EXHIBIT 2.1
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MASTER AGREEMENT
dated as of
November 30, 2001
between
THE PERRIER GROUP OF AMERICA, INC.
and
IONICS, INCORPORATED
TABLE OF CONTENTS
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Page
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ARTICLE I -- DEFINITIONS......................................................2
1.01. DEFINITIONS.........................................................2
1.02. ADDITIONAL DEFINED TERMS...........................................10
ARTICLE II - THE TRANSACTIONS................................................12
2.01. OPERATIVE DOCUMENTS................................................12
2.02. PURCHASE PRICE.....................................................13
2.03. ESCROW AMOUNT......................................................13
2.04. PAYMENT OF CERTAIN FRENCH SUBSIDIARY LIABILITIES...................15
2.05. CLOSING............................................................15
2.06. NET ASSET STATEMENTS...............................................16
2.07. PAYMENT OF NET ASSET STATEMENT ADJUSTMENTS.........................19
2.08. ACTIVE CUSTOMER COUNTS.............................................20
2.09. ACTIVE CUSTOMER ADJUSTMENTS........................................21
2.10. ALLOCATION OF PURCHASE PRICE.......................................22
2.11. ASSUMED LIABILITIES................................................23
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF SELLER.......................23
3.01. CORPORATE EXISTENCE AND POWER......................................23
3.02. CORPORATE AUTHORIZATION............................................24
3.03. GOVERNMENTAL AUTHORIZATION.........................................24
3.04. NON-CONTRAVENTION..................................................24
3.05. CONSENTS...........................................................24
3.06. FINANCIAL STATEMENTS...............................................25
3.07. ABSENCE OF CERTAIN CHANGES.........................................25
3.08. PROPERTIES.........................................................26
3.09. SUFFICIENCY OF PURCHASED ASSETS....................................29
3.10. TITLE TO PURCHASED SHARES..........................................30
3.11. LITIGATION.........................................................30
3.12. MATERIAL CONTRACTS.................................................30
3.13. LICENSES AND PERMITS...............................................32
3.14. INSURANCE COVERAGE.................................................32
3.15. COMPLIANCE WITH LAWS...............................................33
3.16. FINDERS' FEES......................................................33
3.17. PARTICIPATING SUBSIDIARIES AND FRENCH HOLDING COMPANY..............33
3.18. FRENCH SUBSIDIARIES................................................34
3.19. CUSTOMERS..........................................................35
3.20. INVENTORIES........................................................35
3.21. ACCOUNTS RECEIVABLE................................................35
3.22. INTELLECTUAL PROPERTY..............................................36
3.23. ENVIRONMENTAL MATTERS..............................................36
3.24. TRANSACTIONS WITH AFFILIATES.......................................37
3.25. WATER SOURCES......................................................37
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF BUYER REPRESENTATIVE..........37
4.01. ORGANIZATION AND EXISTENCE.........................................37
4.02. CORPORATE AUTHORIZATION............................................37
4.03. GOVERNMENTAL AUTHORIZATION.........................................38
4.04. NON-CONTRAVENTION..................................................38
Master Agreement--Page ii
4.05. FINDERS' FEES......................................................38
4.06. FINANCING..........................................................38
4.07. LITIGATION.........................................................38
4.08. FRENCH BUYER.......................................................39
ARTICLE V - COVENANTS OF SELLER AND PARTICIPATING SUBSIDIARIES...............39
5.01. CONDUCT OF THE TRANSFERRED BUSINESS................................39
5.02. ACCESS TO INFORMATION..............................................41
5.03. NOTICES OF CERTAIN EVENTS..........................................42
5.04. NONCOMPETITION.....................................................42
5.05. CONFIDENTIALITY....................................................44
5.06. RESIGNATIONS.......................................................45
5.07. NO NEGOTIATION WITH THIRD PARTIES..................................45
5.08. PERMITS............................................................45
5.09. ACCOUNTS RECEIVABLE TRANSITION.....................................45
5.10. ACCESS TO EUROPEAN MANAGEMENT......................................46
5.11. SECONDMENT OF U.K. BUSINESS SENIOR MANAGEMENT......................46
5.12. U.S. BUSINESS - TELECOMMUNICATIONS TRANSITION PLANNING.............47
5.13. AQUARELLE - L'ESPRIT FRAICHEUR TRADEMARK............................48
5.14. BUSINESS TRADEMARKS; TRADENAMES....................................48
5.15. INSURANCE PROCEEDS FROM DESTROYED OR DAMAGED FIXED ASSETS...........48
ARTICLE VI - COVENANTS OF BUYER AND BUYER REPRESENTATIVE.....................49
6.01. CONFIDENTIALITY....................................................49
6.02. ACCESS.............................................................49
6.03. SELLER TRADEMARKS; TRADENAMES......................................50
6.04. CUSTOMER RELATIONSHIPS.............................................51
ARTICLE VII - COVENANTS OF BOTH PARTIES......................................52
7.01. GOVERNMENT FILINGS AND CONSENTS....................................52
7.02. PUBLIC ANNOUNCEMENTS...............................................52
7.03. PHONE NUMBERS......................................................53
7.04. THIRD PARTY CONSENTS.............................................53
ARTICLE VIII - TAX MATTERS...................................................55
PART A - GENERAL PROVISIONS..................................................55
8A.01. TAX DEFINITIONS...................................................55
PART B - U.S. TAXES..........................................................55
8B.01. TAX REPRESENTATIONS AND WARRANTIES - U.S. BUSINESS................55
8B.02. TAX COVENANTS - U.S...............................................56
PART C - U.K. BUSINESS.......................................................58
8C.01. TAX REPRESENTATIONS AND WARRANTIES - U.K. BUSINESS................58
8C.01. TAX COVENANTS - U.K. BUSINESS.....................................59
PART D - FRENCH BUSINESS.....................................................59
8D.02. TAX REPRESENTATIONS AND WARRANTIES - FRENCH BUSINESS..............59
8D.02. TAX COVENANTS - FRENCH BUSINESS...................................60
ARTICLE IX - EMPLOYEE AND EMPLOYEE BENEFIT MATTERS...........................62
PART A - GENERAL PROVISIONS..................................................62
Master Agreement--Page iii
9A.01. EMPLOYEE BENEFITS DEFINITIONS.....................................62
9A.02. SELLER RESPONSIBILITY FOR PRE-CLOSING DATE MATTERS................63
9A.03. NO THIRD PARTY BENEFICIARIES......................................65
PART B - U.S. BUSINESS.......................................................65
9B.01. EMPLOYMENT REPRESENTATIONS AND WARRANTIES - U.S. BUSINESS.........65
9B.02. EMPLOYEES AND OFFERS OF EMPLOYMENT - U.S. BUSINESS................66
9B.03. EMPLOYEE BENEFIT REPRESENTATIONS AND WARRANTIES - U.S. BUSINESS...67
9B.04. BUYER BENEFIT PLANS - U.S. BUSINESS...............................68
9B.05. ROLLOVERS FROM DEFINED CONTRIBUTION PLAN..........................69
9B.06. VACATION AND SICK LEAVE...........................................69
PART C - U.K. BUSINESS.......................................................70
9C.01. EMPLOYMENT REPRESENTATIONS AND WARRANTIES - U.K. BUSINESS.........70
9C.02. EMPLOYEES AND OFFERS OF EMPLOYMENT - U.K. BUSINESS................72
9C.03. U.K. PENSION PLAN - U.K. BUSINESS.................................73
PART D - FRENCH BUSINESS.....................................................75
9D.01. EMPLOYMENT REPRESENTATIONS AND WARRANTIES - FRENCH BUSINESS.......75
9D.02. EMPLOYEE BENEFIT COVENANTS - FRENCH BUSINESS......................77
9D.03. EMPLOYEE CONSULTATION COVENANT - FRENCH BUSINESS..................77
ARTICLE X - CONDITIONS TO CLOSING............................................78
10.01. CONDITIONS TO THE OBLIGATIONS OF EACH PARTY.......................78
10.02. CONDITIONS TO OBLIGATIONS OF BUYER REPRESENTATIVE AND BUYERS......78
10.03. CONDITIONS TO OBLIGATIONS OF SELLER, U.K. SUBSIDIARY AND FRENCH
HOLDING COMPANY...................................................79
ARTICLE XI - SURVIVAL, INDEMNIFICATION.......................................81
11.01. SURVIVAL..........................................................81
11.02. INDEMNIFICATION BY SELLER.........................................81
11.03. INDEMNIFICATION OF BUYER..........................................81
11.04. LIMITATIONS.......................................................82
11.05. BUYER REPRESENTATIVE AND SELLER ACKNOWLEDGEMENTS..................84
11.06. PROCESS OF INDEMNIFICATION........................................84
11.07. PURCHASE PRICE ADJUSTMENT.........................................87
11.08. OFFSET............................................................87
11.09. EXCLUSIVE REMEDIES................................................87
ARTICLE XII - TERMINATION....................................................87
12.01. GROUNDS FOR TERMINATION...........................................87
12.02. EFFECT OF TERMINATION.............................................88
12.03. SURVIVAL UPON TERMINATION.........................................88
ARTICLE XIII - MISCELLANEOUS.................................................88
13.01. NOTICES...........................................................88
13.02. AMENDMENTS; NO WAIVERS............................................89
13.03. EXPENSES..........................................................90
13.04. SUCCESSORS AND ASSIGNS; GUARANTY..................................90
13.05. GOVERNING LAW.....................................................90
13.06. COUNTERPARTS; EFFECTIVENESS.......................................90
13.07. ENTIRE AGREEMENT..................................................91
13.08. BULK SALES LAWS...................................................91
13.09. INTERPRETATION; CONSTRUCTION......................................91
13.10. JURISDICTION......................................................92
13.11. FURTHER ASSURANCES................................................92
Master Agreement--Page iv
Exhibits
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Exhibit A - Form of Escrow Agreement
Exhibit B1 - Form of Watertown Lease Agreement
Exhibit B2 - Form of Ludlow Lease Agreement
Exhibit C - Form of Letter Agreement
Exhibit D - Intentionally deleted
Exhibit E - Form of Transition Services Agreement
Exhibit F - Form of U.S. Purchase Agreement
Exhibit G - Form of U.K. Offer
Exhibit H - Form of Share Purchase Agreement
Exhibit I - Form of legal opinion of Seller's counsel
Exhibit J - Form of legal opinion of Buyer Representative's counsel
Schedules(1)
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Schedule 2.06 Reference Net Asset Statement
Schedule 3.01 Foreign Jurisdiction Qualifications of Seller
Schedule 3.05 Consents Schedule 3.06(a) Financial Statements
Schedule 3.07 Absence of Certain Changes
Schedule 3.07(b) Incurrence, Assumption or Guarantee of Indebtedness
Schedule 3.07(f) Cancellation of Indebtedness
Schedule 3.07(h) Asset Dispositions
Schedule 3.07(j) Material Contract Terminations
Schedule 3.07(k) Changes in Employee Compensation
Schedule 3.07(l) Union Activities
Schedule 3.08(a) Real Property List
Schedule 3.08(b) Personal Property List
Schedule 3.08(c)(i) Wimbledon Property
Schedule 3.08(c)(ii) Possession and Right to Use Real Property
Schedule 3.08(d) Liens
Schedule 3.08(e) U.K. Real Property
Schedule 3.09 Sufficiency of Purchased Assets
Schedule 3.11 Litigation
Schedule 3.12(a) Material Contracts
Schedule 3.12(b) Validity of Contracts
Schedule 3.13 Licenses and Permits
Schedule 3.14 Insurance
Schedule 3.17 Foreign Jurisdiction Qualifications of Foreign
Subsidiaries
Schedule 3.18(a) Second Tier Subsidiaries and French Subsidiaries
Capitalization
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1 To be prepared by Seller.
Master Agreement--Page v
Schedule 3.18(c) French Subsidiaries' Bank Accounts
Schedule 3.18(d) French Subsidiaries' Officers and Directors
Schedule 3.18(e) MidasBest Limited Assets
Schedule 3.20 Inventories
Schedule 3.21 Accounts Receivable
Schedule 3.22 Intellectual Property
Schedule 3.23 Environmental Matters
Schedule 3.24 Transactions with Affiliates
Schedule 3.25 Water Sources
Schedule 5.11 Seconded Employees
Schedule 7.03 Phone Numbers
Schedule 7.04(b)(i) Certain Contractual Consents
Schedule 8B.01 Tax Matters - U.S. Business
Schedule 8C.01 Tax Matters - U.K. Business
Schedule 8D.01 French Subsidiaries - Tax Carryforwards/Carrybacks
Schedule 9B.01 U.S. Business Employee Matters
Schedule 9B.02 Potential Transferred U.S. Employees
Schedule 9B.03 Employee Plans and Benefit Arrangements - U.S. Business
Schedule 9C.01(b) Non-Transferred U.K. Employees
Schedule 9C.01(c) U.K. Compensation
Schedule 9C.01(d) U.K. Business Employment Contracts
Schedule 9C.01(e) Unpaid Remuneration and Reimbursement
Schedule 9C.01(f) U.K. Employee Claims Schedule 9C.01(i) U.K. Union
Matters
Schedule 9C.01(j) U.K. Business Stock Options and Commission Schemes
Schedule 9C.01(k) U.K. Business Sick Leave/Maternity Leave
Schedule 9C.03(a) U.K. Business Pension Scheme
Schedule 9C.03(b) U.K. Business Pension Benefits
Schedule 9C.04 U.K. Business Employment Contracts
Schedule 9D.01 French Business - Employee Matters
MASTER AGREEMENT
This Master Agreement dated as of November 30, 2001 (the "Agreement")
by and between THE PERRIER GROUP OF AMERICA, INC., a Delaware corporation
("Buyer Representative"), and IONICS, INCORPORATED, a Massachusetts corporation
("Seller"):
WITNESSETH:
WHEREAS, Seller, directly and through certain of its Subsidiaries (as
defined herein), conducts a business involving the sale and distribution of
bottled water and beverage service supplies, and the lease, sale and
distribution of bottled water coolers, directly plumbed water coolers
("Bottleless Coolers") and beverage service equipment, to homes and businesses
in portions of the United States, the United Kingdom and France (the
"Business");
WHEREAS, Seller and such Subsidiaries conduct the Business through the
following entities:
(a) Seller conducts the Business in the United States (the "U.S.
Business");
(b) Ionics (U.K.), Limited, a corporation organized under the laws of
England and an indirect wholly owned subsidiary of Seller (the "U.K.
Subsidiary"), conducts the Business in the United Kingdom (the "U.K. Business");
and
(c) Aqua Cool, S.A., a French societe anonyme (the "French Subsidiary")
which is an indirect wholly owned subsidiary of Seller and a direct subsidiary
of Ionics France, S.A., a French societe anonyme (the "French Holding Company"),
conducts the Business in France (the "French Business"); and
WHEREAS, certain Affiliates (as defined herein) of Buyer Representative
(such Affiliates will sometimes be referred to collectively as the "Buyers" and
each individually as a "Buyer") desire to purchase from Seller (and certain of
its Subsidiaries), and Seller (and certain of its Subsidiaries) desires to sell
to Buyers, the Business upon the terms and subject to the conditions set forth
in the Operative Documents (as defined herein).
