Exhibit 10.1






Exhibit 10.1




 

 








ASSET PURCHASE AGREEMENT




among



PRIMO REFILL CANADA CORPORATION,



PRIMO WATER CORPORATION,



CULLIGAN OF CANADA, LTD.



and



CULLIGAN INTERNATIONAL COMPANY



March 8, 2011



 

 







 


 









 






TABLE OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE I DEFINITIONS
 	 	 	1	 
	ARTICLE II SALE AND PURCHASE OF ASSETS	 	 	7	 
	2.1	 	Sale and Purchase of Assets
	 	 	7	 
	2.2	 	Excluded Assets
	 	 	8	 
	2.3	 	Assumed Liabilities
	 	 	8	 
	2.4	 	Excluded Liabilities
	 	 	8	 
	2.5	 	Purchase Price
	 	 	9	 
	2.6	 	Closing
	 	 	10	 
	2.7	 	Post-Closing Deliveries
	 	 	10	 
	2.8	 	Allocation of Purchase Price
	 	 	10	 
	2.9	 	Withholding
	 	 	10	 
	2.10	 	Certain Tax Matters.
	 	 	11	 
	 	 	 
	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER	 	 	12	 
	3.1	 	Organization, Qualification and Corporate Power
	 	 	12	 
	3.2	 	Capitalization
	 	 	13	 
	3.3	 	Authority
	 	 	13	 
	3.4	 	No Conflicts
	 	 	13	 
	3.5	 	Financial Information
	 	 	13	 
	3.6	 	No Undisclosed Liabilities
	 	 	14	 
	3.7	 	Title to and Sufficiency of Assets
	 	 	14	 
	3.8	 	Tangible Personal Property; Condition of Purchased Assets
	 	 	14	 
	3.9	 	Accounts Receivable
	 	 	14	 
	3.10	 	Inventory
	 	 	14	 
	3.11	 	Real Property
	 	 	14	 
	3.12	 	Contracts
	 	 	14	 
	3.13	 	Tax
	 	 	15	 
	3.14	 	Legal Compliance
	 	 	15	 
	3.15	 	Permits
	 	 	15	 
	3.16	 	Litigation and Orders
	 	 	15	 
	3.17	 	Environmental
	 	 	16	 
	3.18	 	Customers
	 	 	16	 
	3.19	 	Solvency
	 	 	16	 
	3.20	 	No Brokers’ Fees
	 	 	16	 
	3.21	 	Securities Law
	 	 	16	 
	3.22	 	Disclosure
	 	 	17	 
	3.23	 	Retail Locations
	 	 	17	 
	 	 	 
	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE PRIMO PARTIES	 	 	17	 
	4.1	 	Organization
	 	 	17	 
	4.2	 	Capitalization
	 	 	18	 
	4.3	 	Authority
	 	 	18	 
	4.4	 	No Conflicts
	 	 	18	 
	4.5	 	Financial Statements.
	 	 	19	 
	4.6	 	No Undisclosed Liabilities
	 	 	19	 
	4.7	 	Intellectual Property
	 	 	19	 
	4.8	 	Taxation
	 	 	20	 
	4.9	 	Legal Compliance
	 	 	20	 
	4.10	 	Litigation and Orders
	 	 	20	 





 


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TABLE OF CONTENTS (cont’d)




	 	 	 	 	 	 	 
	 	 	 	 	Page	 

	4.11	 	Environmental
	 	 	20	 
	4.12	 	Employees
	 	 	21	 
	4.13	 	No Brokers’ Fees
	 	 	21	 
	4.14	 	SEC Reports
	 	 	21	 
	4.15	 	Conduct of Business
	 	 	21	 
	 	 	 
	 	 	 	 
	ARTICLE V CLOSING CONDITIONS	 	 	21	 
	5.1	 	Conditions to the Primo Parties’ Obligations
	 	 	21	 
	5.2	 	Conditions to the Seller’s Obligations
	 	 	23	 
	 	 	 
	 	 	 	 
	ARTICLE VI POST-CLOSING COVENANTS	 	 	23	 
	6.1	 	Payment of Excluded Liabilities
	 	 	24	 
	6.2	 	Payment of Assumed Liabilities
	 	 	24	 
	6.3	 	Bulk Transfer Compliance
	 	 	24	 
	6.4	 	Consents
	 	 	24	 
	6.5	 	Mail and Receivables
	 	 	24	 
	6.6	 	Litigation Support
	 	 	24	 
	6.7	 	Transition
	 	 	25	 
	6.8	 	Confidentiality
	 	 	25	 
	6.9	 	Seller Information
	 	 	25	 
	6.10	 	Personal Information
	 	 	25	 
	6.11	 	Regional Operator Agreements
	 	 	26	 
	6.12	 	Provision of Information Related to the Business
	 	 	26	 
	6.13	 	Additional Trademark Sublicense Agreements
	 	 	26	 
	6.14	 	Franchise Agreements
	 	 	27	 
	6.15	 	Transition Services
	 	 	27	 
	 	 	 
	 	 	 	 
	ARTICLE VII INDEMNIFICATION	 	 	27	 
	7.1	 	Indemnification by the Seller
	 	 	27	 
	7.2	 	Indemnification by the Buyer
	 	 	27	 
	7.3	 	Survival and Time Limitations
	 	 	27	 
	7.4	 	Limitations on Indemnification
	 	 	28	 
	7.5	 	Third-Party Claims
	 	 	29	 
	7.6	 	Other Indemnification Matters
	 	 	30	 
	7.7	 	PST Clearance Certificates
	 	 	30	 
	7.8	 	Exclusive Remedy
	 	 	30	 
	 	 	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS	 	 	30	 
	8.1	 	Further Assurances
	 	 	30	 
	8.2	 	No Third-Party Beneficiaries
	 	 	31	 
	8.3	 	Entire Agreement
	 	 	31	 
	8.4	 	Successors and Assigns
	 	 	31	 
	8.5	 	Counterparts
	 	 	31	 
	8.6	 	Notices
	 	 	31	 
	8.7	 	JURISDICTION; SERVICE OF PROCESS
	 	 	32	 
	8.8	 	Governing Law
	 	 	32	 
	8.9	 	Amendments and Waivers
	 	 	32	 
	8.10	 	Severability
	 	 	33	 
	8.11	 	Expenses
	 	 	33	 
	8.12	 	Interpretation
	 	 	33	 
	8.13	 	Specific Performance
	 	 	33	 
	8.14	 	Waiver of Consequential Damages
	 	 	33	 
	8.15	 	Time Is of the Essence
	 	 	33	 





 


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TABLE OF CONTENTS (cont’d)




	 	 	 

	EXHIBIT
	A	 	Standard RO Agreement

	 	 	 

	SCHEDULES
	1.1(a)	 	Franchisees

	1.1(b)	 	Seller’s Knowledge Persons

	1.1(c)	 	Buyer’s Knowledge Persons

	3.1	 	Organization

	3.2	 	Capitalization

	3.4	 	Seller’s Conflicts and Consents

	3.5(a)	 	Financial Information

	3.5(b)	 	Accounts Receivable

	3.5(c)	 	Accounts Payable

	3.12	 	Material Assigned Contracts

	3.18	 	Customers

	4.2	 	Primo Capitalization

	4.4	 	Primo Conflicts and Consents

	4.5(a)	 	Primo Financial Statements

	4.7(b)	 	Primo Intellectual Property

	4.7(c)	 	Primo Licenses

	4.8	 	Primo Taxation

	4.9	 	Primo Legal Compliance

	4.10	 	Primo Litigation and Orders

	4.11	 	Primo Environmental

	6.15	 	Transition Services







 


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ASSET PURCHASE AGREEMENT




This Asset Purchase Agreement (this “Agreement”) is entered into as of March 8, 2011, by Primo
Refill Canada Corporation, a British Columbia corporation (the “Buyer”), Primo Water Corporation, a
Delaware corporation (“Primo Parent”), Culligan of Canada, Ltd., a corporation governed by the
Canada Business Corporations Act (the “Seller”) and Culligan International Company, a Delaware
corporation (“Culligan Parent”).



STATEMENT OF PURPOSE




The Buyer has agreed to purchase from the Seller, and the Seller has agreed to sell to the
Buyer, substantially all of the Seller’s assets relating to the Business for the consideration,
including the Buyer’s assumption of certain stated liabilities, and on the terms and subject to the
conditions set forth in this Agreement.



ARTICLE I

DEFINITIONS




“Accounts Payable” means all trade and other accounts payable of the Business.



“Accounts Receivable” means all trade and other accounts receivable generated by the Business
and owing to the Seller and any claim, remedy or other right related to the foregoing.



“Affiliate” means, with respect to a specified Person, any other Person that directly or
indirectly controls, is controlled by, or is under common control with, the specified Person. The
term “control” means (a) the possession, directly or indirectly, of the power to vote 50% or more
of the securities or other equity interests of a Person having ordinary voting power or (b) the
possession, directly or indirectly, of the power to direct or cause the direction of the management
policies of a Person, by contract or otherwise.



“Agreement” is defined in the opening paragraph.



“Allocation Schedule” is defined in Section 2.8.



“Assigned Contracts” is defined in Section 2.1(d).



“Assumed Liabilities” is defined in Section 2.3.



“Average Closing Price” is defined in Section 2.5.



“Base Amount” is defined in Section 2.5.



“Bill of Sale” means the Bill of Sale and Assignment and Assumption Agreement to be executed
by the Seller and the Buyer in the form agreed upon by the Seller and the Buyer.



“Business” means the bulk water exchange business currently conducted by the Seller in Canada
consisting of accounts with retailers for (a) the delivery of water in 18 liter-sized containers to
retailers for resale to consumers, (b) the pick-up of such containers for reuse and (c) the related
services provided to such retailers, including the provision of display racking located at such
retailers; provided, however, that the Business does not include the Seller’s water
delivery, bottling and bottle refurbishment operations.


 


 









 





“Business Day” means any day that is not a Saturday, Sunday or any other day on which banks
are required or authorized by Law to be closed in Chicago, Illinois.



“Buyer” is defined in the opening paragraph.



“Buyer Cap” is defined in Section 7.4(b).



“Buyer Indemnitees” is defined in Section 7.1.



“Buyer Indemnity Threshold” is defined in Section 7.4(b).



“Buyer” is defined in the opening paragraph.



“Cash Consideration” is defined in Section 2.5.



“Closing” is defined in Section 2.6.



“Closing Adjustment Amount” means CDN$58,000.



“Closing Date” is defined in Section 2.6.



“Confidential Information” means information that is confidential concerning the business or
affairs of any Party, including information relating to the Business, customers, clients,
suppliers, distributors, investors, lenders, consultants, independent contractors or employees,
customer and supplier lists, price lists and pricing policies, cost information, financial
statements and information, budgets and projections, business plans, production costs, market
research, marketing plans and proposals, sales and distribution strategies, manufacturing and
production processes and techniques, processes and business methods, technical information, pending
projects and proposals, new business plans and initiatives, research and development projects,
inventions, discoveries, ideas, technologies, trade secrets, know-how, formulae, technical data,
designs, patterns, improvements, industrial designs, mask works, other Intellectual Property,
compositions, devices, samples, plans, drawings and specifications, photographs and digital images,
computer software and programming, business, employee and financial records, books, ledgers, files,
correspondence, documents and lists of a Party, other confidential information and materials
relating to the Business or any Party, and notes, analyses, compilations, studies, summaries,
reports, manuals, documents and other materials prepared by or for any Party containing or based in
whole or in part on any of the foregoing, whether in verbal, written, graphic, electronic or any
other form and whether or not conceived, developed or prepared in whole or in part by such Party.



“Consent” means any consent, approval, authorization, permission, waiver or clearance.



“Contract” means any contract, obligation, understanding, commitment, lease, license, purchase
order, bid or other agreement, whether written or oral or whether express or implied, together with
all amendments and other modifications thereto.



“Culligan Parent” is defined in the opening paragraph.



“Culligan Parties” means the Seller and Culligan Parent.



“Deposit Liabilities” means all Liabilities owed by the Seller to third parties with respect
to deposits collected by the Seller from such third parties in the operation of the Business.



“Economic Closing Date” is defined in Section 2.5(c).


 


2









 





“Encumbrance” means any lien, mortgage, hypothec, pledge, encumbrance, charge, security
interest, adverse or other claim, community property interest, condition, equitable interest,
option, warrant, right of first refusal, easement, profit, license, servitude, right of way,
covenant, zoning, lease, sublease, right of possession, prior assignment or other restriction of
any kind or nature.



“Environmental Law” means any Law regulating the protection of the environment, including any
Law relating to the presence, use, production, generation, handling, management, transportation,
treatment, storage, disposal, distribution, labeling, testing, processing, discharge, release,
threatened release, control or cleanup of any hazardous material, substance or waste.



“ETA” means the Excise Tax Act (Canada).



“Exchange Act” means the Securities Exchange Act of 1934.



“Excluded Assets” is defined in Section 2.2.



“Excluded Liabilities” is defined in Section 2.4.



“Existing Services Agreement” means that certain Canada Retail Bottled Water Services
Agreement, dated as of November 10, 2010, between the Seller and the Buyer.



“Financial Information” is defined in Section3.5(a).



“Franchisees” means the Persons that are not Affiliates of the Seller that, as of the date
hereof, have been licensed by the Seller to, among other things, provide services in support of the
Business. A list of all Franchisees is set forth on Schedule 1.1(a).



