Document:

exv10w31

Exhibit 10.31

EXECUTION COPY

 

ASSET PURCHASE AGREEMENT

among

PRIMO WATER CORPORATION,

P1 SUB, LLC,

P2 SUB, LLC,

CULLIGAN STORE SOLUTIONS, LLC,

CULLIGAN OF CANADA, LTD.

and

CULLIGAN INTERNATIONAL COMPANY

June 1, 2010

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II SALE AND PURCHASE OF ASSETS	 	 	10	 
	2.1
	 	Sale and Purchase of Assets	 	 	10	 
	2.2
	 	Excluded Assets	 	 	11	 
	2.3
	 	Assumed Liabilities	 	 	12	 
	2.4
	 	Excluded Liabilities	 	 	12	 
	2.5
	 	Purchase Price	 	 	13	 
	2.6
	 	Closing	 	 	14	 
	2.7
	 	Working Capital Statement	 	 	14	 
	2.8
	 	Post-Closing Purchase Price Adjustments	 	 	15	 
	2.9
	 	Allocation of Purchase Price	 	 	16	 
	2.10
	 	Withholding	 	 	16	 
	2.11
	 	Certain Tax Matters.	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE III REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS	 	 	18	 
	3.1
	 	Organization, Qualification and Corporate Power	 	 	18	 
	3.2
	 	Capitalization	 	 	18	 
	3.3
	 	Authority	 	 	18	 
	3.4
	 	No Conflicts	 	 	19	 
	3.5
	 	Financial Statements	 	 	19	 
	3.6
	 	Absence of Certain Changes	 	 	20	 
	3.7
	 	No Undisclosed Liabilities	 	 	21	 
	3.8
	 	Title to and Sufficiency of Assets	 	 	21	 
	3.9
	 	Tangible Personal Property; Condition of Purchased Assets	 	 	21	 
	3.10
	 	Accounts Receivable	 	 	21	 
	3.11
	 	Inventory	 	 	21	 
	3.12
	 	Real Property	 	 	22	 
	3.13
	 	Contracts	 	 	22	 
	3.14
	 	Intellectual Property	 	 	23	 
	3.15
	 	Tax	 	 	24	 
	3.16
	 	Legal Compliance	 	 	24	 
	3.17
	 	Litigation	 	 	25	 
	3.18
	 	Product and Service Warranties	 	 	25	 
	3.19
	 	Environmental	 	 	25	 
	3.20
	 	Employees	 	 	26	 
	3.21
	 	Employee Benefits	 	 	26	 
	3.22
	 	Customers and Suppliers	 	 	27	 
	3.23
	 	Transactions with Related Persons	 	 	27	 
	3.24
	 	Insurance	 	 	28	 
	3.25
	 	Solvency	 	 	28	 
	3.26
	 	No Brokers’ Fees	 	 	28	 
	3.27
	 	Securities Law	 	 	28	 
	3.28
	 	Disclosure	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES REGARDING THE PRIMO PARTIES	 	 	29	 
	4.1
	 	Organization	 	 	29	 
	4.2
	 	Capitalization	 	 	29	 

i

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	4.3
	 	Authority	 	 	30	 
	4.4
	 	No Conflicts	 	 	30	 
	4.5
	 	Financial Statements.	 	 	30	 
	4.6
	 	No Undisclosed Liabilities	 	 	31	 
	4.7
	 	Intellectual Property	 	 	31	 
	4.8
	 	Taxation	 	 	31	 
	4.9
	 	Legal Compliance	 	 	32	 
	4.10
	 	Litigation	 	 	32	 
	4.11
	 	Environmental	 	 	32	 
	4.12
	 	Employees	 	 	33	 
	4.13
	 	No Brokers’ Fees	 	 	33	 
	4.14
	 	Form S-1	 	 	33	 
	 
	 	 	 	 	 	 
	ARTICLE V PRE-CLOSING COVENANTS	 	 	33	 
	5.1
	 	Efforts to Satisfy Conditions	 	 	33	 
	5.2
	 	Approvals.	 	 	34	 
	5.3
	 	Operation of Business	 	 	34	 
	5.4
	 	Full Access	 	 	35	 
	5.5
	 	Notice of Developments	 	 	36	 
	5.6
	 	Exclusivity	 	 	36	 
	5.7
	 	Confidentiality, Press Releases and Public Announcements	 	 	36	 
	5.8
	 	Personal Information	 	 	37	 
	5.9
	 	Form S-1	 	 	37	 
	5.10
	 	Representations and Warranties	 	 	37	 
	5.11
	 	IPO Milestones	 	 	37	 
	5.12
	 	Delivery of Final Financial Statements	 	 	38	 
	 
	 	 	 	 	 	 
	ARTICLE VI CLOSING CONDITIONS	 	 	38	 
	6.1
	 	Conditions to the Primo Parties’ Obligations	 	 	39	 
	6.2
	 	Conditions to the Sellers’ Obligations	 	 	40	 
	 
	 	 	 	 	 	 
	ARTICLE VII TERMINATION	 	 	41	 
	7.1
	 	Termination Events	 	 	41	 
	7.2
	 	Effect of Termination	 	 	42	 
	 
	 	 	 	 	 	 
	ARTICLE VIII EMPLOYEES AND EMPLOYEE BENEFITS	 	 	42	 
	8.1
	 	Employment of Active Employees by the Buyers	 	 	42	 
	8.2
	 	Salaries and Benefits	 	 	43	 
	8.3
	 	No Transfer of Assets	 	 	43	 
	8.4
	 	General Cooperation	 	 	43	 
	 
	 	 	 	 	 	 
	ARTICLE IX POST-CLOSING COVENANTS	 	 	43	 
	9.1
	 	Payment of Excluded Liabilities	 	 	44	 
	9.2
	 	Payment of Assumed Liabilities	 	 	44	 
	9.3
	 	Bulk Transfer Compliance	 	 	44	 
	9.4
	 	Consents	 	 	44	 
	9.5
	 	Mail and Receivables	 	 	44	 
	9.6
	 	Litigation Support	 	 	45	 
	9.7
	 	Transition	 	 	45	 
	9.8
	 	Confidentiality	 	 	45	 
	9.9
	 	Information Rights	 	 	46	 
	9.10
	 	Retention of and Access to Books and Records	 	 	46	 
	9.11
	 	Seller Information	 	 	46	 
	9.12
	 	Personal Information	 	 	46	 

ii

 

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	ARTICLE X INDEMNIFICATION	 	 	46	 
	10.1
	 	Indemnification by the Sellers	 	 	46	 
	10.2
	 	Indemnification by the Buyers	 	 	46	 
	10.3
	 	Survival and Time Limitations	 	 	47	 
	10.4
	 	Limitations on Indemnification	 	 	47	 
	10.5
	 	Third-Party Claims	 	 	48	 
	10.6
	 	Other Indemnification Matters	 	 	49	 
	10.7
	 	PST Clearance Certificates	 	 	49	 
	10.8
	 	Exclusive Remedy	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE XI MISCELLANEOUS	 	 	50	 
	11.1
	 	Further Assurances	 	 	50	 
	11.2
	 	No Third-Party Beneficiaries	 	 	50	 
	11.3
	 	Guaranties.	 	 	50	 
	11.4
	 	Entire Agreement	 	 	51	 
	11.5
	 	Successors and Assigns	 	 	51	 
	11.6
	 	Counterparts	 	 	52	 
	11.7
	 	Notices	 	 	52	 
	11.8
	 	JURISDICTION; SERVICE OF PROCESS	 	 	53	 
	11.9
	 	Governing Law	 	 	53	 
	11.10
	 	Amendments and Waivers	 	 	53	 
	11.11
	 	Severability	 	 	53	 
	11.12
	 	Expenses	 	 	53	 
	11.13
	 	Interpretation	 	 	53	 
	11.14
	 	Specific Performance	 	 	54	 
	11.15
	 	Waiver of Consequential Damages	 	 	54	 
	11.16
	 	Offset	 	 	54	 
	11.17
	 	Time Is of the Essence	 	 	54	 

iii

 

EXHIBITS

	 	 	 

	A

	 	Non-Competition Agreement
	B

	 	Registration Rights Agreement
	C

	 	Supply Agreement
	D

	 	Trademark License Agreement
	E

	 	U.S. Transition Services Agreement
	F

	 	Canada Transition Services Agreement
	G

	 	Dealer Services Agreement
	H

	 	Bill of Sale and Assignment and Assumption Agreement

SCHEDULES

	 	 	 
	1.1(a)

	 	Canadian Active Employees
	1.1(b)

	 	US Employees on Temporary Leave
	1.1(c)

	 	Sellers’ Knowledge Persons
	1.1(d)

	 	Buyers’ Knowledge Persons
	1.1(e)

	 	Calculation of Target Working Capital
	2.1(e)

	 	Certain Assigned Contracts
	2.2(c)

	 	Excluded Contracts
	2.2(i)

	 	Certain Excluded Intellectual Property
	2.3(e)

	 	Assumed Claims
	2.4(f)

	 	Excluded Claims
	2.7

	 	Exceptions to GAAP
	3.1

	 	Organization
	3.2

	 	Capitalization
	3.4

	 	Sellers’ Conflicts and Consents
	3.5(a)

	 	Financial Statements
	3.5(c)

	 	Internal Controls
	3.6

	 	Certain Changes
	3.7

	 	Undisclosed Liabilities
	3.8(a)

	 	Exceptions to Title
	3.8(b)

	 	Business Assets Not Purchased
	3.9(a)

	 	Vended Water Machines
	3.9(b)

	 	Other Tangible Personal Property
	3.10

	 	Accounts Receivable
	3.12(b)

	 	Leased Real Property
	3.12(c)

	 	Real Property Compliance
	3.13(a)

	 	Material Contracts
	3.14(c)

	 	Purchased Intellectual Property
	3.15

	 	Tax Returns, Audits and Elections
	3.16(a)

	 	Compliance with Law
	3.16(b)

	 	Permits
	3.17

	 	Litigation and Orders
	3.18

	 	Standard Sales Terms
	3.19

	 	Environmental
	3.20

	 	Employees
	3.21

	 	Employee Benefit Plans
	3.22

	 	Customers and Suppliers
	3.23

	 	Related Persons Transactions
	3.24

	 	Insurance
	4.2

	 	Primo Capitalization
	4.4

	 	Primo Conflicts and Consents

iv

 

	 	 	 
	4.5(a)

	 	Primo Financial Statements
	4.7(b)

	 	Primo Intellectual Property Infringement Proceedings
	4.7(c)

	 	Primo Licenses
	4.9

	 	Primo Legal Compliance
	4.10

	 	Primo Litigation
	4.11

	 	Primo Environmental
	6.1(d)

	 	Material Consents
	8.1

	 	Sellers’ Severance Policy

v

 

ASSET PURCHASE AGREEMENT

     This Asset Purchase Agreement (this “Agreement”) is entered into as of June 1, 2010, by Primo
Water Corporation, a Delaware corporation (“Primo Parent”), P1 Sub, LLC, a North Carolina limited
liability company (“Primo US”), P2 Sub, LLC, a North Carolina limited liability company (“Primo
Canada”, and together with Primo US, the “Buyers”), Culligan Store Solutions, LLC, a Minnesota
limited liability company (“Culligan US”), Culligan of Canada, Ltd., a corporation governed by the
Canada Business Corporations Act (“Culligan Canada”, and together with Culligan US, the “Sellers”),
and Culligan International Company, a Delaware corporation (“Culligan Parent”).

STATEMENT OF PURPOSE

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

ARTICLE I

DEFINITIONS

     “Accounts Receivable” is defined in Section 2.1.

     “Acquisition Proposal” is defined in Section 5.6.

     “Active Employees” means (a) the employees of Culligan Canada that are listed on Schedule
1.1(a), (b) all current employees of Culligan US, including those employees of Culligan US on
temporary leave of absence (including family medical leave, military leave, temporary disability or
sick leave) listed on Schedule 1.1(b), but excluding employees of Culligan US on long-term
disability leave and (c) Jeanne Cantu.

     “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 2.9.

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

     “Assumed Liabilities” is defined in Section 2.3.

     “Balance Sheet” means (a) as of the date hereof until the Delivery Date, the unaudited balance
sheet of the Business as of December 31, 2009, and the notes thereto, all of which are attached to
Schedule 3.5(a), and (b) as of the Delivery Date and thereafter, the audited balance sheet
of the Business as of December 31, 2009, and the notes thereto, all of which will be attached to
Schedule 3.5(a)-1 as of the Delivery Date.

     “Balance Sheet Date” means December 31, 2009.

 

 

     “Base Amount” is defined in Section 2.5.

     “Books and Records” is defined in Section 2.1(g).

     “Bill of Sale” means the Bill of Sale and Assignment and Assumption Agreement to be executed
by the Sellers and the Buyers in the form of Exhibit H.

     “Business” means the business currently conducted by the Sellers in the United States and
Canada of (a) operating self-service vended water machines that dispense drinking water to end
users and are located at retail stores, (b) providing treated water for use within retail stores on
the basis of the amount of water used and (c) providing retail stores with empty bottles which may
be purchased by the end user for use in dispensing water. For the avoidance of doubt, the Business
does not include the sale of water treatment and filtration equipment or the provision of related
services such as salt delivery to retail stores.

     “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 Cap” is defined in Section 10.4(b).

     “Buyer Indemnitees” is defined in Section 10.1.

     “Buyer Indemnity Threshold” is defined in Section 10.4(b).

     “Buyers” is defined in the opening paragraph.

     “Cash Purchase Price” is defined in Section 2.5.

     “Closing” is defined in Section 2.6.

     “Closing Date” is defined in Section 2.6.

     “COBRA” means the requirements of Part 6 of Subtitle B of Title I of ERISA and Code § 4980B.

     “Code” means the Internal Revenue Code of 1986.

     “Competition Act” means the Competition Act (Canada).

     “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,

2

 

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 Canada” is defined in the opening paragraph.

     “Culligan Guaranty” is defined in Section 11.3.

     “Culligan Parties” means Culligan US, Culligan Canada and Culligan Parent.

     “Culligan US” is defined in the opening paragraph.

     “Delivery Date” is defined in Section 5.12.

     “DOJ” means the United States Department of Justice.

     “Employee Benefit Plan” means any (a) qualified or nonqualified Employee Pension Benefit Plan
(excluding any Multiemployer Plan), deferred compensation plan or arrangement, Registered Pension
Plan or other pension, retirement or supplementary retirement plan or arrangement, (b) Employee
Welfare Benefit Plan or any other health, welfare, supplemental unemployment benefit, incentive
compensation, hospitalization insurance, salary continuation, legal, or other medical, dental,
life, disability or other insurance (whether insured or self-insured), or other similar employee
benefit plan, program, agreement or arrangement or (c) equity-based plan or arrangement (including
any stock option, stock purchase, stock ownership, stock appreciation or restricted stock plan) or
material fringe benefit or other retirement, severance, bonus, profit-sharing, deferred profit
sharing, savings or incentive plan or arrangement.

     “Employee Pension Benefit Plan” has the meaning set forth in ERISA § 3(2).

     “Employee Welfare Benefit Plan” has the meaning set forth in ERISA § 3(1).

     “Employment Agreements” means the Employment Agreements between Primo Parent and each of
Jeanne Cantu and Carl Werner, which have been executed on or prior to the date hereof and whose
effectiveness is conditioned upon the Closing.

     “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.

     “ERISA” means the Employee Retirement Income Security Act of 1974.

3

 

     “Estimated Cash Purchase Price” is defined in Section 2.5.

     “Estimated Working Capital” is defined in Section 2.5.

     “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.

     “Final Financial Statements” is defined in Section 5.12.

     “Financial Statements” means (a) as of the date hereof until the Delivery Date, those
financial statements attached to Schedule 3.5(a) and (b) as of the Delivery Date and
thereafter, the Final Financial Statements.

     “Form S-1” means Primo Parent’s registration statement on Form S-1 pursuant to which shares of
Primo Stock are to be offered and sold to the public in the IPO, as amended or supplemented from
time to time.

     “FTC” means the United States Federal Trade Commission.

     “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.

     “Hazardous Substance” means any material, substance or waste that is limited or regulated by
any Governmental Body under any Environmental Law, including asbestos, polychlorinated biphenyls
and petroleum products.

     “Hired Active Employees” is defined in Section 8.1.

     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

     “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

4

 

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.

     “Indemnified Party” is defined in Section 10.5.

     “Indemnifying Party” is defined in Section 10.5.

     “Initial Share Consideration” is defined in Section 2.5.

     “Insurance Policies” means all insurance policies to which any Seller is a party, a named
insured or otherwise the beneficiary of coverage.

     “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.

     “Interim Balance Sheet” means (a) as of the date hereof, the unaudited balance sheet of the
Business as of March 31, 2010 attached to Schedule 3.5(a) and (b) as of the Delivery Date
and thereafter, the reviewed balance sheet of the Business as of March 31, 2010.

     “Interim Balance Sheet Date” means the date of the Interim Balance Sheet.

     “Inventory” is defined in Section 2.1.

     “IPO” means the initial public offering of Primo Parent with net proceeds sufficient to fund
the Estimated Cash Purchase Price.

     “IPO Share Price” means the initial public offering price per share of Primo Stock (before
giving effect to any underwriting discount) as reflected in the final prospectus included as part
of the Form S-1.

     “IRS” means the U.S. Internal Revenue Service.

