect to, any federal, state 
or local statute, law, ordinance, governmental rule or regulation or court      
decree to which the Purchaser may be subject, including any Environmental Laws, 
nor has the Purchaser failed to obtain any Governmental Authorization necessary 
to the ownership, leasing or operation of its property or to the conduct of its 
business as it is presently being carried on and as described in the Existing   
Purchaser SEC Reports, except for such noncompliance, violations or failures to 
obtain such Governmental Authorization as would not have a Material Adverse     
Effect on the Purchaser.                                                        

6.10 COMPLIANCE WITH OTHER INSTRUMENTS; NO CONFLICT.            

     The Purchaser is not in violation of any provision of its Articles of
Incorporation or Bylaws or in default of the performance or observance of or    
breach under or with respect to any provision of any Purchaser Contract or, to  
its Knowledge, of any federal or state Order applicable to the Purchaser, except
for such violations, defaults or breaches as would not have a Material Adverse  
Effect on the Purchaser. The Purchaser has not received notice that any party to
any such Purchaser Contract intends to cancel, amend or terminate any such      
agreement. The execution, delivery and performance by the Purchaser of this     
Agreement or the other Transactional Agreements, the consummation of the        
Transactions and the fulfillment of the terms hereof and thereof does not and   
will not (i) violate, conflict with or contravene the terms of the Articles of  
Incorporation or the Bylaws of the Purchaser, or any amendment thereof; (ii)    
violate, conflict with or result in any material breach or contravention or     
constitute a default under (a) any Purchaser Contract or (b) any Order or (iii) 
constitute, with or without the passage of time or giving of notice, an event   
that results in the creation of any lien, charge or encumbrance upon any assets 
of the Purchaser or the suspension, revocation, impairment, forfeiture, or      
nonrenewal of any permit, license, authorization, or approval applicable to the 
Purchaser, its business or operations, or any of its assets or properties.      

6.11 LITIGATION.                                                

 There is no private or governmental Proceeding pending or, to the
Knowledge of the Purchaser, threatened against the Purchaser or any of its      
properties before any agency, court or tribunal, foreign or domestic (A)        
affecting the Transactions or (B) which, if determined adversely to the         
Purchaser, would have a Material Adverse Effect on the Purchaser. The Purchaser 
is not a party, subject to the provisions of, or in default with respect to, any
Order, and there are no unsatisfied judgments against the Purchaser. The        
Purchaser has made available to the Company                                     

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accurate and complete copies of all pleadings, correspondence and other written 
materials to which the Purchaser has access that relate to Proceedings (i) to   
which the Purchaser is currently a party or (ii) which have been threatened in  
writing.                                                                        

6.12 TAX RETURNS AND PAYMENTS.                                  

        The Purchaser has timely filed all Tax Returns as required by law. These
Tax Returns are true, complete and correct in all material respects. The        
Purchaser has paid all Taxes for all taxable periods ended on or prior to the   
Closing Date, except where the failure to make such payment would not have a    
Material Adverse Effect on the Purchaser. The Purchaser has not been advised (a)
that any of its returns, federal, state or other, have been or are being audited
as of the date hereof or (b) of any deficiency in assessment or proposed        
judgment to its state or other Taxes. The Purchaser is not aware of any tax     
liability to be imposed upon its properties or assets as of the date of this    
Agreement that would have a Material Adverse Effect upon the Purchaser. There   
are no matters under discussion with any governmental authorities with respect  
to taxes that in the reasonable judgment of the Purchaser are likely to result  
in a material additional liability to the Purchaser for Taxes.                  

6.13 FINDERS AND BROKERS; FEES.                                 

                (a) Neither the Purchaser nor any person acting on behalf of the
Purchaser has engaged any finder, broker, intermediary or any similar person in 
connection with the Transactions.                                               

          (b) The Purchaser has not entered into a contract or other
agreement that provides that a fee shall be paid to any Person or Entity if the 
Transactions are consummated.                                                   

       Notwithstanding the foregoing, the Purchaser has engaged W.R. Hambrecht
& Co., LLC ("WRH") to act as its financial advisor for this transaction pursuant
to that certain Engagement Letter between the Purchaser and WRH dated December  
17, 1999 and is obligated to pay WRH for certain fees and expenses as disclosed 
on Part 6.13 of the Purchaser Disclosure Schedule.                              

6.14 RIGHTS OF REGISTRATION.                                    

       Except as set forth in the Original Rights Agreement or as contemplated
in the Rights Agreement, the Purchaser has not granted or agreed to grant any   
registration rights, including piggyback rights, or other material rights to any
person or entity, (i) the provision or performance of which would render the    
provision or performance (including the issuance of the Purchaser Stock) of the 
material rights to be granted to the Selling Shareholders by the Purchaser in   
this Agreement and the other Transactional Agreements, impracticable or (ii) for
or relating to the registration of any shares of capital stock of the Purchaser 
that are currently outstanding.                                                 

6.15 VOTING RIGHTS.                                             

       Except as set forth in the Original Rights Agreement or as contemplated
in the Rights Agreement, neither the Purchaser, nor to the Purchaser's          
Knowledge, the shareholders of the Purchaser, has entered into any agreement    
with respect to the voting of capital shares of the Purchaser for the election  
of Directors of the Purchaser or otherwise.                                     

6.16 LABOR RELATIONS AND EMPLOYEE MATTERS.                      

              (a) The Purchaser is not engaged in any unfair labor practice.
There is (i) no unfair labor practice complaint pending or, to the Knowledge of 
the Purchaser, threatened against the Purchaser before the National Labor       
Relations Board, and no grievance or arbitration proceeding arising out of or   
under collective bargaining agreements is so pending or, to the Knowledge of the
Purchaser, threatened against the Purchaser, (ii) no strike, labor dispute,     
slowdown or stoppage pending or, to the Knowledge of the Purchaser, threatened  
against the Purchaser, and (iii) no union representation question existing with 
respect to the employees of the Purchaser and, to the Knowledge of the          
Purchaser, no union organizing activities are taking place.                     

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              (b) Except as disclosed in the Existing Purchaser SEC Reports,
the Purchaser is not a party to any employment agreement (other than "at will"  
employment relationships), collective bargaining agreement or covenant not to   
compete, nor has the Purchaser ever been party to any collective bargaining     
agreement.                                                                      

   6.17 NO OTHER AGREEMENTS TO SELL THE ASSETS OR CAPITAL STOCK OF THE
PURCHASER.                                                                      

The Purchaser does not have any legal obligation, absolute or   
contingent, other than the obligations of the Purchaser under this Agreement or 
the other Transactional Agreements, including pursuant Exhibits L-1 and L-2, to 
any person or firm to (i) sell assets other than in the Ordinary Course of      
Business consistent with past practices, (ii) sell any capital stock of the     
Purchaser or effect any merger, consolidation or other reorganization of the    
Purchaser or (iii) enter into any agreement with respect any of the foregoing.  

6.18 INVESTMENT REPRESENTATIONS.                                

             (a) Each of the Purchaser and Merger Sub understands that the
Stock has not been registered under the Securities Act. The Purchaser also      
understands that the Stock is being offered and sold pursuant to an exemption   
from registration contained in the Securities Act based in part upon the        
Purchaser's representations contained in this Section 6.18.                     

                (b) The Purchaser is acquiring the Stock for the Purchaser's own
account for investment only, and not with the current intention of making a     
public distribution thereof.                                                    

             (c) The Purchaser represents that by reason of its, or of its
management's business or financial experience, the Purchaser has the capacity to
protect its own interests in connection with the Transactions contemplated in   
this Agreement and the other Transactional Agreements. The Purchaser is able to 
bear the loss of its entire investment in the Company. The Purchaser is not a   
corporation, partnership or other entity specifically formed for the purpose of 
consummating this transaction.                                                  

           (d) The Purchaser is an accredited investor as that term is
defined in Rule 501(a) of Regulation D, promulgated pursuant to the Securities  
Act.                                                                            

6.19 PROXY STATEMENT.                                           

       None of the information supplied or to be supplied by the Purchaser for
inclusion or incorporation by reference in the Proxy Statement (as defined in   
Section 9.2 hereof) will, at the date the Proxy Statement is mailed to the      
shareholders of the Purchaser, at the time of the Purchaser Shareholders'       
Meeting or as of the Effective Time, contain any untrue statement of a material 
fact or omit to state any material fact required to be stated therein or        
necessary in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. Notwithstanding the foregoing, the   
Purchaser makes no representation or warranty with respect to any information   
supplied by the Company or the Selling Shareholders that is contained in the    
foregoing document.                                                             

7.      PRE-CLOSING COVENANTS OF THE COMPANY AND THE SELLING SHAREHOLDERS.      

7.1 ACCESS AND INVESTIGATION.                                   

  The Company shall ensure that, at all times during the Pre-Closing
Period:                                                                         

             (a) the Company and its representatives provide the Purchaser
and its representatives with free and complete access at reasonable times to the
Company's premises and assets and to all existing books, records, Tax Returns,  
the Company's work papers and other documents and information relating to the   
Company;                                                                        

             (b) the Company and its representatives provide the Purchaser
and its representatives with such copies of existing books, records, Tax        
Returns, the Company's work papers and other documents and information relating 
to the Company as the Purchaser may reasonably request in good faith; and       

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               (c) the Company and its representatives compile and provide the
Purchaser and its representatives with such additional financial, operating and 
other data and information regarding the Company as the Purchaser may reasonably
request in good faith.                                                          

7.2 OPERATION OF COMPANY BUSINESS.                              

The Company shall, during the Pre-Closing Period:               

             (a) conduct its operations in the Ordinary Course of Business
and in the same manner as such operations have been conducted by the Company    
prior to the date of this Agreement; provided, however, that notwithstanding the
foregoing, the Company shall be permitted to sell or otherwise issue (including 
the sale or grant of warrants, options or other rights to purchase) any shares  
of capital stock or any other equity securities to the extent the recipient of  
such capital stock or equity security executes a counterpart signature page to  
this Agreement; provided, further, however, that the Company shall not grant any
options to purchase capital stock to any director, officer, employee of, or     
consultant to, the Company as part of a compensation plan;                      

               (b) not incur any debt that will not be included as a liability
for purposes of the Working Capital calculation set forth in Section 1.4(a);    

            (c) use Best Efforts to preserve intact its current business
organization, keep available the services of its current officers and employees 
and maintain its relations and goodwill with all suppliers, customers,          
landlords, creditors, licensors, licensees, employees and other Persons having  
business relationships with the Company;                                        

                (d) keep in full force all insurance policies identified in Part
5.18 of the Company Disclosure Schedule or renewals or replacements thereof;    

              (e) confer regularly with the Purchaser concerning operational
matters and any change that would be reasonably likely to have a Material       
Adverse Effect on the Company;                                                  

             (f) immediately notify the Purchaser of any proposal or offer
from any Person relating to any acquisition of the Company by sale of stock,    
merger or otherwise or a sale of all or substantially all of the assets of the  
Company;                                                                        

              (g) not declare, accrue, set aside or pay any dividend or make
any other distribution in respect of shares of capital stock or repurchase,     
redeem or otherwise reacquire any shares of capital stock or other securities   
(other than (i) as may be necessary to convert the Company Class L Stock and the
Company Preferred Stock to Company Class A Stock pursuant to the Articles of    
Incorporation of the Company, or (ii) a cash distribution, repurchase,          
redemption or reacquisition by the Company in the event the Company's Working   
Capital (as determined in accordance with Section 1.4) is in excess of negative 
Two Million Two Hundred Fifty Dollars (-$2,250,000), and then only in the amount
of such excess);                                                                