“GAAP” means generally accepted accounting principles in the United States as set forth in
pronouncements of the Financial Accounting Standards Board (and its predecessors) and the American
Institute of Certified Public Accountants and (i) unless otherwise specified and other than with
respect to financial statements, as in effect on the date hereof and (ii) with respect to any
financial statements, the date such financial statements were prepared.



“Governmental Body” means any federal, state, provincial, territorial, municipal, local,
foreign or other government or quasi-governmental authority or any department, ministry, central
bank, bureau, agency, subdivision, court or other tribunal of any of the foregoing.



“GST/HST” means the goods and services tax and harmonized sales tax imposed under the ETA.



“Indebtedness” means as to any Person at any time: (a) obligations of such Person for
borrowed money; (b) obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments; (c) obligations of such Person to pay the deferred purchase price of property
or services (including obligations under noncompete, consulting or similar arrangements), except
trade accounts payable of such Person arising in the ordinary course of business that are not past
due by more than 90 days or that are being contested in good faith by appropriate proceedings
diligently pursued and for which adequate reserves have been established on the financial
statements of such Person; (d) capitalized lease obligations of such Person; (e) indebtedness or
other obligations of others guaranteed by such Person; (f) obligations secured by an Encumbrance
existing on any property or asset owned by such Person; (g) reimbursement obligations of such
Person relating to letters of credit, bankers’ acceptances, surety or other bonds or similar
instruments; (h) Liabilities of such Person relating to unfunded, vested benefits under any
employee benefit plan (excluding obligations to deliver stock pursuant to stock options or stock
ownership plans); and (i) net payment obligations incurred by such Person pursuant to any
hedging agreement.


 


3









 





“Indemnified Party” is defined in Section 7.5.



“Indemnifying Party” is defined in Section 7.5.



“Intellectual Property” means all U.S., Canadian and foreign (a) inventions (whether
patentable or unpatentable and whether or not reduced to practice), improvements thereto, and
patents, patent applications, and patent disclosures, together with reissuances, continuations,
continuations-in-part, revisions, extensions and reexaminations thereof; (b) trademarks, service
marks, trade dress, logos, trade names, and corporate names, and including goodwill associated
therewith, and applications, registrations, and renewals in connection therewith; (c) copyrights,
and applications, registrations and renewals in connection therewith; (d) mask works and
applications, registrations and renewals in connection therewith; (e) trade secrets, discoveries,
ideas, technologies, know-how, formulae and data; (f) domain names; and (g) other similar
intellectual property rights.



“Inventory” is defined in Section 2.1.



“ITA” means the Income Tax Act (Canada).



“Knowledge” means (a) actual knowledge or (b) knowledge that would be expected to be obtained
after a reasonable inquiry concerning the matter at issue. The Seller will be deemed to have
Knowledge of a matter if any Person listed on Schedule 1.1(b) is deemed to have Knowledge
of such matter, and the Buyer will be deemed to have Knowledge of a matter if any Person listed on
Schedule 1.1(c) is deemed to have Knowledge of such matter.



“Law” means any federal, state, provincial, territorial, municipal, local, foreign or other
law, statute, ordinance, regulation, rule, regulatory or binding administrative guidance, Order,
constitution, treaty, principle of common law or other restriction of any Governmental Body.



“Liability” means any liability, obligation or commitment of any kind or nature, whether known
or unknown, asserted or unasserted, absolute or contingent, accrued or unaccrued, liquidated or
unliquidated, or due or to become due.



“Loss” means any loss, claim, demand, Order, damage, penalty, fine, cost, settlement payment,
Liability, Tax, Encumbrance, diminution of value, expense, fee, court costs or attorneys’ fees and
expenses.



“Material Assigned Contract” is defined in Section 3.12.



“Non-Competition Agreement” means the Non-Competition Agreement to be executed by the Seller
and the Buyer, in the form agreed upon by the Seller and the Buyer.



“Order” means any order, award, decision, injunction, judgment, ruling, decree, charge, writ,
subpoena or verdict entered, issued, made or rendered by any Governmental Body or arbitrator.



“Organizational Documents” means (a) any articles of incorporation, organization or formation
and any bylaws, operating agreement, shareholder agreement or limited liability company agreement
(b) any documents comparable to those described in clause (a) as may be applicable pursuant to any
Law and (c) any amendment or modification to any of the foregoing.


 


4









 





“Party” means any of the Culligan Parties or any of the Primo Parties.



“Permit” means any permit, license, franchise or Consent issued by any Governmental Body or
pursuant to any Law.



“Permitted Encumbrance” means (a) any mechanic’s, materialmen’s or similar statutory lien
incurred in the ordinary course of business for monies not yet due, (b) any lien for Taxes not yet
due and (c) any Encumbrance related to the Secured Debt of the Primo Parties.



“Person” means any individual, corporation, limited liability company, partnership, company,
sole proprietorship, joint venture, trust, estate, association, organization, labor union,
Governmental Body or other entity.



“Pre-Closing Tax Period” is defined in Section 2.2(e).



“Primo Financial Statements” is defined in Section 4.5.



“Primo Parent” is defined in the opening paragraph.



“Primo Parties” means the Buyer and Primo Parent.



“Primo Stock” means the shares of common stock, par value USD$0.001 per share, of Primo
Parent.



“Primo Subsidiaries” is defined in Section 4.1.



“Proceeding” means any proceeding, charge, complaint, claim, demand, notice, action, suit,
litigation, hearing, audit, investigation, arbitration or mediation (in each case, whether civil,
criminal, administrative, investigative or informal) commenced, conducted, heard or pending by or
before any Governmental Body, arbitrator or mediator.



“Purchase Price” is defined in Section 2.5.



“Purchased Assets” is defined in Section 2.1.



“QST” means the Quebec sales tax imposed under the QSTA.



“QSTA” means An Act respecting the Quebec sales tax.



“Qualifying Loss” means any individual indemnifiable Loss or series of related Losses in
excess of CDN$5,000.



“Registration Rights Agreement” means the Registration Rights Agreement, dated as of November
10, 2010, between Culligan Parent and Primo Parent, as amended, restated or otherwise modified from
time to time.



“Registration Rights Agreement Amendment” means the amendment to the Registration Rights
Agreement to be executed by Culligan Parent and Primo Parent, in the form agreed upon by Culligan
Parent and Primo Parent.



“Representative” means, with respect to a particular Person, any director, officer, employee,
agent, consultant, advisor or other representative of such Person, including legal counsel,
accountants,
financial advisors, lenders, financing sources and underwriters (including counsel for any
such lenders, financing sources or underwriters).


 


5









 





“SEC” means the U.S. Securities and Exchange Commission.



“Secured Debt” means any Indebtedness that is secured by any Encumbrance.



“Securities Act” means the Securities Act of 1933.



“Seller” is defined in the opening paragraph.



“Seller Cap” is defined in Section 7.4(a).



“Seller Indemnitees” is defined in Section 7.2.



“Seller Indemnity Threshold” is defined in Section 7.4(a).



“Services Agreement” means the Services Agreement to be executed by the Seller and the Buyer,
in the form agreed upon by the Seller and the Buyer.



“Share Consideration” is defined in Section 2.5.



“Standard RO Agreement” means an agreement substantially in the form of Exhibit A.



“Straddle Tax Period” is defined in Section 2.2(e).



“Tangible Personal Property” is defined in Section 2.1.



“Tax” means any federal, state, provincial, local, foreign or other income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental, payroll, employer health, land transfer, customs duties, capital stock, franchise,
profits, withholding, social security (or similar), unemployment, disability, real property,
personal property, goods and services, harmonized sales or other sales, use, transfer,
registration, value added, general service, alternative or add-on minimum, estimated, or other tax
(including Canada Pension Plan or other provincial plan contributions, employment insurance
premiums and workers compensation premiums), including any interest, penalty, or addition thereto.
Taxes shall not include any license, registration or permitting fees that arise as a result of the
Transactions.



“Tax Return” means any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any form, schedule or attachment thereto and any amendment
or supplement thereof.



“Third-Party Claim” is defined in Section 7.5.



“Trademark Sublicense Agreement” means the Trademark Sublicense Agreement to be executed by
the Seller and the Buyer, in the form agreed upon by the Seller and the Buyer.



“Transaction Documents” means this Agreement, the Non-Competition Agreement, the Trademark
Sublicense Agreement, the Bill of Sale, the Services Agreement, the Registration Rights Agreement
Amendment, the Waiver Agreement and all other written agreements, documents and certificates
contemplated by any of the foregoing documents.


 


6









 





“Transaction Expenses” means all expenses (other than Taxes) incurred by the Seller in
connection with this Agreement and the other Transaction Documents, for itself or on behalf of its
equity holders, and the consummation of the Transactions, including any and all legal, accounting,
financial, advisory or consulting fees and expenses incurred as of the Closing Date, whether or not
paid as of the Closing Date.



“Transactions” means the transactions contemplated by the Transaction Documents.



“Transfer Taxes” is defined in Section 2.10(c).



“Transition Period” is defined in Section 6.15.



“Transition Services” is defined in Section 6.15.



“Waiver Agreement” means the Waiver Agreement to be executed by the Seller in the form agreed
upon by the Seller and the Buyer.



ARTICLE II

SALE AND PURCHASE OF ASSETS




2.1 Sale and Purchase of Assets. Subject to the terms and conditions of this Agreement, the
Seller hereby sells, assigns, transfers and conveys to the Buyer, and the Buyer hereby purchases,
acquires and accepts from the Seller, free and clear of all Encumbrances other than Permitted
Encumbrances, all of the Seller’s right, title and interest in the Seller’s assets exclusively used
in the Business (other than the Excluded Assets) (the “Purchased Assets”), including all assets
that fall into the following categories to the extent that they are exclusively used in the
Business:



(a) Approximately 450 racking units owned by the Seller and used in the Business (the
“Tangible Personal Property”);



(b) Approximately 83,000 18 liter-sized containers owned by the Seller and used in the
Business (the “Inventory”);



(c) All Accounts Receivable as of the Closing Date;



(d) All rights and interests in and to all Contracts of the Business with retailers (the
“Assigned Contracts”);



(e) All customer lists, supplier lists, business and financial records regarding Accounts
Receivable and Accounts Payable, and equipment repair, maintenance, service, and quality control
records;



(f) All goodwill of the Business;



(g) All rights of the Seller to causes of action, lawsuits, judgments, claims and demands of
any nature arising out of the operation of the Business and all counterclaims, rights of setoff,
rights of indemnification and affirmative defenses to any claims arising out of the operation of
the Business that may be brought against the Buyer by third parties;



(h) All rights to refunds from customers and suppliers of the Business and all prepaid
expenses of the Business; and


 


7









 





(i) All other properties and assets of the Business not of a type falling within any of the
categories of assets or properties described in clauses (a) through (h) above falling within the
definition of Purchased Assets.



2.2 Excluded Assets. The Seller retains ownership and responsibility for the following assets
and other matters of the Seller (collectively, the “Excluded Assets”):



(a) All cash, cash equivalents and short-term investments;



(b) All Organizational Documents, share books, share ledgers, minute books and Tax Returns and
records (including working papers) related thereto;



(c) All rights to causes of action, lawsuits, judgments, claims and demands of any nature and
all counterclaims, rights of setoff, rights of indemnification and affirmative defenses to any
claims that may be brought against the Seller by third parties, in each case to the extent that
they relate to the Excluded Assets or the Excluded Liabilities;



(d) All rights under any Transaction Document;



(e) Subject to Section 2.10(d), all Tax credits, prepaid Taxes and refunds of the Seller
pertaining to the Business or the Purchased Assets that are attributable to any of the following
tax periods (each, a “Pre-Closing Tax Period”): (i) any taxable period ending on or before the
Closing Date and (ii) for a taxable period that includes (but does not end on) the Closing Date (a
“Straddle Tax Period”), the portion of the Straddle Tax Period ending on the Closing Date;



(f) All employees of the Seller;



(g) All rights and interests in and to any Contracts of the Business other than the Assigned
Contracts; and



(h) All assets of the Seller not used exclusively in the Business.



For purposes of clause (e), the term “Seller” shall include Culligan Parent.




2.3 Assumed Liabilities. The Buyer hereby assumes and agrees to pay, perform and discharge
only the following Liabilities of the Seller (collectively, the “Assumed Liabilities”):



(a) All Accounts Payable as of the Closing Date;



(b) All Deposit Liabilities as of the Closing Date; and



(c) Liabilities to be performed after the Closing Date under any Assigned Contract.