     “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 Sellers 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, and the Buyers will be deemed to have Knowledge of a matter if any Person listed on
Schedule 1.1(d) is deemed to have Knowledge of such matter.

5

 

     “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.

     “Lease” is defined in Section 3.12.

     “Leased Real Property” is defined in Section 3.12.

     “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.

     “Lock-up Agreement” means the Lock-Up Agreement executed on the date hereof by each of
Culligan Parent and Culligan US.

     “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 Adverse Effect” means any change, effect, event, occurrence or state of facts that
has or would reasonably be expected to have or result in a material adverse effect or change on the
business, assets, properties, operations, condition (financial or otherwise) or results of
operations of the Business, taken as a whole, or Primo Parent and the Primo Subsidiaries, taken as
a whole, as the case may be. This definition shall exclude any material adverse effect or change
to the extent arising out of, attributable to or resulting from: (a) changes in conditions
generally affecting the industries in which the Business is conducted or in which the business of
Primo Parent and the Primo Subsidiaries is conducted, which do not disproportionately affect in any
material respect the Business, taken as a whole, or Primo Parent and the Primo Subsidiaries, taken
as a whole, as the case may be, as compared to other similarly situated participants in the
industries in which the Business is conducted or in which the business of Primo Parent and the
Primo Subsidiaries is conducted, as the case may be; (b) general economic, political or capital and
financial market conditions which do not disproportionately affect in any material respect the
Business, taken as a whole, or Primo Parent and the Primo Subsidiaries, taken as a whole, as the
case may be; (c) any outbreak or escalation of hostilities involving the United States (including
any declaration of war by the U.S. Congress) or acts of terrorism; (d) any change in Law, GAAP, or
the enforcement or interpretation thereof, applicable to the Business, taken as a whole, or Primo
Parent and the Primo Subsidiaries, taken as a whole, as the case may be; (e) any specific actions
required to be taken or omitted pursuant to the Transaction Documents; (f) the mere failure of the
Business, taken as a whole, or Primo Parent and the Primo Subsidiaries, taken as a whole, as the
case may be, to achieve any financial projections or forecasts (provided, that the causes
underlying such failure may, subject to the other limitations in this definition, be taken into
account in determining whether a Material Adverse Effect has occurred); or (g) any matter to the
extent set forth in the Schedules (but not including any material worsening of such matter).

     “Material Contract” is defined in Section 3.13.

     “Multiemployer Plan” has the meaning set forth in ERISA § 3(37).

     “Non-Competition Agreement” means the Non-Competition Agreement to be executed by the Culligan
Parties and the Primo Parties in the form of Exhibit A.

6

 

     “Non-Transferable Asset” means any vended water machine included in the Purchased Assets for
which a Permit is required in order to operate, but with respect to which such Permit has not been
obtained by the applicable Seller.

     “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.

     “Overallotment Cash Consideration” is defined in Section 2.8(c)(i).

     “Overallotment Option Closing Date” is defined in Section 2.8(c).

     “Overallotment Option” means the option to purchase additional shares of Primo Stock to be
granted to the underwriters in connection with the IPO pursuant to the Underwriting Agreement.

     “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 or any lien for Taxes that are being contested in good faith through appropriate proceedings
and, in the case of any such contested liens, which are set forth on Schedule 3.15 or
Schedule 4.8, as the case may be, (c) any recorded easement, covenant, zoning or other
restriction on the Leased Real Property that, together with all other Permitted Encumbrances, does
not prohibit or impair the current use, occupancy, value or marketability of title of the property
subject thereto, (d) as of the date hereof, but not as of Closing, any Encumbrance related to
Secured Debt and (e) Encumbrances reserved against on the Interim Balance Sheet, to the extent of
such reserve.

     “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(h).

     “Preliminary Form S-1” means the most recent preliminary Form S-1 filed with the SEC as of the
date hereof.

     “Pricing Date” is defined in Section 5.10.

     “Primo Canada” is defined in the opening paragraph.

     “Primo Financial Statements” is defined in Section 4.5.

     “Primo Guaranty” is defined in Section 11.3.

     “Primo Parent” is defined in the opening paragraph.

7

 

     “Primo Parties” means Primo Canada, Primo US and Primo Parent.

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

     “Primo Subsidiaries” is defined in Section 4.1.

     “Primo US” is defined in the opening paragraph.

     “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 $10,000.

     “Registered Pension Plan” means a “registered pension plan”, as that term is defined in
subsection 248(l) of the ITA.

     “Registration Rights Agreement” means the Registration Rights Agreement to be executed by
Culligan Parent and Primo Parent, in the form of Exhibit B.

     “Related Person” means (a) with respect to a specified individual, any member of such
individual’s Family and (b) with respect to a specified Person other than an individual, any
Affiliate, director or officer of such Person. The “Family” of a specified individual means the
individual, such individual’s spouse and former spouses and children.

     “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).

     “Resolution Accountants” is defined in Section 2.7.

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

     “Secured Debt” means any Indebtedness that is secured by any Encumbrance other than a
Permitted Encumbrance on any Purchased Assets.

     “Securities Act” means the Securities Act of 1933.

     “Seller Cap” is defined in Section 10.4(a).

     “Seller Indemnitees” is defined in Section 10.2.

8

 

     “Seller Indemnity Threshold” is defined in Section 10.4(a).

     “Sellers” is defined in the opening paragraph.

     “Share Consideration” is defined in Section 2.5.

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

     “Supply Agreement” means the Supply Agreement to be executed by Culligan Parent and the
Buyers, in the form of Exhibit C.

     “Tangible Personal Property” is defined in Section 2.1.

     “Target Working Capital” is defined in Section 2.5.

     “Tax” means any federal, state, provincial, local, foreign or other income, gross receipts,
license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Code § 59A), 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 10.5.

     “Trademark License Agreement” means the Trademark License Agreement to be executed by Culligan
Parent and the Buyers, in the form of Exhibit D.

     “Transaction Documents” means this Agreement, the Non-Competition Agreement, the Employment
Agreements, the Trademark License Agreement, the Lock-up Agreement, the Registration Rights
Agreement, the Supply Agreement, the Bill of Sale, the Transition Services Agreements and all other
written agreements, documents and certificates contemplated by any of the foregoing documents.

     “Transaction Expenses” means all expenses (other than Taxes) incurred by any 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 and whether or not reflected in the Financial Statements.

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

     “Transfer Taxes” is defined in Section 2.11(c).

     “Transition Services Agreements” means the (a) U.S. Transition Services Agreement to be
executed by Culligan Parent and Primo US, in the form of Exhibit E, (b) the Canada
Transition Services Agreement to be executed by Culligan Canada and Primo Canada, substantially in
the form of Exhibit F

9

 

and (c) the Dealer Services Agreement to be executed by Culligan Parent and the Buyers,
substantially in the form of Exhibit G.

     “Underwriting Agreement” means that certain Underwriting Agreement to be entered into by and
among Primo Parent and the underwriter or underwriters party thereto in connection with the IPO.

     “WARN Act” means the Worker Adjustment Retraining and Notification Act of 1988 and any similar
state Law.

     “Working Capital” means (a) the amount of the Accounts Receivable, plus (b) the amount of the
Inventory, minus (c) the amount of the Accounts Payable, calculated in a manner consistent with the
calculation of the Target Working Capital, as set forth on Schedule 1.1(e).

     “Working Capital Statement” is defined in Section 2.7.

ARTICLE II

SALE AND PURCHASE OF ASSETS

     2.1 Sale and Purchase of Assets. Subject to the terms and conditions of this Agreement, at the Closing, the Sellers will
sell, assign, transfer and convey to the Buyers, and the Buyers will purchase, acquire and accept
from the Sellers, free and clear of all Encumbrances other than Permitted Encumbrances, all of the
Sellers’ right, title and interest in the Sellers’ 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) All machinery, equipment, parts, tools, fixtures, furniture, office equipment, computer
hardware, supplies, motor vehicles, rental units located at customer locations and other items of
tangible personal property (other than Inventory) of the Business (the “Tangible Personal
Property”);

          (b) All trade and other accounts receivable and other Indebtedness owing to any Seller
generated by or related to the Business, including the benefit of all collateral, security,
guaranties, and similar undertakings received or held in connection therewith and any claim, remedy
or other right related to the foregoing (the “Accounts Receivable”);

          (c) All inventories of the Business wherever located, including raw materials, goods consigned
to vendors or subcontractors, works in process, finished goods, spare parts, goods in transit,
products under research and development, demonstration equipment and inventory on consignment (the
“Inventory”);

          (d) All leases and subleases of real property of the Business as to which any Seller is the
lessor or sublessor and all leases and subleases of real property of the Business as to which any
Seller is the lessee or sublessee, together with any options to purchase the underlying property
and leasehold improvements thereon, and in each case all other rights, subleases, licenses,
permits, deposits and profits appurtenant to or related to such leases and subleases;

          (e) All rights and interests in and to any Contracts of the Business (the “Assigned
Contracts”), including those listed on Schedule 2.1(e);

          (f) All Intellectual Property and computer software of the Business;

          (g) All business, employee and financial records, books, ledgers, files, correspondence,
documents, lists, studies and reports of the Business, including customer lists, supplier

10

 

lists and equipment repair, maintenance, service, personnel, payroll, employee benefit,
quality control and insurance records, whether written, electronically stored or otherwise recorded
(the “Books and Records”), provided, that the Sellers’ retention of and access to such
Books and Records following the Closing shall be subject to Section 9.10, and provided,
further, that employee records and files shall only be included in the Purchased Assets to
the extent permitted under applicable Law;

          (h) All goodwill of the Business;

          (i) All telephone and fax numbers of the Business;

          (j) All Permits of the Business which are transferable to the Buyers;

          (k) All rights of any 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 any Buyer by third parties;

          (l) All benefits under the Insurance Policies arising from or relating to the other Purchased
Assets or Assumed Liabilities in respect of Losses occurring prior to the Closing Date;

          (m) All rights to refunds from customers and suppliers, all prepaid expenses (other than
prepaid expenses with respect to licenses or insurance) and deposits and all rights to condemnation
proceeds of the Business; and

          (n) 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 (m) above falling within the
definition of Purchased Assets.

At the Closing, all of Culligan US’s right, title and interest in the Purchased Assets will be
sold, assigned, transferred and conveyed to Primo US and all of Culligan Canada’s right, title and
interest in the Purchased Assets will be sold, assigned, transferred and conveyed to Primo Canada.

     2.2 Excluded Assets. The Sellers will retain ownership of the following assets of the Sellers (collectively, the
“Excluded Assets”):

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

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

          (c) Those Contracts listed on Schedule 2.2(c);

          (d) 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 any Seller by third parties, in each case to the extent that
they relate to the Excluded Assets or the Excluded Liabilities;

          (e) All benefits under the Insurance Policies arising from or relating to the Excluded Assets
or the Excluded Liabilities;

          (f) All rights under any Transaction Document;

          (g) Subject to Section 2.1(l), all Insurance Policies;

11

 

          (h) Subject to Section 2.11(e), all Tax credits, prepaid Taxes and refunds of the Sellers
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;

          (i) All Intellectual Property and computer software of the Sellers not used exclusively in the
Business, including the Intellectual Property listed on Schedule 2.2(i);

          (j) All Employee Benefit Plans and all Multiemployer Plans;

          (k) All prepaid expenses with respect to licenses and insurance; and

          (l) All other assets of the Sellers not used exclusively in the Business, including those
assets set forth on Schedule 3.8(b).

For purposes of clause 2.2(h), the term “Sellers” shall include Culligan Parent.

     2.3 Assumed Liabilities. The Buyers will assume and agree to pay, perform and discharge only the following
Liabilities of the Sellers (collectively, the “Assumed Liabilities”):

          (a) All trade accounts payable of the Business as of the Closing Date;

          (b) All accrued and unpaid expenses (other than accrued and unpaid expenses with respect to
licenses or insurance) of the Business as of the Closing Date;

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

          (d) All severance obligations assumed by the Buyers pursuant to Section 8.1;

          (e) Liabilities related to the claims set forth on Schedule 2.3(e), provided that the
Buyers shall not assume any such Liabilities in excess of $200,000 in the aggregate; and

          (f) All Liabilities reflected on the Interim Balance Sheet which have not been discharged
prior to the date hereof, and all Liabilities arising after the Interim Balance Sheet Date of the
same character as those which are included on the Interim Balance Sheet.

At the Closing, the Assumed Liabilities of Culligan US will be assumed by Primo US and the Assumed
Liabilities of Culligan Canada will be assumed by Primo Canada.

     2.4 Excluded Liabilities. The Excluded Liabilities will remain the sole responsibility of and will be retained, paid,
performed and discharged as and when due solely by the Sellers. “Excluded Liabilities” means every
Liability of the Sellers, other than the Assumed Liabilities, including all Liabilities of the
Sellers within the following categories to the extent they do not fall within the definition of
Assumed Liabilities (including pursuant to Section 2.3(f)):

          (a) All Liabilities under any Transaction Document;

          (b) Except as provided in Section 2.11(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 2.11 and (ii) franchise and income Taxes of the Sellers for any taxable period;

12

 

          (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 any Seller;

          (f) Liabilities arising out of the claims set forth on Schedule 2.4(f);

          (g) Liabilities arising out of the claims set forth on Schedule 2.3(e), to the extent
such Liabilities are in excess of $200,000 in the aggregate;

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

          (i) All Transaction Expenses;

          (j) All Indebtedness, except as assumed by the Buyers pursuant to Section 2.3;

          (k) 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;

          (l) All product Liability claims for damages or injury to Person or property, other than any
product Liability claims which are assumed by the Buyers pursuant to Section 2.3(e); and

          (m) 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 any 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 2.4(b), the term “Sellers” 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 $105,000,000 composed of:

     (A) $60,000,000 (the “Base Amount”) in cash, as adjusted pursuant to Sections
2.5(c) and 2.8(a) (together with the Overallotment Cash Consideration, the “Cash
Purchase Price”),

     plus

     (B) that number of shares of Primo Stock having an aggregate value of
$45,000,000 (the “Initial Share Consideration”) or such lesser number of shares as
determined pursuant to Section 2.8(c)(i)(B), in each case calculated based upon the
IPO Share Price (the “Share Consideration”); and

     (ii) the assumption of the Assumed Liabilities.

13

 

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, Section 2.8, Article X or otherwise under this Agreement.

          (b) No later than three Business Days prior to the Closing Date, the Sellers will deliver to
the Buyers a good faith, written estimate of the Working Capital as of the Closing Date (the
“Estimated Working Capital”), together with supporting work papers, payoff letters and any other
related documentation reasonably requested by the Buyers.

          (c) The estimated Cash Purchase Price will be an amount equal to the Base Amount, increased or
decreased as set forth below:

     (i) if the Estimated Working Capital is greater than $1,979,290 (the “Target
Working Capital”), the amount of such surplus will be added to the Base Amount; and

     (ii) if the Estimated Working Capital is less than the Target Working Capital,
the amount of such deficit will be subtracted from the Base Amount.

The Base Amount as so increased or decreased is referred to as the “Estimated Cash Purchase Price.”

          (d) Subject to the terms and conditions of this Agreement, the Buyers will pay the Estimated
Cash Purchase Price at Closing to the Sellers by wire transfer of immediately available funds to a
bank account or accounts designated at least two Business Days prior to the Closing Date by the
Sellers. The Share Consideration shall be payable following the Closing in accordance with Section
2.8(c).

     2.6 Closing. 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 9:00 a.m.
local time on the date of the closing of the IPO following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the Transactions to be performed on the
Closing Date (other than conditions with respect to actions the Parties will take at the Closing)
(the “Closing Date”). Subject to the consummation of the Closing on the Closing Date, the sale,
assignment, transfer and conveyance to the Buyers of the Purchased Assets and the assumption by the
Buyers of the Assumed Liabilities will be deemed effective as of 11:59 p.m. local time on the
Closing Date.

     2.7 Working Capital Statement.

          (a) After the Closing, the Buyers will prepare a statement of Working Capital of the Business
as of the Closing Date (the “Working Capital Statement”) in accordance with GAAP (as in effect on
the date hereof) and, to the extent consistent with GAAP (as in effect on the date hereof), in a
manner consistent with the Working Capital items on the Interim Balance Sheet, except as disclosed
on Schedule 2.7. Within 60 days after the Closing Date, the Buyers will deliver to the
Sellers the Working Capital Statement and the calculation of the Working Capital as of the Closing
Date and the Cash Purchase Price.

          (b) The Sellers and their accounting representatives will be entitled to examine the relevant
books and records of the Business and to discuss the preparation of the Working Capital Statement
with the Buyers and their accounting representatives.

          (c) If the Sellers disagree with the calculation of the Cash Purchase Price, the Sellers must
deliver to the Buyers, within 30 days after the date the Buyers delivered the Working Capital
Statement and its Cash Purchase Price calculation to the Sellers, a written description of each
such disagreement. The Buyers and the Sellers will negotiate in good faith to resolve any such
disagreements. If, after a period of 30 days following the date on which such written description
is delivered, the Buyers

14

 

and the Sellers have not resolved each such disagreement, then either the Buyers or the
Sellers will be entitled to submit such disagreements to Ernst & Young LLP (the “Resolution
Accountants”) so long as such submitting party provides written notice of such submission to the
nonsubmitting party. The Buyers will grant to the Resolution Accountants reasonable access to the
Business’s books and records and the Buyers’ accounting representatives to discuss the preparation
of the Working Capital Statement, the calculation of the Working Capital as of the Closing Date and
the Cash Purchase Price. The Resolution Accountants will resolve the disagreements within 30 days
after the date on which the Resolution Accountants are engaged or as soon thereafter as possible,
and the calculation of the Cash Purchase Price by the Resolution Accountants will be binding upon
the Parties. The cost of the services of the Resolution Accountants will be borne by either the
Buyers (jointly and severally) or the Sellers (jointly and severally) based on whose last written
settlement offer submitted to the other Party before the engagement of the Resolution Accountants
differs the most from the amount of the Cash Purchase Price as finally determined by the Resolution
Accountants. If both last written settlement offers differ equally, such cost will be borne half
by the Buyers (jointly and severally) and half by the Sellers (jointly and severally).