               (h) not incur or assume any Liability as a result of any action
or failure to act on the part of the Company, except (i) for current Liabilities
in the Ordinary Course of Business, and (ii) as may be approved by the          
Purchaser, it being understood and agreed that from and after the Closing Date, 
the Purchaser shall be deemed to have approved of the incurrence or assumption  
of all Liabilities set forth on the Company Disclosure Schedule as amended or   
supplemented by the Company Disclosure Schedule Updates;                        

             (i) not make any Tax election without obtaining prior consent
from the Purchaser, which consent shall not be unreasonably withheld or delayed;

            (j) not amend its Articles of Incorporation or Bylaws (other
than to amend and restate its Articles of Incorporation in the form attached    
hereto as Exhibit M), and not effect or become a party to any transaction       
involving the merger or consolidation of the Company with any other Entity      
(other than in connection with the                                              

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Transactions) or a sale of all or substantially all of the assets of the        
Company, or similar transaction, or enter into any transaction or take any other
action of the type referred to in Section 5.20(e) or (f);                       

             (k) not form any subsidiary or acquire any equity interest or
other interest in any other Entity;                                             

            (l) not enter into any joint venture or similar arrangements
with any other Entity;                                                          

          (m) not make more than Fifty Thousand Dollars ($50,000) of
capital expenditures, in addition to capital expenditures made in the Ordinary  
Course of Business and as set forth in Schedule IV;                             

             (n) (i) not establish or adopt any Employee Benefit Plan, and
not pay any bonus or make any profit-sharing or similar payment to, or increase 
the amount of the wages, salary, commissions, fringe benefits or other          
compensation or remuneration payable to, any of its directors, officers or      
employees, other than adjustments in the Ordinary Course of Business made after 
consultation with the Purchaser, and (ii) without limiting the generality of the
foregoing clause (i), not (A) make any payments under its "Stay Bonus Plan" in  
excess of Forty Thousand Dollars ($40,000) in the aggregate, or (B) enter into a
severance contract or other similar agreement with any Person other than Mr.    
John Stankiewicz;                                                               

             (o) not change any of its methods of accounting or accounting
practices in any respect except as required by GAAP; or                         

                (p) not agree, commit or offer (in writing or otherwise) to take
any of the actions described in the preceding clauses of this Section 7.2.      

7.3 REPRESENTING PARTY ACTIONS.                                 

During the Pre-Closing Period, each Representing Party shall:   

             (a) not directly or indirectly sell or otherwise transfer, or
offer, agree or commit (in writing or otherwise) to sell or otherwise transfer, 
any of its Stock or any interest in or right relating to any of its Stock except
for the contribution of such Stock to the LLC;                                  

        (b) not permit, or offer, agree or commit (in writing or
otherwise) to permit, any of its Stock to become subject, directly or           
indirectly, to any encumbrance;                                                 

                (c) not take any action which would cause the Company to violate
its agreements in Section 7.2 or Section 7.6; provided that the recourse of the 
Purchaser and any Indemnitee for violation of Section 7.2 shall be solely       
against the Company and not against any Representing Parties;                   

              (d) ensure that each Consent required to be obtained (pursuant
to any applicable legal requirement, Order or Contract, or otherwise) by such   
Representing Party in connection with its execution and delivery of any of the  
Transactional Agreements and the Rights Agreement or in connection with the     
consummation or performance of any of the Transactions is obtained as promptly  
as practicable after the date of this Agreement and remains in full force and   
effect through the Closing Date; provided, however, that such Representing Party
shall have no obligations under this Section 7.3(d) relating to or in connection
with the HSR Act, which obligations are set forth in Section 9.10; and          

             (e) deliver to the Purchaser a copy of each filing made, each
notice given and each Consent obtained by such Representing Party during the    
Pre-Closing Period.                                                             

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7.4 FILINGS AND CONSENTS.                                       

The Company shall ensure that:                                  

                (a) each filing or notice required to be made or given (pursuant
to any applicable legal requirement, Order or Contract, or otherwise) by the    
Company in connection with the execution and delivery of any of the             
Transactional Agreements or in connection with the consummation or performance  
of any of the Transactions (including each of the filings and notices identified
in Part 5.5 of the Company Disclosure Schedule) is made or given as promptly as 
practicable after the date of this Agreement;                                   

         (b) each Consent required to be obtained (pursuant to any
applicable legal requirement, Order or Contract, or otherwise) by the Company in
connection with the execution and delivery of any of the Transactional          
Agreements or in connection with the consummation or performance of any of the  
Transactions (including each of the Consents identified in Part 5.5 of the      
Company Disclosure Schedule) is obtained as promptly as practicable after the   
date of this Agreement and remains in full force and effect through the Closing 
Date; provided, however, that the Company shall have no obligations under this  
Section 7.4(b) relating to or in connection with the HSR Act, which obligations 
are set forth in Section 9.10;                                                  

            (c) the Company promptly delivers to the Purchaser a copy of
each filing made, each notice given and each Consent obtained by the Company    
during the Pre-Closing Period; and                                              

      (d) during the Pre-Closing Period, the Company and its
representatives cooperate with the Purchaser and with the Purchaser's           
representatives, and prepare and make available such documents and take such    
other actions as the Purchaser may request in good faith, in connection with any
filing, notice or Consent that the Purchaser or Merger Sub is required or elects
to make, give or obtain.                                                        

7.5 NOTIFICATION; UPDATES TO COMPANY DISCLOSURE SCHEDULE.       

         (a) During the Pre-Closing Period, the Company and/or the
Representing Party, as applicable, shall promptly notify the Purchaser in       
writing of:                                                                     

                    (i) the discovery by the Company or the Representing
Party of any event, condition, fact or circumstance that constitutes a material 
breach of any representation or warranty made by the Company or the Representing
Parties in this Agreement; and                                                  

                    (ii) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the conditions set forth in Section
4.1 impossible or unlikely.                                                     

         (b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 7.5(a) requires any change in the  
Company Disclosure Schedule, or if any such event, condition, fact or           
circumstance would require such a change assuming the Company Disclosure        
Schedule were dated as of the date of the occurrence, existence or discovery of 
such event, condition, fact or circumstance, then the Company and/or the        
Representing Parties, as applicable, shall promptly deliver to the Purchaser an 
update to the Company Disclosure Schedule (a "Company Disclosure Schedule       
Update") specifying such change. Each such Company Disclosure Schedule Update   
shall be deemed to supplement or amend the Company Disclosure Schedule for (i)  
the purpose of determining whether the conditions set forth in Section 4.1 have 
been satisfied, unless objected to in writing by Purchaser on or before the     
Closing, and (ii) all other purposes of this Agreement from and after the       
Closing.                                                                        

7.6 NO NEGOTIATION.                                             

        Neither the Company nor a Representing Party nor any of their respective
representatives, nor any of their employees, directors, representatives,        
Affiliates or advisors (including legal, accounting, financial and investment   
banking advisors) will directly or indirectly on behalf of the Company or the   
Representing Parties:                                                           

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              (a) enter into any agreement (or grant any option or right) to
sell, transfer or otherwise dispose of the shares of capital stock or the assets
of the Company or issue any controlling interest in shares of capital stock of  
the Company, directly or indirectly, to any person;                             

                (b) hold any discussion with, or provide any information to, any
person concerning the Company in connection therewith or provide any information
to, any person concerning the Company in connection therewith; or               

          (c) respond to any inquiry made by any person concerning a
proposed acquisition of any assets or capital stock of the Company, except to   
advise such person that the Company has entered into this Agreement. The Company
and the Representing Parties further agree to advise the Purchaser immediately  
upon receiving any inquiry from any such person. If the Company or a            
Representing Party receives a bona fide offer concerning a proposed acquisition 
of any assets or capital stock of the Company, the Company or such Representing 
Party shall, in addition to notifying the Purchaser of the receipt of such      
offer, identify the proposed buyer.                                             

7.7 BEST EFFORTS.                                               

        During the Pre-Closing Period, the Company shall use its Best Efforts to
cause the conditions set forth in Section 4.1 to be satisfied on a timely basis,
and shall not take any action or omit to take any action, the taking or omission
of which would or could reasonably be expected to result in any of the          
conditions to Closing set forth in Section 4.1 not being satisfied.             

8.      PRE-CLOSING COVENANTS OF THE PURCHASER.                                 

8.1 ACCESS AND INVESTIGATION.                                   

    The Purchaser shall ensure that, at all times during the Pre-Closing
Period:                                                                         

             (a) the Purchaser and its representatives provide the Company
and its representatives and the Selling Shareholders with free and complete     
access at reasonable times to the Purchaser's premises and assets and to all    
existing books, records, Tax Returns, the Purchaser's work papers and other     
documents and information relating to the Purchaser;                            

             (b) the Purchaser and its representatives provide the Company
and its representatives with such copies of existing books, records, Tax        
Returns, the Purchaser's work papers and other documents and information        
relating to the Purchaser as the Company may request in good faith; and         

             (c) the Purchaser and its representatives compile and provide
the Company and its representatives with such additional financial, operating   
and other data and information regarding the Purchaser as the Company may       
request in good faith.                                                          

8.2 FILINGS AND CONSENTS.                                       

The Purchaser shall ensure that:                                

                (a) each filing or notice required to be made or given (pursuant
to any applicable legal requirement, Order or Contract, or otherwise) by the    
Purchaser or Merger Sub in connection with the execution and delivery of any of 
the Transactional Agreements or in connection with the consummation or          
performance of any of the Transactions is made or given as promptly as          
practicable after the date of this Agreement;                                   

         (b) each Consent required to be obtained (pursuant to any
applicable legal requirement, Order or Contract, or otherwise) by the Purchaser 
or Merger Sub in connection with the execution and delivery of any of the       
Transactional Agreements or in connection with the consummation or performance  
of any of the Transactions is obtained as promptly as practicable after the date
of this Agreement and remains in full force and effect through the              

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Closing Date; provided, however, that the Purchaser shall have no obligations   
under this Section 8.2(b) relating to or in connection with the HSR Act, which  
obligations are set forth in Section 9.10;                                      

            (c) the Purchaser promptly delivers to the Company a copy of
each filing made, each material notice given and each material Consent obtained 
by the Purchaser or Merger Sub during the Pre-Closing Period; and               

              (d) during the Pre-Closing Period, the Purchaser or Merger Sub
and the representatives of either cooperate with the Company and its            
representatives, and prepare and make available such documents and take such    
other actions as the Company may request in good faith, in connection with any  
filing, notice or Consent that the Company is required or elects to make, give  
or obtain.                                                                      

8.3 OPERATION OF PURCHASER BUSINESS                             

The Purchaser shall, during the Pre-Closing Period:             

               (a) not incur any debt that will not be included as a liability
for purposes of the Working Capital calculation set forth in Section 1.4;       

              (b) confer with the Company concerning operational matters and
any change that would reasonably be expected to have a Material Adverse Effect  
on the Purchaser;                                                               