2.4 Excluded Liabilities. The Excluded Liabilities remain the sole responsibility of and will
be retained, paid, performed and discharged as and when due solely by the Seller. “Excluded
Liabilities” means every Liability of the Seller, other than the Assumed Liabilities, including all
Liabilities of the Seller within the following categories to the extent they do not fall within the
definition of Assumed Liabilities:



(a) All Liabilities under any Transaction Document;


 


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(b) Except as provided in Section 2.10(c), all Liabilities and obligations for (i) Taxes
pertaining to the Business or the Purchased Assets allocated to any Pre-Closing Tax Period as
provided in Section 2.10 and (ii) franchise and income Taxes of the Seller for any taxable period;



(c) All Liabilities pertaining to environmental, ecological, health or safety claims to the
extent relating to or arising from the ownership or operation of the Business or the Purchased
Assets on or prior to the Closing Date;



(d) All Liabilities under any Contracts which are not Assigned Contracts;



(e) All Liabilities to indemnify any Person by reason of the fact that such Person was a
director, officer, employee or agent of the Seller;



(f) All Liabilities in respect of any Excluded Asset;



(g) All Transaction Expenses;



(h) All Indebtedness, except as assumed by the Buyer pursuant to Section 2.3;



(i) All Liabilities pertaining to the Seller’s employees, including the employees of the
Business, and including all Liabilities that are in any way related to the employment and the
termination of employment of such employees as well as any Liabilities and other obligations
related to any employee benefit plans;



(j) All Liabilities for infringement or misappropriation of any Intellectual Property to the
extent relating to or arising from the ownership or operation of the Business or the Purchased
Assets on or prior to the Closing Date;



(k) All product Liability claims for damages or injury to Person or property to the extent
relating to or arising from the ownership or operation of the Business or the Purchased Assets on
or prior to the Closing Date; and



(l) All other Liabilities, regardless of when made or asserted, which arise out of any events
occurring or actions taken or omitted to be taken by the Seller, or otherwise arising out of or
incurred in connection with the conduct of the Business on or prior to the Closing Date.



For purposes of clause (b), the term “Seller” shall include Culligan Parent.




2.5 Purchase Price.



(a) The purchase price for the Purchased Assets (the “Purchase Price”) will be:




(i) an aggregate amount of CDN$5,300,000, as adjusted, composed of:




(A) CDN$1,590,000 (the “Base Amount”) in cash, less the Closing Adjustment
Amount (the Base Amount as adjusted is the “Cash Consideration”),




plus




(B) that number of shares of Primo Stock having an aggregate value of
CDN$3,710,000 (the “Share Consideration”), calculated based upon a price per share
equal to the average of the closing price of Primo Stock on The NASDAQ Global Select
Market for the 20 most recent trading days prior to the Closing Date, with each
day’s closing price converted from U.S. dollars to Canadian dollars based on such
day’s exchange rate as listed in The Wall Street Journal (the “Average Closing
Price”); and


 


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(ii) the assumption of the Assumed Liabilities.



For the avoidance of doubt, no Party shall be required to make a duplicative payment with respect
to the same item under this Section 2.5, Article VII or otherwise under this Agreement.




(b) Subject to the terms and conditions of this Agreement, at the Closing, the Buyer will (i)
pay the Cash Consideration to the Seller by wire transfer of immediately available funds to a bank
account or accounts designated at least one Business Day prior to the Closing Date by the Seller
and (ii) issue to Culligan Parent (on behalf, and upon the direction, of the Seller) the number of
shares of Primo Stock equal to (1) the Share Consideration divided by (2) the Average Closing
Price.



(c) The Parties intend for this Agreement to be effective from an economic standpoint as of
11:59 p.m. local time on December 31, 2010 (the “Economic Closing Date”). In order to accomplish
this, the Parties have mutually agreed to deduct the Closing Adjustment Amount from the Base Amount
and the resulting Cash Consideration shall be paid by the Buyer in accordance with Section 2.5(b).



2.6 Closing. Subject to the satisfaction or written waiver of the conditions in Article V,
the closing of the Transactions to be performed on the Closing Date (the “Closing”) will take place
at the offices of K&L Gates LLP in Charlotte, North Carolina, commencing at 10:30 a.m. local time
on March 8 2011 (the “Closing Date”). Subject to the consummation of the Closing on the Closing
Date, the sale, assignment, transfer and conveyance to the Buyer of the Purchased Assets and the
assumption by the Buyer of the Assumed Liabilities will be deemed effective as of 11:59 p.m. local
time on the Closing Date.



2.7 Post-Closing Deliveries. Within ten Business Days after the Closing Date, the Seller will
deliver a detailed list of each of the Accounts Receivable and the Accounts Payable, in each case
as of the Closing Date.



2.8 Allocation of Purchase Price. The Buyer shall use commercially reasonable efforts to
prepare a schedule setting forth the fair market value of the Purchased Assets for purposes of
allocating the Purchase Price and other relevant items among the Purchased Assets (the “Allocation
Schedule”) prior to the date which is sixty days following the Closing Date and shall deliver such
Allocation Schedule to the Seller promptly after it is prepared. The allocation shall be
reasonable and shall be based on appraisals conducted by an appraiser chosen by the Buyer. The
Seller shall be provided with a reasonable opportunity to review and comment on the Allocation
Schedule. If the Buyer and the Seller agree upon the Allocation Schedule after the Closing then
(a) such allocation shall be the agreed allocation and (b) the Buyer and the Seller shall file any
required Tax Returns in accordance with the Allocation Schedule and shall take no position
inconsistent with the Allocation Schedule unless required by applicable Law or to reflect
subsequent developments such as an adjustment to the Purchase Price. If the Buyer and the Seller
cannot reach agreement on the Allocation Schedule, each shall be entitled to use its own
allocation.



2.9 Withholding. Notwithstanding anything to the contrary in this Article II, the Buyer shall
be permitted to deduct and withhold any amounts from the Purchase Price to the extent required by
the ITA or applicable Law. As of the date hereof, to the Knowledge of the Buyer, no such deduction
or
withholding of any amounts from the Purchase Price is required by the ITA or applicable Law.
Any amounts so deducted and withheld shall be treated as if paid to the Seller.


 


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2.10 Certain Tax Matters.



(a) For purposes of this Agreement, all personal property, intangibles, and other similar
Taxes, including, without limitation, any such Taxes paid or payable pursuant to the terms of any
lease or other Contract (and excluding any Transfer Taxes, which shall be governed by Section
2.10(c)), paid or payable with respect to the Purchased Assets for any Straddle Tax Period shall be
allocated to the Pre-Closing Tax Period and the period beginning on the day after the Closing Date
on a per diem basis. For the avoidance of doubt, any license, registration and permitting fees
that arise as a result of the Transactions shall be for the account of the Buyer.



(b) For purposes of this Agreement, except as provided in Section 2.10(a), Taxes paid or
payable with respect to the Purchased Assets for any Straddle Tax Period (and excluding any
Transfer Taxes, which shall be governed by Section 2.10(c)) shall be allocated to the Pre-Closing
Tax Period and the period beginning on the day after the Closing Date on the basis of an interim
closing of the books as of the completion of the Closing.



(c) Each of the Seller, on the one hand, and the Buyer, on the other hand, shall bear and pay
50% of the aggregate amount of all stamp, transfer, documentary, registration and other such
similar Taxes (other than sales and use Taxes) (collectively, “Transfer Taxes”) incurred in
connection with the transfer of the Purchased Assets, except that the Buyer shall bear 100% of (i)
any value added or similar tax to the extent such transfer tax is recoverable, including, without
limitation, GST/HST and QST and (ii) any fees or Taxes related to any registration,
application or recordation in respect of trademarks, trade names or similar intangible property
arising in connection with assignment of such trademarks, trade names or similar intangible
property pursuant to this Agreement. The Buyer shall be responsible for all sales and use Taxes
incurred in connection with the transfer of the Purchased Assets. The Buyer shall file, or shall
cause to be filed, to the extent permitted by applicable Law, all Tax Returns in respect of
Transfer Taxes as may be required to comply with the provisions of the Tax Law of the relevant Tax
jurisdictions. The Seller shall cooperate with the Buyer in connection with all such filings and
shall file or cause to be filed those Tax Returns that the Buyer is not permitted to file. The
Seller and the Buyer shall cooperate in obtaining all applicable certificates to reduce or
eliminate Transfer Taxes and sales and use Taxes.



(d) If available, the Buyer and the Seller will complete and sign, within ten Business Days
after the Closing Date, joint elections under Section 167(1) of the ETA and under Section 75 of the
QSTA to permit the sale and purchase of the Purchased Assets to take place on a GST/HST-free basis
under Part IX of the ETA and on a QST-free basis. The Buyer will file each election with the
appropriate Governmental Authority within the time permitted under the ETA and QSTA. If at any time
the Seller is assessed by a Governmental Authority on the basis that an election is not valid, the
Buyer agrees to pay to the Seller any GST/HST and QST, interest and penalties assessed by the
Governmental Authority. The Seller is registered for GST/HST purposes under the ETA (registration
number 87049 4739 RT0001) and for QST purposes under the QSTA (registration number 1010347005
TQ0001). The Buyer is registered for GST/HST purposes under the ETA (registration number 803269455
RT0001) and for QST purposes under the QSTA (registration number 1216775755 TQ0001).



(e) If the Seller or the Buyer, as the case may be, shall receive and realize in cash (or cash
equivalent) a refund of any Tax the liability for which was the subject of allocation under Section
2.10(a), (b) or (c), the amount of that refund shall be prorated between the parties in accordance
with the manner in which the related Tax liability was allocated. In the case of a Tax that is not
subject to
apportionment under Section 2.10(a), (b) or (c), if the Seller on the one hand, or the Buyer
on the other hand, shall receive and realize in cash (or cash equivalent) a refund of such Tax and
such Tax has been paid or borne by the other party, the party receiving the refund shall promptly
remit such refund to the other party less any costs or expenses incurred by the receiving party in
connection therewith.


 


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(f) The Buyer and the Seller shall cooperate, as and to the extent reasonably requested by any
other party, in connection with the filing and preparation of Tax Returns related to the Purchased
Assets and any Proceeding related thereto.



(g) The Parties agree that, to the extent an amount of the Purchase Price is to be paid by the
Buyer in respect of the Non-Competition Agreement to the Seller as consideration for its
obligations thereunder, the Buyer and the Seller covenant to jointly elect in the prescribed form
pursuant to proposed paragraph 56.4(3)(b) of the ITA in respect of the Non-Competition Agreement
and to execute and file such joint election within the time specified in proposed subsection
56.4(14) of the ITA. If any provincial taxing authority proposes a similar provision, then the
Buyer and the Seller shall make corresponding provincial elections. If no amount of the Purchase
Price is allocated to or paid in respect of the Non-Competition Agreement, the Buyer and the
Seller covenant to jointly elect in the prescribed form under Subsection 56.4(7) of the ITA to
apply subsection 56.4(5) of the ITA in respect of the Non-Competition Agreement. The Buyer and the
Seller will cooperate with one another in preparing, executing and filing the election form
contemplated by this Section 2.11(g) with a view to ensure that (i) to the extent any amount of the
Purchase Price is allocated to the Non-Competition Agreement, that amount is not treated as income
of the Seller and is not subject to any withholding tax for Canadian tax purposes; and (ii) section
68 of the ITA does not apply to deem consideration to be received or receivable by the Seller for
entering into the Non-Competition Agreement. The covenants in this Section 2.11(g) will survive
the Closing and continue in effect for as long as necessary in order to achieve that purpose.



(h) To the extent that the Seller has received payments prior to the Closing Date from
customers or any other persons in respect of those Liabilities to be performed after the Closing
Date that are assumed under this Agreement, Purchased Assets having a fair market value equal to
the amount of such payments are being transferred to the Buyer under this Agreement as payment for
the Seller’s agreement to assume those Liabilities and the Seller and the Buyer will file an
election pursuant to the provisions of subsections 20(24) and 20(25) of the ITA, and any
corresponding provisions of any other applicable Tax Law, within the prescribed time period.



(i) The Buyer and the Seller will execute and file, within the prescribed time limits, a joint
election under Section 22 of the ITA and Section 184 of the Taxation Act (Quebec), if applicable,
with respect to the Accounts Receivable in respect of the Business and any corresponding provisions
of any other applicable Tax Law and will designate in that joint election the portion of the
Purchase Price allocated to those Accounts Receivable as the consideration paid by the Buyer and
the Seller for such Accounts Receivable for the purpose of the election.



ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLER




The Seller (and, with respect to Sections 3.1, 3.2, 3.3, 3.4 and 3.21 only, Culligan Parent)
represents and warrants as follows:



3.1 Organization, Qualification and Corporate Power. Schedule 3.1 sets forth the
Seller’s jurisdiction of incorporation or organization, the other jurisdictions in which it is
qualified to do business, and its directors and officers. The Seller is a corporation
incorporated, organized and subsisting under the Law of its jurisdiction of incorporation. The
Seller has delivered to the Buyer correct and complete
copies of its Organizational Documents. Culligan Parent is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of incorporation.


 


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3.2 Capitalization. Except as set forth on Schedule 3.2, Culligan Parent owns all of
the outstanding equity of the Seller. There are no outstanding securities convertible or
exchangeable into equity of the Seller.



3.3 Authority. Each Culligan Party has full corporate power, authority and capacity to
execute and deliver this Agreement and to perform its obligations hereunder. The execution,
delivery and performance by the Seller of this Agreement have been approved by the equityholders of
the Seller. The execution and delivery by each Culligan Party of each Transaction Document to
which it is a party and the performance by such Culligan Party of the Transactions have been duly
authorized by all requisite corporate action of such Culligan Party. Except as such validity,
binding effect or enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, conservatorship, fraudulent transfer, moratorium (whether general or
specific) or other Law now or hereafter in effect affecting the enforceability of creditors’ rights
generally, (a) this Agreement constitutes the valid and legally binding obligation of each Culligan
Party, enforceable against such Culligan Party, respectively, in accordance with the terms of this
Agreement and (b) each Transaction Document to which each Culligan Party is a party constitutes the
valid and legally binding obligation of such Culligan Party, as applicable, enforceable against
such Culligan Party in accordance with the terms of such Transaction Document.