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
Master Agreement - Page 2
ARTICLE I
DEFINITIONS
1.01. Definitions. For purposes of the Operative Documents, the
following terms shall have the meanings set forth below:
"Active Customer" means:
(a) an Equipment Customer of the Business that, both (i)
receives a delivery of water (unless such Equipment Customer uses a Bottleless
Cooler, in which case the delivery requirement shall not apply) or beverage
service supplies during the last full 60-day invoice-cycle period ending prior
to the Closing Date, and (ii) makes a payment on account of an equipment lease
or rental or delivery of water or beverage service supplies within 90 days from
the beginning of such 60-day invoice-cycle period; or
(b) if an Equipment Customer's Start Date is within the 90
days prior to the Closing Date, an Equipment Customer that both (i) receives a
delivery of water (unless such Equipment Customer uses a Bottleless Cooler, in
which case the delivery requirement shall not apply) or beverage service
supplies within 60 days from such Equipment Customer's Start Date, and (ii)
makes a payment on account of an invoice relating to such Equipment Customer's
equipment lease or rental or delivery of water or beverage service supplies
within 90 days from the date of such invoice;
provided, however, that an Equipment Customer that leases or rents, or is
provided, more than one bottled water cooler, Bottleless Cooler, refrigerator,
microwave or coffee brewer which are covered by a single invoice and that
satisfies the applicable water delivery and payment requirements set forth in
clause (a) or (b) of the definition of "Active Customer" with respect to at
least one piece of equipment so leased, rented or provided shall be counted as a
separate "Active Customer" for all pieces of equipment covered by such invoice;
and provided further, however, that an Equipment Customer of the French Business
that (1) leases or rents, or is provided, a bottled water cooler, Bottleless
Cooler, refrigerator, microwave or coffee brewer on an annual basis, (2) shall
have paid in advance for such annual period the amounts due with respect to such
lease, rental or provision and (3) shall have received and acknowledged a
delivery of water in accordance with the applicable water delivery requirements
set forth in subclause (i) of either clause (a) or (b) of the definition of
"Active Customer" shall be deemed to be an "Active Customer." In addition, on a
case-by-case basis, Seller may request that Buyer Representative consider, and
Buyer Representative shall consider in good faith, including as an "Active
Customer" any Equipment Customer who has satisfied the applicable water delivery
requirements set forth in subclause (i) of either clause (a) or (b) of the
definition of "Active Customer" but whose payment shall have been received after
expiration of the applicable period specified in subclause (ii) of either clause
(a) or (b) of the definition of "Active Customer" (but not later than 180 days
after the Closing Date) solely as a result of interruptions, delays or
disruptions in postal delivery service in the market in which such Equipment
Customer is located or from which such Equipment Customer's bills are sent; and
any such Equipment Customer
Master Agreement - Page 3
who Buyer Representative and Seller agree shall be an "Active Customer" shall be
deemed to be an "Active Customer" notwithstanding anything to the contrary in
this definition of "Active Customer."
"Adjusted Net Assets" means the amount by which the total assets of the
U.S. Business, the U.K. Business and the French Business exceed the total
liabilities of the U.S. Business, the U.K. Business and the French Business,
respectively, as of the Reference Date or the Closing Date, in each case as set
forth on the Reference Net Asset Statement or Final Closing Net Asset Statement,
as applicable, prepared in accordance with Section 2.06. Notwithstanding other
assets and liabilities that are customarily included in calculations of net
assets, only the assets and liabilities set forth on the Reference Net Asset
Statement or Final Closing Net Asset Statement, as the case may be, prepared in
accordance with Section 2.06 shall be included in the calculation of Adjusted
Net Assets.
"Adjusted Working Capital" means the amount by which the current assets
of the French Business, U.K. Business or U.S. Business exceed the current
liabilities of the French Business, U.K. Business or U.S. Business,
respectively, as of the Reference Date or the Closing Date, in each case as set
forth on the Reference Net Asset Statement or Final Closing Net Asset Statement,
as applicable, prepared in accordance with Section 2.06. Notwithstanding other
current assets and current liabilities that are customarily included in
calculations of working capital, only the current assets and current liabilities
set forth on the Reference Net Asset Statement or Final Closing Net Asset
Statement, as the case may be, prepared in accordance with Section 2.06 shall be
included in the calculation of Adjusted Working Capital.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by, or under common control with such
specified Person.
"Ancillary Agreements" means the Lease Agreements, the Escrow Agreement
and the Transition Services Agreement.
"Asset Sellers" means Seller and the U.K. Subsidiary.
"Assumed Liabilities" means, for purposes of this Agreement, the
Assumed Liabilities under the U.S. Purchase Agreement and the Assumed
Liabilities under the U.K. Purchase Agreement.
"Average Revenue per Customer" means the aggregate amounts invoiced to
a specified group of Active Customers of the European Business during the first
60-day invoice-cycle period after the Closing Date divided by the number of such
Active Customers included in such specified group.
"Books and Records" means the books and records of Seller or a
Participating Subsidiary relating exclusively to the Business, in whatever
medium or format maintained, excluding (i) any Asset Seller's minute and stock
record books, incorporation documents, by-laws, Tax Returns
Master Agreement - Page 4
and other Tax-related documents, (ii) books and records relating to the Excluded
Assets and (iii) any books and records that any Asset Seller is required by law
to retain.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which banks are required or authorized by law to be closed in Boston,
Massachusetts, London, England or Paris, France.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Combined Working Capital" means the sum of the Adjusted Working
Capital of the U.S. Business and the U.K. Business and the Adjusted Net Assets
of the French Subsidiary as of the Reference Date or the Closing Date, in each
case as set forth on the Reference Net Asset Statement or Final Closing Net
Asset Statement, as applicable, prepared in accordance with Section 2.06.
"Contracts" means all contracts, agreements, leases, licenses,
commitments, sales and purchase orders and other legally binding arrangements
and practices, whether or not in writing.
"Customers" means the Equipment Customers and the Water-Only Customers,
collectively.
"Disclosure Schedule" means the "Disclosure Schedule" which accompanies
this Agreement and is being signed concurrently with this Agreement by Seller
and Buyer Representative.
"English Business Premises Contract" means the agreement entitled
"English Business Premises Contract" attached to the U.K. Offer.
"Environmental Laws" means all Laws governing the use, storage,
shipment, handling, disposal, discharge, release, cleanup, reporting, warning,
workplace disclosure or monitoring of Hazardous Materials, or otherwise relating
to environmental pollution or environmental protection, including, as may be
applicable to environmental matters, the common law respecting nuisance,
trespass, tortious liability and strict liability.
"Equipment Customer" means a Person that leases or rents from, or is
provided by, Seller or a Participating Subsidiary a bottled water cooler, a
Bottleless Cooler, a refrigerator, a microwave or a coffee brewer, including
leases, rentals and provisions that are without charge to such Person; provided,
however, that for purposes of determining which Equipment Customers are Active
Customers and for purposes of determining Target Working Capital, (i) Equipment
Customers of the U.S. Business shall include Equipment Customers that lease or
rent, or are provided, no more than 1,688 coffee brewers, 1,607 refrigerators
and 527 microwaves, and (ii) Equipment Customers of the European Business shall
include Equipment Customers that lease or rent, or are provided, no more than a
total of 150 coffee brewers, refrigerators and microwaves in the aggregate. If
such a Person leases or rents, or is provided, more than one such bottled water
cooler, Bottleless Cooler, refrigerator, microwave or coffee brewer, that Person
shall be counted
Master Agreement - Page 5
as a separate "Equipment Customer" for each bottled water cooler, Bottleless
Cooler, and (subject to the foregoing numerical caps) refrigerator, microwave or
coffee brewer so leased, rented or provided. A Person that enters into an
agreement, or that places an order that is accepted by Seller or a Participating
Subsidiary, on or before the Closing Date, to lease or rent from, or be provided
by, Seller or a Participating Subsidiary a bottled water cooler, Bottleless
Cooler, a refrigerator, a microwave or a coffee brewer (subject to the foregoing
numerical caps) with a scheduled installation date within 15 days of such
Customer's Start Date shall be deemed an "Equipment Customer" as of the date
such Person enters into such an agreement or has such an order so accepted.
"Escrow Agent" means State Street Bank & Trust Company, which shall be
the Escrow Agent designated in the Escrow Agreement.
"Escrow Agreement" means the Escrow Agreement in substantially the form
of attached Exhibit A, to be signed at the Closing by Seller, Buyer
Representative and the Escrow Agent.
"Escrow Amount" means the sum of United States $10,000,000 which shall
be deducted pursuant to Section 2.03 from the Aggregate Cash Consideration
payable at Closing and held in escrow and invested in accordance with the Escrow
Agreement, together with any net earnings from investment of the Escrow Amount.
"European Business" means the U.K. Business and the French Business,
taken as a whole.
"Excluded Assets" means, for purposes of this Agreement, the Excluded
Assets under the U.S. Purchase Agreement and the Excluded Assets under the U.K.
Purchase Agreement.
"Excluded Liabilities" means, for purposes of this Agreement, the
Excluded Liabilities under the U.S. Purchase Agreement, the Excluded Liabilities
under the U.K. Purchase Agreement, and, in the case of the French Subsidiaries,
any Liabilities other than Permitted French Subsidiary Liabilities.
"French Buyer" means Societe Francaise des Eaux Regionales, a French
societe anonyme.
"French Purchase Price" means the purchase price for the Purchased
Shares pursuant to the Share Purchase Agreement.
"French Subsidiaries" means the French Subsidiary and the Second Tier
Subsidiaries, collectively.
"GAAP" means United States generally accepted accounting principles,
consistently applied.
Master Agreement - Page 6
"Hazardous Materials" means all substances, in whatever form or
concentration, which are treated or classified as harmful, poisonous, noxious,
hazardous, toxic or dangerous or as pollutants, contaminants or hazardous waste
under any Environmental Laws. "Hazardous Materials" specifically include
gasoline, oil and other petroleum products, their fractions and their
constituent and residual compounds and by-products, and radon, asbestos,
ureaformaldehyde and polychlorinated biphenyls.
"HSR Act" means the United States Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Incremental Customers" shall be determined as follows: If the total
number of Active Customers of the European Business as of the Closing Date
identified in the European Customer Count exceeds 81,256, each such Active
Customer in excess of 81,256 such Active Customers shall be an "Incremental
Customer" as long as such Incremental Customer is located within an existing
service area of the European Business. The Incremental Customers shall be those
with Start Dates closest to the Closing Date.
"Intellectual Property" means patents, patent applications, trademarks,
trademark applications, service marks, service mark applications, trade names,
copyrights, manufacturing processes, formulae, trade secrets, customer lists,
database rights and know how.
"Law" or "Laws" means all laws, statutes, ordinances, rules,
regulations, common law and other requirements having the force of law
promulgated by any Governmental Entity, including treaty provisions, which are
applicable to a specified Person, in each case whether local, state, federal or
foreign, or arising out of or under international treaty or compact.
"Lease Agreements" means the Lease Agreements between Seller and U.S.
Buyer with respect to the properties in Watertown and Ludlow, Massachusetts, in
substantially the forms annexed hereto as Exhibit B1 and Exhibit B2,
respectively.
"Letter Agreement" means the Letter Agreement Regarding Western DWS
Business between Seller and Buyer Representative in substantially the form
annexed hereto as Exhibit C.
"Liability" or "Liabilities" means liabilities or obligations of any
kind or description of the French Subsidiaries and to the extent related to the
U.S. Business or U.K. Business, of Seller and the U.K. Subsidiary, respectively,
whether primary or secondary, direct or indirect, and whether accrued, absolute,
contingent or otherwise, including liabilities or obligations guaranteed by
Seller or by any of the Participating Subsidiaries and liabilities or
obligations secured by any of the Purchased Assets, by any assets of the French
Subsidiaries, or by any of the Purchased Shares.
"Lien" means, with respect to any asset, any mortgage, hypothecation,
lien, pledge, charge, security interest or encumbrance of any kind.
Master Agreement - Page 7
"Material Adverse Change" and "Material Adverse Effect" mean a material
adverse change or effect, respectively, in the business, assets, condition
(financial or otherwise) or results of operations of the U.S. Business or the
European Business, individually, or the Business taken as a whole; provided,
however, that none of the following shall be deemed to constitute, nor be taken
into account in determining whether there has been or will be, a Material
Adverse Change or Material Adverse Effect: (a) any change or effect that results
or arises from changes affecting generally any of the industries in which Buyers
or Seller and the Participating Subsidiaries operate or the overall economy of
the United States, the United Kingdom or France generally; (b) any change or
effect that results or arises from changes affecting general worldwide economic
conditions; or (c) to the extent resulting from the public announcement or
pendency of the transactions contemplated by the Operative Documents, any change
or effect attributable to the disruption or loss of any existing or prospective
customer, distributor or supplier relationships or any delays in or
cancellations of customer or distributor orders.
"Material Contracts" means, collectively, the Contracts referred to in
clauses (i) through (xiv) of Section 3.12(a).
"Operative Documents" means this Agreement, the U.S. Purchase
Agreement, the Share Purchase Agreement, the U.K. Purchase Agreement, the U.K.
Property Contracts, the Letter Agreement and the Ancillary Agreements.
"Participating Subsidiaries" means the U.K. Subsidiary, the French
Subsidiary, and the Second Tier Subsidiaries.
"Permitted French Subsidiary Liabilities" means those Liabilities of
the French Subsidiaries (i) for the accrued expenses and trade accounts payable
(excluding amounts due to Affiliates of the French Subsidiaries) of the French
Business that have been incurred in the ordinary course of the French Business
through the Closing Date, in the amounts and to the extent reflected on the
Final Closing Net Asset Statement; (ii) accruing from and after the Closing
Date, under all Contracts of the French Subsidiaries (other than Liabilities
attributable to (a) any breach or failure by a French Subsidiary to comply with
the terms thereof on or before the Closing or (b) Contracts relating to Excluded
Liabilities), provided that Liabilities under any Contract entered into after
the date hereof that is made or entered into in violation of any provision of
this Agreement shall constitute Permitted French Subsidiary Liabilities unless
the French Buyer expressly elects in writing, on behalf of the French
Subsidiary, to enjoy the corresponding benefits of such Contract for the French
Business; (iii) related to the French Business that are otherwise expressly
assumed by Buyer Representative or the French Buyer at the Closing pursuant to,
or that are expressly set forth as constituting Permitted French Subsidiary
Liabilities under, any other provision of this Agreement or any other Operative
Document; and (iv) the Accrued French Tax Liability.
"Person" means an individual, corporation, partnership, association,
trust or other entity or organization having independent legal status, including
any Governmental Entity.
Master Agreement - Page 8
"Prior Claims" means all claims or causes of action related to the
Business (including general liability claims, claims for personal injury and
property damage, claims arising out of motor vehicle accidents, product
liability claims involving personal injury, property damage or economic injury,
and claims arising out of violations or alleged violations of Laws) which: (i)
are asserted against Seller, any of the Participating Subsidiaries or the French
Holding Company or the Purchased Assets or the Purchased Shares at any time
before the Closing; (ii) arise out of events or occurrences that take place or
circumstances or conditions that are existing at any time before the Closing,
including environmental conditions antedating the Closing which under applicable
Environmental Laws require or will require remediation, disclosure or other
response action; (iii) involve an alleged injury, damage or violation that
occurred on or was subsisting before the Closing; or (iv) concern an alleged
defective product that was produced and distributed or sold by Seller or any
Participating Subsidiary before the Closing. "Prior Claims" also includes those
matters described in Sections 9A.02(b) and (c). If a claim or cause of action
relates to the conduct of the Business both prior to and after the Closing, then
Prior Claims shall only include that portion of such claim or cause of action
attributable to the conduct of the Business prior to the Closing.