            (c) not amend its Articles of Incorporation or Bylaws (other
than to increase the number of authorized shares of Purchaser Stock in          
connection with the Transactions, including as set forth in the last paragraph  
of this Section 8.3, and as may be necessary to convert the Purchaser Preferred 
Stock to Purchaser Stock as contemplated by this Agreement), and not effect or  
become a party to any transaction involving the recapitalization, merger or     
consolidation of the Purchaser or any of its subsidiaries with any other Entity 
(other than in connection with the Transactions) or sell all or substantially   
all of the assets of the Purchaser;                                             

            (d) not acquire any equity interest or other interest in any
other Entity;                                                                   

              (e) not declare, accrue, set aside or pay any dividend or make
any other distribution in respect of shares of capital stock, or repurchase,    
redeem or otherwise reacquire any shares of capital stock or other securities   
(other than (i) as may be necessary to convert the Purchaser Preferred Stock to 
Purchaser Stock as contemplated by this Agreement or (ii) at Purchaser's option,
a cash distribution, repurchase, redemption or reacquisition by the Purchaser in
the event the Purchaser's Working Capital (as determined in accordance with     
Section 1.4) is in excess of Seven Million Two Hundred Fifty Thousand Dollars   
($7,250,000), and then only in the amount of such excess);                      

            (f) not enter into any joint venture or similar arrangements
with any other Entity;                                                          

               (g) other than the issuance of compensatory options to existing
employees (not officers or directors) and to newly-hired employees (including   
officers), not sell or otherwise issue (or grant any warrants, options or other 
rights to purchase) any shares of capital stock or any other securities, unless 
approved in advance in writing by the Company (which such approval shall not be 
unreasonably withheld);                                                         

               (h) not (i) pay any bonus or make any profit-sharing or similar
payment to, or increase the amount of the wages, salary, commissions, fringe    
benefits or other compensation or remuneration payable to, any of its directors 
or officers, or (ii) other than in connection with the employment of new        
officers who are not employees of the Purchaser as of the date of this          
Agreement, enter into, amend, supplement or otherwise modify, any Contract      
relating to the employment of any Person; and                                   

                (i) not agree, commit or offer (in writing or otherwise) to take
any of the actions described in the preceding clauses of this Section 8.3.      

       The parties agree that the Purchaser may during the Pre-Closing Period,
notwithstanding the foregoing (i) clause (g) of this Section 8.3, enter into an 
agreement or agreements and on or before the Closing Date                       

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consummate a transaction pursuant to which the Purchaser will issue and sell up 
to Six Million Dollars ($6,000,000) of Purchaser Stock on terms substantially   
similar to the terms set forth in the letter agreement attached hereto as       
Exhibit L-1 and the term sheet attached hereto as Exhibit L-2, (ii) clause (h)  
of this Section 8.3, accelerate the vesting schedule and extend the exercise    
period of those options to purchase Purchaser Stock held by those members of the
Purchaser Board who, in connection with the consummation of the Transactions,   
shall resign from the Purchaser Board effective as of the Effective Time, and   
(iii) clauses (e) or (g) of this Section 8.3, issue 258,667 shares of Purchaser 
Stock to Catterton in consideration of the cancellation of the Catterton Warrant
and the election to convert the Purchaser Preferred Stock held by Catterton into
Purchaser Stock in connection with the Transactions.                            

8.4 NOTIFICATION; UPDATES TO PURCHASER DISCLOSURE SCHEDULE.     

               (a) During the Pre-Closing Period, the Purchaser shall promptly
notify the Company in writing of:                                               

                (i) the discovery by the Purchaser of any event,
condition, fact or circumstance that constitutes a material breach of any       
representation or warranty made by the Purchaser in this Agreement or in any of 
the other Transactional Agreements; and                                         

                    (ii) any event, condition, fact or circumstance that
would make the timely satisfaction of any of the conditions set forth in Section
4.2 impossible or unlikely.                                                     

         (b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 8.4(a) requires any change in the  
Purchaser Disclosure Schedule, or if any such event, condition, fact or         
circumstance would require such a change assuming the Purchaser Disclosure      
Schedule were dated as of the date of the occurrence, existence or discovery of 
such event, condition, fact or circumstance, then the Purchaser shall promptly  
deliver to the Company an update to the Purchaser Disclosure Schedule (a        
"Purchaser Disclosure Schedule Update") specifying such change. Each such       
Purchaser Disclosure Schedule Update shall be deemed to supplement or amend the 
Purchaser Disclosure Schedule for (i) the purpose of determining whether the    
conditions set forth in Section 4.2 have been satisfied, unless objected to in  
writing by Company on or before the Closing, and (ii) all other purposes of this
Agreement from and after the Closing.                                           

8.5 BEST EFFORTS.                                               

   During the Pre-Closing Period, each of the Purchaser and Merger Sub
shall use its Best Efforts to cause the conditions set forth in Section 4.2 to  
be satisfied on a timely basis, and shall not take any action or omit to take   
any action, the taking or omission of which would or could reasonably be        
expected to result in any of conditions to Closing set forth in Section 4.2 not 
being satisfied.                                                                

8.6 GRANT OF PURCHASER OPTIONS.                                 

      At the Effective Time, subject to shareholder approval of the increase
in shares authorized under the Purchaser's 1997 Stock Option Plan, the Purchaser
shall issue options to purchase Purchaser Stock with an exercise price equal to 
the fair market value of such Purchaser Stock as of the Effective Time, pursuant
to the standard terms of the Purchaser's 1997 Stock Option Plan, to those       
employees of the Company in the amounts listed next to each such employee's     
named on Schedule V attached hereto; provided that such employee is an employee 
of the Purchaser or the Surviving Corporation at the Effective Time; provided,  
further, that such employees shall not have exercised such Company Options      
during the Pre-Closing Period.                                                  

8.7 REPAYMENT OF INDEBTEDNESS.                                  

        On the Closing Date, immediately after the Effective Time, the Purchaser
shall cause the Surviving Corporation to satisfy in full (i) all "Obligations"  
under the Second Amended and Restated Revolving Credit And Loan Agreement, dated
as of January 10, 2000, by and among the Company, Fresh Samantha Juice Bars,    
Inc., a Maine corporation, and Citizens Bank of Massachusetts as amended,       
restated or otherwise modified from time to time and (ii) all obligations of the
Company to certain Selling Shareholders under the Reimbursement Agreement,      

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dated as of January 10, 2000, by and among the Company and certain of the       
Selling Shareholders solely to the extent of any amounts drawn under the        
irrevocable standby letter of credit in the amount of $3,000,000 (Letter of     
Credit No. D-8119) issued by Brown Brothers Harriman & Co. in favor of Citizens 
Bank of Massachusetts, which amounts shall have been applied to reduce the      
"Obligations" to which reference is made in clause (i) above.                   

8.8 BOARD OF DIRECTORS.                                         

       The Purchaser Board shall decrease the size of the Purchaser Board from
six (6) to five (5) members, and elect as members of the Purchaser Board such   
Persons as are nominated pursuant to the terms of the Rights Agreement, in each 
case, effective as of the Effective Time.                                       

9.      OTHER AGREEMENTS.                                                       

9.1 INCREASE OF PURCHASER CREDIT FACILITY.                      

   The Purchaser shall use its Best Efforts to (i) obtain a commitment
letter upon such terms and conditions as are at least as favorable or more      
favorable than those set forth on the term sheet attached hereto as Exhibit N   
(the "Bank Term Sheet") (which letter may be subject to customary               
qualifications) from Imperial Bank or another financial institution (the        
"Bank"), under which the Bank commits to provide the Purchaser with not less    
than $10,000,000 of debt financing on terms in the Bank Term Sheet and other    
terms and conditions reasonably acceptable to the Purchaser (the "Commitment    
Letter") and (ii) consummate the financing described in the Commitment Letter.  

9.2 PROXY STATEMENT; OTHER FILINGS.                             

     As promptly as practicable after the execution of this Agreement, the
Purchaser shall prepare a document (the "Proxy Statement") with respect to the  
solicitation by the Purchaser Board of the affirmative vote of a majority of the
outstanding shares of Purchaser capital stock with respect to the issuance of   
the shares of Purchaser Stock in connection with the Merger, the increase in the
number of shares authorized to be issued under the Purchaser's 1997 Stock Option
Plan and, unless the Purchaser and the Company mutually agree otherwise, this   
Agreement and the Merger. Each of the Purchaser, the Company and the            
Representing Parties shall provide promptly to the other such information       
concerning its business and financial statements and affairs as, in the         
reasonable judgment of the providing party or its counsel, may be required or   
appropriate for inclusion in the Proxy Statement, or in any amendments or       
supplements thereto, and to cause its counsel and auditors to cooperate with the
other's counsel and auditors in the preparation of the Proxy Statement. The     
Purchaser will respond (with the assistance of the Company and the Representing 
Parties, if reasonably necessary) to any comments of the SEC, and the Purchaser 
will cause the Proxy Statement to be mailed to its shareholders at the earliest 
practicable time after the date of this Agreement. As promptly as practicable   
after the date of this Agreement, the Purchaser will prepare and file (with the 
assistance of the Company and the Representing Parties, if reasonably necessary)
any other filings required to be filed by it under the Exchange Act, the        
Securities Act, or any other Federal, foreign, or Blue Sky or related laws      
relating to the Merger and the transactions contemplated by this Agreement (the 
"Other Filings"). The Purchaser will notify the Company promptly upon the       
receipt of any comments from the SEC or its staff or any other government       
officials and of any request by the SEC or its staff or any other government    
officials for amendments or supplements to the Proxy Statement or any Other     
Filing or for additional information and will supply the Company with copies of 
all correspondence between the Purchaser or any of its representatives, on the  
one hand, and the SEC or its staff or any other government officials, on the    
other hand, with respect to the Proxy Statement or any Other Filing. The        
Purchaser (with the assistance of the Company and the Representing Parties, if  
reasonably necessary) will cause all documents that it is responsible for filing
with the SEC or other regulatory authorities under this Section 9.2 to comply in
all material respects with all applicable requirements of law and the rules and 
regulations promulgated thereunder. Whenever any event occurs that is required  
to be set forth in an amendment or supplement to the Proxy Statement or any     
Other Filing, the Purchaser will promptly inform the Company of such occurrence 
and cooperate in filing with the SEC or its staff or any other government       
official, and/or mailing to shareholders of the Purchaser, such amendment or    
supplement.                                                                     

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9.3 MEETING OF PURCHASER SHAREHOLDERS.                          