3.4 No Conflicts. Except as set forth on Schedule 3.4, neither the execution and
delivery of this Agreement nor the performance of the Transactions will, directly or indirectly,
with or without notice or lapse of time: (a) violate any Law to which any Culligan Party or any
Purchased Asset is subject; (b) violate any Permit held by any Culligan Party and related to the
Business or give any Governmental Body the right to terminate, revoke, suspend or modify any Permit
held by any Culligan Party and related to the Business, except in each case with respect to Permits
that individually or in the aggregate are not material; (c) violate any Organizational Document of
any Culligan Party; (d) violate, conflict with, result in a breach of, constitute a default under,
result in the acceleration of or give any Person the right to accelerate the maturity or
performance of, or to cancel, terminate, modify or exercise any remedy under, any Assigned Contract
or any Contract to which any Purchased Asset is subject; or (e) result in the imposition of any
Encumbrance upon any Purchased Asset other than Permitted Encumbrances. Except as set forth on
Schedule 3.4, no Culligan Party is required to notify, make any filing with, or obtain any
Consent of any Person in order to perform the Transactions.



3.5 Financial Information.



(a) Set forth on Schedule 3.5(a) is unaudited financial information for the Business
for the 12-month periods ending December 31, 2008, 2009 and 2010 (the “Financial Information”).
The Financial Information presents fairly the performance of the Business for the respective dates
presented.



(b) Set forth on Schedule 3.5(b) is a detailed list of the Accounts Receivable as of
December 31, 2010, which list sets forth the aging of such Accounts Receivable.



(c) Set forth on Schedule 3.5(c) is a detailed list of the Accounts Payable as of
December 31, 2010.



(d) To the Knowledge of the Seller, the aggregate amount of the Deposit Liabilities as of
December 31, 2010 was $608,000, which aggregate amount is fairly stated based upon the methodology
used by the Seller to estimate the Deposit Liabilities.


 


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(e) Since December 31, 2010, the Seller has operated the Business in the ordinary course of
business, it being understood that the ordinary course of business includes the receipt of certain
services from the Buyer (in its role as the service provider under the Existing Services
Agreement).



3.6 No Undisclosed Liabilities. The Seller has no material Liability arising from the
Business (and no basis exists for any such material Liability), except for (i) Liabilities under
executory Contracts that are either listed on Schedule 3.12 or are not required to be
listed thereon, excluding Liabilities for any breach of any executory Contract and (ii) current
Liabilities incurred in the ordinary course of business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of Contract, breach of warranty, tort,
infringement or violation of Law).



3.7 Title to and Sufficiency of Assets. The Seller has good and marketable title to, or other
right in, the Purchased Assets, free and clear of any Encumbrances except Permitted Encumbrances.
The quantities of the Tangible Personal Property and the Inventory are reasonable in the present
circumstances of the Business and are not materially more or less than normal levels necessary to
conduct the Business in the ordinary course consistent with past practices. The Seller does not
own or license any Intellectual Property that is included in the Purchased Assets.



3.8 Tangible Personal Property; Condition of Purchased Assets. Each item of Tangible Personal
Property is free from material defects and adequate for the uses to which it is being put. Each
item of Tangible Personal Property is in good operating condition and is not in need of maintenance
or repairs, except for ordinary, routine maintenance and repairs that are not material in nature or
cost.




3.9 Accounts Receivable. All Accounts Receivable that are reflected on the accounting records
of the Seller as of the Closing Date represent or will represent valid obligations arising from
products or services actually sold by the Seller in the ordinary course of business. There is no
material contest, claim or right to set-off, other than returns in the ordinary course of business,
under any Contract with any obligor of an Account Receivable relating to the amount or validity of
such Account Receivable.



3.10 Inventory. The Inventory is in all material respects of a quality usable for its
intended purpose in the ordinary course of business consistent with past practices.



3.11 Real Property. The Seller does not own or lease any real property that is exclusively used in
the Business.




3.12 Contracts. Schedule 3.12 lists each Assigned Contract with the customers listed
on Schedule 3.18 (the “Material Assigned Contracts”). Each Material Assigned Contract,
with respect to the Seller, is legal, valid, binding, enforceable, in full force and effect and,
assuming compliance with the applicable matters referred to on Schedule 3.4, will continue
to be so on identical terms following the Closing Date. Each Material Assigned Contract, with
respect to the other parties to such Material Assigned Contract, to the Knowledge of the Seller, is
legal, valid, binding, enforceable, in full force and effect and, assuming compliance with the
applicable matters referred to on Schedule 3.4, will continue to be so on identical terms
following the Closing Date. The Seller is not in breach or default, and no event has occurred that
with notice or lapse of time would constitute a breach or default, or permit termination,
modification or acceleration, under any Material Assigned Contract. To the Knowledge of the
Seller, no other party is in breach or default, and no event has occurred that with notice or lapse
of time would constitute a breach or default, or permit termination, modification or acceleration,
under any Material Assigned Contract. To the Knowledge of the Seller, no party to any Material
Assigned Contract has repudiated any provision of any Material Assigned Contract.


 


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3.13 Tax.



(a) (i) All material Tax Returns required to be filed with respect to the Business for all
periods through and including the Closing Date have been duly and timely filed, and such Tax
Returns are true, correct and complete in all material respects, (ii) all material Taxes required
to be paid (or required to be withheld and paid) with respect to (x) the Business or the Purchased
Assets or (y) any amounts owed by, or related to, the Business to any employee, creditor,
independent contractor or other third party have been duly and timely paid (or withheld and paid),
(iii) none of the Purchased Assets is subject to any Encumbrances (other than Permitted
Encumbrances) as a result of a failure to pay any Tax, and (iv) no written claim has been made by a
Governmental Body within the last three years in a jurisdiction where the Seller or any Affiliate
of the Seller has not filed Tax Returns with respect to the Purchased Assets or the Business that
the Seller or any Affiliate of the Seller is or may be subject to taxation in such jurisdiction
with respect to the Purchased Assets or the Business.



(b) Since December 31, 2009 and as of the date hereof, the Seller has not incurred any
Liability for Taxes in respect of any of the Purchased Assets or the Business outside the ordinary
course of business.



(c) The Seller is not a non-resident of Canada for purposes of Section 116 of the ITA.



(d) Notwithstanding any of the representations and warranties contained elsewhere in this
Agreement, the representations and warranties contained in this Section 3.13 are the sole and
exclusive representations and warranties made by the Seller relating to matters arising under Tax
Law.



3.14 Legal Compliance. The Seller is, and since January 1, 2007, has been, in compliance in all
material respects with all applicable Law and Permits related to the Business, and no Proceeding is
pending, nor since January 1, 2007, has been filed or commenced, against the Seller alleging any
failure to comply with any applicable Law or Permit related to the Business. To the Knowledge of
the Seller, no event has occurred or circumstance exists that (with or without notice or lapse of
time) may constitute or result in a violation by the Seller of any Law or Permit related to the
Business. The Seller has not received any written notice or other written communication from any
Person, or to the Knowledge of the Seller, any notice or other communication regarding any actual,
alleged or potential violation by the Seller of any Law or Permit related to the Business or any
cancellation, termination or failure to renew any Permit related to the Business held by the
Seller.



3.15 Permits. The Seller does not hold any Permits that are exclusively used in the Business.



3.16 Litigation and Orders. There is no Proceeding pending or, to the Knowledge of the
Seller, threatened or anticipated relating to or affecting (a) the Business, any Purchased Asset or
any other asset owned or used by the Seller in connection with the Business or (b) the
Transactions. There is no outstanding Order to which the Business or any Purchased Asset is
subject. No Proceeding has been pending at any time since January 1, 2007, in which the Seller has
been named as a defendant (whether directly, by counterclaim or as a third party defendant) and all
Proceedings pending at any time since January 1, 2007, in which the Seller has been a plaintiff, in
each case relating to the Business. No Order relating to the Business has been in effect at any
time since January 1, 2007 to which any Purchased Asset is subject.


 


15









 





3.17 Environmental.



(a) With respect to the Business, the Seller has complied and is in compliance in all material
respects with all Environmental Law, including obtaining and complying with all material Permits
that are required pursuant to any Environmental Law;



(b) with respect to the Business, the Seller has not received any written notice, report or
other information regarding any actual or alleged violation of any Environmental Law or any
Liabilities or potential Liabilities under Environmental Law; and



(c) with respect to the Business, the Seller has not, either expressly or by operation of Law,
assumed or undertaken any material Liability of any other Person under any Environmental Law.



3.18 Customers. With respect to each of the two fiscal years most recently completed prior to
the date hereof, Schedule 3.18 lists the three largest (by dollar volume) customers of the
Business during each such period (showing the approximate, unaudited dollar volume in descending
order). Except as set forth on Schedule 3.18, since October 1, 2010 no customer listed on
Schedule 3.18 has notified the Seller of a likely material decrease in the volume of
purchases from the Seller, or a material decrease in the price that any such customer is willing to
pay for products or services of the Seller, or of the bankruptcy or liquidation of any such
customer.



3.19 Solvency. The Seller is not an insolvent person within the meaning of the Bankruptcy and
Insolvency Act (Canada) and will not become insolvent as a result of any of the Transactions.
Immediately after giving effect to the Transactions: (a) the Seller will be able to pay its
Liabilities (including the Excluded Liabilities) as they become due in the usual course of
business, (b) the Seller will not have unreasonably small capital with which to conduct its present
or proposed business and (c) taking into account all pending and threatened litigation, final
judgments against the Seller in actions for money damages are not reasonably anticipated to be
rendered at a time when, or in amounts such that, the Seller will be unable to satisfy any such
judgments promptly in accordance with their terms and all other obligations of the Seller.



3.20 No Brokers’ Fees. The Seller has no Liability for any fee, commission or payment to any
broker, finder or agent with respect to the Transactions.



3.21 Securities Law.



(a) Culligan Parent acknowledges that the offer and sale of the Share Consideration is
intended to be exempt from registration under the Securities Act and all applicable state
securities Law.



(b) Culligan Parent has been furnished all of the materials relating to Primo Parent and its
purchase of the Share Consideration that have been requested and has been afforded an opportunity
to ask questions of, and receive answers from, management of Primo Parent in connection with the
Share Consideration. Culligan Parent has not been furnished with any oral or written
representation in connection with the purchase of the Share Consideration by or on behalf of Primo
Parent that it has relied on that is not contained in this Agreement.



(c) Culligan Parent: (i) is an “accredited investor” as defined in Rule 501 of Regulation D
under the Securities Act; (ii) has obtained, in its judgment, sufficient information to evaluate
the merits and risks of the purchase of the Share Consideration; (iii) has sufficient knowledge and
experience in financial and business matters to evaluate the merits and risks associated with such
purchase of the Share Consideration and to make an informed investment decision with respect
thereto and (iv) has consulted with its own advisors with respect to the purchase of the Share
Consideration.


 


16









 





(d) The Share Consideration is being acquired for Culligan Parent’s own account for investment
and not for the benefit or account of any other Person and not with a view to, or in connection
with, any unlawful resale or distribution thereof. Culligan Parent fully understands and agrees
that it must bear the economic risk of the investment in the Share Consideration for an indefinite
period of time because, among other reasons, such Share Consideration has not been registered under
the Securities Act or under the securities Law of any states, and, therefore, the shares of such
Share Consideration are “restricted securities” and cannot be resold, pledged, assigned or
otherwise disposed of unless they are subsequently registered under the Securities Act and under
the applicable securities Law of such states or an exemption from such registration is otherwise
available. Except as and solely to the extent set forth in the Registration Rights Agreement,
Culligan Parent understands that Primo Parent is not under any obligation to register such Share
Consideration on Culligan Parent’s behalf or to assist Culligan Parent in complying with any
exemption from registration under the Securities Act or applicable state securities Law. Culligan
Parent understands that Primo Parent may require, as a condition to registering the transfer of
such Share Consideration, an opinion of counsel satisfactory to Primo Parent to the effect that
such transfer does not violate such registration requirements.



(e) Culligan Parent intends that the state securities Law of Illinois alone (and not the
securities Law of any other state) will apply to its acquisition of the Share Consideration.
Culligan Parent meets all suitability standards imposed by the state of Illinois relating to the
purchase of the Share Consideration hereunder without registering such Share Consideration under
the securities Law of such state. For greater certainty, as the Share Consideration will be issued
to Culligan Parent on behalf of and upon the direction of the Seller pursuant to Section 2.5(b)
hereof, and not to the Seller, the issuance of the Share Consideration to Culligan Parent is not
otherwise subject to the securities Law of any province of Canada.



3.22 Disclosure. To the Knowledge of the Seller, no representation or warranty contained in
this Article III and no statement in any Schedule related thereto contains any untrue statement of
material fact or omits to state any material fact necessary to make the statements therein not
misleading.



3.23 Retail Locations. The Business is currently conducted by the Seller at a minimum of 775
retail locations. As of the date hereof, to the Knowledge of the Seller, no such retail location
intends to terminate Seller’s right to conduct the Business at such retail location.



ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING THE PRIMO PARTIES




Except as disclosed in any report, schedule, form or other document filed with, or furnished
to, the SEC by Primo Parent prior to the date hereof , the Primo Parties represent and warrant to
the Seller as follows:



4.1 Organization. Primo Parent is a corporation duly organized, validly existing and in good
standing under the Law of the jurisdiction of its incorporation. The Buyer is incorporated as a
company under the laws of the Province of British Columbia, is a valid and existing company and is
in good standing. Primo Parent has no direct or indirect subsidiaries other than Primo Refill,
LLC, the Buyer, Primo Direct, LLC, Primo Ice, LLC and Primo Products, LLC (each a “Primo
Subsidiary” and together the “Primo Subsidiaries”), each of which is duly organized, validly
existing and in good standing under the Law of the state of its organization. The Buyer has no
subsidiaries. Each Primo Party
has delivered to the Seller correct and complete copies of the Organizational Documents of
such Primo Party.