     2.8 Post-Closing Purchase Price Adjustments.

          (a) The Cash Purchase Price will be an amount equal to the Estimated Cash Purchase Price,
increased or decreased as set forth below:

     (i) if the Working Capital as of the Closing Date is greater than the Estimated
Working Capital, the amount of such surplus will be added to the Estimated Cash
Purchase Price;

     (ii) if the Working Capital as of the Closing Date is less than the Estimated
Working Capital, the amount of such deficit will be subtracted from the Estimated
Cash Purchase Price; and

     (iii) that portion of the cost of any audit that is required to be borne by the
Sellers pursuant to Section 2.7(a) or 2.7(c) will be subtracted from the Estimated
Cash Purchase Price.

     The Estimated Cash Purchase Price as so increased or decreased is referred to as the Cash
Purchase Price.

          (b) Subject to Section 11.16, within ten Business Days after the final determination of the
Working Capital: (i) if the Cash Purchase Price is greater than the Estimated Cash Purchase Price
(disregarding for this purpose any payments made pursuant to Section 2.8(c)(i)(A)), the Buyers will
pay to the Sellers, by wire transfer of immediately available funds to the bank account or accounts
designated by the Sellers pursuant to Section 2.5, the amount of such surplus; or (ii) if the Cash
Purchase Price is less than the Estimated Cash Purchase Price (disregarding for this purpose any
payments made pursuant to Section 2.8(c)(i)(A)), the Sellers will pay to the Buyers, by wire
transfer of immediately available funds to a bank account or accounts designated by the Buyers, the
amount of such deficit.

          (c) Within two Business Days after the closing or final expiration of the Overallotment Option
(the “Overallotment Option Closing Date”):

     (i) if any shares of Primo Stock are sold by Primo Parent pursuant to the
Overallotment Option, the amount of net cash proceeds from the sale of such shares
(up to the amount of the Initial Share Consideration) (the “Overallotment Cash
Consideration”) shall be:

15

 

     (A) paid to the Sellers by wire transfer of immediately available funds
to the bank account or accounts designated by the Sellers pursuant to
Section 2.5, and

     (B) subtracted from the Initial Share Consideration; and

     (ii) the Buyers will issue to Culligan US (A) the number of shares of Primo
Stock equal to (A) the Share Consideration (as adjusted pursuant to Section
2.8(c)(i)(B)) divided by (B) the IPO Share Price.

     2.9 Allocation of Purchase Price. The Buyers 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 thirty (30) days following the Closing Date and shall deliver such Allocation Schedule to the
Sellers promptly after it is prepared. The allocation shall be reasonable and shall be based on
appraisals conducted by an appraiser chosen by Buyers. The Sellers shall be provided with a
reasonable opportunity to review and comment on the Allocation Schedule. If the Buyers and the
Sellers agree upon the Allocation Schedule (whether before or after Closing) then (a) such
allocation shall be the agreed allocation; provided, however, that amounts
allocated to items included in the calculation of Working Capital will be subject to appropriate
adjustment to reflect the final determination of Working Capital in accordance with Sections 2.5(c)
and 2.8(a) and (b) the Buyers and the Sellers 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 Buyers and Sellers cannot reach agreement on the Allocation Schedule,
each shall be entitled to use its own allocation.

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

     2.11 Certain Tax Matters.

          (a) For purposes of this Agreement, all personal property, real 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 2.11(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 Buyers.

          (b) For purposes of this Agreement, except as provided in Section 2.11(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 2.11(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 Sellers, on the one hand, and the Buyers, 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

16

 

with the transfer of the Purchased Assets, except that Buyers 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. Buyers shall be responsible for all sales and use Taxes incurred in connection
with the transfer of the Purchased Assets. Buyers 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. Sellers shall
cooperate with Buyers in connection with all such filings and shall file or cause to be filed those
Tax Returns that Buyers are not permitted to file. Sellers and Buyers shall cooperate in obtaining
all applicable certificates to reduce or eliminate Transfer Taxes and sales and use Taxes.

          (d) If available, Primo Canada and Culligan Canada will complete and sign on or before 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. Primo Canada will file each election with the
appropriate Governmental Authority within the time permitted under the ETA and QSTA. If at any time
Culligan Canada is assessed by a Governmental Authority on the basis that an election is not valid,
Primo Canada agrees to pay to Culligan Canada any GST/HST and QST, interest and penalties assessed
by the Governmental Authority. Culligan Canada 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). As of the Closing, Primo Canada will be registered for GST/HST purposes under
the ETA and for QST purposes under the QSTA and will have provided its registration numbers to
Culligan Canada.

          (e) If any Seller or 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
2.11(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 2.11(a), (b) or (c), if a Seller on the one hand, or a 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.

          (f) The Buyers and the Sellers 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
Primo Canada in respect of the Non-Competition Agreement to Culligan Canada as consideration for
its obligations thereunder, Primo Canada and the Sellers 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 Primo Canada and the Sellers shall make corresponding provincial elections. If no
amount of the Purchase Price is allocated to or paid in respect of the Non-Competition Agreement,
Primo Canada and the Sellers 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. Primo Canada and the Sellers 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 Culligan Canada 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

17

 

received or receivable by the Sellers 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 Culligan Canada 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 Primo Canada under this Agreement as payment
for Primo Canada’s agreement to assume those Liabilities and Culligan Canada and Primo Canada 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) Primo Canada and Culligan Canada 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 conducted in Canada
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 Primo Canada and Culligan Canada for such Accounts Receivable for the purpose
of the election.

ARTICLE III

REPRESENTATIONS AND WARRANTIES REGARDING THE SELLERS

          Each Seller (and Culligan Parent, where applicable) represents and warrants as follows:

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

     3.2 Capitalization. Culligan Parent owns all of the outstanding equity of each of Culligan US and, except as
set forth on Schedule 3.2, Culligan Canada. There are no outstanding securities
convertible or exchangeable into equity of any Seller.

     3.3 Authority. Each Culligan 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 Culligan Party of this Agreement have
been approved by the board of directors or manager of such Culligan Party, as applicable. At
Closing, the execution and delivery by each Culligan Party of each Transaction Document to which
such Culligan Party is a party and the performance by such Culligan Party of the Transactions will
have been duly authorized by all requisite corporate or limited liability company action of such
Culligan Party, as applicable. 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) upon the execution and
delivery by each Culligan Party of each Transaction Document to which it is a party, such
Transaction Document will constitute the valid and legally binding

18

 

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 Statements.

          (a) Attached to Schedule 3.5(a) are the following financial statements: (i) unaudited
balance sheet of the Business as of December 31, 2008 and 2009, and statements of income, changes
in equityholders’ equity, and cash flow for the fiscal years then ended, together with the notes
thereto; and (ii) unaudited balance sheet of the Business as of March 31, 2010, and statements of
income, changes in equityholders’ equity and cash flow for the three-month period then ended. The
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 the Business as of and for their respective dates; provided, however,
that the interim financial statements are subject to normal, recurring year-end adjustments (which
will not be, individually or in the aggregate, materially adverse) and, with respect to the interim
financial statements attached to Schedule 3.5(a), lack notes (which, if presented, would
not differ materially from the notes accompanying the Balance Sheet).

          (b) The Books and Records (i) are complete and correct in all material respects and all
transactions related to the Business to which any Seller 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 related to the Business granted by any Seller with respect to the
periods covered thereby, (iii) have been maintained in accordance with customary and sound business
practices in the Sellers’ industry, (iv) form the basis for the Financial Statements and (v)
reflect in all material respects the assets, liabilities, financial position, results of operations
and cash flows of the Business on an accrual basis. All computer-generated reports and other
computer output included in the Books and Records are complete and correct in all material respects
and were prepared in accordance with sound business practices based upon authentic data. The
Sellers’ management information systems are adequate for the preservation of relevant information
and the preparation of accurate reports.

          (c) The Sellers maintain, with respect to the Business, a system of “internal control over
financial reporting” (as defined in Rules 13a-15 and 15d-15 under the Exchange Act). This internal
control over financial reporting with respect to the Business is effective and has been designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with GAAP and is effective in
performing the functions for which it was established. Schedule 3.5(c) sets forth (i) any
significant deficiencies or material weaknesses of the Sellers in the design or operation of
internal control over financial reporting relating to the Business, (ii) all changes in the
internal control over financial reporting with respect to the Business that have materially
affected, or are reasonably likely to affect, such internal control over financial

19

 

reporting and (iii) any events of fraud, whether or not material assessed at the level of the
Business, that involve management or other employees of the Sellers who have a significant role in
the Sellers’ internal controls over financial reporting related to the Business.

     3.6 Absence of Certain Changes. Except as set forth on Schedule 3.6, since the Balance Sheet Date:

          (a) no Seller has sold, leased, transferred or assigned any asset related to the Business,
other than for fair consideration in the ordinary course of business;

          (b) no Seller has experienced any damage, destruction or loss (whether or not covered by
insurance) to its property or assets related to the Business in excess of $100,000;

          (c) no Seller has entered into any Contract (or series of related Contracts) related to the
Business involving the payment or receipt of more than $100,000 or that cannot be terminated
without penalty on less than six months notice, and no Person has accelerated, terminated, modified
or canceled any Contract (or series of related Contracts) related to the Business involving more
than $100,000 to which any Seller is a party or by which any Seller or any of its assets are bound,
other than Contracts with customers entered into in the ordinary course of business;

          (d) no Encumbrance (other than any Permitted Encumbrance) has been imposed upon any asset
related to the Business;

          (e) no Seller has made any capital expenditure (or series of related capital expenditures)
related to the Business involving more than $2,000,000 or made any capital investment in, any loan
to, or any acquisition of the securities or assets of, any other Person (or series of related
capital investments, loans or acquisitions) related to the Business involving more than $100,000;

          (f) no Seller has issued, created, incurred or assumed any Indebtedness (or series of related
Indebtedness) related to the Business involving more than $100,000 in the aggregate or delayed or
postponed the payment of accounts payable other than in the ordinary course of business or other
Liabilities related to the Business beyond the original due date;

          (g) no Seller has canceled, compromised, waived or released any right or claim (or series of
related rights or claims) or any Indebtedness (or series of related Indebtedness) owed to it, in
each case related to the Business, in any case involving more than $100,000;

          (h) no Seller has (i) conducted the Business outside the ordinary course of business
consistent with past practices, (ii) made any loan to, or entered into any other transaction with,
any Active Employee or, with respect to the Business, any director or officer of any Seller, on
terms that would not have resulted from an arms-length transaction, (iii) entered into any
employment Contract or modified the terms of any existing employment Contract with any Active
Employee, (iv) granted any increase in the base compensation of any Active Employee other than
increases in the ordinary course of business, including annual merit-based increases or promotions,
or to the extent required under any Employee Benefit Plan, or (v) adopted, amended, modified or
terminated any Employee Benefit Plan or other Contract for the benefit of any Active Employee;

          (i) there has not been (i) with respect to the Business, any loss of any material customer,
distribution channel or source of supply of Inventory, utilities or contract services or the
receipt of any notice that such a loss may be pending, (ii) with respect to the Business, any
Material Adverse Effect; and

20

 

          (j) no Seller has agreed or committed to any of the foregoing.

     3.7 No Undisclosed Liabilities. Except as set forth on Schedule 3.7, no Seller has any material Liability arising
from the Business (and no basis exists for any such material Liability), except for (a) Liabilities
under executory Contracts that are either listed on Schedule 3.13(a) or are not required to
be listed thereon, excluding Liabilities for any breach of any executory Contract, (b) Liabilities
to the extent reflected or reserved against on the Interim Balance Sheet, (c) current Liabilities
incurred in the ordinary course of business since the Interim Balance Sheet Date (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 for the Business prepared in accordance with GAAP in a
manner consistent with the Balance Sheet.

     3.8 Title to and Sufficiency of Assets. Except as set forth on Schedule 3.8(a), the Sellers have good and marketable title
to, or a valid leasehold interest in, or other right in, the Purchased Assets, free and clear of
any Encumbrances except Permitted Encumbrances. Except as set forth on Schedule 3.8(b),
the Purchased Assets and the assets and services which shall be made available to the Buyers
pursuant to the Transaction Documents include all tangible and intangible assets materially
necessary (a) for the continued conduct of the Business after Closing (i) in the same manner as
conducted prior to Closing and (ii) in compliance in all material respects with all applicable Law,
Material Contracts and Permits as of the Closing and (b) to perform all of the Assumed Liabilities
and obligations of the Business as they exist at Closing. Schedule 3.8(b) sets forth a
list of all material assets used in the Business which are not included in the Purchased Assets.

     3.9 Tangible Personal Property; Condition of Purchased Assets. Schedule 3.9(a) lists each vended water machine together with the accompanying water
treatment equipment used in the Business that was in service at a retail location as of March 31,
2010. Schedule 3.9(b) lists each other item of Tangible Personal Property that has a net
book value in excess of $10,000 and its net book value. The buildings, plants, and structures on
the Leased Real Property and the Tangible Personal Property are structurally sound, free from
material defects and adequate for the uses to which they are being put. The buildings, plants and
structures on the Leased Real Property or the Tangible Personal Property are in good operating
condition and are not in need of maintenance or repairs, except for ordinary, routine maintenance
and repairs (including, with respect to vended water machines, the refurbishment of such machines
in the ordinary course of business) that are not material in nature or cost.

     3.10 Accounts Receivable. Schedule 3.10 contains a list of all Accounts Receivable as of the Interim Balance
Sheet Date, which list sets forth the aging of such Accounts Receivable. All Accounts Receivable
that are reflected on the Balance Sheet, the Interim Balance Sheet or the accounting records of the
Sellers as of the Closing Date represent or will represent valid obligations arising from products
or services actually sold by the Sellers 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.

     3.11 Inventory. The Inventory consists in all material respects of a quality and quantity usable for its
intended purpose (including use in the refurbishment of vended water machines) or salable in the
ordinary course of business consistent with past practices, except for slow-moving and obsolete
items and items of below-standard quality, all of which have been written off or written down to
net realizable value on the accounting records of the Sellers. The quantities of each type of
Inventory are reasonable in the present circumstances of the Business and are not materially more
or less than normal Inventory levels necessary to conduct the Business in the ordinary course
consistent with past practices.

21

 

     3.12 Real Property.

          (a) No Seller owns any real property that is primarily used in connection with the Business.

          (b) Schedule 3.12(b) lists all of the real property and interests therein leased,
subleased or otherwise occupied or used by any Seller and primarily used in connection with the
Business (with all easements and other rights appurtenant to such property, the “Leased Real
Property”). For each item of Leased Real Property, Schedule 3.12(b) also lists the lessor,
the lessee, the lease term, the lease rate, and the lease, sublease, or other Contract pursuant to
which a Seller holds a possessory interest in the Leased Real Property and all amendments, renewals
or extensions thereto (each, a “Lease”). Except as set forth on Schedule 3.12(b), the
leasehold interest of the Sellers with respect to each item of Leased Real Property is free and
clear of any Encumbrances, except Permitted Encumbrances. Except as set forth on Schedule
3.12(b), the Leased Real Property is used exclusively by the Business. No Seller is a
sublessor of, and has not assigned any lease covering, any item of Leased Real Property. Leasing
commissions or other brokerage fees due from or payable by the Sellers with respect to any Lease
have been paid in full.

          (c) Except as disclosed on Schedule 3.12(c), the Leased Real Property constitutes all
interests in real property currently primarily used in connection with the Business. The Leased
Real Property is not subject to any rights of way, building use restrictions, title exceptions,
variances, reservations or limitations of any kind or nature, except (i) those that in the
aggregate do not impair the current use, occupancy, value or marketability of title to the Leased
Real Property, (ii) as set forth in Schedule 3.12(c) and (iii) with respect to each item of
Leased Real Property, as set forth in the Lease relating to such item. To the Knowledge of the
Sellers, except as set forth in Schedule 3.12(c), the Leased Real Property complies in all
material respects with all Law, including zoning requirements. Except as set forth in Schedule
3.12(c), no Seller has received any notifications from any Governmental Body or insurance
company recommending improvements to the Leased Real Property or any other actions relative to the
Leased Real Property. With respect to the Business, no Seller is a party to or bound by any
Contract (including any option) for the purchase or sale of any real estate interest or any
Contract for the lease to or from a Seller of any real estate interest not currently in possession
of a Seller.