              (a) The Purchaser will take all action necessary in accordance
with California law and the Purchaser's corporate documents to convene the      
Purchaser Shareholders' Meeting to be held as promptly as practicable for the   
purpose of voting upon the issuance of the shares of Purchaser Stock in         
connection with the Merger, the increase in the number of shares authorized to  
be issued under the Purchaser's 1997 Stock Option Plan and, unless the Purchaser
and the Company mutually agree otherwise, this Agreement and the Merger. The    
Purchaser will use its commercially reasonable efforts to solicit from its      
shareholders proxies in favor of the approval of the issuance of the shares of  
Purchaser Stock in connection with the Merger, the increase in the number of    
shares authorized to be issued under the Purchaser's 1997 Stock Option Plan and,
unless the Purchaser and the Company mutually agree otherwise, this Agreement   
and the Merger, and will take all other action necessary or advisable to secure 
the vote or consent of its shareholders required by the rules of NASD or        
California law to obtain such approvals. Notwithstanding anything to the        
contrary contained in this Agreement, the Purchaser may adjourn or postpone the 
Purchaser Shareholders' Meeting to the extent necessary to ensure that any      
necessary supplement or amendment to the Proxy Statement is provided to the     
Purchaser's shareholders in advance of a vote on the issuance of the shares of  
Purchaser Stock in connection with the Merger, the increase in the number of    
shares authorized to be issued under the Purchaser's 1997 Stock Option Plan and,
unless the Purchaser and the Company mutually agree otherwise, this Agreement   
and the Merger, or, if as of the time for which the Purchaser Shareholders'     
Meeting is originally scheduled (as set forth in the Proxy Statement) there are 
insufficient shares of Purchaser Stock represented (either in person or by      
proxy) to constitute a quorum necessary to conduct the business of the Purchaser
Shareholder Meeting. The Purchaser shall ensure that the Purchaser Shareholders'
Meeting is called, noticed, convened, held and conducted, and that all proxies  
solicited by the Purchaser in connection with the Purchaser Shareholders'       
Meeting are solicited, in compliance with California law, the Purchaser's       
corporate documents, the rules of the NASD and all other applicable legal       
requirements. The Purchaser's obligation to call, give notice of, convene and   
hold the Purchaser Shareholders' Meeting in accordance with this Section 9.3    
shall not be limited to or otherwise affected by the commencement, disclosure,  
announcement or submission to the Purchaser of any proposed acquisition of the  
Purchaser or any change in the Purchaser Board's recommendation regarding the   
Merger.                                                                         

                (b) (i) The Purchaser Board shall recommend that the Purchaser's
shareholders vote in favor of the issuance of the shares of Purchaser Stock in  
connection with the Merger, the increase in the number of shares authorized to  
be issued under the Purchaser's 1997 Stock Option Plan and, unless the Purchaser
and the Company mutually agree not to submit to a vote of the shareholders, this
Agreement and the Merger, at the Purchaser Shareholders' Meeting; (ii) the Proxy
Statement shall include a statement to the effect that the Purchaser Board has  
recommended that the Purchaser's shareholders vote in favor of the issuance of  
the shares of Purchaser Stock in connection with the Merger, the increase in the
number of shares authorized to be issued under the Purchaser's 1997 Stock Option
Plan and, unless the Purchaser and the Company mutually agree not to a vote of  
the shareholders, this Agreement and the Merger, at the Purchaser Shareholders' 
Meeting; and (iii) neither the Purchaser Board nor any committee thereof shall  
withdraw, amend or modify, or propose or resolve to withdraw, amend or modify in
a manner adverse to the Company, the recommendation of the Purchaser Board that 
the Purchaser's shareholders vote in favor of the issuance of the shares of     
Purchaser Stock in connection with the Merger, the increase in the number of    
shares authorized to be issued under the Purchaser's 1997 Stock Option Plan and,
unless the Purchaser and the Company mutually agree not to submit to a vote of  
the shareholders, this Agreement and the Merger.                                

9.4 CONFIDENTIALITY.                                            

       Each of the parties hereto hereby agrees to and reaffirms the terms and
provisions of the Mutual Nondisclosure Agreement by and between the Purchaser   
and the Company, dated as of May 7, 1999.                                       

9.5 PUBLIC DISCLOSURE.                                          

      Unless otherwise required by law (including securities laws) or, as to
the Purchaser, by the rules and regulations of the NASD, prior to the Effective 
Time, no disclosure (whether or not in response to an inquiry) of the subject   
matter of this Agreement or any Transactional Agreement shall be made by any    
party hereto unless approved in writing by the Purchaser and the Company prior  
to release (which approval shall not be unreasonably withheld); provided, that  
on the date of this Agreement, the parties shall jointly release a statement to 
the public substantially in the form attached hereto as Exhibit O; and provided,
further, that the parties agree and understand that certain                     

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disclosures regarding the Transactions may be made to (i) employees of the      
Purchaser and the Company, (ii) third parties whose consent or approval may be  
required in connection with the Transactions and (iii) the professional advisors
of the Purchaser, the Company and/or the Selling Shareholders, in each case     
without any prior written consent.                                              

9.6 NO INCONSISTENT ACTION.                                     

     Each of the Purchaser, the Company and the Representing Parties shall
use Best Efforts to cause the Merger to qualify as, and will not take any action
inconsistent with the treatment of the Merger as, a reorganization under Section
368(a)(2)(E) of the Code.                                                       

9.7 COVENANT NOT TO COMPETE; NON-SOLICITATION.                  

Each of Messrs. Douglas Levin and Michael Carter (each a Selling
Shareholder and for purposes of this Section 9.7, a "Principal Shareholder")    
agrees that for the period specified in this Section 9.7, he will not directly  
or indirectly:                                                                  

              (a) invest in, own, finance or participate in the ownership of
any Entity (other than the Purchaser and its Affiliates) engaged in the         
manufacture, sale and distribution of either fruit juice beverages, all natural 
food bars or spring water (collectively, the "Business"); provided, however,    
that each Principal Shareholder may purchase or otherwise acquire up to (but not
more than) three percent (3%) of the equity securities of any enterprise (but   
without otherwise participating in the activities of such enterprise) if such   
securities are listed on any national securities exchange or have been          
registered under Section 12(g) of the Exchange Act;                             

             (b) engage in, manage, operate, control or participate in the
management, operation or control of, or render services to, any Entity (other   
than the Purchaser and its Affiliates) in connection with such Entity's         
operation of the Business; or                                                   

         (c) except in the Ordinary Course of Business, either for
himself or any other Person, (i) induce or attempt to induce any employee to    
leave the employ of the Company or the Purchaser or any Entity under common     
control with the Company or the Purchaser, (ii) in any way interfere with the   
relationship between (A) the Purchaser and the Company (or any Entity under     
common control with the Company) and (B) any employee of the Purchaser and the  
Company (or such Entity), (iii) induce or attempt to induce any customer,       
supplier, licensee or business relation of the Purchaser, the Company or any    
Entity under common control with the Company to cease doing business with the   
Purchaser, the Company or such Entity, or in any way interfere with the         
relationship between any customer, supplier, licensee or business relation of   
the Company or such Entity or (iv) solicit services related to the Business of  
any Person that has received such services from the Company prior to the Closing
Date or that otherwise is a customer of the Purchaser, the Company or any Entity
under common control with the Purchaser or the Company.                         

       The foregoing agreements of noncompetition and nonsolicitation shall be
effective from the Closing Date to and including the date two (2) years from the
Closing Date and, for the avoidance of doubt, shall not apply in the event the  
Closing does not occur. It is the intent of the Purchaser, the Company and the  
Principal Shareholders that the foregoing agreements of noncompetition and      
nonsolicitation amend and supercede the agreements set forth in Section 6(d) of 
the Recapitalization Agreement dated as of September 17, 1998 by and among the  
Company, the stockholders of the Company and the investors named therein. (the  
"Company Recapitalization Agreement"). In the event, however, that the foregoing
agreements of noncompetition and nonsolicitation are held invalid, illegal or   
unenforceable, it is the intent of the Purchaser, the Company and the Principal 
Shareholders that the agreements set forth in Section 6(d) of the Company       
Recapitalization Agreement shall remain in full force and effect.               

9.8 THE LLC.                                                    

     Upon dissolution of the LLC in accordance with the LLC Agreement, and
upon notice to the Purchaser of such dissolution in accordance with Section     
12.10, all references to the LLC in Section 11 of this Agreement and in the     
Escrow Agreement shall be deemed to be references to the Selling Shareholders.  

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9.9 TRANSFER OF LLC INTERESTS AND PURCHASER STOCK.              

As a Member, each Selling Shareholder shall not (i) directly or 
indirectly sell or otherwise transfer, or offer, agree or commit (in writing or 
otherwise) to sell or otherwise transfer, any interests in the LLC, except as   
permitted under Section 5.2 of the LLC Agreement, or (ii) allow the LLC to      
directly or indirectly sell or otherwise transfer, or offer, agree or commit (in
writing or otherwise) to sell or otherwise transfer, any share of Purchaser     
Stock or any interest in or right relating to any shares of Purchaser Stock,    
except as permitted under the Rights Agreement.                                 

9.10 ANTITRUST LAWS.                                            

     As promptly as practicable, the Company, the Representing Parties and
the Purchaser shall make all filings and submissions under the HSR Act as are   
required to be made in connection with this Agreement and the Transactions.     
Subject to Section 9.4 hereof, the Company and the Representing Parties will    
furnish to the Purchaser, and the Purchaser will furnish to the Company and the 
Representing Parties, such information and assistance as the other may          
reasonably request in connection with the preparation of any such filings or    
submissions. Subject to Section 9.4 hereof, the Company and the Representing    
Parties will provide to the Purchaser, and the Purchaser will to provide the    
Company and the Representing Parties, copies of all correspondence, filings or  
communications (or memoranda setting forth the substance thereof) between such  
party or any of its representatives, on the one hand, and any Governmental Body 
or members of their respective staffs, on the other hand, with respect to this  
Agreement and the Transactions, except to the extent that the Purchaser or the  
Company is advised by independent counsel that the provision of such information
would be inadvisable under applicable antitrust laws.                           

10.     TERMINATION.                                                            

10.1 TERMINATION EVENTS.                                        

This Agreement may be terminated prior to Closing:              

          (a) by Purchaser if there is a breach or inaccuracy in any
representation, warranty, covenant or obligation of the Company or the          
Representing Party after the date of this Agreement and prior to the Closing and
such breach or inaccuracy (i) shall be reasonably likely to have a Material     
Adverse Effect on the Company, and (ii) has not been cured within ten (10)      
business days after written notice of such breach is given to the Company;      

            (b) by the Company if there is a breach or inaccuracy in any
representation, warranty, covenant or obligation of the Purchaser after the date
of this Agreement and prior to the Closing and such breach or inaccuracy (i)    
shall be reasonably likely to have a Material Adverse Effect on the Purchaser,  
and (ii) has not been cured within ten (10) business days after written notice  
of such breach is given to the Purchaser;                                       

               (c) by the Company if the Purchaser shall not have obtained the
Commitment Letter on or prior to the date that is two weeks after the date of   
this Agreement; or                                                              

           (d) by the mutual consent of the Purchaser and the Company.

10.2 TERMINATION PROCEDURES.                                    

       If the Purchaser wishes to terminate this Agreement pursuant to Section
10.1(a), the Purchaser shall deliver to the Representing Parties a written      
notice stating that the Purchaser is terminating this Agreement and setting     
forth a brief description of the basis on which the Purchaser is terminating    
this Agreement. If the Company wishes to terminate this Agreement pursuant to   
Section 10.1(b) or 10.1(c), the Company shall deliver to the Purchaser a written
notice stating that the Company is terminating this Agreement and setting forth 
a brief description of the basis on which the Company is terminating this       
Agreement.                                                                      

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10.3 EFFECT OF TERMINATION.                                     

     If this Agreement is terminated pursuant to Section 10.1, all further
obligations of the parties under this Agreement shall terminate; provided, that 
each party shall remain liable for any breaches of this Agreement prior to its  
termination and provided, further, that Sections 9.4, 9.5, 12.2, 12.3 and 12.11 
shall survive the termination of this Agreement.                                