Notwithstanding anything to the contrary in this Agreement or any other
Operative Document, Prior Claims shall not include any Assumed Liability or any
Permitted French Subsidiary Liability.
"Purchased Assets" means the Purchased Assets under the U.S. Purchase
Agreement, the Purchased Assets under the U.K. Purchase Agreement and the real
property and leases of real property transferred under the U.K. Property
Contracts.
"Purchased Shares" means all the outstanding shares of capital stock of
the French Subsidiary being purchased by the French Buyer pursuant to the Share
Purchase Agreement.
"Reference Date" means June 30, 2001.
"Reference Net Asset Statement" means the Net Asset Statement as of the
Reference Date.
"Restricted Areas" means France, the United Kingdom and the United
States.
"Scottish Business Premises Contract" means the agreement entitled
"Scottish Business Premises Contract" attached to the U.K. Offer.
"Seller's knowledge" means the actual knowledge of any of Arthur L.
Goldstein, Alan M. Crosby, Stephen Korn, Daniel M. Kuzmak, Theodore G.
Papastavros, John Pott, David Albers, Alan Cocker, Peter Gray, Deborah Coulson,
Anthony DiPaola, John LeMay, Patrick Lebaillif, Debjit Datta, Robert Pridgen,
Christopher Collins or Joseph Guthrie.
"Start Date" means the date on which a Person enters into a
relationship with Seller or any Participating Subsidiary which results in that
Person becoming an Equipment Customer.
Master Agreement - Page 9
"Subsidiary" means any Person of which another Person (either alone or
through or together with any Subsidiary) owns, directly or indirectly, 50% or
more of the voting securities or interests the holders of which are generally
entitled to vote for the election of directors or other governing body of such
Person (or, if there are no voting securities or interests, 50% or more of the
equity interests).
"Target Working Capital" means an amount equal to the sum of:
(w) the product obtained by multiplying (i) $62.50 by (ii) the
number of Equipment Customers of the U.S. Business as of the Closing Date set
forth on the Final Closing Net Asset Statement; plus
(x) the product obtained by multiplying (i) $96.94 by (ii) the
number of Equipment Customers of the U.K. Business as of the Closing Date set
forth on the Final Closing Net Asset Statement; plus
(y) the product obtained by multiplying (i) $34.29 by (ii) the
number of Equipment Customers of the French Business as of the Closing Date set
forth on the Final Closing Net Asset Statement; plus
(z) $3,470,187.
"Transferred Employees" means the Transferred U.S. Employees, the
Transferred U.K. Employees and the employees of the French Subsidiary,
collectively. "Transferred Employee" means any of the Transferred Employees.
"Transition Services Agreement" means the Transition Services Agreement
by and between Seller, acting on behalf of the Asset Sellers and the French
Holding Company, and Buyer Representative, acting on behalf of Buyers, in
substantially the form annexed hereto as Exhibit E.
"U.K. Buyer" means Springbar Watercoolers Limited, a company registered
in England and Wales with company number 1963471.
"U.K. Property Contracts" means the English Business Premises Contract
and the Scottish Business Premises Contract.
"U.K. Purchase Price" means the aggregate consideration to be paid for
the Purchased Assets, including the assumption of the Assumed Liabilities,
pursuant to the U.K. Purchase Agreement.
"U.S. Buyer" means Great Spring Waters of America, Inc., a Delaware
corporation.
Master Agreement - Page 10
"U.S. Purchase Price" means the aggregate consideration to be paid for
the Purchased Assets, including the assumption of the Assumed Liabilities,
pursuant to the U.S. Purchase Agreement.
"Water-Only Customer" means a Person that purchases bottled water from
Seller or a Participating Subsidiary but that does not lease or rent from Seller
or a Participating Subsidiary, and is not otherwise provided (whether with or
without a rental charge) by Seller or a Participating Subsidiary with, a bottled
water cooler, a Bottleless Cooler, a refrigerator, a microwave or a coffee
brewer.
"Water Sources" means all water sources held for use, or from which
water is obtained, for bottling purposes in the Business.
1.02. Additional Defined Terms. Each of the following terms is defined
in the Section set forth opposite such term:
Term Section
---- -------
AAA 11.06
Accrued French Tax Liability 8D.02
Aggregate Purchase Price 2.02
Agreement Preamble
Benefit Arrangement 9A.01
Bonus Programs 9A.02
Bottleless Coolers Recitals
Business Recitals
Business Proprietary Rights 3.22
Business Tradenames 5.14
Buyer French Tax Liabilities 8D.02
Buyer Indemnitees 11.02
Buyer Representative Preamble
Buyer(s) Recitals
Closing 2.05
Closing Date 2.05
Confidentiality Agreement 5.05
Consents 3.05
Customer Counts 2.08
Customer Credit 2.09
Date of the Notice of Claim 2.03
Defined Contribution Plan 9A.01
Employee Plan 9A.01
ERA 9C.01
ERISA 9A.01
ERISA Affiliate 9A.01
Master Agreement - Page 11
Escrow Termination Date 2.03
European Customer Count 2.08
Final Closing Net Asset Statement 2.06
Final European Customer Count 2.08
Final U.S. Customer Count 2.08
Financial Statements 3.06
French Business Recitals
French Holding Company Recitals
French Subsidiary Recitals
Governmental Entity 3.03
Indemnified Party 11.06
Indemnifying Party 11.06
Losses 11.02
Multiemployer Plan 9A.01
Net Asset Statement 2.06
Notice of Claim 2.03
Pension Plan 9A.01
Permits 3.13
Permitted Costs 7.04
Permitted Liens 3.08
Preliminary Closing Net Asset Statement 2.06
Real Property 3.08
Restricted Location 5.04
Restricted Offerings 5.04
Restricted Parties 5.04
SEC 5.14
Seconded Employees 5.11
Secondment 5.11
Secondment Period 5.11
Second Tier Subsidiaries 3.18
Section 338 Election 8B.02
Section 338 Form 8B.02
Section 338 Notice 8B.02
Seller Preamble
Seller Indemnitees 11.03
Seller Tradenames 6.03
Share Purchase Agreement 2.01
TA 88 8C.01
Tax Returns 8A.01
Taxation Authority 8A.01
Taxes 8A.01
Transfer Regulations 9C.04
Transferred U.K. Employees 9C.01
Transferred U.S. Employees 9B.02
TULRCA 9C.01
Master Agreement - Page 12
U.K. Assets 2.10
U.K. Business Recitals
U.K. Offer 2.01
U.K. Pension Scheme 9A.01
U.K. Purchase Agreement 2.01
U.K. Real Property 3.08
U.K. Subsidiary Recitals
U.S. Assets 2.10
U.S. Business Recitals
U.S. Customer Count 2.08
U.S. Purchase Agreement 2.01
UST's 3.23
VATA 8C.01
VRP's 9D.01
WARN Act 9B.02
Wimbledon Property 3.08
Working Capital Deficiency 2.07
Working Capital Overage 2.07
ARTICLE II
THE TRANSACTIONS
2.01. Purchase Documents. Concurrently with the execution and delivery
of this Agreement:
(a) Buyer Representative shall cause U.S. Buyer to execute and deliver
to Seller, and Seller shall execute and deliver to U.S. Buyer, a copy of the
Asset Purchase Agreement dated as of the date hereof, in the form annexed hereto
as Exhibit F (the "U.S. Purchase Agreement");
(b) Buyer Representative shall cause the U.K. Buyer to make an offer to
the U.K. Subsidiary on the terms of the Offer Letter attached hereto as Exhibit
G (the "U.K. Offer") by executing, dating as of the date hereof and delivering
the U.K. Offer to the U.K. Subsidiary simultaneously with the execution and
delivery of this Agreement, and Seller shall cause the U.K. Subsidiary to orally
accept the U.K. Offer in the manner set forth in the U.K. Offer (for the
purposes of the Operative Documents, the Contract constituted by such acceptance
of the U.K. Offer shall be referred to as the "U.K. Purchase Agreement");
(c) Buyer Representative shall cause U.K. Buyer to execute and deliver
to U.K. Seller, and Seller shall cause U.K. Seller to execute and deliver to
U.K. Buyer, a copy of each of the U.K. Property Contracts dated as of the date
hereof, in the forms annexed to the U.K. Offer;
(d) Buyer Representative shall cause French Buyer, and Seller shall
cause the French Holding Company, to execute and deliver to one another a copy
of the Share Purchase
Master Agreement - Page 13
Agreement dated as of the date hereof, in the form annexed hereto as Exhibit H
(the "Share Purchase Agreement"); and
(e) Each of Buyer Representative and Seller shall execute and deliver
to one another the Letter Agreement dated as of the date hereof.
Seller and Buyer Representative agree and acknowledge that each of the U.S.
Purchase Agreement, the U.K. Purchase Agreement, the U.K. Property Contracts,
the Share Purchase Agreement and the Letter Agreement, as so entered into, shall
have been entered into in reliance on the terms and subject to the conditions
set forth in this Agreement and each of such other agreements, including the
representations and warranties contained in this Agreement and in each of such
other agreements.
2.02. Purchase Price. Upon the terms and subject to the conditions set
forth in the relevant Operative Documents, the aggregate purchase price for the
Purchased Assets and the Purchased Shares (the "Aggregate Purchase Price") shall
be the sum of (a) subject to the adjustments contemplated by this Agreement, an
amount of consideration with a value equal to United States $218.0 million plus
(pound)1.7 million, which represents the purchase price for the Wimbledon
Property and (b) the assumption by each Buyer of the Assumed Liabilities of that
portion of the Business that is intended to be purchased by such Buyer. The
Aggregate Purchase Price shall be paid in the form specified in the Operative
Documents. For the sake of expediency, Buyer Representative, acting on behalf of
Buyers, shall cause the cash portion of the Aggregate Purchase Price (less the
Escrow Amount) to be paid directly to Seller, acting on behalf of and as agent
for the Asset Sellers and the French Holding Company, by wire transfers of
immediately available funds to one or more accounts in the United States of the
Seller, U.K. Subsidiary, French Holding Company or such other Person as Seller
may designate, which shall have been designated by Seller in writing at least
five days prior to the Closing.
2.03. Escrow Amount. (a) At the Closing, Buyer Representative shall
deduct the Escrow Amount from the cash portion of the Aggregate Purchase Price
(ratably based on the respective cash portions of the Aggregate Purchase Price
for the U.S. Business, U.K. Business and French Business) and pay the Escrow
Amount, by wire transfer of immediately available funds, directly to the Escrow
Agent. The Escrow Amount shall be held and invested by the Escrow Agent in
accordance with the Escrow Agreement and shall constitute security for the
payment and performance as and when due of the obligations of the Asset Sellers
and the French Holding Company under the Operative Documents, including Seller's
obligations, subject to Section 2.09(c)(v), under Section 11.02.
(b) The Escrow Agent's fees for serving as such shall be shared equally
between Seller and Buyer Representative.
(c) Any claim by a Buyer or Buyer Representative against the Escrow
Amount for reimbursement of Losses shall be made in accordance with the
procedures set forth below.
Master Agreement - Page 14
(i) The term "Notice of Claim" shall mean a written notice
from Buyer Representative of a claim for indemnification under Section 11.02.
The term "Date of the Notice of Claim" shall mean the date on which the Notice
of Claim is received by the Escrow Agent.
(ii) Buyer Representative shall give any Notice of Claim
simultaneously to both Seller and the Escrow Agent. The Notice of Claim shall
(x) indicate the amount of Buyer Representative's claim for indemnification, (y)
give a reasonably detailed description of the nature of the claim, demand or
facts that serve as a basis therefor and (z) the date the action, event or
circumstance giving rise to the claim first arose or the date Buyer
Representative first became aware of the event. The Escrow Agent shall have no
duty to verify the amount of Buyer Representative's claim for indemnification.
(iii) Within 45 days after the Date of the Notice of Claim,
the Escrow Agent shall deliver to Buyer Representative from the Escrow Amount
the amount set forth in the Notice of Claim, unless:
(x) the claim or demand set forth in the Notice of
Claim is a claim or demand asserted by a third party and the Escrow
Agent shall have received written notice from Seller within 40 days
after the Date of the Notice of Claim advising the Escrow Agent that
Seller has elected to contest such third party claim or demand in
accordance with Section 11.06(b); or
(y) prior to the expiration of 40 days after the Date
of the Notice of Claim, the Escrow Agent shall have received written
notice from the Seller, a copy of which shall be delivered by the
Seller to the Buyer Representative simultaneously with the delivery
thereof to the Escrow Agent, that Seller elects to contest the claim or
demand set forth in the Notice of Claim; or
(z) prior to the expiration of 40 days after the Date
of the Notice of Claim, the Escrow Agent shall have received written
notice from the Buyer Representative that the claim or demand set forth
in the Notice of Claim has been satisfied other than through operation
of this Agreement.
(iv) If Seller has filed with the Escrow Agent a written
notification pursuant to either Section 2.03(c)(iii)(x) or Section
2.03(c)(iii)(y) hereof, then the Escrow Agent shall thereafter deliver to Buyer
Representative the amount set forth in such Notice of Claim from the Escrow
Amount only in accordance with either: (i) joint written instructions signed by
Buyer Representative and Seller and received by the Escrow Agent; or (ii) a
final, unappealable court order, received by the Escrow Agent.
(d) The Escrow Amount shall continue to be held and invested by the
Escrow Agent in accordance with the Escrow Agreement until the first anniversary
of the Closing Date (the "Escrow Termination Date"). On the Escrow Termination
Date, the Escrow Agent shall disburse to Seller by wire transfer of immediately
available funds to an account or accounts designated by Seller in writing (on
behalf of and as agent for the Asset Sellers and the French Holding
Master Agreement - Page 15
Company) the unapplied balance of the Escrow Amount, LESS the aggregate amount
of the claims set forth in any Notice(s) of Claim(s) dated on or prior to the
Escrow Termination Date with respect to which any indemnification claims are
pending as of the Escrow Termination Date. This remaining Escrow Amount shall
continue to be held and invested pending final resolution of such claims upon
which the Escrow Agent shall then distribute to Seller (on behalf of and as
agent for the Asset Sellers and the French Holding Company) the remainder of the
Escrow Amount.
2.04. Payment of Certain French Subsidiary Liabilities. No later than
immediately prior to the Closing, Seller shall, or shall cause the French
Holding Company or the French Subsidiary to, pay and cause to be discharged all
Liabilities of the French Subsidiaries, other than Permitted French Subsidiary
Liabilities, that are in a liquidated or readily ascertainable amount, including
all indebtedness for borrowed money (including purchase money financing) of the
French Subsidiaries and all receivables and payables, including loans,
management fees, equipment rents and any other amounts due, among any French
Subsidiary, Seller, the French Holding Company or any of their Affiliates.