     3.13 Contracts.

          (a) Schedule 3.13(a) lists the following Assigned Contracts (collectively, with the
Leases, the “Material Assigned Contracts”): (i) each Assigned Contract with the customers and
suppliers listed on Schedule 3.22; (ii) each Assigned Contract that is a lease, rental or occupancy
agreement, license, installment and conditional sale agreement, and other Contract affecting the
ownership of, leasing of, title to, use of, or any leasehold or other interest in, any real
property (except personal property leases and installment and conditional sales agreements having a
value per item or aggregate payments of less than $50,000 and with terms of less than one year and
licenses to commercially available software with aggregate annual payments of less than $50,000),
including each Lease; (iii) each Assigned Contract that is a licensing agreement, assignment,
consent agreement, coexistence agreement or settlement agreement with respect to Intellectual
Property included in the Purchased Assets except “shrink wrap” and “click-through” licenses to
commercially available “off the shelf” software ; (iv) each Assigned Contract that is a collective
bargaining agreement and each other Assigned Contract to or with any labor union or other employee
representative of a group of employees; (v) each Assigned Contract that is a joint venture,
partnership or Assigned Contract involving a sharing of profits, losses, costs or Liabilities with
any other Person (for the avoidance of doubt, rebates shall not be considered a sharing of profits,
losses, costs or Liabilities); (vi) each Assigned Contract containing any covenant that purports to
restrict the business activity of any Seller or limit the freedom of any Seller to engage in any
line of business or to compete with any Person; (vii) each Assigned Contract that is a

22

 

power of attorney; (viii) each Assigned Contract listed in clause (i) that contains or
provides for an express undertaking by any Seller to be responsible for consequential, incidental
or punitive damages; (ix) each Assigned Contract (or series of related Assigned Contracts) for
capital expenditures (other than capital expenditures for the installation or refurbishment of
vended water machines or purchases of related water treatment equipment) in excess of $100,000; (x)
each Assigned Contract that is a written warranty, guaranty or other similar undertaking with
respect to contractual performance other than in the ordinary course of business; (xi) each
Assigned Contract for Indebtedness; (xii) each Assigned Contract that is a written employment or
consulting Contract (other than offer letters); and (xiii) each Assigned Contract not terminable
without penalty on less than six months notice (except leases with commercial retailers with
respect to vended water machines).

          (b) The Sellers have delivered to the Buyers a correct and complete copy of each written
Material Assigned Contract. Each Material Assigned Contract, with respect to the Culligan Parties,
is legal, valid, binding, enforceable, in full force and effect and 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 Sellers, is legal, valid,
binding, enforceable, in full force and effect and, assuming compliance with the applicable matters
referred to on Schedule 3.4(d), will continue to be so on identical terms following the
Closing Date. No Culligan 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 Sellers, 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 Sellers, no party to any Material Assigned
Contract has repudiated any provision of any Material Assigned Contract. Except for the Contracts
which shall be made available to the Buyers pursuant to the Transaction Documents or as set forth
on Schedule 3.13(b), the Assigned Contracts constitute all of the material Contracts
necessary for the continued operation of the Business following the Closing Date in substantially
the same manner as operated by the Sellers prior to the Closing Date.

     3.14 Intellectual Property.

          (a) The Sellers own or have the right to use all Intellectual Property necessary for the
operation of the Business as presently conducted. Each item of Intellectual Property included in
the Purchased Assets that is owned, licensed or used by any Seller immediately prior to the Closing
will be owned, licensed or available for use by the Buyers on substantially similar terms and
conditions immediately following the Closing. To the Knowledge of the Sellers, the Sellers have
taken all necessary action to maintain and protect each item of Intellectual Property that they own
that is used in the Business.

          (b) None of the operation of the Business, the use of the Purchased Assets or the Intellectual
Property owned by any Culligan Party or any Affiliate of any Culligan Party used in and material to
the Business and included in the Purchased Assets infringes the Intellectual Property of any third
party. To the Knowledge of the Sellers, no Culligan Party is aware of any Proceeding alleging such
infringement or has received any notice alleging any such infringement. To the Knowledge of the
Sellers, no third party has infringed or is infringing upon any Intellectual Property included in
the Purchased Assets.

          (c) Schedule 3.14(c) lists all patents, registrations (including copyright, trademark
and service mark and domain name) or any application therefor (whether active and in force or
abandoned, lapsed, canceled or expired) that are included in the Purchased Assets. No Seller has
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 included in the
Purchased Assets. No Seller

23

 

owns or has owned any unregistered trademark, service mark or trade name that is included in
the Purchased Assets.

          (d) Except as set forth on Schedule 3.14(c), no component of the vended water machines
included in the Purchased Assets is the subject of any patent or patent application currently owned
by any Culligan Party or any Affiliate of any Culligan Party.

     3.15 Tax.

          (a) Except as set forth in Schedule 3.15, (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, (iv) none
of the Purchased Assets to be transferred by Culligan Canada is a “United States real property
interest” within the meaning of Section 897 of the Code, (v) none of the Purchased Assets to be
transferred by Culligan US is “taxable Canadian property” as defined in the ITA, (vi) none of the
Purchased Assets is “tax exempt use property” within the meaning of Section 168(h) of the Code,
(vii) none of the Purchased Assets is a lease made pursuant to Section 168(f)(8) of the Internal
Revenue Code of 1954 and (viii) no written claim has been made by a Governmental Body within the
last three years in a jurisdiction where any Seller or any Affiliate of a Seller has not filed Tax
Returns with respect to the Purchased Assets or the Business that any Seller or any Affiliates of a
Seller is or may be subject to taxation in such jurisdiction with respect to the Purchased Assets
or the Business.

          (b) No Seller has made any payments, is obligated to make any payments, nor is party to any
agreement that could obligate it to make any payments that would not be deductible under Code §
162(m). No Seller has made any payments, is obligated to make any payments, or is party to any
agreement that could obligate it to make any payments in connection with the consummation of the
transactions contemplated by this Agreement that would be nondeductible under Code § 280G. No
Active Employee has the right to be indemnified by any Seller for the additional tax, or interest
or penalties, under Code § 409A and no such additional Tax, or interest or penalties, under Code §
409A will be applicable to any amounts to be paid to any Active Employee in connection with the
Transactions.

          (c) The copies of all Tax Returns that have been delivered or made available to the Buyers by
the Sellers as of the date hereof, are true, correct and complete in all material respects.

          (d) Except as set forth on Schedule 3.15, since the Balance Sheet Date and as of the
date hereof, no Seller has incurred any Liability for Taxes in respect of any of the Purchased
Assets or the Business outside the ordinary course of business.

          (e) Culligan Canada is not a non-resident of Canada for purposes of Section 116 of the ITA.

          (f) Notwithstanding any of the representations and warranties contained elsewhere in this
Agreement, the representations and warranties contained in this Section 3.15 are the sole
and exclusive representations and warranties relating to matters arising under Tax Law.

     3.16 Legal Compliance. Except as set forth on Schedule 3.16(a), each 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. Except as set forth on Schedule 3.16(a), no Proceeding is
pending, nor since

24

 

January 1, 2007, has been filed or commenced, against any Seller alleging any
failure to comply with any applicable Law or Permit related to the Business. To the Knowledge of
the Sellers, no event has occurred or circumstance exists that (with or without notice or lapse of
time) may constitute or result in a violation by any Seller of any Law or Permit related to the
Business. No Seller has received any written notice or other written communication from any
Person, or to the Knowledge of the Sellers, any notice or other communication regarding any actual,
alleged or potential violation by such 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 such
Seller. Schedule 3.16(b) contains a complete and accurate list of each Permit related to
the Business held by each Seller and states whether each such Permit is transferable. Each Permit
listed or required to be listed on Schedule 3.16(b) is valid and in full force and effect.
Each Permit listed or required to be listed on Schedule 3.16(b) is renewable and, to the
Knowledge of the Sellers, there is no reason, other than the non-transferable nature of such
Permits identified as such on Schedule 3.16(b), why such Permit would not be renewed. The
Permits listed on Schedule 3.16(b) constitute all of the material Permits necessary to
allow each Seller to lawfully conduct and operate the Business as currently conducted and operated
and to own and use the assets of the Business as currently owned and used.

     3.17 Litigation. Except as set forth on Schedule 3.17, there is no Proceeding pending or, to the
Knowledge of the Sellers, threatened or anticipated relating to or affecting (a) the Business, any
Purchased Asset or any other asset owned or used by any Seller in connection with the Business or
(b) the Transactions. Except as set forth on Schedule 3.17, there is no outstanding Order
to which the Business or any Purchased Asset is subject. Schedule 3.17 lists all
Proceedings pending at any time since January 1, 2007, in which any 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 any Seller has been a plaintiff, in each case
relating to the Business. Schedule 3.17 lists all Orders relating to the Business in
effect at any time since January 1, 2007 to which any Purchased Asset is subject.

     3.18 Product and Service Warranties. Attached to Schedule 3.18 are copies of the standard terms and conditions of sale
or lease for each Seller used in connection with the Business (containing all applicable guaranty,
warranty and indemnity provisions).

     3.19 Environmental. Except as set forth on Schedule 3.19:

          (a) with respect to the Business, the Sellers have complied and are 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) none of the following exists at the Leased Real Property: (i) underground storage tanks
containing Hazardous Substances, (ii) friable asbestos-containing materials, (iii) materials or
equipment containing polychlorinated biphenyls, or (iv) landfills, surface impoundments, or
Hazardous Substance disposal areas, in each case owned or operated by the Seller or reasonably
expected to give rise to any material Liability under applicable Environmental Law;

          (c) with respect to the Business, the Sellers have not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled or released any Hazardous Substance in a
manner that has given or would reasonably be expected to give rise to any material Liability,
including any material Liability for response costs, corrective action costs, personal injury,
property damage, natural resources damages or attorney fees, pursuant to any Environmental Law;

          (d) with respect to the Business, the Sellers have 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;

25

 

          (e) neither this Agreement nor the Transactions will create any material Liability for site
investigation or cleanup, or Consent of any Governmental Body, pursuant to any
“transaction-triggered” or “responsible property transfer” Environmental Law; and

          (f) with respect to the Business, no Seller has, either expressly or by operation of Law,
assumed or undertaken any material Liability of any other Person under any Environmental Law.

     3.20 Employees. Schedule 3.20 sets forth, to the extent permissible under applicable Law, the
name, job title, current rate of direct compensation (including wages, salaries and actual or
anticipated bonuses), location of employment and date of commencement of employment. No Active
Employee listed on Schedule 1.1(a) is on long-term disability leave, extended absence or receiving
benefits pursuant to applicable workplace safety and insurance legislation. No Seller is, nor has
any Seller been, a party to or bound either directly or by operation of Law, any collective
bargaining agreement, labor contract, letter of understanding, letter of intent, voluntary
recognition agreement or legally binding commitment or written communication to any labor union,
trade union or employee organization or group which may qualify as a trade union in respect of or
affecting Active Employees. No Seller is currently engaged in any labor negotiation with respect
to Active Employees. No Seller has experienced or is currently experiencing any strike, labor
dispute, slowdown, picketing, work stoppage, employee grievance process or arbitration, claim of
unfair labor practice or other collective bargaining dispute by Active Employees. There is no
lockout of any Active Employees by any Seller, and no such action is contemplated by any Seller.
No Seller has committed any unfair labor practice with respect to Active Employees. To the
Knowledge of the Sellers, (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 Active
Employees. To the Knowledge of the Sellers, no Active Employee has any plans to accept employment
with any Person other than the Buyers after Closing. No Seller is a party to or bound by any
written employment Contract (other than offer letters) in respect of any Active Employee or
termination or severance agreement (other than the applicable severance policies set forth on
Schedule 8.1). To the Knowledge of the Sellers, none of the Active Employees are in
violation of any non-competition, non-solicitation, non-disclosure or similar agreement with any
third party. No Seller is subject to the provisions of any WARN Act with respect to the Business.

     3.21 Employee Benefits.

          (a) Schedule 3.21 lists each material Employee Benefit Plan that any Seller maintains
or to which any Seller contributes, has any obligation to contribute or has any other Liability, in
each case with respect to any Active Employee. With respect to each Employee Benefit Plan in which
an Active Employee participates or is eligible to participate, the Sellers will, upon request,
provide or make available to the Buyer complete and correct copies of such Employee Benefit Plan
(or a description of such Employee Benefit Plan if not written) and any related funding agreements.

     (i) Except as would not result in any Liability to the Buyer, all contributions
(including all employer contributions and employee salary reduction contributions)
that are due have been paid to each such Employee Benefit Plan that is an Employee
Pension Benefit Plan, a Registered Pension Plan or other pension or retirement plan
or arrangement and all contributions for any period ending on or before the Closing
Date that are not yet due have been paid to each such plan or arrangement or accrued
in accordance with the past custom and practice of the Sellers. Except as would not
result in any Liability to the Buyer, all premiums or other payments for all periods
ending on or before the Closing Date have been paid with respect to each such
Employee Benefit Plan that is an Employee Welfare Benefit Plan or any other health,
welfare, hospitalization insurance, medical, dental, life, disability or similar
employee benefit plan, program,

26

 

agreement or arrangement. Each Employee Benefit
Plan that is an Employee Pension Benefit Plan meets the requirements of a “qualified
plan” under Code § 401(a).

     (ii) No Active Employee participates in a Multiemployer Plan or in any
“multi-employer pension plan”, as that term is defined in the Pension Benefits Act
(Ontario), or any similar plan registered under pension standards legislation of any
other jurisdiction in Canada.

     (iii) The execution of the Transaction Documents and the performance of the
Transactions will not constitute a triggering event under any such Employee Benefit
Plan that (either alone or upon the occurrence of any additional or subsequent
event) will or may result in any payment, “parachute payment” (as defined in Code §
280G), acceleration, vesting or increase in or funding of benefits to any Active
Employee. Except as set forth on Schedule 3.21, the Sellers have not paid
nor will they be required to pay any bonus, fee, distribution, remuneration or other
compensation to any Active Employee (other than salaries, wages or bonuses paid or
payable to employees in the ordinary course of business) as a result of the
transactions contemplated by this Agreement.

          (b) No Seller maintains or contributes, has maintained or contributed, has been required to
contribute, nor as a result of the Transactions will be required to contribute to any Employee
Welfare Benefit Plan or other Employee Benefit Plan providing medical, health, or life insurance or
other welfare-type benefits for current or future retired or terminated Active Employees, their
spouses, or their dependents (other than in accordance with COBRA).

     3.22 Customers and Suppliers. With respect to each of the two fiscal years most recently completed prior to the date
hereof, Schedule 3.22 lists (a) the ten largest (by dollar volume) customers of the
Business during each such period (showing the approximate, unaudited dollar volume for each) and
(b) the three largest (by dollar volume) suppliers of the Business during each such period (showing
the approximate, unaudited dollar volume for each). Except as set forth on Schedule 3.22,
since the Balance Sheet Date, no customer or supplier listed on Schedule 3.22 has notified
any Seller of a likely material decrease in the volume of purchases from or sales to such Seller,
or a material decrease in the price that any such customer is willing to pay for products or
services of such Seller, or a material increase in the price that any supplier will charge for
products or services sold to such Seller, or of the bankruptcy or liquidation of any such customer
or supplier.

     3.23 Transactions with Related Persons. Except as set forth in Schedule 3.23, for the past five years, neither any
equityholder, officer or director of any Culligan Party nor any Related Person of any of the
foregoing has (a) owned any interest in any material asset used in the Business, (b) been involved
in any material business transaction with any Seller related to the Business or (c) engaged in
competition with the Business. Except as set forth in Schedule 3.23, neither any
equityholder, officer or director of any Culligan Party nor any Related Person of any of the
foregoing (i) is a party to any material Contract with, or has any claim or rights against, any
Seller related to the Business or (ii) has any Indebtedness owing to any Seller related to the
Business. Except as set forth in Schedule 3.23, no Seller (A) has any claim or right
against any equityholder, officer or director of any Seller nor any Related Person of any of the
foregoing related to the Business or (B) has any Indebtedness owing to any equityholder, officer or
director of any Seller nor any Related Person of any of the foregoing related to the Business.

     3.24 Insurance. Schedule 3.24 sets forth the following information with respect to each insurance
policy covering the Business or the Purchased Assets: the name of the insurer, the policy number,
the name of the policyholder, the period of coverage, and the amount of coverage. All current

27

 

property and liability insurance policies covering the Business or the Purchased Assets are in full
force and effect (and all premiums due and payable thereon have been paid in full on a timely
basis), and no written notice of cancellation, termination or revocation or other written notice
that any such insurance policy is no longer in full force or effect or that the issuer of any
policy is not willing or able to perform its obligations thereunder has been received by the
Sellers and, to the Knowledge of the Sellers, none of the Sellers is in default of any provision
thereof. The Sellers have delivered or made available to the Buyers copies of loss runs and
outstanding claims, in each case relating to the Business, as of a recent date with respect to each
insurance policy covering the Business or the Purchased Assets.

     3.25 Solvency. Culligan US is not now insolvent nor will be rendered insolvent by any of the Transactions.
As used in the preceding sentence, “insolvent” means that the sum of the debts and other probable
Liabilities of such Seller exceeds the present fair saleable value of such Seller’s assets.
Culligan Canada 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) each Seller will be able to pay its Liabilities (including
the Excluded Liabilities) as they become due in the usual course of business, (b) each 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 each Seller in
actions for money damages are not reasonably anticipated to be rendered at a time when, or in
amounts such that, such Seller will be unable to satisfy any such judgments promptly in accordance
with their terms and all other obligations of such Seller.

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

     3.27 Securities Law.

          (a) Each Seller acknowledges that the offer and sale of the Primo Stock to be issued in
connection with the Purchase Price is intended to be exempt from registration under the Securities
Act and all applicable state securities Law.