10.4 EXCLUSIVITY OF TERMINATION RIGHTS.                         

   Except to the extent termination occurs due to the bad faith of the
other party, the termination rights and obligations provided in this Section 10 
shall be deemed to be exclusive. Subject to the provisions of Section 10.3, the 
parties shall not have any other or further Liabilities to or with respect to   
one another by reason of this Agreement or its termination.                     

11.     INDEMNIFICATION, ETC.                                                   

11.1 SURVIVAL OF REPRESENTATIONS AND COVENANTS.                 

              (a) The representations, warranties, covenants and obligations
of each party set forth in this Agreement or any other Transactional Agreement  
shall survive the Closing Date to the extent provided in this Section 11.1(a).  
Section 5.28(a) and any covenants or obligations of the Representing Parties and
the Purchaser set forth in Sections 1, 2, 3, 9.6, 9.7, 9.8, 10, 11 and 12 of    
this Agreement to be performed after the Closing shall survive the Closing and  
continue until the expiration of the statute of limitation period or periods    
applicable to them. All other representations and warranties (as well as        
covenants and obligations to be performed prior to the Closing Date) of the     
parties in this Agreement or any other Transactional Agreement shall survive    
until the first anniversary of the Closing Date. Notwithstanding the foregoing, 
the fraudulent breach of any representation or warranty shall survive the       
Closing Date and continue until the expiration of the statute of limitations    
governing fraud.                                                                

              (b) The representations, warranties, covenants and obligations
of the respective parties, and the rights and remedies that may be exercised by 
any of them, shall not be limited or otherwise affected by or as a result of any
information furnished to, or any investigation made by, or the Knowledge of, any
of the parties or any of their respective representatives.                      

              (c) For purposes of this Agreement, although each statement or
other item of information set forth in the Company Disclosure Schedule or the   
Purchaser Disclosure Schedule qualifies the specific representation and warranty
to which such information refers, all such statements and other items of        
information set forth in the Company Disclosure Schedule or the Purchaser       
Disclosure Schedule shall be deemed to be a representation and warranty made by 
the Company, the Representing Party or the Purchaser, as applicable, in this    
Agreement.                                                                      

       11.2 INDEMNIFICATION OF THE PURCHASER; LIMITS ON PURCHASER OBLIGATIONS.

             (a) Subject to the remainder of this Section 11.2 and Section
11.5, each Representing Party severally covenants and agrees that from and after
the Closing Date, it shall defend, indemnify and hold harmless the Purchaser and
each of its officers, directors, employees, agents and representatives (other   
than a Representing Party) (collectively, the "Indemnitees" and individually    
each an "Indemnitee") from and against, and shall compensate and reimburse each 
of the Indemnitees for, any Damages which are suffered or incurred by any of the
Indemnitees (regardless of whether or not such Damages relate to any third party
claim) directly or indirectly resulting from any breach of any representation or
warranty made by the Company or such Representing Party in this Agreement or the
failure of the Company or such Representing Party to perform any covenant or    
obligation hereof; provided, that, notwithstanding the foregoing, from and after
the Closing Date no Selling Shareholder shall be liable for Damages resulting   
from any breach of any representation or warranty contained in the second       
sentence of Section 5.14(c). The aggregate post-Closing Liability of any Selling
Shareholder under this Section 11 shall (i) in no event exceed such Selling     
Shareholder's Pro Rata Share of the Holdback Amount, and (ii) be reduced by such
Selling Shareholder's Pro Rata Share of the aggregate distributions of the      
Escrow Fund (as defined in the Escrow                                           

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Agreement) in satisfaction of claims for indemnification against the LLC, except
to the extent such Liability results from the intentional fraud of such Selling 
Shareholder.                                                                    

               (b) After the Closing, no Person shall be required to indemnify
any Indemnitee pursuant to this Section 11 unless and until the aggregate amount
of indemnifiable Damages suffered by all Indemnitees with respect to which      
Indemnitees are entitled to indemnification pursuant to this Section 11 exceeds 
One Hundred Seventy Five Thousand Dollars ($175,000) (the "Threshold"), at which
point Indemnitees shall be entitled to recover the full amount of all such      
Damages (including, for the avoidance of doubt, the initial One Hundred Seventy 
Five Thousand Dollars ($175,000)) and all other indemnifiable Damages thereafter
suffered or incurred by the Indemnitees, subject, in each case, to any other    
applicable limitations in this Section 11 on the indemnifying Person's          
indemnification obligations.                                                    

             (c) The number of shares of Purchaser Stock to be released to
any Indemnitee from the Holdback Amount pursuant to the terms of the Escrow     
Agreement to satisfy the obligations of the Representing Parties to indemnify   
such Indemnitee for Damages suffered or incurred shall be calculated by dividing
the dollar amount of such Damages by the Average Purchaser Stock Price on the   
Closing Date.                                                                   

      (d) The aggregate amount of Damages recoverable by the
Representing Parties resulting from any breach of any representation or warranty
made by the Purchaser in this Agreement or the failure of the Purchaser to      
perform any of its covenants or obligations hereunder shall in no event exceed  
the product of (i) the total number of shares of Purchaser Stock which comprise 
the Holdback Amount as of the Effective Time and (ii) the Average Purchaser     
Stock Price on the Closing Date, except to the extent that such Damages result  
from the intentional fraud of the Purchaser. After the Closing, neither the     
Representing Parties nor the Company shall commence any Proceeding against the  
Purchaser to recover Damages resulting from any breach of any representation or 
warranty made by the Purchaser in this Agreement or the failure of the Purchaser
to perform any of its covenants or obligations hereunder unless and until the   
aggregate amount of Damages recoverable by the Representing Parties and/or the  
Company resulting from any such breach or failure of the Purchaser to perform   
exceeds the Threshold, at which point the Representing Parties and/or the       
Company shall be entitled to recover the full amount of such Damages and all    
other Damages (including, for the avoidance of doubt, the initial One Hundred   
Seventy-Five Thousand ($175,000)) resulting from any such breach or failure of  
the Purchaser to perform thereafter suffered or incurred by the Representing    
Parties and/or the Company.                                                     

               (e) No party shall have any Liability hereunder for any Damages
suffered or incurred by any other party or any Indemnitee resulting from any    
breach of any representation or warranty made by any party in this Agreement or 
the failure of any party to perform any of its covenants or obligations         
hereunder unless a Proceeding to recover such Damages is initiated prior to     
expiration of the applicable survival period set forth in Section 11.1(a).      

11.3 NO CONTRIBUTION.                                           

    The Representing Parties hereby waive and acknowledge and agree that
they shall not have and shall not exercise or assert, against the Purchaser or  
any Indemnitee, or attempt to exercise or assert, any right of contribution or  
right of indemnity or any other right or remedy against the Purchaser to seek   
reimbursement or recovery of any amount paid to any Indemnitee as               
indemnification for Damages pursuant to this Section 11. It is the intention of 
the parties that after the Closing the remedy for the Purchaser or any          
Indemnitee seeking indemnification from the Representing Parties hereunder be a 
remedy solely against the Representing Parties and not against the Company;     
accordingly, the Representing Parties agree to the waivers contained in this    
Section 11.3. The Representing Parties further acknowledge that the waivers,    
acknowledgments and agreements of such Representing Parties contained in this   
Section are an essential inducement to the Purchaser in entering into this      
Agreement and agreeing to consummate the Transactions.                          

11.4 DEFENSE OF THIRD PARTY CLAIMS.                             

In the event of the commencement by any Person of any Proceeding
(whether against the Purchaser, any other Indemnitee or any other Person) with  
respect to which the Representing Parties may become obligated hereunder to     
indemnify, hold harmless, compensate or reimburse any Indemnitee pursuant to    
this Section 11, the party to be indemnified (the "Indemnified Party") shall    
reasonably promptly, but in any event within thirty (30) days                   

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following the Indemnified Party's actual knowledge thereof, notify the Person   
who may become obligated to indemnify the Indemnified Party pursuant to this    
Section 11 (the "Indemnifying Party") of such Proceeding by providing written   
notice to the Representing Parties. In any such event, the Indemnified          
Party(ies) shall proceed with the defense of such Proceeding and shall bear and 
pay all costs and expenses (including attorneys fees and costs) in connection   
with the Indemnified Party's(ies') defense of any such Proceeding (whether or   
not incurred by the Indemnified Party(ies)).                                    

In connection with the defense of any such Proceeding:          

   (a) the Indemnified Party(ies) shall be entitled to
indemnification for all expenses reasonably incurred and relating to the defense
of such claim or Proceeding to the extent such expenses are indemnifiable       
Damages under the terms of this Section 11;                                     

          (b) the Indemnified Party(ies) shall keep the Representing
Parties informed of all material developments and events relating to such claim 
or Proceeding;                                                                  

       (c) the Indemnifying Party(ies) shall have the right to
participate in the defense of such claim or Proceeding at his own expense; and  

                (d) the Indemnified Party(ies) shall not consent to the entry of
any judgement or settle, adjust or compromise such Proceeding without the prior 
written consent of the Representing Parties, which consent shall not be         
unreasonably withheld.                                                          

11.5 SOLE REMEDY.                                               

       Other than rights to equitable relief, the sole remedy available to any
Indemnitee for any breach, as of the Closing Date (or if this Agreement shall   
have been terminated pursuant to Section 10 prior to the Closing Date, as of the
date of this Agreement), of any representation or warranty made by any party to 
this Agreement or the failure of any party to this Agreement to perform any of  
its covenants or obligations hereunder shall be limited to the rights set forth 
in this Section 11.                                                             

11.6 INDEMNIFICATION OF PERSONS OTHER THAN THE INDEMNITEES.     

No Person other than an Indemnitee (or any successor or assignee
thereof) shall be permitted to assert any indemnification claim under this      
Agreement unless the Purchaser, the Company and the LLC shall have consented to 
the assertion of such indemnification claim.                                    

12.     MISCELLANEOUS.                                                          

12.1 FURTHER ASSURANCES.                                        

    Each party hereto shall execute and/or cause to be delivered to each
other party hereto such instruments and other documents, and shall take such    
other actions, as such other party may reasonably request (prior to, at or after
the Closing) for the purpose of carrying out or evidencing any of the           
Transactions.                                                                   

12.2 FEES AND EXPENSES.                                         

The Company shall bear and pay all legal and accounting fees and
reasonable costs and expenses that have been incurred or that are in the future 
incurred by or on behalf of the Selling Shareholders and the Company in         
connection with the Transactions. The Purchaser shall bear and pay all legal and
accounting fees and reasonable costs and expenses that have been incurred or    
that are in the future incurred by or on behalf of the Purchaser in connection  
with the Transactions.                                                          

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12.3 ATTORNEYS' FEES.                                           

     If any legal action or other legal proceeding (including arbitration)
relating to the Transactions or the enforcement of any provision of any of the  
Transactional Agreements is brought against any party hereto, 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).                          

12.4 TRANSFER TAXES.                                            

   The Company shall be responsible for sales, use and transfer taxes,
including any value added, gross receipts, stamp duty and real, personal or     
intangible property transfer taxes, due by reason of the consummation of the    
Transactions, including any interest or penalties in respect thereof, other than
transfer taxes imposed upon the exchange of any Company Stock for Purchaser     
Stock in connection with this Agreement and the Merger.                         