 


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4.2 Capitalization. The entire authorized capital stock of Primo Parent consists of (a)
70,000,000 shares of common stock, par value USD$0.001 per share, 19,123,884 shares of which are
outstanding as of January 31, 2011, and (b) 65,000,000 shares of preferred stock, par value
USD$0.001 per share, none of which are outstanding. All of the outstanding capital stock of Primo
Parent has been duly authorized and is validly issued, fully paid and nonassessable. Except as set
forth on Schedule 4.2 or contemplated under this Agreement, there are no outstanding
securities convertible or exchangeable into capital stock of the Primo Parent or any options,
warrants, purchase rights, subscription rights, preemptive rights, conversion rights, exchange
rights, calls, puts, rights of first refusal or other contracts that could require Primo Parent to
issue, sell or otherwise cause to become outstanding or to acquire, repurchase or redeem capital
stock of Primo Parent. The Share Consideration will be duly authorized and validly issued and,
upon the issuance of the Share Consideration as set forth in Section 2.5, will be fully paid,
nonassessable and free of preemptive rights. Primo Parent does not directly or indirectly own or
control any direct or indirect equity interest in any Person other than the Primo Subsidiaries.
Primo Parent owns all of the outstanding equity of the Buyer.



4.3 Authority. Each Primo Party has full corporate or limited liability company power,
authority and capacity, as applicable, to execute and deliver this Agreement and to perform its
obligations hereunder. The execution, delivery and performance by each Primo Party of this
Agreement have been approved by the board of directors of such Primo Party. The execution and
delivery by each Primo Party of each Transaction Document to which such Primo Party is a party and
the performance by such Primo Party of the Transactions have been duly authorized by all requisite
corporate action of such Primo Party. Except as such validity, binding effect or enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, receivership, conservatorship,
fraudulent transfer, moratorium (whether general or specific) or other Law now or hereafter in
effect affecting the enforceability of creditors’ rights generally, (a) this Agreement constitutes
the valid and legally binding obligation of each Primo Party, enforceable against such Primo Party,
respectively, in accordance with the terms of this Agreement and (b) each Transaction Document to
which each Primo Party is a party constitutes the valid and legally binding obligation of such
Primo Party, as applicable, enforceable against such Primo Party in accordance with the terms of
such Transaction Document.



4.4 No Conflicts. Except as set forth on Schedule 4.4, neither the execution and
delivery of this Agreement nor the performance of the Transactions will, directly or indirectly,
with or without notice or lapse of time: (a) violate any Law to which any Primo Party is subject;
(b) violate any Permit held by any Primo Party or give any Governmental Body the right to
terminate, revoke, suspend or modify any Permit held by any Primo Party, except in each case with
respect to Permits that individually or in the aggregate are not material; (c) violate any
Organizational Document of any Primo Party; (d) violate, conflict with, result in a breach of,
constitute a default under, result in the acceleration of or give any Person the right to
accelerate the maturity or performance of, or to cancel, terminate, modify or exercise any remedy
under, any material Contract to which any Primo Party is a party or by which any Primo Party is
bound; or (e) result in the imposition of any Encumbrance upon any asset of any Primo Party other
than Permitted Encumbrances. Except as set forth on Schedule 4.4, no Primo Party is
required to notify, make any filings with, or obtain any Consent of any Person in order to perform
the Transactions.




 


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4.5 Financial Statements.




(a) Attached to Schedule 4.5(a) are the following financial statements (collectively,
the “Primo Financial Statements”): (i) audited balance sheet of Primo Parent as of December 31,
2008 and 2009, and statements of income, changes in stockholders’ equity, and cash flow for the
fiscal years
then ended, together with the notes thereto and the reports thereon of McGladrey & Pullen,
LLP, independent certified public accountants; and (ii) an unaudited balance sheet of Primo Parent
as of September 30, 2010, and statements of income, changes in stockholders’ equity and cash flow
for the nine-month period then ended. The Primo Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis throughout the periods covered thereby, and
present fairly the financial condition and results of operations of Primo Parent as of and for
their respective dates; provided, however, that the interim financial statements
described in clause (ii) above are subject to normal, recurring year-end adjustments (which will
not be, individually or in the aggregate, materially adverse) and lack notes (which, if presented,
would not differ materially from the notes accompanying the balance sheet dated as of December 31,
2009).



(b) The books and records of Primo Parent (i) are complete and correct in all material
respects and all transactions to which Primo Parent is or has been a party are accurately reflected
therein in all material respects on an accrual basis, (ii) reflect all material discounts, returns
and allowances by Primo Parent with respect to the periods covered thereby, (iii) have been
maintained in accordance with customary and sound business practices in Primo Parent’s industry,
(iv) form the basis for the Primo Financial Statements and (v) reflect in all material respects the
assets, liabilities, financial position, results of operations and cash flows of Primo Parent on an
accrual basis. All computer-generated reports and other computer output included in the books and
records of Primo Parent are complete and correct in all material respects and were prepared in
accordance with sound business practices based upon authentic data. Primo Parent’s management
information systems are adequate for the preservation of relevant information and the preparation
of accurate reports.



4.6 No Undisclosed Liabilities. Neither Primo Parent nor any Primo Subsidiary has any
material Liability (and no basis exists for any such material Liability), except for (a)
Liabilities under executory Contracts, excluding Liabilities for any breach of any executory
Contract, (b) Liabilities to the extent reflected or reserved against on the Primo Parent interim
balance sheet dated as of September 30, 2010, (c) current Liabilities incurred in the ordinary
course of business since September 30, 2010 (none of which results from, arises out of, relates to,
is in the nature of, or was caused by any breach of Contract, breach of warranty, tort,
infringement or violation of Law), and (d) Liabilities not required to be disclosed on a balance
sheet of Primo Parent prepared in accordance with GAAP in a manner consistent with the Primo Parent
balance sheet dated as of December 31, 2009.



4.7 Intellectual Property.



(a) Primo Parent owns or has the right to use all Intellectual Property necessary for the
operation of its business as presently conducted. To the Knowledge of the Buyer, Primo Parent has
taken all necessary action to maintain and protect each item of Intellectual Property that it owns
that is used in its business.



(b) Neither the operation of its business nor the Intellectual Property owned by Primo Parent
infringes the Intellectual Property of any third party. Except as set forth on Schedule
4.7(b), to the Knowledge of the Buyer, Primo Parent is not aware of any Proceeding alleging any
such infringement and has not received any notice alleging any such infringement. Except as set
forth on Schedule 4.7(b), to the Knowledge of the Buyer, no third party has infringed or is
infringing upon any Intellectual Property owned by Primo Parent.



(c) Except as set forth on Schedule 4.7(c), Primo Parent has not granted any license,
agreement or other permission to any third party (whether active and in force or terminated,
canceled or expired) with respect to any Intellectual Property owned by Primo Parent.


 


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4.8 Taxation.



(a) Except as set forth in Schedule 4.8, (i) all material Tax Returns required to be
filed by Primo Parent and the Primo Subsidiaries for all periods through and including the Closing
Date have been duly and timely filed, and such Tax Returns are true, correct and complete in all
material respects, (ii) all material Taxes required to be paid (or required to be withheld and
paid) with respect to (x) Primo Parent or any of the Primo Subsidiaries or (y) any amounts owed by
Primo Parent or any of the Primo Subsidiaries to any employee, creditor, independent contractor or
other third party have been duly and timely paid (or withheld and paid), (iii) none of the assets
of Primo Parent or any of the Primo Subsidiaries is subject to any Encumbrance (other than
Permitted Encumbrances) as a result of a failure to pay any Tax and (iv) no written claim has been
made by a Governmental Body within the last three years in a jurisdiction where Primo Parent or any
of the Primo Subsidiaries has not filed Tax Returns that Primo Parent or any of the Primo
Subsidiaries is or may be subject to taxation in such jurisdiction.



(b) Except as set forth on Schedule 4.8, since December 31, 2009 and as of the date
hereof, neither Primo Parent nor any of the Primo Subsidiaries has incurred any Liability for Taxes
outside the ordinary course of business.



(c) Notwithstanding any of the representations and warranties contained elsewhere in this
Agreement, the representations and warranties contained in this Section 4.8 are the sole and
exclusive representations and warranties made by the Primo Parties relating to matters arising
under Tax Law.



4.9 Legal Compliance. Except as set forth on Schedule 4.9, Primo Parent and all of the
Primo Subsidiaries are, and since January 1, 2007, have been, in compliance in all material
respects with all applicable Law and Permits. Except as set forth on Schedule 4.9, no
Proceeding is pending, nor since January 1, 2007, has been filed or commenced, against Primo Parent
or any of the Primo Subsidiaries alleging any failure to comply with any applicable Law or Permit.
To the Knowledge of the Buyer, no event has occurred or circumstance exists that (with or without
notice or lapse of time) may constitute or result in a violation by Primo Parent or any of the
Primo Subsidiaries of any Law or Permit. Except as set forth on Schedule 4.9, neither
Primo Parent nor any Primo Subsidiary has received any written notice or other written
communication from any Person, or to the Knowledge of the Buyer, any notice or other communication
regarding any actual, alleged or potential violation by Primo Parent or any of the Primo
Subsidiaries of any Law or Permit or any cancellation, termination or failure to renew any Permit
held by Primo Parent or any of the Primo Subsidiaries.



4.10 Litigation and Orders. There is no material Proceeding pending or, to the Knowledge of
the Buyer, threatened or anticipated relating to or affecting (a) the business of Primo Parent or
(b) the Transactions. There is no outstanding Order to which the business of Primo Parent is
subject. Schedule 4.10 lists all material Proceedings pending at any time since January 1,
2007, in which Primo Parent or any Primo Subsidiary has been named as a defendant (whether
directly, by counterclaim or as a third party defendant) and all material Proceedings pending at
any time since January 1, 2007, in which Primo Parent or any Primo Subsidiary has been a
plaintiff. There are no Orders relating to the business of Primo Parent in effect at any time
since January 1, 2007 to which any asset owned by Primo Parent or any Primo Subsidiary is subject.



4.11 Environmental. Except as set forth on Schedule 4.11:



(a) Primo Parent and each of the Primo Subsidiaries has complied and is in compliance in all
material respects with all Environmental Law, including obtaining and complying with all material
Permits that are required pursuant to any Environmental Law;


 


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(b) Neither Primo Parent nor any of the Primo Subsidiaries has received any written notice,
report or other information regarding any actual or alleged violation of any Environmental Law or
any Liabilities or potential Liabilities under Environmental Law;



(c) Neither Primo Parent nor any of the Primo Subsidiaries has, either expressly or by
operation of Law, assumed or undertaken any material Liability of any other Person under any
Environmental Law.



4.12 Employees. Neither Primo Parent nor any of the Primo Subsidiares are, nor has Primo Parent or
any of the Primo Subsidiaries been, a party to or bound by any collective bargaining agreement.
Neither Primo Parent nor any of the Primo Subsidiaries has experienced any strike, slowdown,
picketing, work stoppage, employee grievance process, claim of unfair labor practice or other
collective bargaining dispute. There is no lockout of any employees by Primo Parent or any Primo
Subsidiary, and no such action is contemplated by Primo Parent or any Primo Subsidiary. Neither
Primo Parent nor any Primo Subsidiary has committed any unfair labor practice. To the Knowledge of
the Primo Parties, (a) no event has occurred or circumstance exists that could provide the basis
for any work stoppage or other labor dispute and (b) there is no organizational effort presently
being made or threatened by or on behalf of any labor union with respect to employees of Primo
Parent or any Primo Subsidiary.



4.13 No Brokers’ Fees. No Primo Party has any Liability for any fee, commission or payment to
any broker, finder or agent with respect to the Transactions for which the Seller could be liable.



4.14 SEC Reports. Primo Parent has timely filed all forms, reports and documents required to
be filed by it with the SEC, all of which have complied as of their respective filing dates or, if
amended or superseded by a subsequent filing prior to the date hereof, the date of the last such
amendment or superseding filing, in all material respects with all applicable requirements of the
Securities Act and the Exchange Act. None of the forms, reports or documents filed by Primo Parent
with the SEC, including any financial statements or schedules included or incorporated by reference
therein, at the time filed (and, in the case of a registration statement, as of its effective date)
or, if amended or superseded by a subsequent filing prior to the date hereof, as of the date of the
last such amendment or superseding filing, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, no representation or warranty is made by the Primo Parties with
respect to statements made in the forms, reports or documents filed by Primo Parent with the SEC
regarding any Culligan Party or any of their Affiliates, any business or former business of any
Culligan Party or any of their Affiliates or any assets purchased from any Culligan Party or any of
their Affiliates.



4.15 Conduct of Business. Since December 31, 2010, the Buyer (in its role as the service provider
under the Existing Services Agreement) has operated the Business in the ordinary course of
business.