          (b) Each Seller has been furnished all of the materials relating to Primo Parent and its
purchase of Primo Stock to be issued in connection with the Purchase Price 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 Primo Stock to be issued in connection with the Purchase Price.
No Seller has been furnished with any oral or written representation in connection with the
purchase of Primo Stock to be issued in connection with the Purchase Price by or on behalf of Primo
Parent that it has relied on that is not contained in this Agreement.

          (c) Each Seller: (i) is an “accredited investor” as defined in Rule 501 of Regulation D under
the Securities Act; (ii) has obtained, in such Seller’s judgment, sufficient information to
evaluate the merits and risks of the purchase of Primo Stock to be issued in connection with the
Purchase Price; (iii) has sufficient knowledge and experience in financial and business matters to
evaluate the merits and risks associated with such purchase of Primo Stock to be issued in
connection with the Purchase Price 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 Primo Stock to be
issued in connection with the Purchase Price.

          (d) Each Seller’s Primo Stock to be issued in connection with the Purchase Price is being
acquired for its 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. Each
Seller fully understands and agrees that it must bear the economic risk of the investment in the
Primo Stock to be issued in connection with the Purchase Price for an indefinite period of time
because, among other reasons, such Primo Stock has not been registered under the Securities Act or
under the securities Law of

28

 

any states, and, therefore, the shares of such Primo Stock 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, each Seller understands that Primo
Parent is not under any obligation to register such Primo Stock on behalf of such Seller or to
assist such Seller in complying with any exemption from registration under the Securities Act or
applicable state securities Law. Each Seller understands that Primo Parent may require, as a
condition to registering the transfer of such Primo Stock, an opinion of counsel satisfactory to
Primo Parent to the effect that such transfer does not violate such registration requirements.

          (e) Each Seller 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 Primo Stock in connection
with the Purchase Price. Each Seller meets all suitability standards imposed by the state of
Illinois relating to the purchase of the Primo Stock hereunder without registering such Primo Stock
under the securities Law of such state.

     3.28 Disclosure. To the Knowledge of the Sellers, 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.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES REGARDING THE PRIMO PARTIES

     Except as disclosed in the Preliminary Form S-1, the Primo Parties represent and warrant to
the Sellers 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. Primo US is a limited liability company duly
organized, validly existing and in good standing under the Law of the jurisdiction of its
organization. Primo Canada is a limited liability company duly organized, validly existing and in
good standing under the Law of the jurisdiction of its organization. Primo Parent has no direct or
indirect subsidiaries other than Primo US, Primo Canada, Primo Direct, 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. Neither
Primo US nor Primo Canada has any subsidiaries. Each Primo Party has delivered to the Sellers
correct and complete copies of the Organizational Documents of such Primo Party.

     4.2 Capitalization. The entire authorized capital stock of Primo Parent consists of (a) 200,000,000 shares of
common stock, par value $0.001 per share, 16,305,180 shares of which are outstanding and (b)
100,000,000 shares of preferred stock, par value $0.001 per share, 18,780,000 of which are
designated Series A, 18,755,000 of which are outstanding, 30,000,000 of which are designated Series
B, 23,280,222 of which are outstanding, and 14,000,000 of which are designated Series C, 12,519,971
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, 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 2.8(c), 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

29

 

any Person other than the Primo Subsidiaries. Primo Parent owns all of
the outstanding equity of each of Primo US and Primo Canada.

     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 or manager of such Primo Party, as applicable. At Closing, 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 will have been duly
authorized by all requisite corporate or limited liability company action of such Primo Party, as
applicable. 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) upon the execution and delivery by each Primo
Party of each Transaction Document to which it is a party, such Transaction Document will
constitute 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.

     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 March 31, 2010, and statements of income, changes in stockholders’ equity and cash
flow for the three-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

30

 

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 March 31, 2010,
(c) current Liabilities incurred in the ordinary course of business since March 31, 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 Buyers, 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 Buyers, 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 Buyers, 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.

     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.

31

 

          (b) Neither Primo Parent nor any of the Primo Subsidiaries has made any payments, is obligated
to make any payments, or is party to any agreement that could obligate it to make any payments that
would not be deductible under Code § 162(m). Neither Primo Parent nor any of the Primo
Subsidiaries has made any payments, is obligated to make any payments, or is party to any agreement
that could obligate it to make any payments in connection with the consummation of the transactions
contemplated by this Agreement that would be nondeductible under Code § 280G. No employee of
Primo Parent or any of the Primo Subsidiaries has the right to be indemnified by any Seller for the
additional tax, or interest or penalties, under Code § 409A and no such additional Tax, or interest
or penalties, under Code § 409A will be applicable to any amounts to be paid to any such employee
in connection with the Transactions.

          (c) Except as set forth on Schedule 4.8, since the Balance Sheet Date 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.

     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 Buyers, 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 Buyers, 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. There is no material Proceeding pending or, to the Knowledge of the Buyers, 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;

          (b) none of the following exists at any location owned or leased by Primo Parent or any of the
Primo Subsidiaries: (i) underground storage tanks containing Hazardous Substances, (ii) friable
asbestos-containing materials, (iii) materials or equipment containing polychlorinated biphenyls,
or (iv) landfills, surface impoundments, or Hazardous Substance disposal areas, in each case owned
or
operated by Primo Parent or any of the Primo Subsidiaries or reasonably expected to give rise
to any material Liability under applicable Environmental Law;

32

 

          (c) Neither Primo Parent nor any of the Primo Subsidiaries has treated, stored, disposed of,
arranged for or permitted the disposal of, transported, handled or released any Hazardous Substance
in a manner that has given or would reasonably be expected to give rise to any material Liability,
including any material Liability for response costs, corrective action costs, personal injury,
property damage, natural resources damages or attorney fees, pursuant to any Environmental Law;

          (d) 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;

          (e) neither this Agreement nor the Transactions will create any material Liability on behalf
of Primo Parent or any of the Primo Subsidiaries for site investigation or cleanup, or Consent of
any Governmental Body, pursuant to any “transaction-triggered” or “responsible property transfer”
Environmental Law; and

          (f) 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 Subsidiaries 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 Buyers,
(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 Sellers could be liable.

     4.14 Form S-1. The Form S-1 will not, at the time it becomes effective under the Securities Act, and on
the Overallotment Option Closing Date, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not misleading. The Form S-1
will comply as to form in all material respects with the requirements of the Exchange Act.
Notwithstanding the foregoing, no representation or warranty is made by the Primo Parties with
respect to statements made in the Form S-1 regarding any Culligan Party, the Business or the
Purchased Assets.

ARTICLE V

PRE-CLOSING COVENANTS

     The Parties agree as follows with respect to the period between the date hereof and the
Closing:

     5.1 Efforts to Satisfy Conditions. Each Party will use its commercially reasonable efforts to take all actions necessary,
proper or advisable in order to perform the Transactions contemplated to be
performed by such Party (including satisfaction, but not waiver, of the closing conditions of
such Party set forth in Article VI).

33

 

     5.2 Approvals.

          (a) The Parties shall cooperate to make, in the most expeditious manner practicable, all
filings and applications with and to, and obtain all licenses, Permits, Consents, approvals,
authorizations, qualifications and orders of, applicable Governmental Bodies to consummate the
Transactions, provided that all actions to be taken by the Parties in connection with the IPO shall
be governed by Sections 5.9 and 5.11.

          (b) In furtherance of the provisions set forth in Section 5.2(a), the Sellers and the Buyers
shall (i) file or cause to be filed as promptly as practicable, but in no event later than ten days
following the date hereof, with the FTC, the DOJ, the Canadian Competition Bureau and any other
applicable Governmental Body all notification and report forms that may be required for the
transactions contemplated hereby and thereafter provide as promptly as practicable any supplemental
information requested in connection therewith pursuant to the HSR Act, the Competition Act or any
other competition Law and (ii) include in each such filing, notification and report form referred
to in the immediately preceding clause (i) a request for early termination or acceleration of any
applicable waiting or review periods, to the extent available under the applicable competition Law.
In connection therewith, the Sellers and the Buyers shall (A) furnish to the other Party such
necessary information and reasonable assistance as the other Party may reasonably request in
connection with its preparation of any filing or submission that is necessary under the HSR Act,
the Competition Act and any other competition Law, (B) subject to applicable Law, provide the other
Party with a draft of any filing or submission and a reasonable opportunity to review such draft
before making or causing to be made such filing or submission, and consider in good faith the views
of such other Party regarding such filing or submission, (C) not extend any applicable waiting or
review periods or enter into any agreement with a Governmental Body to delay or not to consummate
the Transactions to be consummated on the Closing Date, except with the prior written consent of
the other Party, (D) not have any substantive contact with any Governmental Body in respect of any
filing or proceeding contemplated by this Section 5.2(b) unless they have engaged in prior
consultation with the other Party and, to the extent permitted by such Governmental Body, given the
other Party the opportunity to participate and (E) keep each other apprised of the status of any
communications with, and any inquiries or requests for additional information from, the FTC, the
DOJ and any other applicable Governmental Body.

          (c) As promptly as practicable after the date hereof, the Sellers will solicit the Consents
set forth on Schedule 3.4(d), but not prior to the Buyers’ approval of the form and
substance of each such Consent, which approval will not be unreasonably withheld or delayed. Each
Seller will use its commercially reasonable efforts (at such Seller’s expense), and the Buyer will
cooperate in all reasonable respects with such Seller to obtain prior to the Closing 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.

     5.3 Operation of Business. Prior to the Closing, except as otherwise expressly permitted or required by this Agreement
or the Transaction Documents or otherwise requested or consented to in writing by the Buyers, which
consent shall not be unreasonably conditioned, withheld or delayed, each Seller will: (i)conduct
the Business only in the ordinary course of business; (ii) confer with the Buyers concerning
matters of a material nature to the Business; (iii) deliver to the Buyers its standard operating
reports generated in the ordinary course of business for monthly operating reviews as they become
available to the Business and otherwise report periodically to the Buyers concerning the status of
the Business and the operations and finances of the Business; (iv) refrain from selling, leasing,
transferring or assigning any asset related to the Business, other than for fair consideration in the ordinary
course of business; (v) refrain from entering into, accelerating, terminating, modifying or
canceling any Contract (or series of related Contracts) related to the Business involving the
payment or receipt of more than

34

 

$100,000 or that cannot be terminated without penalty on less than
six months notice, other than Contracts with customers entered into in the ordinary course of
business; (vi) refrain from making any capital expenditure (or series of related capital
expenditures) related to the Business involving more than $2,000,000 or making any capital
investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or
series of related capital investments, loans or acquisitions) related to the Business involving
more than $100,000 (other than capital expenditures for the installation or refurbishment of vended
water machines or purchases of related water treatment equipment); (vii) refrain from issuing,
creating, incurring or assuming any Indebtedness (or series of related Indebtedness) related to the
business involving more than $100,000 in the aggregate or refrain from delaying or postponing the
payment of accounts payable other than in the ordinary course of business or other Liabilities
related to the business beyond the original due date; (viii) refrain from canceling, compromising,
waiving or releasing any right or claim (or series of related rights or claims) or any Indebtedness
(or series of related Indebtedness) owed to it, in each case related to the Business, in any case
involving more than $100,000; (ix) refrain from making any loan to, or entering into any other
transaction with, any Active Employee on terms that would not have resulted from an arms-length
transaction; (x) refrain from entering into any employment Contract or modifying the terms of any
existing employment Contract with any Active Employee; (xi) refrain from granting any increase in
the base compensation of any Active Employee, other than increases in the ordinary course of
business, including annual merit-based increases or promotions, or to the extent required under any
Employee Benefit Plan; and (xii) refrain from adopting, amending, modifying or terminating any
Employee Benefit Plan or other Contract for the benefit of any Active Employee.

     5.4 Full Access.

          (a) Prior to the Closing, the Sellers will: (i) upon reasonable prior notice, permit the
Buyers and their Representatives to have access to all premises, properties, personnel (including
the opportunity to discuss the affairs of the Business with such personnel), books, records,
Contracts, documents and data of the Business; (ii) furnish the Buyers and their Representatives
with copies of all such books, records, Contracts, documents and data of the Business as the Buyers
may reasonably request; and (iii) furnish the Buyers and their Representatives with such additional
financial, operating, and other data and information (including compilations and analyses thereof)
of the Business as the Buyers may reasonably request; provided, however, that any
such access shall be provided at a reasonable time and in such a manner so as not to interfere with
the normal operation of the business of Sellers, the Buyers access to personnel of the Business for
the purpose of conducting employment interviews shall be subject to Section 8.1(a), and nothing
herein shall require disclosure of any information to either Buyers or their respective
Representatives if such disclosure would (x) cause significant competitive harm to either of the
Sellers or their respective Affiliates regardless of whether the transactions contemplated by this
Agreement are consummated, (y) based on advice of Sellers’ counsel, jeopardize any attorney-client
or other legal privilege or (z) contravene any Applicable Law, fiduciary duty or binding agreement
entered into prior to the date of this Agreement (including any confidentiality agreement to which
either of the Sellers or any of their Affiliates is a party), as long as the Sellers have made
commercially reasonable efforts to obtain a waiver regarding the possible disclosure from the third
party to whom a Seller owes a fiduciary duty or an obligation of confidentiality; provided,
that in each case, the Sellers shall provide the Buyers with written substantiation of the reasons
why access is being denied.

          (b) Prior to the Closing, Primo Parent shall provide to the General Counsel of Culligan Parent
(i) upon reasonable prior notice, reasonable access to Primo Parent’s senior personnel for the sole
purpose of verifying the accuracy of the Primo Parties’ representations or warranties or
compliance with their obligations hereunder, which access shall be provided at a reasonable
time and in such a manner so as not to interfere with the normal operation of the business of Primo
Parent and the Primo Subsidiaries, and (ii) the same information that is provided to members of
Primo Parent’s board of

35

 

directors; provided, however, that with respect to the
information to be provided pursuant to clauses (i) and (ii) of this Section 5.4(b), (A) all such
information shall be deemed to be Confidential Information and subject to Section 5.7 hereof and
(B) Primo Parent shall have no obligation to provide Culligan Parent access to any information
which Primo Parent reasonably determines would be reasonably likely to (1) have an anti-competitive
effect on the Primo Parties, based upon the then-current business activities of the Culligan
Parties and their respective Affiliates, (2) adversely affect the attorney-client privilege between
any Primo Party and its counsel or (3) result in the disclosure of trade secrets.

     5.5 Notice of Developments. Each Party will immediately notify the other Parties in writing of (a) any fact or
condition existing prior to or on the date hereof that constitutes a breach of any representation
or warranty of such Party in this Agreement and (b) any fact or condition developing after the date
hereof that would constitute a breach of any representation or warranty of such Party in this
Agreement if such representation or warranty were made on the date of the occurrence or discovery
of such fact or condition.

     5.6 Exclusivity. Each Seller agrees that it will not, and will cause its Representatives not to, directly or
indirectly: (a) solicit, initiate or encourage any inquiry, proposal, offer or contact from any
Person (other than the Primo Parties and their Affiliates and Representatives) relating to any
transaction involving the sale of the Business or the Purchased Assets (whether by a sale of equity
or substantially all of the assets) (other than (i) any transaction involving, directly or
indirectly, the sale of the business of Culligan Parent or Culligan Canada as a whole;
provided, however, that any such potential transaction shall be subject to the terms of
this Agreement and shall not permit any Culligan Party to terminate this Agreement for any reason,
including any “fiduciary out” or similar reason, or (ii) the sale of Inventory in the ordinary
course of business) (an “Acquisition Proposal”); or (b) participate in any discussion or
negotiation regarding, furnish any information with respect to, assist or participate in, or
facilitate in any other manner any Acquisition Proposal. If any Person makes an Acquisition
Proposal with terms and conditions which the Sellers consider to be superior to the terms and
conditions of this Agreement, the Sellers will immediately notify the Buyers of such Acquisition
Proposal and such notice will indicate in reasonable detail the identity of the Person making the
Acquisition Proposal and the terms and conditions of such Acquisition Proposal.

     5.7 Confidentiality, Press Releases and Public Announcements. Each Party will, and will cause its respective Representatives to, maintain in confidence
all information received from another Party or a Representative of another Party in connection with
this Agreement or the Transactions (including the existence and terms of this Agreement and the
Transactions) and use such information solely to evaluate the Transactions, unless such information
is already known to the receiving Party or its Representatives, (a) such information is
subsequently disclosed to the receiving Party or its Representatives by a third party that, to the
Knowledge of the receiving Party, is not bound by a duty of confidentiality, (b) such information
becomes publicly available through no fault of the receiving Party, (c) the receiving Party in good
faith believes that the use of such information is necessary or appropriate in making any filing or
obtaining any Consent required for the performance of the Transactions (in which case the receiving
Party will use its best efforts to advise the other Parties prior to making the disclosure) or (d)
the receiving Party in good faith believes that the furnishing or use of such information is
required by or necessary or appropriate in connection with any Proceeding, Law or any listing or
trading agreement concerning its securities (in which case the receiving Party will use its best
efforts to advise the other Parties prior to making the disclosure). No Party will issue any press
release or make any public announcement relating to the subject matter of this Agreement without
the prior written approval of the Buyers and the Sellers; provided, however, that
any Party may make any public disclosure it believes in
good faith is required by Law or any listing agreement concerning its publicly-traded
securities (in which case such Party will use its best efforts to advise the other Parties prior to
making the disclosure). The Sellers and the Buyers will consult with each other concerning the
means by which any employee,

36

 

customer or supplier of any Seller or any other Person having any
business relationship with the Sellers will be informed of the Transactions, and the Buyers will
have the right to be present for any such communication. Notwithstanding anything to the contrary
contained herein, the Parties agree that Primo Parent may disclose this Agreement, the Transactions
and all information relating to the Sellers (in relation to the Business and the Transactions) or
the Business that it may reasonably determine to be necessary in the Form S-1 (including the Final
Financial Statements), in its road show presentations and marketing activities in connection with
the IPO, and in connection with any other filings that it may reasonably determine are necessary in
order to effect the IPO, in each case subject to its obligations under Section 5.11.