12.5 GOVERNING LAW; ARBITRATION.                                

            (a) 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.                                                                    

               (b) Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, shall be settled by arbitration administered by   
the American Arbitration Association in accordance with its then existing       
Commercial Arbitration rules and judgment upon the award rendered by the        
arbitrator may be entered in any court having jurisdiction thereof. The         
arbitrator shall be appointed by mutual agreement of Purchaser and Representing 
Parties involved in such controversy or claim, but, if the Purchaser and such   
Representing Parties fail to agree, the arbitrator shall be appointed by the    
American Arbitration Association in accordance with its then existing rules. The
place of the arbitration shall be San Francisco, California and the governing   
law shall be the laws of the State of California in accordance with Section     
12.5(a) of this Agreement.                                                      

12.6 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 the Indemnitees   
and shall inure to the benefit of and be enforceable by each person who shall be
a holder of the Stock from time to time. None of the parties hereto may assign  
any of its or their rights or obligations hereunder to any other party (by      
contract, operation of law or otherwise) without the prior written consent of   
the other, which consent shall not be unreasonably withheld, and any attempted  
assignment in violation thereof shall be void and of no effect.                 

12.7 ENTIRE AGREEMENT.                                          

This Agreement, the Schedules and the Exhibits hereto, the other
Transactional Agreements, the Rights Agreement and the other documents          
contemplated expressly hereby and thereby constitute the full and entire        
understanding and agreement among the parties thereto with regard to the        
subjects hereof and thereof and supersede all prior agreements and              
understandings among or between any of the Parties relating to the subject      
matter hereof and thereof.                                                      

12.8 SEPARABILITY.                                              

    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, unless such    
provision is material to the terms of this Agreement, in which case the         
Purchaser, the Company each Representing Party shall in good faith agree upon   
such amendments as are necessary to restore the original intent and arrangement 
between the parties.                                                            

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12.9   AMENDMENTS.                                              

       This Agreement may be amended or modified only upon the written consent
of (i) Bain, (ii) a majority in number of the other Selling Shareholders, (iii) 
at all times prior to its dissolution, the LLC, (iv) the Company, and (v) the   
Purchaser. Any amendment or modification effected pursuant to this Section 12.9 
shall be binding upon each Holder, the Company, the Purchaser and Merger Sub.   

12.10 NOTICES.                                                  

       Any notice or other communication required or permitted to be delivered
to any party under this Agreement shall be in writing and shall be deemed       
properly delivered and given (a) on the date delivered or given, when delivered 
or given by hand or by telecopier during business hours, (b) one business day   
after being delivered or given by courier or next-day express delivery service, 
or (c) two business days after being delivered or give by registered mail to the
address set forth beneath the name of such party below (or to such other address
or telecopier number as such party shall have specified in a written notice     
given to the other parties hereto):                                             

if to the Company:                                                              

Fresh Samantha, Inc.                                            
84 Industrial Park Road                                         
Saco, ME  04072                                                 
Attention:  Douglas Levin                                       
Telecopier: (207) 284-8331                                      

with copies to:                                                                 

Verrill & Dana, LLP                                             
One Portland Square                                             
P.O. Box 586                                                    
Portland, ME 04112-0586                                         
Attention:  Mark Googins                                        
Telecopier: (207) 774-7499                                      

Ropes & Gray                                                    
One International Plaza                                         
Boston, MA  02110-2624                                          
Attention:  Howard S. Glazer                                    
Telecopier: (617) 951-7050                                      

Drummond Woodsum & MacMahon                                     
245 Commercial Street                                           
P.O. Box 9781                                                   
Portland, ME  04104-5081                                        
Attention:  Michael High                                        
Telecopier: (207) 772-3627                                      

if to the LLC:                                                                  

c/o Fresh Samantha, Inc.                                        
84 Industrial Park Road                                         
Saco, ME  04072                                                 
Attention:  Douglas Levin                                       
Telecopier: (207) 284-8331                                      

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and                                                             

c/o Bain Capital, Inc.                                          
Two Copley Square, 7th Floor                                    
Boston, MA  02116                                               
Attention:  Andrew Balson                                       
Telecopier: (617) 572-3274                                      

with copies to:                                                 

Verrill & Dana, LLP                                             
One Portland Square                                             
P.O. Box 586                                                    
Portland, ME 04112-0586                                         
Attention:  Mark Googins                                        
Telecopier: (207) 774-7499                                      

Ropes & Gray                                                    
One International Plaza                                         
Boston, MA  02110-2624                                          
Attention:  Howard S. Glazer                                    
Telecopier: (617) 951-7050                                      

Drummond Woodsum & MacMahon                                     
245 Commercial Street                                           
P.O. Box 9781                                                   
Portland, ME  04104-5081                                        
Attention:  Michael High                                        
Telecopier: (207) 772-3627                                      

if to Bain:                                                                     

c/o Bain Capital, Inc.                                          
Two Copley Square, 7th Floor                                    
Boston, MA  02116                                               
Attention:  Andrew Balson                                       
Telecopier: (617) 572-3274                                      

with a copy to:                                                 

Ropes & Gray                                                    
One International Plaza                                         
Boston, MA  02110-2624                                          
Attention:  Howard S. Glazer                                    
Telecopier: (617) 951-7050                                      

if to RGIP, LLC:                                                                

c/o Ropes & Gray                                                
One International Place                                         
Boston, MA  02110                                               
Attention:  Kevin Smith                                         
Telecopier:  (617) 951-7050                                     

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with a copy to:                                                 

Ropes & Gray                                                    
One International Plaza                                         
Boston, MA  02110-2624                                          
Attention:  Howard S. Glazer                                    
Telecopier: (617) 951-7050                                      

if to JIP Enterprises, Inc.                                                     

c/o ATC Trustees BVI Ltd.                                       
Abbott Building, 2nd Floor                                      
Box 933                                                         
Road Town, Tortola, BVI                                         
Telecopier:                                                     

if to any other Selling Shareholder:                                            

c/o Fresh Samantha, Inc.                                        
84 Industrial Park Road                                         
Saco, ME  04072                                                 
Attention:  Douglas Levin                                       
Telecopier: (207) 284-8331                                      

with a copy to:                                                 

Drummond Woodsum & MacMahon                                     
245 Commercial Street                                           
P.O. Box 9781                                                   
Portland, ME  04104-5081                                        
Attention:  Michael High                                        
Telecopier: (207) 772-3627                                      

if to the Purchaser:                                                            

Odwalla, Inc.                                                   
120 Stone Pine Road                                             
Half Moon Bay, CA  94019                                        
Attention:  D. Stephen C. Williamson                            
Telecopier: (650) 712-5967                                      

with a copy to:                                                 

Morrison & Foerster LLP                                         
425 Market Street                                               
San Francisco, California 94105                                 
Attention: Robert Townsend, Esq.                                
Telecopier: 415-268-7522                                        

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12.11 PUBLICITY AND USE OF CONFIDENTIAL INFORMATION.            

             (a) Notwithstanding anything to the contrary contained in any
agreement among the parties hereto, the Purchaser shall have the right to       
disclose the information provided to the Purchaser by the Company and the Sel   
ling Shareholders in accordance with Section 9.2, the terms of this Agreement   
and the identity of the Company in the Proxy Statement, through the use of      
printed offering materials or otherwise or as otherwise required by applicable  
legal requirements.                                                             

                (b) The Company and the Representing Party, on the one hand, and
Purchaser, on the other hand, shall keep strictly confidential, and shall not   
use, or disclose to any other Person, any non-public document or other          
information in the Representing Party's possession, on the one hand, and in     
Purchaser's possession, on the other hand, that relates directly or indirectly  
to the business of the Company or any Affiliate of the Company, on the one hand,
or the Purchaser or any Affiliate of the Purchaser, on the other hand; provided,
however, that the Purchaser, the Company and the Representing Party may disclose
such non-public information as required by any applicable law or rule to which  
Purchaser, the Company or the Representing Party is subject, including the      
Exchange Act and the rules of the NASD.                                         

                (c) Except as set forth in Section 9.5, neither the Representing
Parties, the Company and the LLC, on the one hand, nor the Purchaser, on the    
other hand, shall issue or disseminate any press release or other publicity     
concerning any of the Transactions, or permit any press release or other        
publicity concerning any of the Transactions to be issued or otherwise          
disseminated on its behalf without the prior written consent of the Purchaser,  
in the case of the Representing Parties and the Company, or the Company, in the 
case of the Purchaser; provided, however, that the Purchaser, the Company and   
the Representing Party may disclose or disseminate such information as required 
by any applicable law or rule to which Purchaser, the Company or the            
Representing Parties is subject, including the Exchange Act and the rules of the
NASD.                                                                           

12.12 COUNTERPARTS.                                             

     This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one      
instrument.                                                                     

12.13 DELAYS OR OMISSIONS; WAIVERS.                             

               (a) No failure on the part of any Person to exercise any power,
right, privilege or remedy under this Agreement, and no delay on the part of any
Person in exercising any power, right, privilege or remedy under this Agreement,
shall operate as a waiver of such power, right, privilege or remedy; and no     
single or partial exercise or waiver of any such power, right, privilege or     
remedy shall preclude any other or further exercise thereof or of any other     
power, right, privilege or remedy.                                              

              (b) No Person shall be deemed to have waived any claim arising
out of this Agreement, or any power, right, privilege or remedy under this      
Agreement, unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on      
behalf of such Person; and any such waiver shall not be applicable or have any  
effect except in the specific instance in which it is given.                    

12.14 REMEDIES CUMULATIVE; SPECIFIC PERFORMANCE.                

          (a) All remedies, either under this Agreement or by law or
otherwise afforded to the parties hereto, shall be cumulative and not           
alternative.                                                                    

               (b) Each of the parties hereto agrees that if the conditions to
such party's obligation to consummate the Merger have been satisfied as set     
forth in Sections 4.1 or 4.2, as the case may be, and such party nonetheless    
refuses to consummate the Merger, then the other party shall be entitled (in    
addition to any other remedy that may be available to it) to (i) a decree or    
order of specific performance or mandamus to enforce the observance and         
performance of such obligation to consummate the Merger, and (ii) an injunction 
restraining such non-performance.                                               

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12.15 HEADINGS.                                                 

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.                                                                      

12.16 CONSTRUCTION.                                             

        (a) 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.                               

             (b) The parties hereto agree that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall 
not be applied in the construction or interpretation of this Agreement.         

      (c) As used in this Agreement, the words "include" and
"including," and variations thereof, shall not be deemed to be terms of         
limitation, but rather shall be deemed to be followed by the words "without     
limitation."                                                                    

         (d) Except as otherwise specified, all references in this
Agreement to "Sections," "Exhibits" and "Schedules" are intended to refer to    
Sections of this Agreement and Exhibits and Schedules to this Agreement.        

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       IN WITNESS WHEREOF, the parties hereto have executed this AGREEMENT AND
PLAN OF MERGER as of the date set forth in the first paragraph hereof.          