ARTICLE V

CLOSING CONDITIONS




5.1 Conditions to the Primo Parties’ Obligations. Each Primo Party’s obligation to perform
the Transactions contemplated to be performed on or about the Closing Date is subject to
satisfaction, or written waiver by such Primo Party, of each of the following conditions:


 


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(a) (i) All of the representations and warranties of the Culligan Parties in this Agreement
must be accurate in all material respects as of the Closing Date (except for representations and
warranties that are as of a specific date, which representations and warranties must be accurate in
all material respects as of such date), except in each case to the extent any such representation
or warranty contains a materiality qualification, in which case such representation or warranty
must be accurate in all respects, and (ii) each Culligan Party must perform and comply in all
material respects with all of its covenants and agreements in this Agreement to be performed prior
to or at the Closing.



(b) Each of the following documents must be delivered to the Buyer and must be dated as of the
Closing Date:




(i) the Bill of Sale, executed by the Seller;




(ii) the Non-Competition Agreement, executed by the Seller;




(iii) the Trademark Sublicense Agreement, executed by the Seller;




(iv) the Registration Rights Agreement Amendment, executed by the Seller;




(v) the Services Agreement, executed by the Seller;




(vi) the Waiver Agreement, executed by the Seller;




(vii) a certificate of the Seller, in form and substance reasonably
satisfactory to the Buyer, certifying that (A) the transactions contemplated by this
Agreement are in compliance with the Seller’s credit agreements and (B) all
Encumbrances on the Purchased Assets related to Secured Debt will be automatically
released upon the Closing;




(viii) a certificate of an officer of the Seller, in form and substance
reasonably satisfactory to the Buyer, certifying that attached thereto is a true,
correct and complete copy of resolutions duly adopted by the equityholders of the
Seller authorizing the performance of the Transactions and the execution and
delivery of the Transaction Documents to which it is a party and that such
resolutions are still in effect;




(ix) such other bills of sale, assignments, certificates of title and other
instruments of transfer, all in form and substance reasonably satisfactory to the
Buyer, as are necessary or desirable to convey fully and effectively to the Buyer
all of the Purchased Assets in accordance with the terms of this Agreement; and




(x) such other documents as the Buyer may reasonably request for the purpose of
(A) evidencing the accuracy of the Seller’s representations and warranties, (B)
evidencing the Seller’s performance of, and compliance with, any covenant or
agreement required to be performed or complied with by the Seller, (C) evidencing
the satisfaction of any condition referred to in this Section 5.1, (D) vesting in
the Buyer legal and beneficial title to the Purchased Assets, (E) complying with all
applicable securities Law or (F) otherwise facilitating the performance of the
Transactions.



(c) There must not be any Proceeding pending or threatened against any of the Primo Parties or
any of their respective Affiliates that (i) challenges or seeks damages or other relief in
connection with any of the Transactions or (ii) may have the effect of making illegal or
interfering with any of the Transactions.


 


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5.2 Conditions to the Seller’s Obligations. The Seller’s obligations to perform the
Transactions contemplated to be performed on or before the Closing Date are subject to
satisfaction, or written waiver by the Seller, of the following conditions:



(a) (i) All of the representations and warranties of the Primo Parties in this Agreement must
be accurate in all material respects as of the Closing Date (except for representations and
warranties that are as of a specific date, which representations and warranties must be accurate in
all material respects as of such date), except in each case to the extent any such representation
or warranty contains a materiality qualification, in which case such representation or warranty
must be accurate in all respects, and (ii) the Primo Parties must perform and comply in all
material respects with all of their respective covenants and agreements in this Agreement to be
performed prior to or at the Closing.



(b) Each of the following documents must be delivered to the Seller and must be dated as of
the Closing Date:





(i) the Bill of Sale, executed by the Buyer;




(ii) the Non-Competition Agreement, executed by the Buyer;




(iii) the Trademark Sublicense Agreement, executed by the Buyer;




(iv) the Registration Rights Agreement Amendment, executed by the Buyer;




(v) the Services Agreement, executed by the Buyer; and




(vi) a certificate of an officer of Primo Parent, in form and substance
reasonably satisfactory to the Seller, certifying that attached thereto is a true,
correct and complete copy of resolutions duly adopted by the board of directors of
Primo Parent authorizing the performance of the Transactions and the execution and
delivery of the Transaction Documents to which it is a party and that such
resolutions are still in effect;




(vii) such other documents as the Seller may reasonably request for the purpose
of (A) evidencing the accuracy of each Primo Party’s representations and warranties,
(B) evidencing each Primo Party’s performance of, and compliance with, any covenant
or agreement required to be performed or complied with by such Primo Party, (C)
evidencing the satisfaction of any condition referred to in this Section 5.2, (D)
complying with all applicable securities Law or (E) otherwise facilitating the
performance of the Transactions.



(c) There must not be any Proceeding pending or threatened against any Culligan Party or any
of their respective Affiliates that (i) challenges or seeks damages or other relief in connection
with any of the Transactions or (ii) may have the effect of making illegal or interfering with any
of the Transactions.



ARTICLE VI

POST-CLOSING COVENANTS




The Parties agree as follows with respect to the period following the Closing Date:



 


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6.1 Payment of Excluded Liabilities. The Seller will pay, perform and discharge the
Excluded Liabilities as and when due.



6.2 Payment of Assumed Liabilities. The Buyer will pay, perform and discharge the Assumed
Liabilities as and when due.



6.3 Bulk Transfer Compliance. Inasmuch as the Buyer is to assume the Assumed Liabilities and
the Seller is to pay, perform and discharge the Excluded Liabilities, the Buyer and the Seller
hereby mutually agree to waive compliance with the provisions of any bulk transfer or sales Law, to
the extent applicable to the Transactions, and any bulk sales legislation in the jurisdictions in
which any of the Purchased Assets are located. Except for the Assumed Liabilities, which shall be
paid by the Buyer as they become due, the Seller shall, after the Closing, pay its creditors as its
debts to them become due.



6.4 Consents. This Agreement will not constitute an assignment, attempted assignment or
agreement to assign any Contract to the extent that any attempted assignment or agreement to assign
such Contract without the Consent of any Person would constitute a breach thereof or would impair
the rights of the Seller or the Buyer thereunder and such Consent is not obtained. If any Consent
set forth or required to be set forth on Schedule 3.4 has not been obtained prior to or at
the Closing, then the Seller will use commercially reasonable efforts to obtain such Consent, but
not prior to the Buyer’s approval of the form and substance of each such Consent, which approval
will not be unreasonably withheld or delayed. The Seller will use its commercially reasonable
efforts (at the Seller’s expense), and the Buyer will cooperate in all reasonable respects with the
Seller to obtain all such Consents; provided, however, that such cooperation will
not include any requirement to pay any consideration, to agree to any undertaking or modification
to a Contract or to offer or grant any financial accommodation not required by the terms of such
Contract. Until such Consent is obtained, or the Contract to which such Consent relates is novated
or terminated, to the extent permissible under such Contract, the Buyer will be entitled to receive
all of such Seller’s benefits under such Contract and, to the extent it receives such benefits,
will perform all of the obligations of the Seller under such Contract. The Seller will, at the
Buyer’s request, do all such acts and things as the Buyer may reasonably request to enable due
performance of such Contract and to provide for the Buyer the benefits, subject to the obligations,
of such Contract. Without limiting the generality of the foregoing, the Seller will provide all
reasonable assistance to the Buyer (at the Buyer’s request) to enable the Buyer to enforce its
rights under such Contract.



6.5 Mail and Receivables. The Seller hereby irrevocably authorizes the Buyer after the
Closing to receive and open all mail and other communications received by the Buyer and addressed
or directed to the Seller and, to the extent relating to the Business, the Purchased Assets or the
Assumed Liabilities, to act with respect to such communications in such manner as the Buyer may
elect. If any such communication does not relate to the Business, the Purchased Assets or the
Assumed Liabilities, the Buyer will forward such communication to such Seller. The Seller will
promptly deliver to the Buyer the original of any mail or other communication received by the
Seller after the Closing that directly relates to the Business and a copy of any such mail or other
communication to the extent that a portion of such mail or communication relates to the Business.
The Seller hereby irrevocably authorizes the Buyer after the Closing to endorse, without recourse,
the name of the Seller on any check or any other evidence of indebtedness received by the Buyer if
such check or evidence of indebtedness is in respect of a Purchased Asset. After the Closing, the
Seller will promptly remit to the Buyer any payment that is in respect of a Purchased Asset that
the Seller receives.



6.6 Litigation Support. If any Party is evaluating, pursuing, contesting or defending against
any Proceeding in connection with (a) any Transaction or (b) any fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident, action, failure to act,
or transaction on or prior to the Closing involving the Business, each other Party will cooperate
with such Party and such Party’s counsel in the evaluation, pursuit, contest or defense, make available its personnel,
and provide such testimony and access to its books and records as may be necessary in connection
therewith. The evaluating, pursuing, contesting or defending Party will reimburse each other Party
for its out-of-pocket expenses related to such cooperation (unless the contesting or defending
Party is entitled to indemnification therefor under Section 7.1 without regard to Section 7.4).





 


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6.7 Transition. After the Closing, at the Buyer’s request, the Seller will cooperate with the
Buyer in its efforts to continue and maintain for the benefit of the Buyer those business
relationships of the Seller existing prior to the Closing, including relationships with
Governmental Bodies, licensors, licensees, customers, suppliers and others, and the Seller will
satisfy the Excluded Liabilities in a manner that is not materially detrimental to any of such
relationships; provided, however, that the Buyer will reimburse the Seller for its
out-of-pocket expenses related to such cooperation (unless the Buyer is entitled to indemnification
with respect to the matter for which the Buyer is seeking such Seller’s cooperation under Section
7.1 without regard to Section 7.4). The Seller will refer to the Buyer all inquiries relating to
the Business.



6.8 Confidentiality. Each Party will, and will cause its Affiliates and Representatives to,
maintain, for a period equal to the later of (a) three years following the Closing Date or (b)
three years following termination of the information rights of Culligan Parent pursuant to Section
9.9 of that certain Asset Purchase Agreement, dated June 1, 2010, by and among the Culligan
Parties, the Primo Parties and the other parties thereto, the confidentiality of the Confidential
Information of any other Party (any party to whom Confidential Information belongs shall be
referred to in this Section as the “disclosing Party” and any Party who receives Confidential
Information of another Party shall be referred to in this Section as the “receiving Party”) at all
times, and will not, directly or indirectly, use any Confidential Information of any disclosing
Party for its own benefit or for the benefit of any other Person or reveal or disclose any
Confidential Information of any disclosing Party to any Person other than authorized
Representatives of the disclosing Party, except in connection with this Agreement or with the prior
written consent of the disclosing Party. Notwithstanding the foregoing, each Party’s
confidentiality obligations with respect to any trade secrets shall continue for so long as such
Confidential Information constitutes a trade secret. The covenants in this Section 6.8 will not
apply to Confidential Information that (i) is or becomes available to the general public through no
breach of this Agreement by the receiving Party or any of their respective Affiliates or
Representatives or, to the Knowledge of the receiving Party, breach by any other Person of a duty
of confidentiality to the disclosing Party or (ii) a receiving Party is required to disclose by
applicable Law; provided, however, that the receiving Party will, to the extent it
is legally permitted to do so, notify the disclosing Party in writing of such required disclosure
as much in advance as practicable in the circumstances and cooperate with the disclosing Party to
limit the scope of such disclosure. At any time that a disclosing Party may request, each other
receiving Party will, and will cause their respective Affiliates and Representatives to, turn over
or return to the requesting disclosing Party all Confidential Information in any form (including
all copies and reproductions thereof) in their respective possession or control. The Buyer may
refer to the Business as formerly being owned by the Seller. The Seller will not issue any press
release or make any public announcement relating to the subject matter of this Agreement until the
earlier of (i) such time as the Buyer has issued a press release or public announcement relating to
the subject matter of this Agreement or (ii) the second Business Day after the date hereof.



6.9 Seller Information. After the Closing, the Seller will provide all information concerning
the Business as Primo Parent may reasonably request in order for Primo Parent to comply with its
obligations under all applicable securities Law, including all filings pursuant to the Exchange
Act.



6.10 Personal Information. After the Closing, the Primo Parties will use and disclose all
individual personal information included in the Purchased Assets only for the purposes for which it
was initially collected by the Seller.


 


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6.11 Regional Operator Agreements. For a period of one year following the Closing Date, the Seller
will cooperate with the Buyer in its efforts to enter into a Standard RO Agreement with each of the
Franchisees. Neither the Buyer nor any Affiliate of the Buyer will enter into any agreement with
respect to the Business with any Franchisee other than a Standard RO Agreement without the written
consent of the Seller; provided, however, that the foregoing shall not prohibit the
Buyer nor any Affiliate of the Buyer from amending, supplementing or otherwise modifying a Standard
RO Agreement with a Franchisee in a manner that both (a) would not reasonably be expected to have a
material adverse effect on the Seller and (b) would not, after giving effect to the Waiver
Agreement, reasonably be expected to result in a material violation of the franchise agreement
between the Seller and such Franchisee; provided, further, that the foregoing
provision shall not apply to any Franchisee who is no longer a franchisee of the Seller. The
Parties acknowledge and agree that if an amendment, supplement or other modification to a Standard
RO Agreement would not reasonably be expected to result in a material violation of the form
Culligan of Canada, Ltd. Franchise Agreement previously provided by the Seller to the Buyer, then
such amendment, supplement or other modification shall be deemed to not result in a material
violation of any franchise agreement between the Seller and any Franchisee, provided, that
the Seller has not previously provided the Buyer with written notice to the contrary.