Seller shall, or shall cause its Subsidiaries to, use commercially reasonable
efforts to effectuate any repayment in such a manner so as not to result in the
recognition of income or any Tax on the part of any of the French Subsidiaries;
provided, however, that if any income or Taxes arise as a result of such
repayment, all resulting Taxes shall be paid in full by the French Subsidiary
prior to Closing and, if not so paid, shall be accrued as an expense of the
French Subsidiary on the Final Closing Net Asset Statement and shall, to the
extent so accrued, constitute Permitted French Subsidiary Liabilities. As of the
Closing, the French Subsidiary shall have no indebtedness for borrowed money and
shall be a party to no Contracts other than Contracts exclusively related to the
French Business. Any Prior Claims and any Liabilities of the French Subsidiaries
which are not Permitted French Subsidiary Liabilities and which are not paid and
discharged prior to the Closing in accordance with this Section 2.04 shall
constitute Excluded Liabilities.
2.05. Closing. Subject to the satisfaction or waiver of the conditions
set forth in Article X, the closing (the "Closing") of the purchase and sale of
the Purchased Assets, the assumption of the Assumed Liabilities, the purchase
and sale of the Purchased Shares pursuant to the Operative Documents and the
consummation of the other transactions contemplated by the Operative Documents
to be consummated at the Closing shall take place at the offices of Testa,
Hurwitz & Thibeault, LLP in Boston, Massachusetts on the later of December 31,
2001 or five Business Days after the satisfaction or waiver of the conditions
set forth in Article X, or at such other time or place as Buyer Representative
and Seller may agree (the day on which the Closing takes place being referred to
herein as the "Closing Date"). The Closing shall not take place hereunder or
under any of the other Operative Documents unless all such transactions
contemplated by the Operative Documents close simultaneously. At the Closing,
(a) Buyer Representative (acting on behalf of Buyers) shall pay and
remit (i) the Escrow Amount to the Escrow Agent under the Escrow Agreement, and
(ii) to the account or accounts designated in writing by Seller, the balance of
the cash portion of the Aggregate Purchase Price;
Master Agreement - Page 16
(b) The Asset Sellers, the French Holding Company and Buyers shall
enter into such assignment and assumption agreements, and the Asset Sellers and
the French Holding Company shall deliver to the applicable Buyer such deeds,
bills of sale, endorsements, consents, assignments and other good and sufficient
instruments of conveyance and assignment, all as required to be delivered under
the Operative Documents;
(c) The French Holding Company shall deliver to the French Buyer duly
signed transfer orders (ordres de mouvement) enabling the French Buyer to be
immediately registered as the sole owner of the Purchased Shares, along with an
update of (i) the corresponding shareholder accounts for the French Subsidiary
and (ii) the share transfer registry for the French Subsidiary;
(d) Except to the extent that the U.K. Property Contracts provide for
later delivery, the U.K. Subsidiary shall deliver to the U.K. Buyer assignments
of leasehold properties, and freehold transfer documents for the freehold
property in Wimbledon, in accordance with the English Business Premises Contract
and the Scottish Business Premises Contract, together with any accompanying
required Consents; and
(e) Seller, the U.K. Subsidiary, the French Holding Company, Buyer
Representative and Buyers shall each execute and deliver to the others each of
the Ancillary Agreements to which it is a party, with appropriate mutually
agreed upon attachments attached thereto.
2.06. Net Asset Statements.
(a) Preparation Guidelines. (i) A "Net Asset Statement" means
a statement of the assets and liabilities of the U.S. Business, the U.K.
Business and the French Subsidiary being transferred to the Buyers pursuant to
the Operative Documents (presented both on combining and combined bases) as of
the Reference Date or the Closing Date, as the case may be, prepared (X) from
the Books and Records of Seller and the Participating Subsidiaries (subject, in
the case of the Final Closing Net Asset Statement, to adjustment based on the
results of the audit and inspection contemplated by clause (iii) below), (Y) in
accordance with this Section 2.06, and (z) in accordance with GAAP applied on a
consistent basis as to classification of items and amounts and interpretations
and assumptions with those that were used to prepare the Seller's audited
financial statements. Each Net Asset Statement shall also set forth, in each
case as of the Reference Date or the Closing Date, (A) the Adjusted Net Assets
of the U.S. Business, the U.K. Business and the French Subsidiary being
transferred to the Buyers pursuant to the Operative Documents (presented both on
combining and combined bases), (B) the Adjusted Working Capital of the U.S.
Business and the U.K. Business, (C) the Combined Working Capital of the
Business, (D) the number of Equipment Customers of the U.S. Business, the U.K.
Business and the French Subsidiary, and (E) in the case of the Closing Net Asset
Statement only, the Target Working Capital and the calculation of any Working
Capital Overage or Working Capital Deficiency.
(ii) For purposes of preparing the Net Asset Statements and
determining Adjusted Net Assets, Adjusted Working Capital, Combined Working
Capital, Target Working
Master Agreement - Page 17
Capital and any other amounts based on the Net Asset Statements, the following
adjustments shall be made:
(A) Cash and cash equivalents, whether on hand or in
banks, certificates of deposit or marketable securities, shall be excluded;
(B) All Excluded Assets shall be excluded;
(C) No Liabilities shall be reflected other than the
Assumed Liabilities and the Permitted French Subsidiary Liabilities, which shall
be reflected in accordance with GAAP;
(D) All plant, property, equipment and other fixed
assets included in the Purchased Assets or owned by the French Subsidiaries
shall be included at their respective net book value as of the Reference Date,
subject only to adjustment for (1) depreciation between the Reference Date and
the Closing Date according to depreciation schedules used in preparing the
Reference Net Asset Statement, (2) losses or dispositions of fixed assets and
(3) acquisitions of fixed assets;
(E) All intercompany receivables and payables between
or among any of Seller, the Participating Subsidiaries, the French Holding
Company or any of their Affiliates shall be eliminated;
(F) For purposes of converting currencies other than
United States dollars into United States dollars, the same currency conversion
rates used in preparing the Reference Net Asset Statement shall be applied for
purposes of the Closing Net Asset Statement, regardless of any intervening
change in exchange rates between the Reference Date and the Closing Date; and
(G) Such other items or adjustments as are expressly
contemplated by this Agreement with respect to the Final Closing Net Asset
Statement. To the extent this Agreement contemplates that an item or adjustment
shall be reflected on the Final Closing Net Asset Statement, such item or
adjustment may also be reflected on the Preliminary Closing Net Asset Statement.
(iii) In order to prepare the Final Closing Net Asset
Statement, Seller shall perform or cause to be performed a physical audit and
count of the inventories (including finished product, work in process and raw
materials) of each of the U.S. Business, the U.K. Business and the French
Business as of a date within 5 Business Days prior to the Closing Date as Seller
and Buyer Representative shall jointly select. Buyers or their representatives
shall be permitted to observe the physical audit and count and shall receive
copies of the results. Buyers or their representatives shall also be permitted,
within 5 Business Days prior to the Closing Date, to verify by physical
inspection the existence and condition of all vehicles used in the Business and
included in the Purchased Assets or held by the French Subsidiary (including
vehicles under lease from third-party lessors) and fixed assets consisting of
machinery and equipment (including
Master Agreement - Page 18
bottling lines) with a net book value of $10,000 or more. The results of the
physical count and inspection shall be utilized in the preparation of the Final
Closing Net Asset Statement.
(b) Reference Net Asset Statement. The Reference Net Asset Statement is
set forth as Schedule 2.06.
(c) Closing Net Asset Statement. (i) After the Closing Date, Seller
shall prepare, or cause to be prepared, the Net Asset Statement as of the
Closing Date (the "Preliminary Closing Net Asset Statement").
(ii) Buyer Representative's Right of Review. Within 90 days
after the Closing Date, Seller shall deliver a copy of the Preliminary Closing
Net Asset Statement to Buyer Representative. As promptly as practicable after
Buyer Representative has received the Preliminary Closing Net Asset Statement
but in no event later than 90 days after such receipt, Buyer Representative
shall give Seller a written notice which shall either: (A) state that Buyer
Representative accepts the Preliminary Closing Net Asset Statement and the
amounts set forth on the Preliminary Closing Net Asset Statement as submitted;
or (B) describe in reasonable detail, including nature and amount, each proposed
adjustment that Buyer Representative proposes to make to the Preliminary Closing
Net Asset Statement and the amounts set forth on the Preliminary Closing Net
Asset Statement; provided, however, that any such proposed adjustments shall be
based solely on the grounds that the Preliminary Closing Net Asset Statement or
the amounts set forth on the Preliminary Closing Net Asset Statement (x) were
not prepared or determined in accordance with this Section 2.06 or (y) contain
mathematical errors. If Seller has not received a written notice from Buyer
Representative within such 90-day period, Buyer Representative and Buyers shall
conclusively be deemed to have accepted the Preliminary Closing Net Asset
Statement and the amounts set forth on the Preliminary Closing Net Asset
Statement as submitted by Seller.
(iii) Resolution of Disputed Adjustments. If Buyer
Representative gives Seller a timely notice pursuant to Section 2.06(c)(ii) that
includes a proposed adjustment to which Seller objects, then Buyer
Representative and Seller shall negotiate in good faith to resolve any
disagreement over whether the proposed adjustment is or is not appropriate. If
they have not resolved all such proposed adjustments within 30 days following
Seller's receipt of Buyer Representative's notice, then Buyer Representative and
Seller shall refer any unresolved proposed adjustments to the international
accounting firm of Andersen, or to such other independent accounting firm of
international reputation as Seller and Buyer Representative shall mutually
designate (who shall not have any material relationship with Seller, Buyer
Representative or any of their Affiliates), to make the determination as to the
appropriateness or amount of such adjustments. The accounting firm's
determination shall be limited in scope solely to the unresolved proposed
adjustments set forth in Buyer Representative's original notice and remaining
unresolved. Seller and Buyer Representative shall direct the accounting firm to
act expeditiously to resolve all unresolved proposed adjustments. The accounting
firm's decision as to the appropriateness or amount of such proposed adjustments
shall be final, binding and conclusive on Seller, the other Asset Seller, the
French Holding Company, Buyer Representative, Buyers, and anyone else having an
interest in the determination. Unless otherwise determined by
Master Agreement - Page 19
the accounting firm, the accounting firm's fees and expenses in making the
determination shall be shared equally between Seller and Buyer Representative
and shall be paid within five (5) Business Days of demand.
(iv) Cooperation. During the period required for the
preparation and review of, and resolution of disputes relating to, the
Preliminary Closing Net Asset Statement or the amounts set forth on the
Preliminary Closing Net Asset Statement, Seller and Buyer Representative shall
each afford the other's accountants and other designated representatives access
during regular business hours to the Books and Records as they may reasonably
require in order to review and verify the items on the Preliminary Closing Net
Asset Statement.
(v) Final Closing Net Asset Statement. The "Final Closing Net
Asset Statement" shall be either: (A) the Preliminary Closing Net Asset
Statement prepared by Seller, if accepted or deemed to have been accepted by
Buyer Representative in accordance with this Section 2.06(c); or (B) the
Preliminary Closing Net Asset Statement adjusted to reflect the resolution of
all proposed adjustments submitted by Buyer Representative, either by agreement
of the parties or as determined by the accounting firm in accordance with this
Section 2.06(c).
2.07. Payment of Net Asset Statement Adjustments. Within 10 Business
Days after the Final Closing Net Asset Statement has been accepted or deemed to
have been accepted in accordance with Section 2.06(c) or any proposed
adjustments have been resolved in accordance with Section 2.06(c):
(i) if the Combined Working Capital as of the Closing Date
exceeds the Target Working Capital by more than United States $1,000,000 (the
amount by which the Combined Working Capital exceeds the Target Working Capital
being hereinafter referred to as the "Working Capital Overage"), Buyer
Representative (acting on behalf of Buyers) shall pay the amount of the Working
Capital Overage, together with interest as provided below, to Seller (acting on
behalf of the Asset Sellers and the French Holding Company) in immediately
available funds by wire transfer;
(ii) if the Combined Working Capital as of the Closing Date
does not exceed the Target Working Capital by more than United States $1,000,000
and is not less than the Target Working Capital by more than United States
$1,000,000, no payments shall be made; and
(iii) if the Combined Working Capital as of the Closing Date
is less than the Target Working Capital by more than United States $1,000,000
(the amount by which the Target Working Capital exceeds the Combined Working
Capital being hereinafter referred to as the "Working Capital Deficiency"),
Seller (acting on behalf of the Asset Sellers and the French Holding Company)
shall pay the amount of the Working Capital Deficiency, together with interest
as provided below, to Buyer Representative (acting on behalf of Buyers) in
immediately available funds by wire transfer; provided, however, that Seller may
apply any available Customer Credits to satisfy its obligation pursuant to this
clause (iii).
Master Agreement - Page 20
Any payment required to be made by this Section 2.07 shall include interest from
the Closing Date to the date of payment, calculated at a variable rate of
interest equal to the United States prime rate or base rate of Citibank N.A.
announced from time to time. No payment to be made pursuant to this Section 2.07
shall be subject to the limitations contained in Section 11.04.
2.08. Active Customer Counts. (a) Not later than 180 days after the
Closing Date, Buyer Representative shall review the Equipment Customers of the
Business as of the Closing Date to determine which such Equipment Customers
qualify as Active Customers, including which Incremental Customers are eligible
to be included as Active Customers in the European Customer Count. For avoidance
of doubt, Persons who do not become Equipment Customers of the Business until
after the Closing Date shall not qualify as Active Customers or be included in
the Customer Counts.
(b) Within 180 days after the Closing Date, Buyer Representative shall
deliver to Seller a certificate showing the number of Active Customers in the
European Business and the U.S. Business (respectively, the "European Customer
Count" and the "U.S. Customer Count," and collectively, the "Customer Counts"),
together with copies of appropriate supporting documentation. Seller shall have
90 days to review the Customer Counts and supporting documentation and give
Buyer Representative a written notice which shall either: (i) state that Seller
accepts the Customer Counts as submitted; or (ii) describes in reasonable
detail, including the names of customers and the reason for any proposed
adjustment, each proposed adjustment that Seller proposes be made to the
Customer Counts. If Buyer Representative has not received a written notice from
Seller within the 90-day review period, Seller, the U.K. Subsidiary and the
French Holding Company shall conclusively be deemed to have accepted the
Customer Counts as submitted by Buyer Representative. If Seller does give timely
notice of dispute that includes a proposed adjustment to which Buyer
Representative objects, Buyer Representative and Seller shall negotiate in good
faith to resolve the dispute. If they have not resolved the dispute within 30
days following Buyer Representative's receipt of Seller's notice, the dispute
shall be resolved by an international accounting firm in the same manner
provided for in Section 2.06(c)(iii) in the case of disputed adjustments in
connection with the Preliminary Closing Net Asset Statement.
(c) Solely for purposes of determining the European Customer Count,
Incremental Customers with the lowest total revenue during the period for
determining Average Revenue per Customer shall be excluded from the calculation
of the Average Revenue per Customer of the Incremental Customers until the
Average Revenue per Customer of the Incremental Customers equals the Average
Revenue per Customer for all of the Active Customers of the European Business
other than Incremental Customers. Only Incremental Customers that are included
in the Average Revenue per Customer of the Incremental Customers when the
Average Revenue per Customer of the Incremental Customers equals the Average
Revenue per Customer for all of the Active Customers of the European Business
other than Incremental Customers shall be included as Active Customers in the
European Customer Count.