COMPANY:                                    FRESH SAMANTHA, INC.,               
                           a Maine corporation

                             By: /s/ Douglas Levin
                                               ---------------------------------
                                 Name: Douglas Levin
                                              Title:   Chief Executive Officer

PURCHASER:                                  ODWALLA, INC.,                      
                                a California corporation

                                        By: /s/ D. Stephen C. Williamson
                                               ---------------------------------
                                            Name: D. Stephen C. Williamson
                                              Title:   Chief Executive Officer

MERGER SUB:                                 ORANGE ACQUISITION SUB, INC.,       
                           a Maine corporation

                                         By: /s/  D. Stephen C. Williamson
                                               ---------------------------------
                                             Name:  D. Stephen C. Williamson
                                               Title:    Chief Executive Officer

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LLC:                                        SAMANTHA INVESTORS, LLC             
                                         a Massachusetts limited liability
               company

                                By: /s/ Mark E. Nunnelly
                                               ---------------------------------
                                    Name: Mark E. Nunnelly
                                         Title:    Authorized Person

SELLING SHAREHOLDERS:                       BAIN CAPITAL FUND VI, L.P.,         
                                            By:  Bain Capital Partners VI, L.P.,
                                 its general partner
                                             By:  Bain Capital Investors VI,
                                       Inc., its general partner

                                By: /s/ Mark E. Nunnelly
                                               ---------------------------------
                                     Name:  Mark E. Nunnelly
                                       Title:  Managing Director

                          BCIP ASSOCIATES II
                                BCIP TRUST ASSOCIATES II
                            BCIP ASSOCIATES II-B
                                  BCIP TRUST ASSOCIATES II-B
                             BCIP ASSOCIATES II-C,
                                                   By: Bain Capital, Inc.,
                                                  their Managing Partner

                                 By:  /s/ Mark E. Nunnelly
                                               ---------------------------------
                                    Name: Mark E. Nunnelly
                                       Title:  Managing Director

                                 PEP INVESTMENTS PTY LTD.,
                                                  By: Bain Capital, Inc.
                                                its Attorney-in-Fact

                                By: /s/ Mark E. Nunnelly
                                               ---------------------------------
                                    Name: Mark E. Nunnelly
                                       Title:  Managing Director

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                  RGIP, LLC,
                                            a Delaware limited liability company

                                By: /s/ J. Bradford Malt
                                               ---------------------------------
                                    Name: J. Bradford Malt
                                       Title:  Authorized Person

                              JIP ENTERPRISES, INC.,
                                            a British Virgin Islands corporation

                          By: /s/ Juan Prado
                                               ---------------------------------
                              Name: Juan Prado
                                       Title:  Authorized Person

                              /s/ Robert Carter, Jr.
                                            ------------------------------------
                                 Robert Carter, Jr.,
                           an individual

                        /s/ Julie Carter
                                            ------------------------------------
                           Julie Carter,
                           an individual

                             /s/ Michael D. Carter
                                            ------------------------------------
                                  Michael D. Carter,
                             an individual

                         /s/ Douglas Levin
                                            ------------------------------------
                            Douglas Levin,
                           an individual

                         /s/ Martha Carter
                                            ------------------------------------
                            Martha Carter,
                           an individual

                       /s/ Abby Carter
                                            ------------------------------------
                          Abby Carter,
                           an individual

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                                                                      APPENDIX B

ORANGE, INC.

SHAREHOLDERS' RIGHTS AGREEMENT

APRIL __, 2000

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 TABLE OF CONTENTS

                                                                [Download Table]

                                                                    PAGES
                                                                    -----
                                                                         
1.        GENERAL .............................................       1  

   1.1    Definitions .........................................       1  

2.        REGISTRATION ........................................       3  

   2.1    Demand Registrations ................................       3  
   2.2    Company Registration ................................       4  
   2.3    Additional Procedures in Connection with Underwritten          
          Offerings; Lockups; Cutbacks ........................       4  
   2.4    Expenses of Registration ............................       5  
   2.5    Obligations of the Company ..........................       6  
   2.6    Termination of Registration Rights ..................       7  
   2.7    Company Lockup ......................................       7  
   2.8    Indemnification .....................................       7  
   2.9    Assignment of Registration Rights ...................       9  
   2.10   Participation by Shareholders .......................       9  
   2.11   Reports Under Securities Exchange Act of 1934 .......       9  

3.        RIGHT OF FIRST OFFER; CO-SALE RIGHTS ................       10 

   3.1    Notice of Intended Disposition ......................       10 
   3.2    Exercise of Right by the Company ....................       10 
   3.3    Non-Exercise of Right of First Refusal ..............       10 
   3.4    Closing of Sale of Target Shares ....................       11 
   3.5    Assignment ..........................................       11 
   3.6    Co-Sale Rights in Sales by a Transferring Shareholder       11 
   3.7    Exempt Transfers ....................................       12 
   3.8    Termination .........................................       12 

4.        VOTING AGREEMENT ....................................       12 

   4.1    Election of Members of the Board of Directors .......       12 
   4.2    Termination of Voting Agreement .....................       13 

5.        OTHER AGREEMENTS ....................................       13 

   5.1    Information Rights ..................................       13 
   5.2    Restrictive Legend ..................................       13 
   5.3    Shareholder Lockup ..................................       13 
   5.4    Standstill ..........................................       13 

6.        MISCELLANEOUS .......................................       14 

   6.1    LLC Shares ..........................................       14 
   6.2    Amendment of LLC Agreement ..........................       14 
   6.3    Governing Law .......................................       15 
   6.4    Termination of Existing Rights Agreement ............       15 
   6.5    Successors and Assigns ..............................       15 
   6.6    Severability ........................................       15 

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                                                                [Download Table]
                                                                   
6.7    Amendment and Waiver ................................     15
6.8    Delays or Omissions .................................     15
6.9    Notices .............................................     15
6.10   Attorneys' Fees .....................................     16
6.11   Titles and Subtitles ................................     16
6.12   Counterparts ........................................     16
6.13   Construction ........................................     16
6.14   Entire Agreement ....................................     16

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ODWALLA, INC. 

SHAREHOLDERS' RIGHTS AGREEMENT

      This SHAREHOLDERS' Rights Agreement (this "Agreement") is entered into
as of April ___, 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
              Catterton-Simon Partners III, L.P. ("Catterton") in connection
               with the acquisition by Catterton of certain shares of Series A
    Preferred Stock of the Company (the "Existing Rights
        Agreement"). On or before the date hereof, Catterton has
               converted such shares of Series A Preferred Stock together with
             those additional shares of Series A Preferred Stock Catterton
                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 Catterton 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, 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 Catterton.                               

 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:                               

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 of Section 14 of the Exchange Act to remove a majority of  
the Board of Directors.                                                         

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      "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, Bain 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 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.                                             

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"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 Catterton-Simon 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.                                                                    

      Any capitalized terms not defined herein shall have the meanings given
them in the Merger Agreement.                                                   

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 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, 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                                           

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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 (vi) 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 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 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        

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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 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)                                                                  

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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 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.                                           

              (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.                                                                  

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              (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 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 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.                                                         

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

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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.                                       

       (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.                                                                    

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            (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, 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 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;                                                            

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        (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, (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 Catterton, the Bain 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 provision 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 Catterton, the Bain 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 Catterton, the Bain 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").                                         

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 Catterton, the Bain         
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 Catterton, the  
Bain 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                                                                       

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first offer rights shall continue to be applicable to any subsequent disposition
of the Target Shares by the Transferring Shareholder until such right lapses 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 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, that 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 Catterton, the Bain 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 shall not adversely affect its rights to     
participate in subsequent sales by the Transferring Shareholder.                

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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 Catterton and its   
Permitted Transferees holds 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 Catterton, who initially shall be    
Craig Sakin, (ii) for so long as the Bain 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 Bain Shareholders, (iii) for so long as the Bain    
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 Bain Shareholders, (iv) for so long as WP and its Permitted Transferees  
holds 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 Ellis Jones, 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. Stephen C. Williamson.        

          (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, then the Board of Directors of the Company 
(and, if applicable, the Nominating Committee thereof) shall, for so long as the
Bain 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 Bain Shareholders to serve as member of the    
Company's Board of Directors, and (ii) one (1) person designated by,            
collectively, the Company, Catterton 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 Shareholders shall vote any shares of Common
Stock he may own and 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                                                               

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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.       

4.2  TERMINATION OF VOTING AGREEMENT.                           

   The rights and obligations of each Shareholder and the Company with
respect to Section 4.1 shall cease at such time as such Shareholder (or with    
respect to the Samantha Shareholders, such shareholders as a group) cease 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 Bain Shareholders, Catterton 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 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 April __, 2000, a copy of
       which Shareholders' Rights Agreement Orange, 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.                                      

       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                                                                    

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transaction own immediately after the transaction less than fifty percent (50%) 
of the equity securities of the surviving corporation or its parent, neither    
Catterton, WP 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), 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 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, Catterton 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, Catterton 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, Catterton 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 clause (a) above 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.                                        

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.                                           

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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 Catterton hereby agree 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.                                    

     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 effect  
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 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    

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nationally recognized overnight courier, specifying next-day delivery, with     
written verification of receipt. All communications shall be sent to the        
addresses set forth on the signature page 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.                                                                      

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.                                                                   

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       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:
                                               ---------------------------------
                                            Name: D. Stephen C. Williamson
                                           Title:Chief Executive Officer

SHAREHOLDER:                                CATTERTON-SIMON PARTNERS III L.P.,  
                                      a Delaware limited partnership

           By:
                                               ---------------------------------
                   Name:
                    Title:

SHAREHOLDER:                                D. STEPHEN C. WILLIAMSON,           
                     an individual

           By:
                                               ---------------------------------
                                            Name: D. Stephen C. Williamson

SHAREHOLDER:                                U.S. EQUITY PARTNERS, L.P.,         
                                      a Delaware limited partnership

           By:
                                               ---------------------------------
                   Name:
                    Title:

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SHAREHOLDER:                                BAIN CAPITAL FUND VI, L.P.,         
                                            By:  Bain Capital Partners VI, L.P.,
                                     its general partner
                                                 By:  Bain Capital Investors VI,
                       Inc.,
                                     its general partner

           By:
                                               ---------------------------------
                  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:    Bain Capital, Inc.,
                                        their Managing Partner

           By:
                                               ---------------------------------
                  Name
                                       Title:  Managing Director

SHAREHOLDER:                                PEP INVESTMENTS PTY LTD.,           
                                           By:    Bain Capital, Inc.
                                      its Attorney-in-Fact

           By:
                                               ---------------------------------
                  Name
                                       Title:  Managing Director

SHAREHOLDER:                                RGIP, LLC,                          
                                            a Delaware limited liability company

           By:
                                               ---------------------------------
                  Name
                                       Title:  Authorized Person

SHAREHOLDER:                                JIP ENTERPRISES, INC.,              
                                            a British Virgin Islands corporation

           By:
                                               ---------------------------------
                  Name
                                       Title:  Authorized Person

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SHAREHOLDER:                                MICHAEL CARTER,                     
                     an individual

           By:
                                               ---------------------------------
                   Name:
                    Title:

SHAREHOLDER:                                DOUGLAS LEVIN,                      
                     an individual

           By:
                                               ---------------------------------
                   Name:
                    Title:

SHAREHOLDER:                                SAMANTHA INVESTORS, LLC,            
                                         a Massachusetts limited liability
               company

           By:
                                               ---------------------------------
                   Name:
                    Title:

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SCHEDULE 1

                                                                [Download Table]

                                         SHARES OF COMMON STOCK OWNED AS OF
              SHAREHOLDER                          THE DATE HEREOF         
              -----------                          ---------------         
                                                                           