     5.8 Personal Information. The collection, use and disclosure of individual personal information by any of the Parties
prior to the Closing is restricted to those purposes that relate to the Transactions.

     5.9 Form S-1. Between the date hereof and the Closing Date, the Culligan Parties will use their
commercially reasonable efforts promptly to provide such information (financial or otherwise)
concerning the Sellers (in relation to the Business and the Transactions) and the Business as Primo
Parent may reasonably request in order to describe the Business in the Form S-1 and otherwise
comply with the disclosure obligations of Primo Parent in respect of the Transactions and the IPO,
including required audited financial statements as of and for the years ended December 31, 2008 and
2009, and unaudited quarterly financial statements for 2009 and 2010; provided, that in
each such case no Culligan Party shall be responsible for drafting any such disclosure or preparing
any such filing, or have any legal responsibility for the accuracy or completeness of any such
disclosure or filing, and, subject to the limitations set forth in Article X, shall be held
harmless and indemnified against any liability thereunder, except and solely to the extent that (a)
the Culligan Parties, their Affiliates or their Representatives knowingly provide any Primo Party
with inaccurate information for inclusion in such filing or (b) in reliance upon a representation
or warranty of any Culligan Party in this Agreement or in any other Transaction Document which was
inaccurate in any material respect when made (including on any date upon which any Culligan Party
delivers a certificate confirming the accuracy of such representations or warranties under this
Agreement) or was inaccurate as of such time in any respect if such representation or warranty
contains a materiality qualification, any such disclosure or filing contains an untrue statement of
material fact or omits to state a material fact necessary in order to make the statements made, in
the light of the circumstances in which they were made, not misleading. Nothing in this Section
shall be construed as limiting the Buyers’ rights to indemnification for breaches of
representations and warranties under Section 10.1(a).

     5.10 Representations and Warranties. Each Culligan Party shall deliver to the Buyers on the date of the pricing of the IPO (the
“Pricing Date”) a certificate confirming that all of the representations and warranties of such
Culligan Party in this Agreement are accurate in all material respects as of any 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 have been and must be accurate in
all respects.

     5.11 IPO Milestones. Primo Parent shall as promptly as reasonably practicable following the date hereof and,
subject to Section 5.9, no later than two weeks after the Delivery Date, prepare and file an
amended Form S-1 with the SEC which includes required disclosures concerning the Business. Primo
Parent shall notify the Culligan Parties as promptly as practicable of the receipt of any written
or oral comments from the SEC or its staff and of any request by the SEC or its staff for
amendments or supplements to the Form S-1 or for additional information with respect to the Form
S-1 in each case to the
extent they relate to the Business and will supply the Culligan Parties with copies of all
correspondence between Primo Parent or any of its Representatives, on the one hand, and the SEC or
its staff, on the other hand, with respect to the Form S-1 or the transactions contemplated by this
Agreement, in each case to the

37

 

extent they relate to the Business. Prior to filing of the amended
Form S-1 (or any amendment or supplement thereto) or responding to any comments of the SEC or its
staff with respect thereto, Primo Parent shall provide the Culligan Parties a reasonable
opportunity to review any disclosure in the Form S-1 or any such response, in each case relating to
the Business, by including the General Counsel of Culligan Parent in all relevant distributions to
the working group in connection with the preparation and filing of the amended Form S-1. Primo
Parent shall use commercially reasonable efforts to consult with the Culligan Parties on the same
timeframe as other members of the working group to resolve all SEC comments regarding the Business
with respect to the amended Form S-1 as reasonably promptly as practicable after receipt thereof.
The Sellers acknowledge, in exercising their rights of review, comment and consultation under this
Section, that time is of the essence. Primo Parent shall use commercially reasonable efforts to
have the Form S-1 declared effective by the SEC as promptly as practicable after filing. Primo
Parent will advise the Culligan Parties promptly after it receives notice that the Form S-1 has
been declared effective by the SEC or any request by the SEC for amendment of the Form S-1. If at
any time after such date on which the Form S-1 has been declared effective and prior to the
Overallotment Closing Date there shall occur any event (including discovery of any fact,
circumstance or event by any Party) that is required by Law to be set forth in an amendment or
supplement to the Form S-1, the Party which discovers such information shall promptly notify the
other Parties and Primo Parent shall promptly prepare and file with the SEC such a post-effective
amendment or supplement, in each case to the extent required by applicable Law. Notwithstanding
anything to the contrary contained in this Agreement, the Parties acknowledge that Primo Parent
shall not be required to delay its filing of the amended Form S-1 (or any amendment or supplement
thereto) in order to comply with the review and comment rights of the Culligan Parties contained
herein.

     5.12 Delivery of Final Financial Statements. The Sellers shall, as promptly as reasonably practicable but in no event later than five
Business Days after the date hereof, deliver to Primo Parent (a) an audited balance sheet of the
Business as of December 31, 2008 and 2009, and statements of income, changes in equityholders’
equity, and cash flow for the fiscal years then ended, together with the notes thereto and the
reports thereon of KPMG, LLP, independent certified public accountants; and (b) a reviewed balance
sheet of the Business as of March 31, 2010, and statements of income, changes in equityholders’
equity and cash flow for the three-month period then ended (the items referred to in clauses (a)
and (b) shall be collectively referred to as the “Final Financial Statements”); provided,
that the financial statements contained in the Final Financial Statements shall be the same as
those attached to Schedule 3.5(a) (other than de minimis changes) and the notes contained
in the Final Financial Statements shall be substantially the same as those attached to Schedule
3.5(a). On the date of the delivery of the Final Financial Statements (the “Delivery Date”),
the Sellers shall also deliver a certificate of an officer of the Sellers certifying that such
Final 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 the Business as of and for their respective dates; provided, however,
that the interim financial statements described in clause (b) above are subject to normal,
recurring year-end adjustments (which will not be, individually or in the aggregate, materially
adverse). The Final Financial Statements delivered on the Delivery Date shall be attached hereto
as Schedule 3.5(a)-1.

ARTICLE VI

CLOSING CONDITIONS

     6.1 Conditions to the Primo Parties’ Obligations. The Primo Parties’ respective obligations to perform the Transactions contemplated to be
performed on or about the Closing Date is subject to satisfaction, or written waiver by Primo
Parent, of each of the following conditions:

          (a) (i) All of the representations and warranties of each Culligan Party in this Agreement
must have been accurate in all material respects as of the date hereof, as of the Pricing Date

38

 

and
as if made on the Closing Date (except for representations and warranties that are as of a specific
date, which representations and warranties must have been 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 have been and must be
accurate in all respects, (ii) each Culligan Party must have performed and complied in all material
respects with all of its covenants and agreements in this Agreement to be performed prior to or at
the Closing; and (iii) each Culligan Party must deliver to the Buyers at the Closing a certificate,
in form and substance reasonably satisfactory to the Buyers, confirming satisfaction of the
conditions in clauses (i) and (ii) above and in Section 6.1(e).

          (b) Each of the following documents must have been delivered to the Buyers and must be dated
as of the Closing Date (unless otherwise indicated):

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

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

     (iii) the Supply Agreement, executed by Culligan Parent;

     (iv) the Trademark License Agreement, executed by Culligan Parent;

     (v) the Registration Rights Agreement, executed by Culligan Parent;

     (vi) the Transition Services Agreements, executed by the applicable Culligan
Party;

     (vii) a certificate of Culligan US’s non-foreign status as set forth in
Treasury Regulation § 1.1445-2(b), signed under penalties of perjury, in the form
and substance reasonably satisfactory to the Buyers;

     (viii) the joint elections under Section 167(1) of the ETA and Section 75 of
the QSTA;

     (ix) payoff letters with respect to the Secured Debt, dated as of the Closing
Date or within a reasonable time prior to the Closing Date, and all documentation
necessary or desirable to obtain releases of all Encumbrances related to such
Secured Debt, including appropriate UCC termination statements, in each case in form
and substance reasonably satisfactory to the Buyers;

     (x) a certificate of the secretary of each Culligan Party, in form and
substance reasonably satisfactory to the Buyers, certifying that (A) attached
thereto is a true, correct and complete copy of (1) the articles of organization (or
comparable document) of such Culligan Party, certified as of a recent date by the
Secretary of State of such Culligan Party’s state of incorporation or formation (or
the Canadian equivalent) and the operating agreement or bylaws of such Culligan
Party, (2) to the extent applicable, resolutions duly adopted by the managers, board
of directors and equityholders of such Culligan Party
authorizing the performance of the Transactions and the execution and delivery
of the Transaction Documents to which it is a party and (3) a certificate of
existence or good standing as of a recent date of such Culligan Party from such
Culligan Party’s state of incorporation or formation (or the Canadian equivalent),
(B) the resolutions referenced in subsection (A)(2) are still in effect and (C)
nothing has occurred since the date of the

39

 

issuance of the certificate(s) referenced
in subsection (A)(3) that would adversely affect such Culligan Party’s existence or
good standing in any such jurisdiction;

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

     (xii) such other documents as the Buyers may reasonably request for the purpose
of (A) evidencing the accuracy of the Culligan Party’s representations and
warranties, (B) evidencing the Sellers’ performance of, and compliance with, any
covenant or agreement required to be performed or complied with by any Culligan
Party, (C) evidencing the satisfaction of any condition referred to in this Section
6.1, (D) vesting in the Buyers 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) An Assignment of the Lease for each item of Leased Real Property, in form and substance
reasonably satisfactory to the Buyers, must have been obtained and delivered to the Buyers.

          (d) All applicable waiting periods (and any extensions thereof) under the HSR Act and the
Competition Act must have expired or otherwise been terminated and each other Consent listed in
Schedule 6.1(d) must have been obtained, delivered to the Buyer, be in full force and
effect and be in the form approved by the Buyer pursuant to Section 5.2.

          (e) Since the date hereof, there must not have been an event that has caused a Material
Adverse Effect on the Business or could reasonably be expected to have a Material Adverse Effect on
the Business.

          (f) 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.

          (g) The closing of the IPO shall have occurred on terms and conditions satisfactory to Primo
Parent.

          (h) The Buyer must have obtained all Permits necessary to operate the vended water machines
included in the Purchased Assets representing not less than 80% of the aggregate revenue of all
such vended water machines during the fiscal year ending December 31, 2009.

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

          (a) (i) All of the representations and warranties of the Primo Parties in this Agreement must
have been accurate in all material respects as of the date hereof and must be accurate in
all material respects as if made on the Closing Date (except for representations and
warranties that are as of a specific date, which representations and warranties must have been
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 have been and must be accurate in all respects, (ii) the Primo Parties must have
performed and complied in all material respects

40

 

with all of their respective covenants and
agreements in this Agreement to be performed prior to or at the Closing and (iii) the Primo Parties
must deliver to the Sellers at the Closing a certificate, in form and substance reasonably
satisfactory to the Sellers, confirming satisfaction of the conditions in clauses (i) and (ii)
above.

          (b) Each of the following documents must have been delivered to the Sellers and must be dated
as of the Closing Date (unless otherwise indicated):

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

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

     (iii) the Supply Agreement, executed by the Buyers;

     (iv) the Trademark License Agreement, executed by the Buyers;

     (v) the Registration Rights Agreement, executed by Primo Parent; and

     (vi) the Transition Services Agreements, executed by the applicable Buyer.

          (c) All applicable waiting periods (and any extensions thereof) under the HSR Act and the
Competition Act must have expired or otherwise been terminated.

          (d) There must not be any Proceeding pending or threatened against any of the Culligan 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.

          (e) The closing of the IPO shall have occurred.

ARTICLE VII

TERMINATION

     7.1 Termination Events. This Agreement may, by written notice given to Culligan Parent or Primo Parent, as
applicable, prior to the Closing, be terminated:

          (a) by (i) Primo Parent, if any representation or warranty made by any Culligan Party is
inaccurate in any material respect or any Culligan Party has breached any covenant or agreement in
this Agreement in any material respect and such inaccuracy or breach is not cured within 10 days
following receipt of notice of such inaccuracy or breach, or (ii) Culligan Parent, if any
representation or warranty made by any Primo Party is inaccurate in any material respect or any
Primo Party has breached any covenant or agreement in this Agreement in any material respect and
such inaccuracy or breach is not cured within 10 days following receipt of notice of such
inaccuracy or breach;

          (b) by (i) Primo Parent, if any condition in Section 6.1 has not been satisfied or waived in
writing by December 31, 2010, or if satisfaction of any such condition is or becomes impossible (in
either case, for reasons other than the failure of any Primo Party to comply with its
obligations under this Agreement) or (ii) Culligan Parent, if any condition in Section 6.2 has
not been satisfied or waived in writing by December 31, 2010 or if satisfaction of any such
condition is or becomes impossible (in either case, for reasons other than the failure of any
Culligan Party to comply with such Party’s obligations under this Agreement);

41

 

          (c) by mutual consent of Primo Parent and Culligan Parent; or

          (d) by Culligan Parent, if Primo Parent has not filed the amended Form S-1 contemplated by
Section 5.11 by 30 days after the date set forth in Section 5.11; provided,
however, that Culligan Parent may not exercise its rights under this Section 7.1(d) if (i)
any representation or warranty made by any Culligan Party is inaccurate in any material respect or
(ii) any Culligan Party has not complied (A) in all respects with its obligations under Section 5.9
or (B) in all material respects with its other obligations and covenants under this Agreement to be
performed as of such date; or

          (e) by Primo Parent, within 3 Business Days of the Delivery Date, if the Sellers have not
complied in all respects with Section 5.12.

     7.2 Effect of Termination. If this Agreement is terminated pursuant to Section 7.1, all further obligations of the
Parties under this Agreement will terminate; provided, however, that the
obligations in Section 5.7 (confidentiality) and Article XI (miscellaneous) will survive the
termination. Nothing in this Article VII will release any Party from any Liability for any breach
of any representation, warranty, covenant or agreement in this Agreement, other than a termination
pursuant to section 7.1(e), which will release the Parties from all Liabilities for any such
breach, provided that the Sellers shall be responsible for, and shall reimburse the Buyers
for, the Buyers’ reasonable and documented out-of-pocket costs incurred in connection with the
Transactions, including the preparation of the amended Form S-1, during the period commencing on
the date hereof and ending on the termination date.

ARTICLE VIII

EMPLOYEES AND EMPLOYEE BENEFITS

     8.1 Employment of Active Employees by the Buyers.

          (a) The Buyers may interview all Active Employees, and the Sellers will provide the Buyers
with reasonable access (with respect to Active Employees located in Eagan, Minnesota, for a period
of not more than three consecutive Business Days) upon reasonable notice to the Leased Real
Property and the Active Employees for the purpose of preparing for and conducting employment
interviews with the Active Employees. Subject to the requirements of Law, upon the request of the
Buyers, the Sellers shall promptly provide the Buyers any information reasonably requested by the
Buyers with respect to the Active Employees. Not later than ten (10) Business Days prior to the
Closing Date, the Buyers shall deliver to the Sellers a list of Active Employees to whom the Buyer
intends to make an offer of employment (the “Hired Active Employees”). The Buyers agree to
reimburse the Sellers for all severance payments made by the Sellers in accordance with the
applicable Seller’s severance policy (as set forth on Schedule 8.1) or imposed by
applicable Law (whichever is greater) to those Active Employees (i) to whom a Buyer does not offer
employment, (ii) who do not accept such Buyer’s offer of employment, but only with respect to
those Active Employees who receive offers of employment with (A) a lower base salary and/or wage
level, (B) a different work location or (C) terms and conditions materially different from those in
effect immediately prior to Closing, and (iii) who accept such Buyer’s offer of employment and are
subsequently terminated by such Buyer. The Buyer shall not be liable for severance obligations
with respect to any Active Employee to whom the Buyer makes an offer of employment and such offer
is not accepted by such Active Employee if such offer of employment does not provide for (X) a
lower base salary and/or wage level, (Y) a different work location or (Z) terms and conditions
materially different from those in effect immediately prior to Closing. Subject to the
limitations set forth in Article X, the Buyers shall indemnify and hold harmless the Sellers
and their affiliates from any Liability arising in connection with any claim that their hiring
process, and the offers of employment made and not made, do not comply with applicable Law.

42

 

          (b) The Buyers’ expressed intention to extend offers of employment as set forth in this
Section 8.1 will not constitute any commitment or Contract by any Buyer to enter into an employment
relationship with any employee of any Seller of any fixed term or duration or upon any terms or
conditions other than those that the Buyers may establish pursuant to individual offers of
employment. Employment offered by the Buyers is “at will” and may be terminated by the Buyers or
by an employee at any time for any reason (subject to any written commitments to the contrary made
by the Buyers or an employee and any requirements of Law).