(d) The "Final European Customer Count," and "Final U.S. Customer
Count" shall be either: (i) the European Customer Count and U.S. Customer Count,
respectively, as shown in Buyer Representative's certificate delivered pursuant
to Section 2.08(b), if accepted or deemed to
Master Agreement - Page 21
have been accepted by Seller in accordance with Section 2.08(b); or (ii) the
European Customer Count and U.S. Customer Count, respectively, adjusted to
reflect the resolution of any disputes, either by agreement of the parties or as
determined by the accounting firm in accordance with Section 2.08(b).
(e) During the period required for the preparation and review of, and
resolution of disputes relating to, the Customer Counts, Seller and Buyer
Representative shall each afford the other's accountants and other designated
representatives access during regular business hours to the books and records as
they may reasonably require in order to review and verify information relating
to the Customer Counts.
2.09. Active Customer Adjustments. (a) Within 10 Business Days after
Seller has accepted or is deemed to have accepted the audit results and the
Customer Counts, or any dispute has been resolved as provided in Section
2.08(b):
(i) if, as a cumulative result of the adjustments to the
Aggregate Purchase Price required to be made pursuant to Sections 2.09(b) and
(c), the Aggregate Purchase Price is increased, Buyer Representative (acting on
behalf of Buyers) shall pay the amount of the increase in the Aggregate Purchase
Price, together with interest from the Closing Date to the date of payment
(calculated at the same rate as provided in Section 2.07), to Seller (acting on
behalf of the Asset Sellers and the French Holding Company) in immediately
available funds by wire transfer; or
(ii) if, as a cumulative result of the adjustments to the
Aggregate Purchase Price required to be made pursuant to Sections 2.09(b) and
(c), the Aggregate Purchase Price is reduced, Seller (acting on behalf of the
Asset Sellers and the French Holding Company) shall pay the amount of the
reduction in the Aggregate Purchase Price, together with interest from the
Closing Date to the date of payment (calculated at the same rate as provided in
Section 2.07), to Buyer Representative (acting on behalf of Buyers) in
immediately available funds by wire transfer.
(b) United States Active Customers. (i) If the Final U.S. Customer
Count is less than 82,000 Active Customers, then the Aggregate Purchase Price
shall be reduced by an amount equal to the product of United States $975.00
multiplied by the shortfall (i.e., by the difference between 82,000 and the
Final U.S. Customer Count).
(ii) If the Final U.S. Customer Count equals or exceeds 82,000
Active Customers, there shall be no adjustment to the Aggregate Purchase Price.
(c) European Active Customers. (i) If the Final European Customer Count
is less than 79,000 Active Customers, the Aggregate Purchase Price shall be
reduced by an amount equal to the product of United States $1,625.00 multiplied
by the shortfall (i.e., by the difference between 79,000 and the Final European
Customer Count).
Master Agreement - Page 22
(ii) If the Final European Customer Count equals or exceeds
79,000 Active Customers but is less than 81,257 Active Customers, there shall be
no adjustment to the Aggregate Purchase Price.
(iii) If the Final European Customer Count exceeds 81,256
Active Customers, the Aggregate Purchase Price shall be increased by an amount
equal to the product of United States $1,625.00 multiplied by the excess (i.e.,
by the difference between 81,256 and the Final European Customer Count);
provided, however, that for purposes of this clause (iii) only, the Final
European Customer Count shall not exceed 85,500.
(iv) If the Final European Customer Count exceeds 85,500
Active Customers, there shall be no adjustment to the Aggregate Purchase Price
other than the increase contemplated by Section 2.09(c)(iii).
(v) If the Final European Customer Count exceeds 85,500 Active
Customers, Seller will be provided a credit (the "Customer Credit") with a value
equal to the product of United States $1,625.00 multiplied by the excess (i.e.,
by the difference between 85,500 and the Final European Customer Count). This
Customer Credit may be used by Seller on a dollar-for-dollar basis to reduce any
payments that would be required to be made but for this Section 2.09(c)(v) by
Seller, acting on behalf of the Asset Sellers and the French Holding Company, to
Buyer Representative, acting on behalf of Buyers, pursuant to Section 2.07,
Article XI or pursuant to any other indemnification obligation of Seller, the
other Asset Seller or the French Holding Company set forth in the Operative
Documents; provided, however, that no reduction in any such payment will affect
the determination as to whether or not any threshold contained in Section 2.07
and Section 11.04(b) has been achieved.
2.10. Allocation of Purchase Price.
(a) U.S. Business - Prior to the Closing, Buyer Representative and
Seller, and their respective Affiliates, shall use good faith efforts to agree
on an allocation of the U.S. Purchase Price among the assets being purchased
pursuant to the U.S. Purchase Agreement (the "U.S. Assets"). Buyer
Representative and Seller shall report, and/or to cause their Affiliates to
report, the purchase and sale of the U.S. Assets for Tax purposes (including (i)
on their respective IRS Forms 8594 and any other Tax Returns and all other
documents, schedules or requests from any Taxation Authority, (ii) before any
Taxation Authority and (iii) in the course of any audit, review or judicial
proceeding concerning the Tax consequences of the purchase and sale of the U.S.
Assets pursuant to the U.S. Purchase Agreement) in a manner consistent with the
allocation agreed upon pursuant to this Section 2.10. Under no circumstances,
however, shall agreement on an allocation of the U.S. Purchase Price be or be
deemed to be a condition precedent for Seller's or Buyer Representative's (or
their respective Affiliates') obligations under this Agreement and the other
Operative Documents, nor shall the failure to agree on such an allocation be or
be deemed to be a breach of this Agreement or the other Operative Documents.
Master Agreement - Page 23
(b) U.K. Business - The U.K. Purchase Price shall be allocated among
the assets purchased pursuant to the U.K. Purchase Agreement (the "U.K. Assets")
in accordance with the U.K. Purchase Agreement and the U.K. Property Contracts.
(c) Allocation of Adjustments - Seller shall be responsible for
appropriately allocating among the Asset Sellers and the French Holding Company
any adjustments in the Aggregate Purchase Price, based on the respective
adjustment amounts attributable to the U.S. Business, the U.K. Business or the
French Business, as the case may be. Buyer Representative shall be responsible
for appropriately allocating among Buyers any adjustments in the Aggregate
Purchase Price, based on the respective adjustment amounts attributable to the
U.S. Business, the U.K. Business or the French Business, as the case may be.
Where an adjustment is specifically attributable to the U.S. Business, the U.K.
Business or the French Business individually (e.g., an adjustment pursuant to
Section 2.09(b) based on the Final U.S. Customer Count), the adjustment shall be
allocated accordingly. Seller and Buyer Representative shall cooperate and
consult with one another in good faith so as to report such adjustments
consistently for financial and Tax accounting purposes, and shall cause their
respective Affiliates to do likewise.
2.11. Assumed Liabilities. At the Closing, the U.S. Buyer shall assume
the Assumed Liabilities in accordance with and subject to the U.S. Purchase
Agreement, and the U.K. Buyer shall assume the Assumed Liabilities in accordance
with and subject to the U.K. Purchase Agreement. Seller shall retain the
responsibility for all Excluded Liabilities (including all Prior Claims and with
respect to the French Subsidiaries, any Liabilities other than Permitted French
Subsidiary Liabilities), and shall either pay or discharge them or cause the
U.K. Subsidiary or the French Holding Company, as appropriate, to pay or
discharge them.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth in the Disclosure Schedule, Seller hereby
represents and warrants to Buyer Representative that:
3.01. Corporate Existence and Power. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and has all corporate powers and authority
necessary to carry on the U.S. Business as now conducted. Seller is duly
qualified to do business as a foreign corporation and is in good standing (to
the extent that the laws of a jurisdiction have a concept of good standing as a
foreign corporation) in each jurisdiction where the character of the property
related to the U.S. Business owned or leased by Seller or the nature of its
activities related to the U.S. Business make such qualification necessary,
except for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a Material Adverse Effect. A list of all
jurisdictions where Seller is qualified as a foreign corporation on account of
the U.S. Business is attached hereto as Schedule 3.01.
Master Agreement - Page 24
3.02. Corporate Authorization. The execution and delivery of the
Operative Documents to which Seller is a party, the performance by Seller of
such Operative Documents, and the consummation by Seller of the transactions
contemplated thereby, are within Seller's corporate powers and have been duly
authorized by all necessary corporate action on the part of Seller, and no
further corporate action is required on the part of Seller in order to authorize
the Operative Documents to which Seller is a party or the transactions
contemplated thereby. Each of the Operative Documents (other than the Ancillary
Agreements) to which Seller is a party has been duly executed and delivered and
constitutes a valid and binding agreement of Seller, enforceable against Seller
in accordance with its terms. Each of the Ancillary Agreements, when executed
and delivered by Seller, will have been duly executed and delivered by Seller
and will constitute a valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms.
3.03. Governmental Authorization. The execution, delivery and
performance by Seller, the French Holding Company and the U.K. Subsidiary of the
Operative Documents to which each is a party do not require any action by or in
respect of, or filing with, any multinational, national, state or local
governmental, regulatory or administrative body, agency, official, authority or
commission (each, a "Governmental Entity"), other than (i) compliance with any
applicable requirements of the HSR Act; and (ii) compliance with any applicable
requirements of competition, merger or acquisition control laws and regulations
of any jurisdiction other than the United States where pre-closing notification
and review of the transactions contemplated under the Operative Documents is
required by law.
3.04. Non-Contravention. The execution, delivery and performance by
Seller of each of the Operative Documents to which Seller is a party do not and
will not (i) contravene or conflict with the corporate charter, bylaws or other
organization or governing documents of Seller; (ii) assuming compliance with the
matters referred to in Section 3.03, contravene or conflict with or constitute a
violation of any provision of any judgment, injunction, order or decree, or
violate in any material respect any Law, binding upon or applicable to Seller or
the U.S. Business; (iii) except as would not result in a Material Adverse Effect
and assuming the receipt of all Consents identified in Schedule 3.05, constitute
a default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation, or to a loss of any benefit, under any
Material Contract, or any Permit; or (iv) result in the creation or imposition
of any Lien on any Purchased Asset, any asset of the French Subsidiaries or the
Purchased Shares, other than Permitted Liens.
3.05. Consents. Schedule 3.05 sets forth each Material Contract binding
upon Seller or any Participating Subsidiary or any Permit requiring the consent
of another Person as a result of the execution, delivery or performance of the
Operative Documents or the consummation of the transactions contemplated
thereby, except such Contracts or Permits for which the failure to obtain such
consent would not result in a Material Adverse Effect and would not prevent or
materially interfere with the continued use of all or any part of any owned or
leased Real Property as currently being used in the Business (the "Consents").
Master Agreement - Page 25
3.06. Financial Statements.
(a) The unaudited combining and combined statements of operations for
the Business for the years ended December 31, 1998, 1999 and 2000 and the six
months ended June 30, 2001 (collectively, the "Financial Statements") are
attached hereto as Schedule 3.06(a).
(b) Each of the Financial Statements has been prepared from and is
consistent with the Books and Records of Seller and the Participating
Subsidiaries and has been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be indicated therein
or in the notes thereto (subject to normal year-end adjustments in the case of
interim statements and except that the unaudited Financial Statements do not
contain all of the required footnotes), and fairly presents the results of
operations of each of the U.S. Business, the U.K. Business and the French
Business, individually, and of the Business as a whole for the periods then
ended. None of the statements of operations included as part of the Financial
Statements contains any revenues or losses unrelated to the Business, or any
items of extraordinary or nonrecurring income or any other revenues, including
insurance proceeds or damage awards, not earned in the ordinary course of the
Business, or as the result of any inconsistency in or change of accounting
principles or practices.
(c) The Reference Net Asset Statement is set forth as Schedule 2.06.
The Reference Net Asset Statement has been prepared in accordance with Section
2.06(a).
3.07. Absence of Certain Changes. Between the Reference Date and the
date hereof, Seller, the U.K. Subsidiary and the French Subsidiary have
conducted the U.S. Business, the U.K. Business and the French Business,
respectively, in the ordinary course consistent with past practices, and there
has not been:
(a) any Material Adverse Change;
(b) except as provided in Schedule 3.07(b), any incurrence, assumption
or guarantee by Seller or by any Participating Subsidiary of any indebtedness
for borrowed money with respect to the Business other than in the ordinary
course and in amounts and on terms consistent with past practices;
(c) any creation or other incurrence of any Lien on any Purchased
Asset, the assets of the French Subsidiary or the Purchased Shares, other than
Permitted Liens;
(d) any event or occurrence resulting in the damage, destruction or
other casualty loss of United States $100,000 or more (whether or not covered by
insurance) to the U.S. Business, the U.K. Business, the French Business, any
Purchased Asset or any asset of the French Subsidiary, individually;
(e) any transaction or Contract entered into, or commitment made, that
is related to the Business, any Purchased Asset, any asset of the French
Subsidiary, or the Purchased Shares, or any relinquishment or compromise of any
existing Contract, Permit or other right that is
Master Agreement - Page 26
related to the Business that (i) is of a nature which would be required to be
disclosed in Schedule 3.12(a), or (ii) is otherwise material to the U.S.
Business or the European Business, individually, or to the Business taken as a
whole, other than as contemplated by the Operative Documents;
(f) except as provided in Schedule 3.07(f), any cancellation or
compromise by Seller or any Participating Subsidiary of any debt owed to the
Business which is material to the U.S. Business or the European Business,
individually, or to the Business taken as a whole;
(g) any capital expenditure, or commitment for a capital expenditure,
for additions, replacements or improvements to property, plant or equipment
related to the Business other than in the ordinary course consistent with past
practices, or in excess of United States $25,000 in any of the U.S. Business,
U.K. Business or the French Business, individually;
(h) except for (i) the sale, lease or other disposition of inventory in
the ordinary course consistent with past practice, (ii) the sale or other
disposition of the trucks listed in Schedule 3.07(h), and (iii) the sale or
other disposition of other surplus or obsolete fixed assets with a net book
value of not more than $10,000 in each instance or $50,000 in the aggregate, any
sale, lease or other disposition of any assets or properties of Seller or any
Participating Subsidiary related to the Business;
(i) any product recall, voluntary or involuntary, or the institution
or, to Seller's knowledge, threatened institution of any proceeding or order to
effectuate a product recall;
(j) except as provided in Schedule 3.07(j), any termination or
cancellation of, or notice of intent to terminate or cancel, any Material
Contract;
(k) except as provided in Schedule 3.07(k), any increase by Seller or
any Participating Subsidiary, except in each case as consistent with past
practices, in the wages, salaries, compensation or benefits payable or provided
to any employee involved in the U.S. Business, U.K. Business or the French
Business, as the case may be, or the adoption by Seller or any Participating
Subsidiary of any new Employee Plan or Benefit Arrangement covering any employee
of the U.S. Business, U.K. Business or the French Business, as the case may be;
or
(l) except as provided in Schedule 3.07(l), any actual or, to Seller's
knowledge, threatened strike, lockout, walkout, sickout or labor stoppage with
respect to the Business or, to Seller's knowledge, any attempt to organize or
unionize any employees involved in the Business.
3.08. Properties.
(a) Schedule 3.08(a) lists all real property occupied, used or held for
use by Seller or any Participating Subsidiary in connection with the Business
(the "Real Property"), indicating which of Seller or the Participating
Subsidiary is the owner (with respect to owned Real Property) or the
lessee/sublessee (with respect to leased or subleased Real Property) and
Master Agreement - Page 27
specifying, in the case of leases or subleases, the name of the lessor or
sublessor, the current lease term and the basic annual rent required to be paid
by the lessee/sublessee.