6.12 Provision of Information Related to the Business. For a period of six months following the
end of the Transition Period, the Seller will use commercially reasonable efforts to provide the
Buyer with all information within the possession of the Seller that the Buyer requests and that is
reasonably necessary to be provided to the Buyer in order to allow the Buyer to operate the
Business in the ordinary course and consistent with the Seller’s past practices.



6.13 Additional Trademark Sublicense Agreements.



(a) During the term of the Trademark Sublicense Agreement, if (x) the Buyer notifies the
Seller that the Buyer intends to engage a third party to operate the Business under the Culligan
brand in a territory that (a) is not then assigned to a franchisee of the Seller and (b) is not
then being serviced by the Seller pursuant to the Services Agreement, then (y) Seller will enter
into a trademark sublicense agreement with such third party, provided that such third party
is reasonably satisfactory to the Seller.



(b) During the term of the Trademark Sublicense Agreement, if the franchise agreement between
the Seller and any of Seller’s franchisees with whom the Buyer or one of its Affiliates has entered
into a Standard RO Agreement is terminated by the Seller for any reason, the Seller shall (i)
cooperate with the Buyer to locate a replacement third party service provider in the territory
formerly serviced by the terminated franchisee and (ii) enter into a trademark sublicense agreement
with such third party, provided that such third party is reasonably satisfactory to the
Seller.



(c) Any such trademark sublicense agreement entered into pursuant to this Section 6.13 or
Section 6.14 (i) shall grant such third party the right to use the Marks (as such term is defined
in the Trademark Sublicense Agreement) on a royalty-free basis in the operation of the Business to
the extent reasonably necessary for such third party to service the Business in the territory, (ii)
shall not grant such third party any rights to use the Marks in any territory that is then assigned
to a Franchisee pursuant to a franchise agreement with the Seller, (iii) shall terminate upon the
earlier of (A) the termination of the Standard RO Agreement (as such agreement may be amended,
supplemented or otherwise modifed pursuant to Section 6.11) between such third party and the Buyer
and (B) the termination of the Trademark Sublicense Agreement and (iv) shall otherwise be in form
and substance reasonably satisfactory to the Buyer and the Seller.


 


26









 





6.14 Franchise Agreements. For a period of three years following the Closing Date, the Seller
shall not enter into any new franchise agreement unless the Seller uses commercially reasonable
efforts to cause the new franchisee to provide the Buyer with a written offer to enter into a
Standard RO Agreement with the Buyer, provided that the initial term of such Standard RO
Agreement would expire on the fifth anniversary of the Closing Date. If such new franchisee and
the Buyer enter into a Standard RO Agreement, the Seller shall (a) execute a waiver agreement
substantially similar to the Waiver Agreement with respect to such new franchisee and (b) grant
such new franchisee the right to use the Marks (as such term is defined in the Trademark Sublicense
Agreement) on the terms set forth in Section 6.13(c).



6.15 Transition Services. For a period of 90 days following the Closing Date (the “Transition
Period”), the Seller shall provide the services set forth on Schedule 6.15 (the “Transition
Services”) to the Buyer at no cost. The Transition Services shall be provided in materially the
same scope and manner as provided by the Seller to the Business prior to the Closing Date. No
later than 30 days following the Closing Date, the Seller shall provide detailed Accounts
Receivable and Accounts Payable information (by invoice), as well as all relevant billing
information and contacts and payment information and contacts to enable the Buyer to begin to
transition control of the Transition Services and to operate the Business.



ARTICLE VII

INDEMNIFICATION




7.1 Indemnification by the Seller. After the Closing and subject to the terms and conditions
of this Article VII, the Seller will indemnify and hold harmless the Buyer and its Affiliates and
Representatives (collectively, the “Buyer Indemnitees”) from, and pay and reimburse the Buyer
Indemnitees for, all Losses directly or indirectly relating to or arising from: (a) any breach or
inaccuracy or any allegation of any third party that, if true, would be a breach or inaccuracy of
any representation or warranty made by any Culligan Party in this Agreement or pursuant to the
certificates delivered pursuant to Section 5.1; (b) any breach of any covenant or agreement of any
Culligan Party in this Agreement; (c) any failure to pay, perform or otherwise discharge any
Excluded Liability as and when due or any Liability arising out of or in connection with
non-compliance with any “bulk sales,” “bulk transfer” or any other bulk sales legislation in any
jurisdiction where any of the Purchased Assets are located other than as a result of any failure by
the Buyer to discharge any Assumed Liability; and (d) any Liability (other than Assumed Liabilities
and other than Liabilities for Taxes (the allocation of which is governed by Article II)) arising
out of the operation of the Business on or prior to the Closing Date.



7.2 Indemnification by the Buyer. After the Closing and subject to the terms and conditions
of this Article VII, the Buyer will indemnify and hold harmless the Seller and its Affiliates and
Representatives (collectively, the “Seller Indemnitees”) from, and pay and reimburse the Seller
Indemnitees for, all Losses directly or indirectly relating to or arising from: (a) any breach or
inaccuracy or any allegation of any third party that, if true, would be a breach or inaccuracy of
any representation or warranty made by any Primo Party in this Agreement or pursuant to the
certificates delivered pursuant to Section 5.2; (b) any breach of any covenant or agreement of any
Primo Party in this Agreement; (c) any failure to pay, perform or otherwise discharge any Assumed
Liability as and when due and (d) any Liability (other than Excluded Liabilities) arising out of
the operation of the Business after the Closing Date.



7.3 Survival and Time Limitations. All representations, warranties, covenants and agreements
of the Parties in this Agreement or any other certificate or document delivered pursuant to this
Agreement will survive the Closing. The Seller will have no Liability with respect to any claim
for any breach or inaccuracy of any representation or warranty in this Agreement or any other
certificate or document delivered pursuant to this Agreement, unless the Buyer notifies the Seller
of such a claim on or before the date eighteen (18) months after the Closing Date;
provided, however, that (a) any claim relating to Section 3.17 (environmental) may be made


 


27









 






 at any time until the date three years
after the Closing Date, (b) any claim relating to Section 3.13 (taxes) may be made at any time
until the date 30 days after the expiration of the applicable statute or period of limitations
(including any extension of such statute or period of limitations) and (c) any claim relating to
Section 3.1 (organization), 3.3 (authority), 3.4 (conflicts) or 3.7 (title to assets), the
certificate delivered pursuant to Section 5.1(b)(vi), fraud, or any covenant or agreement to be
performed or complied with at or after the Closing may be made at any time without any time
limitation. The Buyer will have no Liability with respect to any claim for any breach or
inaccuracy of any representation or warranty in this Agreement or any other certificate or document
delivered pursuant to this Agreement, unless the Seller notifies the Buyer of such a claim on or
before the date eighteen (18) months after the Closing Date; provided, however,
that any claim relating to Section 4.8 (taxes) may be made at any time until the date 30 days after
the expiration of the applicable statute or period of limitations (including any extension of such
statute or period of limitations) and any claim relating to Section 4.1 (organization) 4.2
(capitalization) 4.3 (authority), or 4.4 (conflicts), fraud or any covenant or agreement to be
performed or complied with at or after the Closing may be made at any time without any time
limitation. If the Buyer or the Seller, as applicable, provides proper notice of a claim within
the applicable time period set forth above, Liability for such claim will continue until such claim
is resolved.




7.4 Limitations on Indemnification.



(a) The Seller will have no Liability with respect to the matters described in Section 7.1(a):
(i) in respect of any Loss incurred or suffered by the Buyer Indemnitee that is not a Qualifying
Loss and (ii) until such time as the aggregate of all Qualifying Losses that Buyer Indemnitees may
have under Section 7.1(a) exceeds CDN$37,500 (the amount referred to in this clause (ii), the
“Seller Indemnity Threshold”), and then only for the aggregate amount of all Qualifying Losses in
excess of the Seller Indemnity Threshold; provided, however, that any claim
relating to Section 3.3 (authority), 3.4 (conflicts), 3.7 (title to assets), 3.13 (taxes), 3.17
(environmental) or 3.20 (brokers) or the certificate delivered pursuant to Section 5.1(b)(vi) will
not be subject to or counted towards the Seller Indemnity Threshold. The Seller’s maximum
aggregate Liability with respect to the matters described in Section 7.1(a) will be limited to an
amount equal to CDN$1,000,000 (the “Seller Cap”); provided, however, that any claim
relating to Section 3.3 (authority), 3.4 (conflicts), 3.7 (title to assets), 3.13 (taxes), 3.17
(environmental) or 3.20 (brokers), the certificate delivered pursuant to Section 5.1(b)(vi) or any
covenant or agreement will not be subject to or counted towards the Seller Cap, but will be limited
to an amount equal to the Purchase Price.



(b) The Buyer will have no Liability with respect to the matters described in Section 7.2(a):
(i) in respect of any Loss incurred or suffered by the Seller Indemnitee that is not a Qualifying
Loss and (ii) until such time as the aggregate of all Qualifying Losses that Buyer Indemnitees may
have under Section 7.2(a) exceeds CDN$37,500 (the amount referred to in this clause (ii), the
“Buyer Indemnity Threshold”), and then only for the aggregate amount of all Qualifying Losses in
excess of the Buyer Indemnity Threshold; provided, however, that any claim relating
to Section 4.1 (organization), 4.2 (capitalization), 4.3 (authority), 4.4 (conflicts), 4.8 (taxes)
or 4.13 (brokers) will not be subject to or counted towards the Buyer Indemnity Threshold. The
Buyer’s maximum aggregate Liability with respect to the matters described in Section 7.2(a) will be
limited to an amount equal to CDN$1,000,000 (the “Buyer Cap”); provided, however,
that any claim relating to Section 4.1 (organization), 4.2 (capitalization), 4.3 (authority), 4.4
(conflicts), 4.8 (taxes) or 4.13 (brokers) or any covenant or agreement will not be subject to or
counted towards the Buyer Cap, but will be limited to an amount equal to the Purchase Price.



(c) This Section 7.4 will not apply to fraud, including any fraudulent or intentional breach
of any representation or warranty.


 


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7.5 Third-Party Claims.



(a) If a third party commences a lawsuit or arbitration (a “Third-Party Claim”) against any
Person (the “Indemnified Party”) with respect to any matter that the Indemnified Party might make a
claim for indemnification against any Party (the “Indemnifying Party”) under this Article VII, then
the Indemnified Party must notify the Indemnifying Party thereof in writing of the existence of
such Third-Party Claim and must deliver copies of any documents served on the Indemnified Party
with respect to the Third-Party Claim; provided, however, that any failure to
notify the Indemnifying Party or deliver copies will not relieve the Indemnifying Party from any
obligation hereunder unless (and then solely to the extent) the Indemnifying Party is materially
prejudiced by such failure.



(b) Upon receipt of the notice described in Section 7.5(a), the Indemnifying Party will have
the right to defend the Indemnified Party against the Third-Party Claim with counsel reasonably
satisfactory to the Indemnified Party so long as (i) within ten days after receipt of such notice,
the Indemnifying Party notifies the Indemnified Party in writing that the Indemnifying Party will,
subject to the limitations of Section 7.4, indemnify the Indemnified Party from and against any
Losses the Indemnified Party may incur relating to or arising out of the Third-Party Claim, (ii)
the Indemnifying Party provides the Indemnified Party with evidence reasonably acceptable to the
Indemnified Party that the Indemnifying Party will have the financial resources to defend against
the Third-Party Claim and fulfill its indemnification obligations hereunder, (iii) the Indemnifying
Party is not a party to the Proceeding or the Indemnified Party has determined in good faith that
there would be no conflict of interest or other inappropriate matter associated with joint
representation, (iv) the Third-Party Claim does not involve, and is not likely to involve, any
claim by any Governmental Body, (v) the Indemnifying Party conducts the defense of the Third-Party
Claim actively and diligently and (vi) the Indemnifying Party keeps the Indemnified Party apprised
of all developments, including settlement offers, with respect to the Third-Party Claim and permits
the Indemnified Party to participate in the defense of the Third-Party Claim.



(c) So long as the Indemnifying Party is conducting the defense of the Third-Party Claim in
accordance with Section 7.5(b), (i) the Indemnifying Party will not be responsible for any
attorneys’ fees incurred by the Indemnified Party regarding the Third-Party Claim (other than
attorneys’ fees incurred prior to the Indemnifying Party’s assumption of the defense pursuant to
Section 7.5(b)) and (ii) neither the Indemnified Party nor the Indemnifying Party will consent to
the entry of any judgment or enter into any settlement with respect to the Third-Party Claim
without the prior written consent of the other party, which consent will not be withheld
unreasonably, it being understood that any Party may withhold its consent to a settlement that
provides for non-monetary relief. If the Indemnified Party desires to consent to the entry of
judgment with respect to or to settle a Third-Party Claim but the Indemnifying Party refuses, then
the Indemnifying Party will be responsible for all Losses with respect to such Third-Party Claim,
without giving effect to the Seller Indemnity Threshold, the Buyer Indemnity Threshold, the Seller
Cap or the Buyer Cap, as applicable.



(d) If any condition in Section 7.5(b) is or becomes unsatisfied in any material respect, (i)
the Indemnified Party may defend against, and consent to the entry of any judgment or enter into
any settlement with respect to, the Third-Party Claim in any manner it may deem appropriate (and
the Indemnified Party need not consult with, or obtain any consent from, the Indemnifying Party in
connection therewith), (ii) the Indemnifying Party will reimburse the Indemnified Party promptly
and periodically (but no less often than monthly) for the costs of defending against the
Third-Party Claim, including attorneys’ fees and expenses, and (iii) the Indemnifying Party will
remain responsible for any Losses the Indemnified Party may incur relating to or arising out of the
Third-Party Claim to the fullest extent provided in this Article VII.