     8.2 Salaries and Benefits.

          (a) Each Seller shall retain and be responsible for (i) the payment of all wages, incentive
compensation and other remuneration due to Active Employees with respect to their services as
employees of such Seller, including pro rata bonus payments and all vacation pay earned on and
prior to the Closing Date; provided, that the Buyers shall cause such payments to be made
to such Active Employees to the extent that such pro rata bonus payments and vacation pay have been
accrued by the respective Seller as of the Closing Date and the Sellers shall reimburse the Buyers
for the amount of any such accruals, (ii) the payment of any deferred compensation or similar
benefits (other than severance payments) that arise as a result of the Transaction, (iii) the
provision of health plan continuation coverage in accordance with the requirements of COBRA and
ERISA §§ 601 through 608 for any Active Employees who do not become Hired Active Employees;
provided, that the Buyers shall reimburse the Sellers for the expense of any such coverage
that is provided pursuant to the applicable Seller’s severance policy to the extent that the Buyers
are obligated to reimburse the Sellers for severance payments to such Active Employee pursuant to
Section 8.1, and (iv) any claims made or incurred by Active Employees and their beneficiaries under
any of such Seller’s Employee Benefit Plans.

          (b) Each Buyer shall be responsible for (i) the payment of all wages and other remuneration
due to Active Employees with respect to their services as employees of such Buyer, including pro
rata bonus payments and all vacation pay earned after the Closing Date, (ii) the provision of
health plan continuation coverage in accordance with the requirements of COBRA and ERISA §§ 601
through 608 for any Hired Active Employees, provided, that the Parties may agree that the
Sellers shall provide such health plan continuation coverage for certain Hired Active Employees for
a certain period of time, in which case the Buyers shall reimburse the Sellers for the cost of
providing such health plan continuation coverage after the Closing Date, and (iii) any claims made
or incurred by Hired Active Employees and their beneficiaries under any of such Buyer’s Employee
Benefit Plans.

     8.3 No Transfer of Assets. No Employee Benefit Plan shall be assigned to or assumed by any Buyer and there shall be no
transfer of any Employee Benefit Plan assets or liabilities to any Buyer or to any pension or
Employee Benefit Plan maintained by any Buyer.

     8.4 General Cooperation. Each of the Sellers and the Buyers shall reasonably cooperate to give effect to the
agreements made in this Article VIII. The Buyers will not have any responsibility, liability or
obligation, whether to Active Employees, former employees, their beneficiaries or to any other
Person, with respect to any Employee Benefit Plans (including the establishment, operation or
termination thereof and the notification and provision of COBRA coverage extension or such other
similar foreign Law) maintained by any Culligan Party.

ARTICLE IX

POST-CLOSING COVENANTS

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

     9.1 Payment of Excluded Liabilities. The Sellers will pay, perform and discharge the

43

 

Excluded Liabilities as and when due.

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

     9.3 Bulk Transfer Compliance. Inasmuch as the Buyers are to assume the Assumed Liabilities and the Sellers are to pay,
perform and discharge the Excluded Liabilities, the Buyers and the Sellers 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 Buyers as they
become due, the Sellers shall, after the Closing, pay their respective creditors as their debts to
them become due.

     9.4 Consents.

          (a) This Agreement will not constitute an assignment, attempted assignment or agreement to
assign any Contract or Permit to the extent that any attempted assignment or agreement to assign
such Contract or Permit without the Consent of any Person would constitute a breach thereof or
would impair the rights of any Seller or any 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, or if any Seller has not complied with the last sentence of Section
5.2, then such Seller will use its commercially reasonable efforts to obtain such Consent in the
manner set forth in Section 5.2. Until such Consent is obtained, or the Contract to which such
Consent relates is novated or terminated, to the extent permissible under such Contract, such 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 such Seller under such Contract.
Each Seller will, at such Buyer’s request, do all such acts and things as such Buyer may reasonably
request to enable due performance of such Contract and to provide for such Buyer the benefits,
subject to the obligations, of such Contract. Without limiting the generality of the foregoing,
each Seller will provide all reasonable assistance to such Buyer (at such Buyer’s request) to
enable such Buyer to enforce its rights under such Contract.

          (b) Notwithstanding anything in this Agreement to the contrary, this Agreement shall not
constitute an agreement to convey, transfer or assign any Non-Transferable Asset at the Closing.
If the Purchased Assets include any Non-Transferable Assets as of the Closing Date, the Sellers and
the Buyers will cooperate in a mutually agreeable arrangement under which the Buyers would obtain
all of the benefits and assume all of the Liabilities arising under such Non-Transferable Assets
from and after the Closing Date in accordance with this Agreement; provided, however, that
this Section 9.4(b) shall not affect Buyer’s right to indemnification hereunder for any breach or
inaccuracy of any representation in this Agreement. The arrangement described in the preceding
sentence shall provide that each Non-Transferable Asset shall, automatically and without further
action, be conveyed, transferred and assigned to the Buyers at such time as such asset ceases to be
a Non-Transferable Asset; provided that any and all remaining Non-Transferable Assets
shall, automatically and without further action, be conveyed, transferred and assigned to the
Buyers on the date which is 90 days after the Closing Date.

     9.5 Mail and Receivables. Each Seller hereby irrevocably authorizes each Buyer after the Closing to receive and open
all mail and other communications received by such Buyer and addressed or directed to such 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 such Buyer may elect. If any such
communication does not relate to the Business, the Purchased Assets or the Assumed Liabilities,
such Buyer will forward such communication to such Seller. Each Seller will promptly deliver
to each Buyer the original of any mail or other communication received by such 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

44

 

portion of such mail or communication relates to the Business. Each Seller
hereby irrevocably authorizes each Buyer after the Closing to endorse, without recourse, the name
of such Seller on any check or any other evidence of indebtedness received by such Buyer if such
check or evidence of indebtedness is in respect of a Purchased Asset. After the Closing, each
Seller will promptly remit to the applicable Buyer any payment that is in respect of a Purchased
Asset that such Seller receives.

     9.6 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 Date 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 10.1 without regard to
Section 10.4).

     9.7 Transition. After the Closing, at the Buyers’ request, each Seller will cooperate with each Buyer in
its efforts to continue and maintain for the benefit of the Buyers those business relationships of
such Seller existing prior to the Closing, including relationships with lessors, lessees,
employees, Governmental Bodies, licensors, licensees, customers, suppliers and others, and such
Seller will satisfy the Excluded Liabilities in a manner that is not materially detrimental to any
of such relationships; provided, however, that such Buyer will reimburse such
Seller for its out-of-pocket expenses related to such cooperation (unless such Buyer is entitled to
indemnification with respect to the matter for which such Buyer is seeking such Seller’s
cooperation under Section 10.1 without regard to Section 10.4). Each Seller will refer to the
applicable Buyer all inquiries relating to the Business.

     9.8 Confidentiality. Each Party will, and will cause its Affiliates and Representatives to, maintain, for a
period of three years after the termination of Culligan Parent’s information rights pursuant to
Section 9.9, 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 9.8 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
Buyers may refer to the Business as formerly being owned by the Sellers.

     9.9 Information Rights. After the Closing and for so long as the Sellers own at least 10% of the issued and
outstanding Primo Stock, Primo Parent shall provide to the General Counsel of Culligan Parent the
same information that is provided to members of Primo Parent’s board of directors;
provided,

45

 

however, that (a) all such information shall be deemed to be Confidential
Information and subject to Section 9.8 hereof and (b) Primo Parent shall have no obligation to
provide Culligan Parent access to any information which Primo Parent reasonably determines would be
reasonably likely to (i) have an anti-competitive effect on the Primo Parties, based upon the
then-current business activities of the Culligan Parties and their respective Affiliates, (ii)
adversely affect the attorney-client privilege between any Primo Party and its counsel or (iii)
result in the disclosure of trade secrets. Culligan Parent shall have the right to suspend (and
reinstate) delivery of information pursuant to this Section upon reasonable notice to Primo Parent.

     9.10 Retention of and Access to Books and Records. The Buyers will retain for a period consistent with the Buyers’ record-retention policies
and practices the Books and Records delivered to the Buyers. The Buyers will provide the Sellers
and their respective Representatives reasonable access to the Books and Records during normal
business hours and on at least three Business Days’ prior written notice, to the extent reasonably
required for any reasonable business purpose specified by the Sellers in such notice. The Sellers
may retain copies of the relevant Books and Records (i) to the extent reasonably required to
prepare financial statements or Tax Returns or deal with Tax Proceedings and (ii) to the extent
reasonably required with respect to rights, Liabilities or Excluded Assets retained by the Sellers.

     9.11 Seller Information. After the Closing Date, the Sellers 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.

     9.12 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 Sellers.

ARTICLE X

INDEMNIFICATION

     10.1 Indemnification by the Sellers. After the Closing and subject to the terms and conditions of this Article X, the Sellers,
jointly and severally, will indemnify and hold harmless the Buyers and their 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 6.1; (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 Buyers 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.

     10.2 Indemnification by the Buyers. After the Closing and subject to the terms and conditions of this Article X, the Buyers,
jointly and severally, will indemnify and hold harmless the Sellers and their 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 6.2; (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

46

 

and when due and (d) any Liability (other than Excluded Liabilities) arising out of
the operation of the Business after the Closing Date.

     10.3 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.
If the Closing occurs, the Sellers 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, or any covenant or agreement in this Agreement to be
performed and complied with prior to the Closing Date, unless the Buyers notify the Sellers 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 3.19 (environmental) or 3.21 employee
benefits) may be made at any time until the date three years after the Closing Date, (b) any claim
relating to Section 3.15 (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 3.8 (title to assets), 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 Closing occurs, the Buyers 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, or any covenant or agreement in this
Agreement to be performed and complied with prior to the Closing Date, unless the Sellers notify
the Buyers 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 Buyers or the Sellers, 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.

     10.4 Limitations on Indemnification.

          (a) The Sellers will have no Liability with respect to the matters described in Section
10.1(a): (i) in respect of any Loss incurred or suffered by such 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 10.1(a) exceeds $750,000 (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), 3.8 (title to assets), 3.15 (taxes),
3.19 (environmental), 3.21 (employee benefits) or 3.26 (brokers) will not be subject to or counted
towards the Seller Indemnity Threshold. The Sellers’ maximum aggregate Liability with respect to
the matters described in Section 10.1(a) will be limited to an amount equal to $20,000,000 (the
“Seller Cap”); provided, however, that any claim relating to Section 3.3
(authority), 3.4 (conflicts), 3.8 (title to assets), 3.15 (taxes), 3.19 (environmental), 3.21
(employee benefits) or 3.26 (brokers) or any covenant or agreement will not be subject to or
counted towards the Cap, but will be limited to an amount equal to the Purchase Price.

          (b) The Buyers will have no Liability with respect to the matters described in Section
10.2(a): (i) in respect of any Loss incurred or suffered by such 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 10.2(a) exceeds $750,000 (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

47

 

counted towards the Buyer Indemnity Threshold. The Buyers’
maximum aggregate Liability with respect to the matters described in Section 10.2(a) will be
limited to an amount equal to $20,000,000 (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 10.4 will not apply to fraud, including any fraudulent or intentional breach
of any representation or warranty.

          (d) In no event shall any Party be entitled to recover for any Losses with respect to any
matter to the extent included or reflected to such Party’s favor in the Working Capital Statement
as finally determined.

     10.5 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 X, 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 10.5(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 10.4, 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 10.5(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 10.5(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

48

 

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 10.5(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 X.

          (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.

     10.6 Other Indemnification Matters. Any claim for indemnification under this Article X must be asserted by providing written
notice to the Sellers (or the Buyers, in the case of a claim by the Sellers) 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 X as adjustments to the
Purchase Price, including for Tax purposes to the extent permitted by Law. The Sellers shall have
no obligation to make any indemnification payments under this Article X 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 Sellers’
indemnification obligations under this Article X 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 X 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.

     10.7 PST Clearance Certificates. In respect of the purchase and sale of the Purchased Assets under this Agreement, Primo
Canada shall not require Culligan Canada 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 Sellers, jointly and
severally, 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
Primo Canada, 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 10.7 are not subject to the limitations set forth in Section 10.4.

49

 

     10.8 Exclusive Remedy. After the Closing, this Article X will provide the exclusive legal remedy for the matters
covered by this Article X, except for claims based upon fraud. This Article X will not affect any
remedy any Party may have under this Agreement prior to the Closing or upon termination of this
Agreement or any equitable remedy available to any Party.

ARTICLE XI

MISCELLANEOUS

     11.1 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 Buyers), all as any other Party may
reasonably request for the purpose of carrying out the intent of the Transaction Documents.

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

     11.3 Guaranties.

          (a) In consideration for and as an inducement to the Buyers to enter into this Agreement,
Culligan Parent does hereby, on behalf of itself, its successors and assigns, unconditionally
guarantee to the Buyers the full and prompt performance of all obligations and Liabilities of every
kind and nature arising under this Agreement or any other Transaction Document of the Sellers to
the Buyers (including prompt and punctual payment of any and all amounts that may be or become due
by the Sellers to the Buyers from time to time under this Agreement), howsoever evidenced, whether
now existing or hereafter created or arising, whether direct or indirect, absolute or contingent,
or joint or several (the “Culligan Guaranty”). This Culligan Guaranty shall be continuing,
absolute, present and unconditional and shall remain in full force and effect and extend to any
renewal, extension, indulgence, modification or amendment of this Agreement, whether or not
Culligan Parent shall have notice thereof. Culligan Parent shall reimburse or pay all Losses paid
or incurred by the Buyers in protecting, defending or enforcing this Culligan Guaranty in any
Proceeding or otherwise.

          (b) Culligan Parent hereby agrees that it shall not be released from the obligations of this
Section 11.3, nor shall said obligations be diminished or otherwise affected by any assignment of
this Agreement or the other Transaction Documents, by any extension of time or other indulgence
granted to the Sellers or by any waiver with respect to the terms or conditions of this Agreement
or any other Transaction Document, or with respect to the performance and observance of any of the
other obligations of the Sellers under this Agreement or the other Transaction Documents, or by any
other matter whatsoever whereby the guarantor would or might be released. Culligan Parent waives
(i) all notices of any kind whatsoever with respect to this Agreement or the other Transaction
Documents and all other obligations of the Sellers to the Buyers relating to this Agreement or the
other Transaction Documents, including notice of any default, of presentment, of protest, of
demand, of notice of non-payment, of notice of dishonor, and notice of protest; (ii) the right to
require, and the benefit of any Law which may require, the enforcement of any other rights before
enforcing the Liability of the guarantor; (iii) all defenses whatsoever to its Liability under this
Section 11.3 except the defense of payment and (iv) any and all claims to subrogation to the rights
of the Buyers should the guarantor be required to make any payment or perform any obligation
hereunder until all of the obligations of the Sellers to the Buyers shall have been
satisfied in full. Culligan Parent hereby agrees that the Buyers may proceed against it
directly and independently of the Sellers.

50

 

          (c) In consideration for and as an inducement to the Sellers to enter into this Agreement,
Primo Parent does hereby, on behalf of itself, its successors and assigns, unconditionally
guarantee to the Sellers the full and prompt performance of all obligations and Liabilities of
every kind and nature arising under this Agreement or any other Transaction Document of the Buyers
to the Sellers (including prompt and punctual payment of any and all amounts that may be or become
due by the Buyers to the Sellers from time to time under this Agreement), howsoever evidenced,
whether now existing or hereafter created or arising, whether direct or indirect, absolute or
contingent, or joint or several (the “Primo Guaranty”). This Primo Guaranty shall be continuing,
absolute, present and unconditional and shall remain in full force and effect and extend to any
renewal, extension, indulgence, modification or amendment of this Agreement, whether or not Primo
Parent shall have notice thereof. Primo Parent shall reimburse or pay all Losses paid or incurred
by the Sellers in protecting, defending or enforcing this Primo Guaranty in any Proceeding or
otherwise.

          (d) Primo Parent hereby agrees that it shall not be released from the obligations of this
Section 11.3, nor shall said obligations be diminished or otherwise affected by any assignment of
this Agreement or the other Transaction Documents, by any extension of time or other indulgence
granted to the Buyers or by any waiver with respect to the terms or conditions of this Agreement or
any other Transaction Document, or with respect to the performance and observance of any of the
other obligations of the Buyers under this Agreement or the other Transaction Documents, or by any
other matter whatsoever whereby the guarantor would or might be released. Primo Parent waives (i)
all notices of any kind whatsoever with respect to this Agreement or the other Transaction
Documents and all other obligations of the Buyers to the Sellers relating to this Agreement or the
other Transaction Documents, including notice of any default, of presentment, of protest, of
demand, of notice of non-payment, of notice of dishonor, and notice of protest; (ii) the right to
require, and the benefit of any Law which may require, the enforcement of any other rights before
enforcing the Liability of the guarantor; (iii) all defenses whatsoever to its Liability under this
Section 11.3 except the defense of payment and (iv) any and all claims to subrogation to the rights
of the Sellers should the guarantor be required to make any payment or perform any obligation
hereunder until all of the obligations of the Buyers to the Sellers shall have been satisfied in
full. Primo Parent hereby agrees that the Sellers may proceed against it directly and
independently of the Buyers.

     11.4 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).