(b) Schedule 3.08(b) describes all tangible personal property owned or
leased by Seller or any Participating Subsidiary for use in the Business as of
the date hereof that is included in the Purchased Assets or held by the French
Subsidiaries, including machinery, equipment, furniture, vehicles, storage
tanks, coolers, bottles, bottleless coolers, spare and replacement parts, fuel
and other trade fixtures and fixed assets, and any Liens thereon, specifying, in
the case of leases or subleases, the name of the lessor or sublessor, the
current lease term and the basic annual rent required to be paid by the
lessee/sublessee.
(c)(i) Seller has good and marketable record, fee simple title to all
of the owned Real Property in the United States that is included in the
Purchased Assets and the U.K. Subsidiary has good and marketable title to the
Wimbledon, England facility described in Schedule 3.08(c)(i) (the "Wimbleton
Property"). Seller has good and marketable title to, or in the case of leased
Real Property or leased personal property valid leasehold interests in, the
Purchased Assets set forth in the U.S. Purchase Agreement. The U.K. Subsidiary
has good and marketable title to, or in the case of leased personal property
valid leasehold interests in, or in the case of leased Real Property good and
marketable leasehold title to, the Purchased Assets set forth in the U.K.
Purchase Agreement. The French Subsidiary has good and marketable title to, or
in the case of leased Real Property or leased personal property valid leasehold
interests in, its assets as reflected on the Reference Net Asset Statement or
acquired by the French Subsidiary after the Reference Date, except for
inventory, surplus, obsolete or other properties and assets sold or disposed of,
or accounts receivable collected, since the Reference Date in the ordinary
course consistent with past practices.
(ii) Except as set forth on Schedule 3.08(c)(ii), Seller, the U.K.
Subsidiary or the French Subsidiary (as the case may be) is in actual possession
of the Real Property on an exclusive basis and no other Person has any right
(actual or contingent) to possession, use or occupancy of any of the Real
Property, subject to Permitted Liens. To Seller's knowledge, there are no
boundary or title disputes relating to any Real Property and included in the
Purchased Assets or occupied by the French Subsidiary, including any
encroachments, nor to Seller's knowledge is any Real Property included in the
Purchased Assets or occupied by the French Subsidiary the subject of any other
outstanding or threatened dispute, claim, action or notice of violation. To
Seller's knowledge, the improvements made by Seller or any of the Participating
Subsidiaries at each parcel of the Real Property included in the Purchased
Assets or occupied by the French Subsidiary are in material compliance with
building and fire codes and other applicable Laws. To Seller's knowledge, there
is no pending or proposed change in zoning, urbanization regulation or other
land use Law, classification or designation which, if implemented, would
materially impede or otherwise materially adversely affect the continued use of
any of the Real Property included in the Purchased Assets or occupied by the
French Subsidiary as currently being used in the U.S. Business, U.K. Business or
French Business, as the case may be. To Seller's knowledge, none of the Real
Property included in the Purchased Assets or occupied by the French Subsidiary
has been designated as a historical site, wilderness or habitat preserve or
other restricted use area.
Master Agreement - Page 28
(iii) All leases of Real Property and included in the Purchased Assets
or occupied by the French Subsidiary, and all leases of personal property
related to the Business, are in good standing and are valid, binding and
enforceable against Seller or a Participating Subsidiary in accordance with
their respective terms, and there does not exist under any such lease of Real
Property or personal property any material default on the part of Seller or the
relevant Participating Subsidiary or, to Seller's knowledge, on the part of any
other party to such lease.
(iv) The plants, buildings, structures and equipment included in the
Purchased Assets or held by the French Subsidiary have, to Seller's knowledge,
no material defects and have been reasonably maintained by Seller or a
Participating Subsidiary consistent with standards generally followed in the
industry (giving due account to the age and length of use of same, ordinary wear
and tear excepted) and are substantially suitable for their present uses.
(d) No Purchased Asset and no asset held by the French Subsidiary is
subject to any Lien, except:
(i) With respect to the Real Property:
(A) those specific exceptions to title listed in Schedule
3.08(d);
(B) the Lien of real estate Taxes not yet due and payable;
(C) inchoate Liens of mechanics, materialmen and repairmen
arising by operation of Law in the ordinary course of business consistent with
past practices for sums not yet due and payable;
(D) Liens to which specific reference is made in the U.K.
Property Contracts; and
(E) Nonmonetary Liens in the nature of easements, deed
restrictions and covenants of record which do not render title to such Real
Property unmarketable or prohibit, prevent or materially interfere with the
continued use of the Real Property as currently being used in the Business; and
(ii) With respect to any other asset:
(A) those specific Liens listed in Schedule 3.08(d);
(B) the Lien of personal property Taxes, use Taxes or similar
Taxes levied in respect of the asset and not yet due and payable; and
(C) the inchoate Liens of landlords, carriers, warehousemen,
mechanics, materialmen and repairmen arising by operation of Law in the ordinary
course of business consistent with past practices for sums not yet due and
payable.
Master Agreement - Page 29
The Liens described in clauses (i) and (ii) are, collectively, the "Permitted
Liens."
(e) Except as provided in Schedule 3.08(e), with respect to all Real
Property located in the United Kingdom (the "U.K. Real Property"):
(i) The documents of title consist of original documents or properly
examined abstracts, all of which are in possession of Seller or the U.K.
Subsidiary or are unconditionally held to its order. Where necessary, all title
deeds are fully stamped with ad valorem stamp duty and a produced document
stamp.
(ii) To Seller's knowledge, no buildings, extensions or major
alterations have been erected or carried out on any U.K. Real Property within
the last six (6) years, nor is any such construction in process or under
contract. No development (as defined in the Town and Country Planning Act 1990)
is being carried out at any U.K. Real Property. All planning permissions are
either unconditional or subject only to conditions which have either been
satisfied in all material respects or, in the case of continuing conditions, are
being complied with in all material respects in the ordinary course.
(iii) In the case of any U.K. Real Property occupied under leasehold:
(A) Any consent required for the grant of lease or the vesting
of the lease in the U.K. Subsidiary or for any works carried out by or change of
use effected by such tenant has been obtained and placed with the documents of
title, along with evidence of the registration of any such grant or vesting
where requisite.
(B) If title to the lease is not registered at HM Land
Registry with leasehold title absolute, the titles of the landlord and any
superior landlord have been investigated on behalf of the U.K. Subsidiary and
found to be satisfactory in all material respects.
(C) The landlord or a relevant associate within the meaning of
Schedule 10 VATA has properly made an election under Schedule 10 VATA having
effect in relation to the whole of the relevant U.K. Real Property.
3.09. Sufficiency of Purchased Assets. The Purchased Assets, the
Excluded Assets and the assets held by the French Subsidiary constitute all of
the assets and properties used or held for use by Seller and the Participating
Subsidiaries in the conduct of the Business. All of the assets and properties
that are reflected on the Reference Net Asset Statement are included in the
Purchased Assets and the assets held by the French Subsidiary, except for (i)
any such assets or properties that may have been sold, consumed or disposed of
in the ordinary course of business between the Reference Date and the date of
this Agreement and, to the extent such disclosure is required thereby, as
disclosed pursuant to Section 3.07(h) or as otherwise permitted by the Operative
Documents, and (ii) any accounts receivable that may have been collected in the
ordinary course of business since the Reference Date. Except as set forth in
Schedule 3.09, the
Master Agreement - Page 30
Purchased Assets and the assets held by the French Subsidiary are adequate to
conduct the Business as currently conducted.
3.10. Title to Purchased Shares. The French Holding Company or its
nominees or agents now has, and on the Closing Date will have, good and
marketable title to and unrestricted power to vote and sell the Purchased
Shares, free and clear of any Lien.
3.11. Litigation. Except as disclosed in Schedule 3.11, there is no
action, suit, investigation or proceeding pending against, or, to Seller's
knowledge, threatened against or affecting, Seller or any Participating
Subsidiary related to the U.S. Business, the U.K. Business or the French
Business which (i) seeks injunctive or other equitable relief against Seller or
any Participating Subsidiary or monetary relief of United States $100,000 or
more, or (ii) if adversely decided, would have a Material Adverse Effect, or
(iii) if adversely decided, would materially impede, interfere with or prevent
the continued use of any Real Property included in the Purchased Assets or any
other material Purchased Asset, or any Real Property or other material asset of
any French Subsidiary, as currently being used in the U.S. Business, the U.K.
Business or the French Business, as the case may be, or (iv) in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by the Operative Documents.
3.12. Material Contracts. (a) Except for the Contracts disclosed in
Schedule 3.12(a) or any other Schedule to this Agreement or Contracts which will
either be terminated at or prior to the Closing or as to which none of Buyers or
the French Subsidiaries will have any actual or contingent liability or
obligation following the Closing, neither Seller nor any Participating
Subsidiary is a party to or subject to:
(i) any Contract related to the Business for the purchase of
materials, supplies, goods, services, equipment or other assets providing for
annual payments by Seller or any Participating Subsidiary of, or pursuant to
which in the last year Seller and/or any Participating Subsidiary was required
to pay, or in the next year will be required to pay, in the aggregate, United
States $50,000 or more;
(ii) any sales, distribution or other similar Contract related
to the Business for the sale by Seller or any Participating Subsidiary of
materials, supplies, goods, services, equipment or other assets that provides
for annual payments to Seller or any Participating Subsidiary of, or pursuant to
which in the last year Seller or any Participating Subsidiary was entitled to
receive, or in the next year will be entitled to receive, in the aggregate
United States $50,000 or more;
(iii) any partnership, joint venture or other similar
multiparty Contract related to the Business involving a sharing of profits,
expenses or business operations;
(iv) any Contract related to the Business involving
indebtedness for borrowed money or the deferred purchase price of property
(whether incurred, assumed, guaranteed or secured by an asset), except any
Contract relating to indebtedness in an amount not exceeding United States
$50,000 incurred in the ordinary course consistent with past practices;
Master Agreement - Page 31
(v) any license Contract (other than licenses of Intellectual
Property), franchise Contract or Contract in respect of similar rights related
to the Business granted to or held by Seller or any Participating Subsidiary;
(vi) any agency, dealer, sales representative, distributorship
or other similar Contract related to the Business;
(vii) any Contract related to the Business that limits the
freedom of Seller or any Participating Subsidiary to compete in any line of
business or with any Person or in any area or to own, operate, sell, transfer,
pledge or otherwise dispose of or encumber any Purchased Asset, the assets of
the French Subsidiary or the Purchased Shares;
(viii) any Contract related to the Business involving capital
expenditures of $25,000 or more in any particular instance or for any particular
project;
(ix) any Contract, including "credit-bail" agreements, for the
lease of personal property related to the Business in which Seller or any
Participating Subsidiary is the lessor (but excluding bottled water cooler,
Bottleless Cooler, microwave, refrigerator or coffee brewer equipment rental
Contracts with Equipment Customers) or the lessee, or receives the beneficial
use of the leased personal property, that provides for annual payments of United
States $50,000 or more;
(x) any Contract related to the Business requiring Seller or
any Participating Subsidiary to purchase its requirements of a particular raw
material, resource or product from a particular supplier or suppliers, or to
purchase all or substantially all of the output or production of a particular
supplier, other than Contracts for utility services which are terminable at will
by Seller or any Participating Subsidiary;
(xi) any Contract for the license of any Intellectual Property
included in the Purchased Assets, including computer software (other than
"shrink wrap" or "click wrap" licenses for readily available, standardized
computer software);
(xii) any Contract related to the Business for the purchase of
water from any Person or with respect to any Water Source;
(xiii) any Contract of sponsorship exclusively related to the
Business (including sponsorship of public events, public facilities, sports
teams or charitable or other causes, whether with or without associated "pouring
rights"); or
(xiv) any other Contract related to the Business which either
(x) is not terminable by Seller or the relevant Participating Subsidiary without
penalty upon thirty (30) days' notice or less and involves a commitment over the
remaining term of United States $50,000 or more by Seller or the relevant
Participating Subsidiary; or (y) is otherwise material to the U.S. Business or
the European Business, individually, or to the Business taken as a whole.
Master Agreement - Page 32
(b) Except as provided in Schedule 3.12(b), each Contract disclosed in
any Schedule to this Agreement or required to be disclosed pursuant to Section
3.12(a) is a valid and binding agreement of Seller or the Participating
Subsidiary that is a party to such Contract and is in full force and effect.
Neither Seller or the relevant Participating Subsidiary nor, to Seller's
knowledge, any other party to such Contract is in default in any material
respect under the terms of any such Contract.
(c) Except as otherwise specified in Schedule 3.12(a), true and
complete copies of all written Contracts disclosed in any Schedule to this
Agreement, including all amendments, and accurate and materially complete
summaries of all unwritten Contracts disclosed in any Schedule to this
Agreement, have been made available to Buyer Representative or to one or more of
the Buyers.
3.13. Licenses and Permits. Schedule 3.13 describes each material
license, franchise, permit or other similar authorization related to the
Business (collectively, the "Permits"), together with the name of the
Governmental Entity issuing the Permit and to whom such Permit was issued.
Except as set forth on Schedule 3.13, the Permits are valid and in full force
and effect and, assuming the related Consents set forth on Schedule 3.05 have
been obtained prior to the Closing Date, are transferable by Seller and the
relevant Participating Subsidiary and will not be terminated or impaired or
become terminable as a result of the transactions contemplated by the Operative
Documents. Except as set forth in Schedule 3.13, (i) each of Seller, the U.K.
Subsidiary and the French Subsidiary has been, and are now, conducting the U.S.
Business, the U.K. Business and the French Business, respectively, in material
compliance with the respective relevant Permits; and (ii) no action or
proceeding is pending or, to Seller's knowledge, threatened or proposed, to
limit, not renew, cancel or revoke any Permit. Seller, the U.K. Subsidiary and
the French Subsidiary each holds all material Permits needed to own and operate
their respective assets and properties and to conduct the U.S. Business, the
U.K. Business and the French Business, respectively.
3.14. Insurance Coverage. Schedule 3.14 sets forth a true and complete
list of, and Seller has furnished to Buyer Representative to the extent
requested true and complete copies of, all insurance policies, fidelity bonds,
binders and self-insurance authorizations covering the Purchased Assets, the
French Subsidiaries, the operations of the Business and the employees of the
Business. Except as set forth in Schedule 3.14, neither Seller nor any
Participating Subsidiary self-insures any type of liability claims, whether
product liability, vehicular liability, general liability or otherwise. Schedule
3.14 also contains, to the extent related to the Business, a listing of all
outstanding insurance and self-insurance claims, including workers compensation
claims, as of the Reference Date. Except as set forth in Schedule 3.14, neither
Seller or any Participating Subsidiary nor the French Holding Company has
received notice of cancellation or nonrenewal or any material premium increase
or material change in the terms of any insurance policy related to the Business.
There is no claim by Seller or any Participating Subsidiary pending under any of
such policies or bonds as to which coverage has been questioned, denied or
disputed by the underwriters or issuers of such policies or bonds, written
notice of which has been sent to Seller, any Participating Subsidiary or the
French Holding Company. All premiums
Master Agreement - Page 33
payable under all such policies and bonds have been paid and each of Seller and
the Participating Subsidiaries is otherwise in material compliance with the
terms and conditions of any such policy and bond applicable to it.