Catterton-Simon Partners III L.P.                                          
D. Stephen C. Williamson                                                   
U.S. Equity Partners, L.P.                                                 

Samantha Shareholders:                                                     
Bain Capital Fund VI, L.P.                                                 
BCIP Associates II                                                         
BCIP Associates II-B                                                       
BCIP Associates II-C                                                       
BCIP Trust Associates II                                                   
BCIP Trust Associates II-B                                                 
PEP Investments PTY Ltd                                                    
RGIP, LLC                                                                  
JIP Enterprises, Inc.                                                      
Doug Levin                                                                 
Michael Carter                                                             

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                                                                      APPENDIX C

[LETTERHEAD OF W.R. HAMBRECHT + CO LLC] 

February 2, 2000                                                                

Board of Directors                                                              
Odwalla, Inc.                                                                   
120 Stone Pine Road                                                             
Half Moon Bay, CA 94019                                                         

Ladies and Gentlemen:                                                           

       We understand that Orange, Inc. ("Purchaser") proposes to enter into an
Agreement and Plan of Merger (the "Agreement") with Strawberry, Inc. (the       
"Company") and Orange Acquisition Sub, Inc., a wholly owned subsidiary of the   
Purchaser ("Merger Sub"). Pursuant to the Agreement, at the Effective Time: (i) 
Merger Sub will be merged with and into the Company (the "Merger") and (ii) all 
of outstanding shares of Company Common Stock and Company Preferred Stock (other
than shares held in the Company's treasury or held by the Purchaser or any      
subsidiary of the Purchaser) will be converted into the night to receive the    
Aggregate Merger Consideration. Capitalized terms not defined herein shall have 
the meanings ascribed to them in the Agreement.                                 

      You have asked for our opinion as investment bankers as to whether the
Aggregate Merger Consideration is fair, from a financial point of view, to the  
Purchaser. In conducting our investigation and analysis and in arriving at our  
opinion herein, we have reviewed such information and taken into account such   
financial and economic factors as we have deemed relevant under the             
circumstances. In that connection, we have, among other things: (i) reviewed    
certain internal information, primarily financial in nature, including          
projections, concerning the business and operations of the Company and the      
Purchaser furnished to us for purposes of our analysis, as well as publicly     
available information including but not limited to the Purchaser's recent       
filings with the Securities and Exchange Commission and equity analyst research 
reports prepared by various investment banking firms; (ii) reviewed the draft   
Agreement in the form presented to the Purchaser's Board of Directors; (iii)    
compared the historical market prices and trading activity of the Purchaser's   
common stock with those of certain other publicly traded companies we deemed    
relevant; (iv) compared the financial position and operating results of the     
Company with those of other publicly traded companies we deemed relevant; and   
(v) compared the proposed financial terms of the Merger with the financial terms
of certain other transactions we deemed relevant. We have held discussions with 
members of the Purchaser's and the Company's respective senior managements      
concerning the Purchaser's and the Company's historical and current financial   
condition and operating results, as well as the future prospects of each of the 
Purchaser and the Company. We have also considered such other information,      
financial studies, analysis and investigations                                  

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Board of Directors                                                              
Odwalla, Inc.                                                                   
February 2, 2000                                                                
Page Two                                                                        

and financial, economic and market criteria which we deemed relevant for the    
preparation of this opinion.                                                    

        In arriving at our opinion, we have assumed and relied upon the accuracy
and completeness of all of the financial and other information that was publicly
available or provided us by or on behalf of each of the Purchaser and the       
Company, and have not assumed any obligation to independently verify any such   
information. We have assumed, with your consent, (i) that all material assets   
and liabilities (contingent or otherwise, known or unknown) of the Purchaser and
the Company are as set forth in their most recent financial statements and,     
accordingly, no adjustment to the Aggregate Merger Consideration will be made   
pursuant to the working capital adjustment set forth in Section 1.4 of the      
Agreement, (ii) the Merger will be accounted for under the purchase method of   
accounting, (iii) the Merger will be consummated in accordance with the terms of
the Agreement, without any amendment thereto and without waiver by the parties  
of any of the conditions to their respective obligations thereunder and (iv)    
that in the course of consummating the merger and obtaining any regulatory      
approvals, no restrictions, including divestiture requirements, will be imposed 
that could have had an adverse effect on the contemplated benefits of the       
Merger. We have also assumed that the financial forecasts examined by us were   
reasonably prepared on bases reflecting the best available estimates and good   
faith judgements of the Purchaser's and the Company's respective senior         
managements as to future performance of the Purchaser and the Company,          
respectively. In conducting our review, we have not undertaken nor obtained an  
independent evaluation or appraisal of any of the assets or liabilities         
(contingent or otherwise) of the Purchaser and the Company, nor have we made a  
physical inspection of the properties or facilities of the Purchaser or the     
Company. We have relied on advice of counsel and independent accountants to     
Orange as to all legal and financial reporting matters with respect to Orange,  
the Merger and the Agreement, including the legal status and financial reporting
of any litigation involving Orange. Our opinion relates solely to the fairness, 
from a financial point of view, of the Aggregate Merger Consideration and does  
not express any view as to the allocation of such Aggregate Merger Consideration
among the holders of Company Common Stock and Company Preferred Stock. In       
addition, our opinion necessarily is based upon economic, monetary and market   
conditions as they exist and can be evaluated on the date hereof, and does not  
predict or take into account any changes which may occur, or information which  
may become available, after the date hereof. Accordingly, although subsequent   
developments may affect this opinion, we have not assumed any obligation to     
update, revise or reaffirm this opinion. Furthermore, we express no opinion as  
to the price or trading range at which the Purchaser's securities will trade at 
any time.                                                                       

       Our opinion has been prepared at the request and for the information of
the Board of Directors of the Purchaser, and shall not be used for any other    
purpose or disclosed to any other party without our prior written content;      
provided, however, that this letter may                                         

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Board of Directors                                                              
Odwal1a, Inc.                                                                   
February 2, 2000                                                                
Page Three                                                                      

be reproduced in full in the Proxy Statement to be provided to the Purchaser's  
stockholders in connection with the Merger. This opinion does not address the   
relative merits of the Merger and any other potential transactions or business  
strategies considered by the Purchaser's Board of Directors nor the Purchaser's 
underlying decision to proceed with or affect the Merger or any aspect of the   
Merger. This opinion does not constitute a recommendation to any shareholder of 
the Purchaser or the Company as to how any such shareholder should vote with    
respect to the Merger. We have acted as financial advisor to the Purchaser and  
will receive a fee for such services, including the rendering of this opinion.  

    We have assumed that the Merger will be consummated in a manner that
complies in all respects with the applicable provisions of the Securities Act of
1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934 and
all other applicable federal, state and local statues, rules and regulations. In
furnishing this opinion, we do not admit that we are experts within the meaning 
of the term "experts" as used in the Securities Act and the rules and           
regulations promulgated thereunder, nor do we admit that this opinion           
constitutes a report or valuation within the meaning of Section 11 of the       
Securities Act.                                                                 

      In the ordinary course of our business, we may from time to time trade
the securities of the Purchaser for our own account or the accounts of our      
customers and, accordingly, may at any time hold long or short positions in such
securities. Bill Hambrecht, Chairman of W.R. Hambrecht & Co. LLC, is a          
shareholder of Orange. His holdings constitute less than 0.5% of Orange on a    
fully diluted basis and he did not participate in the preparation of this       
Opinion or the presentation to Orange's Board of Directors.                     

        Based upon and subject to the foregoing, it is our opinion as investment
bankers that, as of the date hereof, the Aggregate Merger Consideration is fair,
from a financial point of view, to the Purchaser.                               

                   Very truly yours,

                          /s/ W.R. HAMBRECHT & Co.
                           W.R. Hambrecht & Co. LLC.

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PROXY                                                                           

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ODWALLA, INC. 
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 25, 2000

       The undersigned shareholder of ODWALLA, INC., a California corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and 
Proxy Statement, each dated March 16, 2000 and the Annual Report to             
Shareholders, and hereby appoints D. Stephen C. Williamson and James R. Steichen
or either of them, proxies, with full power to each of substitution, on behalf  
and in the name of the undersigned, to represent the undersigned at the Annual  
Meeting of Shareholders of ODWALLA, INC. to be held on April 25, 2000 at 9:30   
a.m., local time, at the Mel Mello Center for the Arts located at 1167 Main     
Street, Half Moon Bay, California, and at any adjournment or adjournments       
thereof, and to vote all shares of Common Stock which the undersigned would be  
entitled to vote if then and there personally present, on the matters set forth 
below.                                                                          

    THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE MERGER OF ODWALLA AND FRESH SAMANTHA, INCLUDING
THE ISSUANCE OF ODWALLA COMMON STOCK, FOR THE AMENDMENT OF THE CERTIFICATE OF   
DESIGNATION, FOR THE AMENDMENT OF THE ODWALLA 1997 STOCK OPTION/STOCK ISSUANCE  
PLAN, FOR THE ELECTION OF DIRECTORS, FOR THE RATIFICATION OF THE APPOINTMENT OF 
PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS OF ODWALLA, AND AS SAID   
PROXIES DEEM ADVISABLE ON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE MEETING. 

    1. Proposal to approve the merger and the issuance of Odwalla Common
Stock pursuant to the Agreement and Plan of Merger, dated as of February 2,     
2000, among Odwalla, Orange Acquisition Sub, Inc., a Maine corporation and a    
wholly owned subsidiary of Odwalla, and Fresh Samantha, Inc., a Maine           
corporation, pursuant to which Fresh Samantha will become a wholly owned        
subsidiary of Odwalla:                                                          

   _____   FOR        _____   AGAINST      _____   ABSTAIN

  2. Proposal to approve the amendment to the Odwalla Certificate of
Designation of Preferred Stock to increase the conversion ratio of the Preferred
Stock:                                                                          

   _____   FOR        _____   AGAINST      _____   ABSTAIN

3. Proposal to approve the amendment of the Odwalla 1997 Stock  
Option/Stock Issuance Plan to increase the number of shares reserved for        
issuance thereunder:                                                            

   _____   FOR        _____   AGAINST      _____   ABSTAIN

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4. ELECTION OF DIRECTORS                                        

____    FOR all nominees listed below      ____   WITHHOLD AUTHORITY to vote for
   (except as indicated)                     all nominees listed below

If you wish to withhold authority to vote for any individual nominee, strike a  
line through that nominee's name in the list below.                             

Nominees:     D. STEPHEN C. WILLIAMSON              RANZELL "NICK" NICKELSON, II
MARTIN S. GANS                        CRAIG H. SAKIN
     RICHARD GRUBMAN                       GREG A. STELTENPOHL

      5. Proposal to ratify the appointment of PricewaterhouseCoopers LLP as
the independent accountants of Odwalla for the fiscal year ending September 2,  
2000:                                                                           

   _____   FOR        _____   AGAINST      _____   ABSTAIN

                                 -----------------------------------
       Signature

                                 DATED:  _____________________, 2000

This Proxy should be marked, dated and signed by the shareholder(s) exactly as  
his or her name appears hereon, and returned promptly in the enclosed envelope. 
Persons signing in a fiduciary capacity should so indicate. If shares are held  
by joint tenants or as community property, both should sign.                    

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