 


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(e) Notwithstanding anything to the contrary in this Agreement, each party shall have the sole
right to control any audit, examination or Proceeding that relates to any Taxes of the Business for
which such party is solely responsible and the parties shall jointly control, each at its own
expense, any audit, examination or Proceeding that relates to any Taxes of the Business for which
the parties are jointly responsible.



7.6 Other Indemnification Matters. Any claim for indemnification under this Article VII must
be asserted by providing written notice to the Seller (or the Buyer, in the case of a claim by the
Seller) specifying the factual basis of the claim in reasonable detail to the extent then known by
the Person asserting the claim. Each Party agrees to treat all indemnification payments under this
Article VII as adjustments to the Purchase Price, including for Tax purposes to the extent
permitted by Law. The Seller shall have no obligation to make any indemnification payments under
this Article VII prior to the third Business Day following the date upon which the registration
statement to be filed by Primo Parent in respect of the Share Consideration pursuant to the
Registration Rights Agreement is first declared effective by the SEC; provided, that the
foregoing shall in no way limit the Seller’s indemnification obligations under this Article VII
except with respect to the timing of such indemnification payment. The right to indemnification
will not be affected by any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the date hereof, with respect to
any representation, warranty, covenant or agreement in this Agreement. THE INDEMNIFICATION
PROVISIONS IN THIS ARTICLE VII WILL BE ENFORCEABLE REGARDLESS OF WHETHER ANY PERSON ALLEGES OR
PROVES THE SOLE, CONCURRENT, CONTRIBUTORY OR COMPARATIVE NEGLIGENCE OF THE PERSON SEEKING
INDEMNIFICATION OR ITS AFFILIATES, OR THE SOLE OR CONCURRENT STRICT LIABILITY IMPOSED ON THE PERSON
SEEKING INDEMNIFICATION OR ITS AFFILIATES. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any covenant or
agreement, will not affect the right to indemnification, payment of damages, or other remedy based
on any such representation, warranty, covenant or agreement.



7.7 PST Clearance Certificates. In respect of the purchase and sale of the Purchased Assets
under this Agreement, the Buyer shall not require the Seller to comply with the requirements of
section 6 of the Retail Sales Tax Act (Ontario) or any equivalent or corresponding provisions under
any other applicable legislation. Notwithstanding anything to the contrary in this Agreement, the
Seller will indemnify and hold harmless the Buyer Indemnitees from and pay and reimburse the Buyer
Indemnitees for, any provincial sales Tax, penalties and interest payable or assessed against the
Seller, directly or indirectly, by reason of, or as a consequence of, any non-compliance with
Section 6 of the Retail Sales Tax Act (Ontario) or similar legislation in those jurisdictions in
which the Purchased Assets are located. For the avoidance of doubt, the indemnification
obligations set forth in this Section 7.7 are not subject to the limitations set forth in Section
7.4.



7.8 Exclusive Remedy. After the Closing, this Article VII will provide the exclusive legal
remedy for the matters covered by this Article VII, except for claims based upon fraud. This
Article VII will not affect any equitable remedy available to any Party.



ARTICLE VIII

MISCELLANEOUS




8.1 Further Assurances. Each Party agrees to furnish upon request to any other Party such
further information, to execute and deliver to any other Party such other documents, and to do such
other acts and things (including the execution and delivery of such further instruments or
documents as may be necessary or convenient to transfer and convey any Purchased Asset to the Buyer
in accordance with this Agreement), all as any other Party may reasonably request for the purpose of carrying out the
intent of the Transaction Documents.


 


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8.2 No Third-Party Beneficiaries. This Agreement does not confer any rights or remedies upon
any Person (including any employee of the Seller) other than the Parties, their respective
successors and permitted assigns and, as expressly set forth in this Agreement, any Indemnified
Party.



8.3 Entire Agreement. The Transaction Documents constitute the entire agreement among the
Parties with respect to the subject matter of the Transaction Documents and supersede all prior
agreements (whether written or oral and whether express or implied) among any Parties to the extent
related to the subject matter of the Transaction Documents (including any letter of intent or
confidentiality agreement).



8.4 Successors and Assigns. This Agreement will be binding upon and inure to the benefit of
the Parties and their respective successors and permitted assigns. No Party may assign, delegate
or otherwise transfer (whether by operation of Law or otherwise) any of its rights, interests or
obligations in this Agreement without the prior written approval of the other Parties;
provided, that the Buyer may assign any or all of its rights or interests, or delegate any
or all of their obligations, in this Agreement (a) to any successor to the Buyer or any acquirer of
a material portion of the business or assets of the Buyer, (b) to one or more of the Buyer’s
Affiliates or (c) to any lender to the Buyer or its Affiliates as security for obligations to such
lender; and, provided, further, that no such assignment shall relieve the Buyer of
any of its obligations under this Agreement; and, provided, further, that the
Buyer shall be responsible for, and shall indemnify the Seller against, any Taxes that would not
have arisen but for such assignment or delegation.



8.5 Counterparts. This Agreement may be executed by the Parties in multiple counterparts and
shall be effective as of the date set forth above when each Party shall have executed and delivered
a counterpart hereof, whether or not the same counterpart is executed and delivered by each Party.
When so executed and delivered, each such counterpart shall be deemed an original and all such
counterparts shall be deemed one and the same document. Transmission of images of signed signature
pages by facsimile, e-mail or other electronic means shall have the same effect as the delivery of
manually signed documents in person.



8.6 Notices. Any notice pursuant to this Agreement must be in writing and will be deemed
effectively given to another Party on the earliest of the date (a) three Business Days after such
notice is sent by registered U.S. mail, return receipt requested, (b) one Business Day after
receipt of confirmation if such notice is sent by facsimile, (c) one Business Day after delivery of
such notice into the custody and control of an overnight courier service for next day delivery, (d)
one Business Day after delivery of such notice in person and (e) such notice is received by that
Party; in each case to the appropriate address below (or to such other address as a Party may
designate by notice to the other Parties):


If to any Culligan Party:


Culligan International Company

9399 West Higgins Road

Suite 1100

Rosemont, IL 60018

Fax: (847) 430-2365

Phone: (847) 430-1365

Attn: Susan E. Bennett




 


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with a copy (which shall not constitute notice) to:


Debevoise & Plimpton LLP

919 Third Avenue

New York, NY 10022

Fax: (212) 521-7611

Phone: (212) 909-6611

Attn: John M. Allen, Jr.


If to any Primo Party:


Primo Water Corporation

104 Cambridge Plaza Drive

Winston-Salem, NC 27104

Fax: (336) 331-4247

Phone: (336) 331-4047

Attn: Mark Castaneda


with a copy (which shall not constitute notice) to:


K&L Gates LLP

4350 Lassiter at North Hills Avenue

Suite 300

Raleigh, NC 27619

Fax: (919) 516-2028

Phone: (919) 743-7328

Attn: D. Scott Coward



8.7 JURISDICTION; SERVICE OF PROCESS. EACH PARTY (a) CONSENTS TO THE PERSONAL JURISDICTION OF
ANY STATE OR FEDERAL COURT LOCATED IN CHICAGO, ILLINOIS (AND ANY CORRESPONDING APPELLATE COURT) IN
ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY TRANSACTION DOCUMENT, (b) WAIVES ANY VENUE OR
INCONVENIENT FORUM DEFENSE TO ANY PROCEEDING MAINTAINED IN SUCH COURTS, (c) EXCEPT AS OTHERWISE
PROVIDED IN THIS AGREEMENT, AGREES NOT TO INITIATE ANY PROCEEDING ARISING OUT OF OR RELATING TO ANY
TRANSACTION DOCUMENT IN ANY OTHER COURT OR FORUM, (d) AGREES THAT PROCESS IN ANY SUCH PROCEEDING
MAY BE SERVED ON ANY PARTY ANYWHERE IN THE WORLD, (e) AGREES THAT SERVICE OF PROCESS WHICH IS SENT
BY CERTIFIED MAIL TO SUCH PARTY’S ADDRESS IN SECTION 8.6 SHALL BE DEEMED EFFECTIVE SERVICE AND (f)
WAIVES ANY DEFENSE BASED ON SERVICE OF PROCESS OTHER THAN AS PROVIDED HEREIN.



8.8 Governing Law. This Agreement and all other Transaction Documents (unless otherwise
stated therein) will be governed by the Law of the State of Illinois without giving effect to any
choice or conflict of law principles of any jurisdiction.



8.9 Amendments and Waivers. No amendment of any provision of this Agreement will be valid
unless the amendment is in writing and signed by the Primo Parties and the Culligan Parties. No
waiver of any provision of this Agreement will be valid unless the waiver is in writing and signed
by the waiving Party. The failure of a Party at any time to require performance of any provision
of this Agreement will not affect such Party’s rights at a later time to enforce such provision.
No waiver by any Party of any breach of this Agreement will be deemed to extend to any other breach
hereunder or affect in any way any rights arising by virtue of any other breach.


 


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8.10 Severability. Any provision of this Agreement that is determined by any court of
competent jurisdiction to be invalid or unenforceable will not affect the validity or
enforceability of any other provision hereof or the invalid or unenforceable provision in any other
situation or in any other jurisdiction. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.



8.11 Expenses. Except as otherwise expressly provided in this Agreement, the Culligan Parties
will bear all expenses incurred by the Culligan Parties or any of their Representatives in
connection with the Transactions contemplated to be performed before or on the Closing Date.
Except as otherwise expressly provided in this Agreement, the Primo Parties will bear all expenses
incurred by any Primo Party or any of their respective Representatives in connection with the
Transactions contemplated to be performed before or on the Closing Date. The Buyer shall be
responsible for the payment of any license, registration or permitting fees that arise as a result
of the Transactions.



8.12 Interpretation. The article and section headings in this Agreement are inserted for
convenience only and are not intended to affect the interpretation of this Agreement. Any
reference in this Agreement to any Article or Section refers to the corresponding Article or
Section of this Agreement. Any reference in this Agreement to any Schedule or Exhibit refers to
the corresponding Schedule or Exhibit attached to this Agreement and all such Schedules and
Exhibits are incorporated herein by reference. The word “including” in this Agreement means
“including without limitation.” This Agreement will be construed as if drafted jointly by the
Parties and no presumption or burden of proof will arise favoring or disfavoring any Party by
virtue of the authorship of any provision in this Agreement. Unless the context requires
otherwise, any reference to any Law will be deemed also to refer to all amendments and successor
provisions thereto and all rules and regulations promulgated thereunder, in each case as in effect
as of the Closing Date. All accounting terms not specifically defined in this Agreement will be
construed in accordance with GAAP as in effect on the date hereof (unless another effective date is
specified herein). The word “or” in this Agreement is disjunctive but not necessarily exclusive.
All words in this Agreement will be construed to be of such gender or number as the circumstances
require. References in this Agreement to time periods in terms of a certain number of days mean
calendar days unless expressly stated herein to be Business Days. In interpreting and enforcing
this Agreement, each representation and warranty will be given independent significance of fact and
will not be deemed superseded or modified by any other such representation or warranty. All
references to “USD$” refer to U.S. dollars and all references to “CDN$” refer to Canadian dollars.



8.13 Specific Performance. Each Party acknowledges that the other Parties would be damaged
irreparably and would have no adequate remedy at law if any provision of this Agreement is not
performed in accordance with its specific terms or otherwise is breached. Accordingly, each Party
agrees that the other Parties will be entitled to an injunction to prevent any breach of any
provision of this Agreement and to enforce specifically any provision of this Agreement, in
addition to any other remedy to which they may be entitled and without having to prove the
inadequacy of any other remedy they may have at law or in equity and without being required to post
bond or other security.



8.14 Waiver of Consequential Damages. Each Party hereby (a) waives all rights to special,
indirect, incidental or consequential damages of any kind or nature whatsoever, whether in
contract, warranty, tort (including negligence or strict liability) or otherwise, in each case
arising out of or related to the Transactions and (b) acknowledges that in no event shall any Party
be liable to any other Party for such damages described in clause (a).



8.15 Time Is of the Essence. Time is of the essence with respect to all time periods and
dates set forth herein.



[Signature page follows]



 


33









 








The Parties have executed and delivered this Asset Purchase Agreement as of the date first
written above.



	 	 	 	 	 
	 	PRIMO REFILL CANADA CORPORATION

 	 
	 	By:  	/s/ Mark Castaneda
 	 
	 	 	Name:  	Mark Castaneda 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	PRIMO WATER CORPORATION

 	 
	 	By:  	/s/ Mark Castaneda
 	 
	 	 	Name:  	Mark Castaneda 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	CULLIGAN OF CANADA, LTD.

 	 
	 	By:  	/s/ Susan E. Bennett
 	 
	 	 	Name:  	Susan E. Bennett 	 
	 	 	Title:  	Senior Vice President, General
Counsel 	 
	 	 	  	
and Secretary 	 
	 
	 	CULLIGAN INTERNATIONAL COMPANY

 	 
	 	By:  	/s/ Susan E. Bennett
 	 
	 	 	Name:  	Susan E. Bennett 	 
	 	 	Title:  	Senior Vice President, General
Counsel 	 
	 	 	  	
and Secretary