3.15. Compliance with Laws. To Seller's knowledge, neither Seller, the
U.K. Subsidiary nor the French Subsidiary, as the case may be, is in violation
of, is under investigation with respect to, or has been threatened to be charged
with or given notice of any violation or alleged violation of, any Law, or any
judgment, order or decree entered by any court, arbitrator or Governmental
Entity applicable to its respective Purchased Assets, the Purchased Shares or
the conduct of the U.S. Business, the U.K. Business or the French Business,
respectively.
3.16. Finders' Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Seller, the Participating Subsidiaries or the French Holding Company which
might be entitled to any fee or commission from Buyer Representative or any of
its Affiliates upon consummation of the transactions contemplated by the
Operative Documents.
3.17. Participating Subsidiaries and French Holding Company.
(a) The Participating Subsidiaries and the French Holding Company each
are duly organized, validly existing and in good standing (or, in the case of
the U.K. Subsidiary, not in liquidation or receivership) under the laws of their
respective jurisdictions of organization, and have all corporate power and
authority necessary to carry on their respective businesses as now conducted.
Each Participating Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing (to the extent that the laws of a
jurisdiction have a concept of good standing as a foreign corporation) in each
jurisdiction where the character of the property related to the U.K. Business or
the French Business, as the case may be, owned or leased by it or the nature of
its activities related to the U.K. Business or the French Business, as the case
may be, make such qualification necessary, except for those jurisdictions where
failure to be so qualified would not, individually or in the aggregate, have a
Material Adverse Effect. A list of all jurisdictions where each Participating
Subsidiary is qualified as a foreign corporation on account of the U.K. Business
or the French Business, as the case may be, is attached as Schedule 3.17.
(b) The execution, delivery and performance of the Share Purchase
Agreement by the French Holding Company, the acceptance of the U.K. Offer by the
U.K. Subsidiary and the U.K. Subsidiary's performance of the U.K. Purchase
Agreement, and the consummation by the French Holding Company and the U.K.
Subsidiary of the transactions contemplated by the Operative Documents to which
they are parties, are within the U.K. Subsidiary's and the French Holding
Company's respective corporate powers and have been duly authorized by all
necessary corporate action, and no further corporate action is required on the
part of the U.K. Subsidiary or the French Holding Company in order to authorize
the Operative Documents to which they are parties or the transactions
contemplated thereby. The Share Purchase Agreement has been duly executed and
delivered by the French Holding Company and the U.K. Offer has been duly
accepted by the U.K. Subsidiary, and they constitute valid and binding
agreements of the French
Master Agreement - Page 34
Holding Company and the U.K. Subsidiary, respectively, enforceable against such
parties in accordance with their respective terms.
(c) The execution, delivery and performance of the Share Purchase
Agreement by the French Holding Company, the acceptance of the U.K. Offer by the
U.K. Subsidiary, and the U.K. Subsidiary's performance of the U.K. Purchase
Agreement, do not and will not (i) contravene or conflict with the corporate
charter, bylaws or other organizational or governing documents of the French
Holding Company or the U.K. Subsidiary, respectively; (ii) assuming compliance
with the matters referred to in Section 3.03 and the accuracy of Buyer
Representative's representations and warranties in Article IV, contravene or
conflict with or constitute a violation of any provision of any judgment,
injunction, order or decree, or violate in any material respect any Law, binding
upon or applicable to the French Holding Company or the U.K. Subsidiary,
respectively; (iii) except as would not result in a Material Adverse Effect and
assuming the receipt of all Consents identified in Schedule 3.05, constitute a
default under or give rise to any right of termination, cancellation or
acceleration of any right or obligation, or to a loss of any benefit, under any
Material Contract or any Permit; or (iv) result in the creation or imposition of
any Lien on any Purchased Asset, any asset of the French Subsidiaries, or the
Purchased Shares, other than Permitted Liens.
3.18. French Subsidiaries.
(a) The French Subsidiary has no Subsidiaries except Midasbest Limited,
which shall not be a Subsidiary of the French Subsidiary as of Closing, and
except as set forth in Schedule 3.18(a) (the scheduled Subsidiaries
collectively, "Second Tier Subsidiaries"). All of the outstanding capital stock
of, or other ownership interests in, the French Subsidiary, are owned
beneficially and of record by the French Holding Company (or its nominee or
agents), and all of the outstanding capital stock of, or other ownership
interests in, each Second Tier Subsidiary, are owned beneficially and of record
by the French Subsidiary (or its nominee or agents), in each case free and clear
of any Lien, and free of any other limitation or restriction on the right to
vote, sell or otherwise dispose of such capital stock or other ownership
interests. None of the Purchased Shares was issued in violation of the
preemptive rights of any Person. There are no outstanding (i) securities of any
of the French Subsidiaries convertible into or exchangeable for shares of
capital stock or other securities or ownership interests in any of the French
Subsidiaries, or (ii) options or other rights to acquire from any of the French
Subsidiaries or any other Person any capital stock, securities or other
ownership interests in, or any securities convertible into or exchangeable for
any capital stock, securities or ownership interests in, any of the French
Subsidiaries. Schedule 3.18(a) sets forth the number of shares of each class of
capital stock issued and outstanding of each of the French Subsidiaries. As of
immediately prior to the Closing, all outstanding shares of capital stock of the
French Subsidiary will be held beneficially and of record by the French Holding
Company.
(b) The registers and minute books of each of the French Subsidiaries
are complete in all material respects and contain true and accurate accounts in
all material respects of the shareholdings, share transfers, meetings, corporate
proceedings and other relevant activities of
Master Agreement - Page 35
the French Subsidiaries as required to be documented or set forth under
applicable Laws or the organizational or governing documents of the French
Subsidiaries.
(c) Schedule 3.18(c) sets forth (i) the names and locations of all
banks, trust companies, brokerage house, mutual funds, savings and loan
associations and other financial institutions at which any of the French
Subsidiaries maintains safe deposit boxes, depositary accounts, checking
accounts or other accounts of any nature, and (ii) the names of all Persons
authorized to draw on, make withdrawals from or have access to such accounts or
safe deposit boxes.
(d) Schedule 3.18(d) is a true and complete listing of all directors
and officers of each of the French Subsidiaries.
(e) Neither "Sources et Services SARL" or MidasBest Limited conducts
any operations or has any assets or Liabilities, except as set forth in Schedule
3.18(e).
3.19. Customers. Seller has previously provided to Buyer Representative
a list of all Customers as of a recent date prior to the date of this Agreement
by Customer number and city and state or postal zip code.
3.20. Inventories. Except as described in Schedule 3.20, all items of
Seller's and the Participating Subsidiaries' inventories related to the U.S.
Business, the U.K. Business and the French Business, as the case may be,
including raw materials, work-in-process and finished goods, are in reasonable
condition and of a quality usable and saleable in the ordinary course of the
Business. To Seller's knowledge, each of the U.S. Business, the U.K. Business
and the French Business has sufficient inventories on hand for the continued
operation of its business in the ordinary course consistent with past practice.
3.21. Accounts Receivable. All accounts receivable reflected on the
Reference Net Asset Statement and all accounts receivable of the Business that
have arisen since the Reference Date derive from bona fide transactions of the
U.S. Business, the U.K. Business or the French Business, as the case may be, in
the ordinary course. Except as set forth in Schedule 3.21, the Books and Records
of each of Seller and the Participating Subsidiaries reflect an accurate aging
of all of its respective accounts receivable. Except as set forth in Schedule
3.21, no Person has asserted in writing or, to Seller's knowledge, threatened to
assert any counterclaims or offsetting claims or defenses to collection of any
of the Participating Subsidiaries' or Seller's accounts receivable related to
the U.S. Business, the U.K. Business or the French Business, as the case may be,
other than claims in the ordinary course which in the aggregate are not material
relative to the total amount, net of reserves, of the accounts receivable of the
U.S. Business or the European Business, individually, or of the Business taken
as a whole. To Seller's knowledge, the aggregate reserves for uncollectible
accounts receivable of the U.S. Business, the U.K. Business and the French
Business, individually, reflected on the Reference Net Asset Statement were
recorded in accordance with GAAP applied on a basis consistent with that used to
prepare Seller's audited financial statements and, on that basis, were, as of
the Reference Date, adequate for each of the U.S. Business, the U.K. Business
and the French Business, respectively.
Master Agreement - Page 36
3.22. Intellectual Property. No claim is pending or, to the knowledge
of Seller, threatened to the effect that the operations of the Business infringe
upon or conflict with the asserted rights of any other Person under any
Intellectual Property. Schedule 3.22 lists all the trademarks and trade names
(and applications therefor and registrations thereof), domain name registrations
and copyright registrations included in the Purchased Assets or owned by the
French Subsidiary (the "Business Proprietary Rights"), specifying as to each (i)
the owner of the Business Proprietary Right and the jurisdictions by or in which
such Business Proprietary Right has been registered or in which any application
for such registration has been filed, and (ii) licenses, sublicenses and other
agreements relating to the Business Proprietary Rights as to which Seller or a
Participating Subsidiary is a party and pursuant to which any Person is
authorized to use any such Business Proprietary Right. None of the Business
Proprietary Rights is subject to any outstanding order, judgment, decree,
stipulation or settlement agreement restricting the use thereof by Seller or the
Participating Subsidiaries or restricting the licensing thereof to any Person by
Seller or the Participating Subsidiaries. Except as specified in Schedule 3.22,
neither Seller nor any Participating Subsidiary has received written notice that
its respective use of the Business Proprietary Rights violates or infringes the
Intellectual Property rights of any other Person.
3.23. Environmental Matters. Except as specified in Schedule 3.23:
(a) The Participating Subsidiaries and Seller are in compliance in all
material respects with applicable Environmental Laws related to the U.K.
Business, the French Business and the U.S. Business, respectively, including all
disclosure, warning and reporting requirements under Environmental Laws, and
have obtained and are in compliance in all material respects with all Permits
necessary for the conduct of the Business. To Seller's knowledge, there is no
past or existing event, condition or circumstance involving or relating to
Hazardous Materials or other environmental matters related to the Business which
might materially interfere with or adversely affect the conduct of any of the
U.K. Business, the French Business or the U.S. Business as each is now being
conducted or the ability of Seller and the Participating Subsidiaries to
continue to use any of the Real Property as presently used by it in the U.K.
Business, the French Business and the U.S. Business, respectively, or which
would require disclosure, reporting, monitoring, cleanup, remediation or other
action on the part of Seller or any Participating Subsidiary or at Seller's or
any Participating Subsidiary's expense, or which might result in Seller's, any
Participating Subsidiary's or any of the Purchased Assets or the French
Subsidiaries' assets being held in violation of, or in material noncompliance
with, Environmental Laws.
(b) No proceeding under Environmental Laws is pending or, to Seller's
knowledge, threatened against or in respect of any of (i) the Participating
Subsidiaries or Seller, to the extent related to the Business, or (ii) any Real
Property included in the Purchased Assets or occupied by the French Subsidiary.
None of the Participating Subsidiaries or Seller has ever been designated as a
"potentially responsible party" or equivalent in any administrative or private
party proceeding under Environmental Laws related to the Business, or has ever
received or been the subject of any violation notice, demand for remediation, or
similar action under any such Environmental Laws. To Seller's knowledge, none of
the Real Property included in the
Master Agreement - Page 37
Purchased Assets or occupied by the French Subsidiary contains Hazardous
Materials in violation of Environmental Laws. To Seller's knowledge, all wastes
generated by the Business have been properly disposed of or processed at
appropriately licensed facilities in accordance with applicable Environmental
Laws.
(c) Schedule 3.23 contains a true and complete listing of all
underground storage tanks ("UST's") at any of the owned Real Property included
in the Purchased Assets or, to Seller's knowledge, in the portion of any leased
Real Property occupied by Seller or any Participating Subsidiary and included in
the Purchased Assets or held by the French Subsidiary, including any UST's taken
out of service, closed or removed during Seller's or the applicable
Participating Subsidiary's ownership or occupancy.
3.24. Transactions with Affiliates. Except as set forth in Schedule
3.24, neither Seller nor any Participating Subsidiary has any outstanding
Contract or other arrangement or understanding related to the Business with any
of its Affiliates, and none of the Purchased Assets or assets of the French
Subsidiary is owned by or is leased, licensed or used under grant or consignment
from any of its Affiliates.
3.25. Water Sources. Except as provided in Schedule 3.25, with respect
to each well, borehole, spring source, public main or water utility from which
Seller or any Participating Subsidiary currently draws water in bulk to be
formulated, processed or packaged as bottled water in the U.S. Business, the
U.K. Business or the French Business, as the case may be, Seller or such
Participating Subsidiary has sufficient legal, contractual or other rights to
permit them to take or draw such bulk water in the ordinary course, without
seasonal or volume limitations. Water products sold by Seller or any
Participating Subsidiary in the U.S. Business, the U.K. Business or the French
Business, as the case may be, and labeled as spring water, mineral water or
purified drinking water have complied in all material respects with respective
applicable Laws and industry or trade association requirements establishing or
defining the criteria for characterization or classification as spring water,
mineral water or purified drinking water, as the case may be.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER REPRESENTATIVE
Buyer Representative hereby represents and warrants to Seller that:
4.01. Organization and Existence. Buyer Representative and each Buyer
is a corporation duly incorporated, validly existing and in good standing (or,
in the case of the U.K. Buyer, not in liquidation or receivership) under the
laws of its jurisdiction of incorporation, and has all corporate powers and
authority necessary to carry on its business as now conducted.
4.02. Corporate Authorization. The execution, delivery and performance
by Buyer Representative and Buyers of the Operative Documents to which each is a
party, and the
Master Agreement - Page 38
consummation by Buyer Representative or such Buyer, as the case may be, of the
transactions contemplated thereby, and the execution and delivery of the U.K.
Offer by the U.K. Buyer and the performance by the U.K. Buyer of the
transactions contemplated by the U.K. Purchase Agreement, are within the
corporate powers of Buyer Representative and each such Buyer, and have been duly
authorized by all necessary corporate action on the part of Buyer Representative
or such Buyer, and no further corporate action is required on the part of Buyer
Representative or any Buyer or any Person holding an interest, direct or
indirect, in Buyer Representative or in any Buyer in order to authorize such
Operative Documents or the transactions contemplated thereby. Each of the
Operative Documents (other than the Ancillary Agreements) to which Buyer
Representative or a Buyer is a party has been duly executed and delivered by,
and (subject, in the case of the U.K. Purchase Agreement, to the U.K.
Subsidiary's acceptance of the U.K. Offer) constitutes a valid and binding
agreement of, Buyer Representative or the relevant Buyer, as the case may be,
enforceable against such parties in accordance with their respective terms. Each
of the Ancillary Agreements, when executed and delivered by Buyer Representative
or the relevant Buyer, will have been duly executed by Buyer Representative or
such Buyer, as the case may be, and will constitute a valid and binding
agreement of Buyer Representative or such Buyer, as the case may be, enforceable
against Buyer Representative or such Buyer, as the case may be, in accordance
with its terms.