     11.5 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
Buyers may assign any or all of their rights or interests, or delegate any or all of their
obligations, in this Agreement (a) from and after the Closing, to any successor to any Buyer or any
acquirer of a material portion of the business or assets of any Buyer, (b) to one or more of the
Buyers’ 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
Buyers of any of their obligations under this Agreement; and, provided, further,
that the Buyers shall be responsible for, and shall indemnify the Sellers against, any Taxes that
would not have arisen but for such assignment or delegation. Notwithstanding the foregoing, the
Parties agree that, prior to the Closing, either Buyer shall be permitted to assign all of its
rights under this
Agreement to another wholly-owned Subsidiary of Primo Parent, with such assignor having no
further Liability hereunder.

51

 

     11.6 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.

     11.7 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

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: Andrew L. Sommer

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

52

 

Phone: (919) 743-7328

Attn: D. Scott Coward

     11.8 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 11.7 SHALL BE DEEMED EFFECTIVE SERVICE AND (f) WAIVES ANY DEFENSE BASED ON
SERVICE OF PROCESS OTHER THAN AS PROVIDED HEREIN.

     11.9 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.

     11.10 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.

     11.11 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.

     11.12 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 respective 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 Primo Parties will
pay the HSR Act filing fee and any Competition Act filing fee. The Buyers shall be responsible for
the payment of any license, registration or permitting fees that arise as a result of the
Transactions. If this Agreement is terminated, the obligation of each Party to pay its own
expenses will be subject to any rights of such Party arising from a breach of this Agreement by
another Party.

     11.13 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

53

 

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 date hereof and 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 dollar
amounts in this Agreement refer to U.S. dollars.

     11.14 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.

     11.15 Waiver of Consequential Damages. Each Party hereby (i) 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
(ii) acknowledges that in no event shall any Party be liable to any other Party for such damages
described in clause (i).

     11.16 Offset. The Parties’ respective reimbursement obligations in Sections 8.1(a) and 8.2(a) shall be offset
against one another and against the payment obligation of the applicable Party pursuant to Section
2.8(b) and a single payment shall be made by the applicable Party at the time payment is due under
Section 2.8(b).

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

[Signature pages follow]

54

 

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

	 	 	 	 	 
	 	P1 SUB, LLC

 	 
	 	By:  	 /s/
Billy D. Prim	 
	 	 	Name:  	 Billy D. Prim	 
	 	 	Title:  	 Manager	 
	 

	 	 	 	 	 
	 	P2 SUB, LLC

 	 
	 	By:  	 /s/
Billy D. Prim	 
	 	 	Name:  	 Billy D. Prim	 
	 	 	Title:  	 Manager	 
	 

	 	 	 	 	 
	 	PRIMO WATER CORPORATION

 	 
	 	By:  	 /s/
Billy D. Prim	 
	 	 	Name:  	 Billy D. Prim	 
	 	 	Title:  	 Manager	 
	 

	 	 	 	 	 
	 	CULLIGAN STORE SOLUTIONS, LLC

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

	 	 	 	 	 
	 	CULLIGAN OF CANADA, LTD.

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

	 	 	 	 	 
	 	CULLIGAN INTERNATIONAL COMPANY

 	 
	 	By:  	 /s/
Susan E. Bennett	 
	 	 	Name:  	 Susan E. Bennett	 
	 	 	Title:  	Senior Vice President, General
Counsel & Secretaryexv10w32

Exhibit 10.32

TRADEMARK LICENSE AGREEMENT

     This TRADEMARK LICENSE AGREEMENT (this “License”) is made as of [•] (the
“Effective Date”), by and between Culligan International Company, a Delaware corporation,
having its principal place of business at 9399 W. Higgins Road, Rosemont, Illinois 60018
(“CULLIGAN”), P1 Sub, LLC, a North Carolina limited liability company and P2 Sub, LLC, a
North Carolina limited liability company (each, a “LICENSEE” and together, the
“LICENSEES”). Capitalized terms used in this License without definition have the meanings
set forth in the Purchase Agreement (as defined below).

RECITALS

     A. CULLIGAN owns the trademark “Culligan”, which is registered in the United States Patent and
Trademark Office, and owns and controls certain other related registered trademarks, trade names,
signs and commercial symbols which are associated with water and the treatment of water. Such
marks and related designations have gained a high degree of consumer acceptance and distinction for
quality and consistency.

     B. LICENSEES, CULLIGAN, Culligan Store Solutions, LLC and Culligan of Canada Ltd. have entered
into an Asset Purchase Agreement, dated as of June 1, 2010 (the “Purchase Agreement”),
pursuant to which LICENSEES agreed to acquire certain assets of Culligan Store Solutions, LLC and
Culligan of Canada Ltd. in exchange for cash and common stock of Primo Water Corporation, all as
more fully described in the Purchase Agreement.

     C. It is a condition to the Closing under the Purchase Agreement that this Agreement be
executed by the parties and delivered to the LICENSEES on the Closing Date.

     NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions set forth
below, the parties agree as follows:

1. LICENSE

     1.1 CULLIGAN, as licensor, hereby grants to each LICENSEE during the Term (as defined below)
of this License a non-transferable (except pursuant to Section 7 below), non-exclusive,
royalty-free, fully paid-up right and license to use within the Licensed Territory (as defined
below) the trademarks identified on Attachment A (such trademarks, together with all
registrations and applications therefor and all common law rights pertaining thereto, the
“Marks”) in connection with its ownership and operation of the Purchased Assets which
display or otherwise make use of the Marks as of the Effective Date (the “Licensed
Products”) and the promotion and advertising of the Licensed Products (the “Licensed
Use”).

     1.2 Each LICENSEE acknowledges that its rights acquired pursuant to this License are not
exclusive to such LICENSEE and that (a) CULLIGAN and its Affiliates have heretofore entered
into franchise agreements with third-party dealers, pursuant to which such dealers have been
granted the right to produce, distribute or sell products that are the same as or similar to the
Licensed Products using the Marks (the “Existing Licensees”), which rights shall not be

 

 

terminated or affected by the sale of the Business to LICENSEES pursuant to the Purchase
Agreement, (b) the Existing Licensees may compete with the LICENSEES in their future
operation of the Business, and (c) CULLIGAN and its Affiliates have heretofore produced,
distributed and sold products and retain the right in the future to use the Marks to produce,
distribute and sell products other than the Licensed Products and to license third parties,
including but not limited to the Existing Licensees to do the same. For the avoidance of doubt,
neither the foregoing nor any other provision of this License shall amend or otherwise diminish the
obligations of CULLIGAN and its Affiliates pursuant to the Non-Competition Agreement.

     1.3 The territory in which the LICENSEES are authorized to use the Marks in accordance with
this License consists of the United States and Canada (the “Licensed Territory”).
Notwithstanding the foregoing, the Licensed Use of the Marks by LICENSEES in advertising via the
Internet shall not be deemed a violation of this License merely because such advertisements may be
viewed by persons outside of the Licensed Territory provided that (i) such advertising is not
directed to Persons outside of the Licensed Territory and (ii) the Licensed Products being so
advertised are provided or sold by LICENSEES only in the Licensed Territory.

     1.4 CULLIGAN grants no license by implication or otherwise under this License for rights to
any territory except the Licensed Territory, or to any other trademark or designation other than
the Marks, or to other rights with respect to the trademark “Culligan” on any product other than
the Licensed Products or with any use other than the Licensed Use. LICENSEE acknowledges that
CULLIGAN retains all rights and privileges not expressly granted by this License.

2. QUALITY STANDARDS AND CONTROL

     2.1 Each LICENSEE covenants that it will ensure that the Licensed Products and
Licensed Use are maintained at a level of a quality at least equal to the quality maintained by
CULLIGAN immediately prior to the Effective Date hereof (the “Quality Standards”).

     2.2 All use of the Marks made by each LICENSEE hereunder shall faithfully reproduce
the design and appearance of the Marks as reflected on Exhibit A.

     2.3 CULLIGAN shall have the right to inspect and approve any and all uses by each LICENSEE of
the Marks. CULLIGAN hereby approves any and all uses of the Marks by LICENSEES that are consistent
with uses of the Marks by CULLIGAN as of the Effective Date. From time to time, upon CULLIGAN’S
reasonable request in writing, each LICENSEE shall provide CULLIGAN, at LICENSEE’S expense, with
representative samples of the ways in which the Marks are then being used by such LICENSEE (or
photographs depicting the same). CULLIGAN shall be deemed to have approved any use of the Marks if
CULLIGAN does not object to such use within fifteen (15) days of its receipt of representative
samples of such use (or photograph thereof). If CULLIGAN believes that any use by a LICENSEE of
the Marks (other than a use deemed approved pursuant to this Section 2.3) is in violation of the
Quality Standards, CULLIGAN shall provide written notice of such violation to such LICENSEE within
such fifteen (15) day period setting forth specific information regarding the alleged violation.
CULLIGAN and such LICENSEE will cooperate diligently and in good faith thereafter to

2

 

determine whether such a violation has occurred and, if so, LICENSEE shall use reasonably diligent
efforts to cure the cause of such violation or, if such LICENSEE is unable to cure such violation,
discontinue such use.

     2.4 Each LICENSEE shall use the Marks only in such manner as will comply with the
provisions of applicable laws and regulations relating to the Marks.

     2.5 Each LICENSEE shall maintain any equipment to which a Mark is affixed only in such manner
as will comply with all applicable laws and regulations relating to such equipment.

3. VALIDITY OF MARKS; USE OF MARKS

     3.1 Each LICENSEE acknowledges the validity of the Marks and CULLIGAN’S common law and other
rights in the Marks and will not question the ownership or validity of same.

     3.2 Each LICENSEE will refrain from using the Marks and other trademarks or designations of
CULLIGAN except as authorized in this License.

     3.3 Each LICENSEE will refrain from using any other mark in any manner that creates a
likelihood of confusion with the Marks.

4. TERM AND TERMINATION PROVISIONS

     4.1 The term of this License will commence on the Effective Date and continue in effect for
one year, unless sooner terminated in accordance with the terms hereof (the “Term”).

     4.2 Either party may terminate this License if the other party fails to perform a material
obligation under this License and does not cure such failure within twenty (20) days after
receiving written notice from the other party.

     4.3 Termination of this License will not relieve CULLIGAN or either LICENSEE of their
respective obligations under Section 6.

     4.4 Upon termination of this License LICENSEES shall cease use of the Marks; provided,
however, that after such termination, LICENSEES may continue to use Purchased Assets having
any Mark affixed thereto, to the extent that such Purchased Assets are not located in the retail
area of a commercial retailer, without any obligation to remove or obscure such Marks and such
continued use shall not be a violation hereof. Notwithstanding anything to the contrary contained
herein, to the extent required by applicable Law, LICENSEE shall be permitted to refer to the
business acquired pursuant to the Purchase Agreement as the business acquired from Culligan Store
Solutions, LLC and Culligan of Canada Ltd.

5. INDEPENDENT CONTRACTOR

     Each LICENSEE is an independent contractor and will itself control and direct the performance
of the details of its operations. This License is not intended to give CULLIGAN

3

 

any significant control over the business operations of any LICENSEE or grant any LICENSEE any
significant assistance from CULLIGAN. CULLIGAN does not prescribe a marketing plan or system, and
the parties do not have a community of interest or continuing financial interest in the marketing
of goods or services. The parties do not intend to create a franchise or sale of a business
opportunity plan as applicable under any state or federal law. No party to this License is
authorized to incur debts or other obligations of any kind on the part of or act as an agent of any
other party hereto.

6. TRADEMARK INFRINGEMENT; INDEMNIFICATION; LIMITATION OF LIABILITY; INSURANCE

     6.1 Each LICENSEE shall promptly advise CULLIGAN of any claims of infringement or the
commencement against such LICENSEE of any lawsuit for trademark infringement relating to such
LICENSEE’s use of the Marks. CULLIGAN shall have control over the defense of any such lawsuit. So
long as CULLIGAN is conducting the defense of such claim, neither the LICENSEE nor CULLIGAN will
consent to the entry of any judgment or enter into any settlement with respect to such 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 or an admission of liability. Each LICENSEE agrees to assist
CULLIGAN by providing information and witnesses as needed and CULLIGAN shall reimburse such
LICENSEE for its actual expenses incurred in such assistance provided that CULLIGAN has approved
such expenses in advance. Each LICENSEE shall have the right to be represented by its own counsel
at its own expense, which counsel shall act only in an advisory capacity.

     6.2 CULLIGAN shall defend, indemnify and hold each LICENSEE, its officers, directors,
managers, employees, agents, and equityholders harmless from and against, and pay and reimburse
such LICENSEE for, any liability, loss or damage, cost or expense, including but not limited to
court costs, attorneys’ fees, and any awards or damages (collectively, “Losses”) directly or
indirectly relating to or arising from (a) such LICENSEE’s use of the Marks, as long as such use is
authorized by this License or (b) CULLIGAN’s breach of any of its warranties or obligations
hereunder.

     6.3 Each LICENSEE (jointly and severally) shall defend, indemnify and hold CULLIGAN, its
officers, directors, employees, agents, shareholders, and dealers harmless from and against, and
pay and reimburse CULLIGAN for, Losses directly or indirectly relating to or arising from any
LICENSEE’s breach of its warranties or obligations hereunder, or unauthorized use of the Marks.

     6.4 Except as related to the parties’ indemnity obligations as stated in Sections 6.2 and 6.3,
no party will be liable to any other party for indirect, incidental, exemplary or consequential
damages of any nature (including without limitation lost profits) or for special or punitive
damages arising out of or related to this License, whether such damages are based on breach of
contract, breach of warranty, negligence, gross negligence, strict liability or any other legal
theory.

4

 

7. SUBLICENSES; ASSIGNMENT

     No LICENSEE will have any right of sublicense without CULLIGAN’S prior written consent, which
consent will be in CULLIGAN’S sole and absolute discretion. Notwithstanding Section 4, if any
LICENSEE attempts to sublicense this License without CULLIGAN’S consent, then this License will
terminate immediately. No party shall assign its rights under this License to any third party,
except (a) either party may assign its rights hereunder to an Affiliate, provided, that
such assignment shall not relieve the assignor of its responsibilities under this License, (b)
CULLIGAN may assign its rights and obligations to a third party pursuant to a merger or sale of
substantially all of its assets and (c) any LICENSEE may collaterally assign its rights hereunder
to its lenders for security purposes. Any purported assignment in violation of the foregoing shall
be null and void and of no effect.

8. GENERAL PROVISIONS

     8.1 All notices pertaining to this License will be transmitted in a manner to confirm receipt
to the President of the party at the address of its principal place of business set forth above.
When this License requires any LICENSEE to notify CULLIGAN, an additional copy will be transmitted
to its General Counsel at CULLIGAN’S address for its principal place of business set forth above.
Either party may change its address for receiving notices by giving written notice to the other
party in accordance with the provisions of this Section.

     8.2 No party will be liable for delays or non-performance caused by fire, flood, explosion,
accident, strike, war, riots, sabotage, terrorism or material changes in governmental law or
regulation, or for other causes beyond its control, but the delaying party will exercise all
reasonable efforts to cure and minimize the extent of the delay.

     8.3 This License and Attachment A and the Purchase Agreement contain the
complete understanding between the parties concerning the Marks and other subjects covered herein.
This License may not be modified or supplemented except by a writing signed by authorized officers
of each party. This License is independent of any other agreement that may be in effect between
the parties.

     8.4 If any term or provision of this License should be declared invalid by a court of
competent jurisdiction, the remaining terms and provisions will be unimpaired and the invalid term
or provision will be replaced by such valid term or provision as comes closest to the intention
underlying the invalid term or provision.

     8.5 No waiver or delay by CULLIGAN or any LICENSEE in the enforcement of any term, covenant or
condition of this License will be construed as a waiver by that party of such covenant or condition
of this License. The observation or performance of any condition or obligation imposed upon a
party under this License may be waived only in writing by an authorized officer and only to the
extent stated in such writing.

5

 

     8.6 All remedies provided under this License are cumulative and in addition to any remedy
otherwise available under any federal, state or local law.

     8.7 This License, and any and all disputes between CULLIGAN and any LICENSEE related to this
License, are to be exclusively construed in accordance with and governed by the laws of the State
of Illinois, without regard to choice of law or conflicts of law principles that might apply the
laws of another state. Any lawsuit between any LICENSEE and CULLIGAN related to this License shall
be adjudicated exclusively in a state or federal court located in Cook County, Illinois, the county
in which CULLIGAN presently has its principal place of business. Each LICENSEE waives any
objections that it may have to jurisdiction or venue in those courts and shall not make any claim
that litigating disputes in such courts would be an inconvenient forum. In the event of a lawsuit
or proceeding between the parties, the nonprevailing party will pay or reimburse, as the case may
be, the expenses and costs, including court costs and reasonable attorneys’ fees, of the prevailing
party.

     8.8 This License is binding on the respective, permitted successors in interest, assignees,
executors, administrators and heirs of the parties.

[the remainder of this page intentionally left blank]

6

 

     IN WITNESS WHEREOF, this License has been duly executed by the parties hereto on the Effective
Date.

	 	 	 	 	 
	 	P1 SUB, LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	P2 SUB, LLC

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	CULLIGAN INTERNATIONAL COMPANY

 	 
	 	By:  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

ATTACHMENT A

MARKS

	 	 	 	 	 	 	 
	Mark	 	Registration Number	 	Jurisdiction
	TRUST THE WATER EXPERTS

	 	 	1890197	 	 	USA
	CULLIGAN & DESIGN

(script with water drop design)

	 	 	1365112	 	 	USA

Any other Culligan-owned trademark affixed to the Purchased Assets as of the date hereof

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00174-of-00352.parquet"}]]