4.03. Governmental Authorization. The execution, delivery and
performance by Buyer Representative and Buyers of the Operative Documents to
which each is a party, and the execution and delivery of the U.K. Offer by the
U.K. Buyer and the performance by the U.K. Buyer under the U.K. Purchase
Agreement, do not require any action by or in respect of, or filing with, any
Governmental Entity other than compliance with any applicable requirements of
the HSR Act.
4.04. Non-Contravention. The execution, delivery and performance by
Buyer Representative and Buyers of the Operative Documents to which each is a
party and the execution and delivery of the U.K. Offer by the U.K. Buyer and the
performance by the U.K. Buyer under the U.K. Purchase Agreement, do not and will
not (i) contravene or conflict with the corporate charter, bylaws or other
organization or governing documents of Buyer Representative or such Buyer; or
(ii) assuming compliance with the matters referred to in Section 4.03,
contravene or conflict with any provision of any Law, or any judgment,
injunction, order or decree, binding upon or applicable to Buyer Representative
or such Buyer.
4.05. Finders' Fees. There is no investment banker, broker, finder or
other intermediary which has been retained by or is authorized to act on behalf
of Buyer Representative or any Buyer which might be entitled to any fee or
commission from Seller or any of its Affiliates upon consummation of the
transactions contemplated by the Operative Documents.
4.06. Financing. Buyers have, and at the Closing will have, sufficient
funds available to purchase the Purchased Assets and the Purchased Shares.
4.07. Litigation. There is no action, suit, investigation or proceeding
pending against, or to the knowledge of Buyer Representative or any Buyer,
threatened against or affecting, Buyer
Master Agreement - Page 39
Representative or any Buyer before any court or arbitrator or any Governmental
Entity which (i) if determined adversely, could reasonably be expected to have a
material adverse effect on the ability of Buyer Representative or any Buyer to
enter into and perform its respective obligations under the Operative Documents,
or on the ability of the U.K. Buyer to execute and deliver the U.K. Offer or
perform its obligations under the U.K. Purchase Agreement; or (ii) in any manner
challenges or seeks to prevent, enjoin, alter or materially delay the
transactions contemplated by the Operative Documents.
4.08. French Buyer. The French Buyer has not, at any time, been (x)
engaged in a trade or business within the United States for purposes of Section
864(b) of the Code, or (y) a "controlled foreign corporation" within the meaning
of Section 957 of the Code.
ARTICLE V
COVENANTS OF SELLER AND PARTICIPATING SUBSIDIARIES
5.01. Conduct of the Business. From the date hereof until the Closing
Date, Seller shall, and shall cause the U.K. Subsidiary and the French
Subsidiary to, conduct the U.S. Business, the U.K. Business, and the French
Business, respectively, in the ordinary course consistent with past practice and
use commercially reasonable efforts to preserve intact the business organization
and relationships with third parties of the Business, to keep available the
services of the present employees of the Business, to continue to pay the trade
accounts payable and the accrued expenses of the Business in the ordinary course
consistent with past practice, and to keep the Purchased Assets and the assets
of the French Subsidiary in substantially their present state of repair
(reasonable wear and tear excepted). Except as expressly provided for in this
Agreement or any other Operative Document, from the date hereof until the
Closing Date, without the written consent of Buyer Representative (which consent
will not be unreasonably withheld or delayed), Seller shall not, and shall cause
the Participating Subsidiaries not to:
(a) with respect to either the U.S. Business or the European Business,
individually, or with respect to the Business taken as a whole, acquire a
material amount of assets from any other Person;
(b) sell, lease, license or otherwise dispose of any Purchased Assets,
the Purchased Shares or any assets of the French Subsidiary, except sales or
dispositions of any surplus or obsolete fixed asset (other than trucks) with a
net book value of less than United States $25,000 in each instance and sales,
leases, licenses and dispositions of inventory in the ordinary course of
business consistent with past practices;
(c) incur any commitment for capital expenditures related to the
Business in excess of United States $25,000 in any one instance or United States
$100,000 in the aggregate with respect to any of the U.S. Business, the U.K.
Business or the French Business, individually; enter into any new Material
Contract, or cancel, terminate or modify in any material respect any existing
Material Contract, except that Seller and the Participating Subsidiaries may
enter in the
Master Agreement - Page 40
ordinary course of business into any Contract (i) of the type specified in
Section 3.12(a)(ii) with Persons who become Customers for the delivery of
bottled water or beverage service supplies or for the lease, rental or provision
of bottled water coolers, Bottleless Coolers, microwaves, refrigerators or
coffee brewers or (ii) of the type specified in Section 3.12(a)(i), Section
3.12(a)(x), or Section 3.12(a)(xii) provided that such Contract is terminable by
Seller or such Participating Subsidiary without penalty upon ninety (90) days'
notice or less;
(d) mortgage, pledge, encumber, hypothecate or otherwise subject or
allow any of the Purchased Assets or the assets of the French Subsidiary to
become subject to Liens (except for Permitted Liens);
(e) make any change in the existing accounting methods, principles or
practices used in the U.S. Business, U.K. Business or French Business, as the
case may be, other than as may be required by GAAP or, with respect to the U.K.
Business or the French Business, its applicable foreign equivalent;
(f) (i) increase, except as consistent with past practices, the wages,
salaries or compensation payable to any employees of the U.S. Business, the U.K.
Business or the French Business, as the case may be; (ii) adopt any new Pension
Plan or pension scheme or any new Employee Plan or Benefit Arrangement (except
as required by Law) for any employees of the U.S. Business, the U.K. Business or
the French Business, as the case may be, or (except for technical amendments
which under applicable Laws must be made prior to the Closing Date) modify any
existing Employee Plan or Benefit Arrangement; (iii) enter into any employment
Contract, written or oral, related to the U.S. Business, the U.K. Business or
the French Business, except that (A) to the extent the mere hiring of an
employee gives rise to a Contract of employment in England, Wales, Scotland or
France, nothing contained in this clause (iii) shall be deemed to prevent the
hiring in the ordinary course of non-management employees for the U.K. Business
or the French Business and (B) Seller and the Participating Subsidiaries may
enter into agreements regarding inventions, confidential information,
nondisclosure and noncompetition with existing and new employees of the U.S.
Business, the U.K. Business and the French Business consistent with past
practice; or (iv) enter into any consulting, deferred compensation, sales
representation, distributorship or similar Contract, written or oral, related to
the U.S. Business, the U.K. Business or the French Business, as the case may be;
(g) in connection with the Business, purchase any real property or
enter into any new real property lease, including any "credit-bail" arrangement,
except that the U.K. Seller may enter into a new Lease for the premises located
at Unit 1 Network Park, Duddeston Mill Road, Saltley, Birmingham, England in
accordance with the terms previously disclosed to Buyer Representative; sell,
transfer or otherwise dispose of, or grant any other Person an interest in, any
Real Property; or amend or modify in any material respect any lease of Real
Property;
(h) with respect to the French Subsidiary, engage in any transaction
outside the ordinary course of business;
Master Agreement - Page 41
(i) with respect to the conduct of the Business by Seller or the U.K.
Subsidiary, engage in any transaction outside the ordinary course of business;
or
(j) agree or commit to do any of the foregoing.
5.02. Access to Information.
(a) From the date hereof until the Closing Date, Seller will, or will
cause the Participating Subsidiaries to, (i) give Buyer Representative, Buyers
and their counsel, financial advisors, auditors and other authorized
representatives access on reasonable notice and at reasonable times to the Books
and Records and to the offices and properties of Seller and the Participating
Subsidiaries related to the Business, (ii) furnish to Buyer Representative,
Buyers and their counsel, financial advisors, auditors and other authorized
representatives such financial and operating data and other information related
to the Business, including (even though they may be excluded from the Books and
Records as defined in this Agreement) sales and value-added Tax Returns with
respect to the operations of the Business and personal property and use Tax
Returns with respect to the Purchased Assets, as they may reasonably request,
and shall provide or allow them to make copies of these materials, (iii)
instruct the employees, counsel and financial advisors of Seller and the
Participating Subsidiaries to cooperate with Buyer Representative and Buyers in
their investigation of the Business, and (iv) make the Real Property available
on reasonable notice and at reasonable times for surveys and inspections, which
may in Buyer Representative's discretion include environmental investigations
and the taking of soil and water samples; provided that any investigation
pursuant to this Section 5.02 shall be conducted in such manner as not to
interfere unreasonably with the conduct of the business of Seller and the
Participating Subsidiaries. Notwithstanding the foregoing, (x) Buyer
Representative and Buyers shall not have access to personnel records of Seller
or the Participating Subsidiaries relating to individual performance or
evaluation records, medical histories or other employee personal information the
disclosure of which could in Seller's good faith opinion subject Seller or any
Participating Subsidiary to risk of liability or action by any third party under
the Data Protection Act 1998 or otherwise, and (y) prior to the Closing Date,
Buyer Representative and Buyers shall not contact or approach, either directly
or indirectly, any Customer or employee of the Business, except as specifically
set forth herein, without Seller's prior written consent, which in the case of
Transferred Employees shall not be unreasonably withheld or delayed.
(b) Following the Closing Date, Seller will, and will cause the U.K.
Subsidiary and the French Holding Company to, give Buyers and their counsel,
financial advisors, auditors and other authorized representatives, to the extent
reasonably required for the purposes described in clauses (i), (ii), (iii) or
(iv) below, access on reasonable notice and at reasonable times to, and permit
them to make copies of, Tax Returns (or portions thereof), including sales and
value-added Tax Returns, with respect to the operations of the Business and
personal property and use Tax Returns with respect to the Purchased Assets, and
any other information related to the Business but not included in the Books and
Records as they may reasonably request in order to (i) prepare Tax Returns for
the Business for periods from and after the Closing Date, (ii) verify, perform
or discharge Assumed Liabilities and Permitted French Subsidiary Liabilities,
(iii) participate in accordance with Article XI in the conduct or defense of any
third-party
Master Agreement - Page 42
indemnification claim, or (iv) otherwise carry out the obligations, or exercise
or enjoy the rights, of Buyer Representative and Buyers, or determine any matter
relating to their rights or obligations, under this Agreement and the other
Operative Documents; provided that access pursuant to this section 5.02(c) shall
be exercised in such manner as not to interfere unreasonably with the conduct of
business by Seller, the U.K. Subsidiary and the French Holding Company.
(c) All information disclosed to or obtained by any party to the
Operative Documents or its counsel, financial advisors, auditors or other
authorized representatives as a result of another party's performance of its
obligations under this Section 5.02 shall be deemed "Confidential Information"
(as defined in the Confidentiality Agreement) under, and shall be subject to,
the Confidentiality Agreement.
5.03. Notices of Certain Events. From the date hereof until the Closing
Date, Seller shall promptly notify Buyer Representative of:
(a) any notice or other communication from any Person alleging
that the consent of such Person is or may be required in connection with the
transactions contemplated by the Operative Documents;
(b) any notice or other communication from any Governmental
Entity in connection with the transactions contemplated by the Operative
Documents;
(c) any actions, suits, claims, investigations or proceedings
commenced or, to Seller's knowledge, threatened against, relating to or
involving or otherwise affecting (i) Seller or any Participating Subsidiary,
insofar as related to the Business, or (ii) any Purchased Assets or any assets
of the French Subsidiary which, if pending on the date of this Agreement, would
have been required to have been disclosed pursuant to Section 3.11, or which
relate to the consummation of the transactions contemplated by the Operative
Documents; and
(d) any condition, event or matter (other than those for which
Buyer Representative's consent has been obtained in accordance with Section
5.01) which, if pending or in existence on the date of this Agreement, would
have been required to be disclosed pursuant to Section 3.07.
5.04. Noncompetition.
(a) As used in this Section 5.04, the following terms have the
indicated meanings:
"Restricted Location" means, as to any Customer as of the
Closing Date, (i) each specific location of the Customer where one or more
bottled water coolers or Bottleless Coolers were installed or in place as of the
Closing Date, or, in the case of Water-Only Customers, where the Customer took
delivery of bottled water as of the Closing Date, and (ii) in the case where a
Customer moves or relocates after the Closing Date from any such specific
location to another location (whether or not proximate to the original
location), the replacement location.
Master Agreement - Page 43
"Restricted Offerings" means Bottleless Coolers and any
directly plumbed point-of-use or point-of-entry drinking water filter or
drinking water purification system that does not use bottled water, and coffee
brewers and coffee service supplies. For the avoidance of doubt, water softening
and water conditioning systems, including "whole house" and industrial
installations, shall not be considered Restricted Offerings.
"Restricted Parties" means each of Seller, the U.K.
Subsidiary, the French Holding Company and any other Subsidiary of Seller,
whether now existing or subsequently formed.
(b) From the Closing Date until the third anniversary of the Closing
Date, none of the Restricted Parties shall, directly or indirectly, whether
alone or in concert with others, and in whatever capacity, sell or distribute
bottled water, or lease, sell or distribute bottled water coolers, to homes or
businesses anywhere in the Restricted Areas. Notwithstanding anything to the
contrary in this Section 5.04(b), the Restricted Parties shall be expressly
permitted to, directly or indirectly, (i) lease, sell or distribute water
softening and water conditioning systems and (except to Restricted Locations as
provided in Section 5.04(c) below) Restricted Offerings, (ii) acquire any Person
or business of which less than five percent (5%) of its annual revenue
(determined on a consolidated basis based on its then most recent audited
consolidated annual financial statements) is derived from the sale or
distribution of bottled water or the lease, sale or distribution of bottled
water coolers to homes or businesses in the Restricted Areas, and (iii) own not
more than five percent (5%) of the outstanding voting securities of any publicly
held Person that competes, directly or indirectly, with the Business in the
Restricted Areas, so long as none of Seller or its Subsidiaries or any of their
respective officers or management participates in the management, direction or
operations of any such publicly held Person.
(c) From the Closing Date until the third anniversary of the Closing
Date, none of the Restricted Parties shall, directly or indirectly, whether
alone or in concert with others, and in whatever capacity, (i) solicit or
otherwise target any Customer of the Business as of the Closing Date for the
purpose or with the intent of offering or providing the Customer with, or
inducing the Customer to purchase or acquire, any of the Restricted Offerings at
any Restricted Location, or (ii) sell, distribute, lease, supply, service or
otherwise provide Restricted Offerings to any Customer of the Business as of the
Closing Date at any Restricted Location, even if expressly requested to do so by
the Customer without having been previously directly solicited by the Restricted
Parties; or (iii) otherwise induce any Customer of the Business as of the
Closing Date to curtail or cease doing business with any Buyer; provided,
however, that general advertising or publicity with respect to product or
service offerings in newspapers, publications, websites and other mass media
shall not be considered a violation of the prohibitions in this Section 5.04;
and provided further that if at any time after the first anniversary of the
Closing Date a Customer of the Business as of the Closing Date issues, without
having previously been solicited by or on behalf of any of the Restricted
Parties (whether acting alone or in concert with others) to do so in violation
of this Subsection 5.04(c), a formal request for proposal or formal request for
quotation that invites the provision of Restricted Offerings and does not
contemplate or allow for bottled water or bottled water coolers as one of the
possible options or alternatives, then the Restricted Parties shall be free to
respond in any manner requested, and take any requested action to follow
Master Agreement - Page 44
up such response to such request for proposal or formal request for quotation
and to provide such Restricted Offerings with respect to such Customer without
being deemed in violation of this Section 5.04.
(d) From the Closing Date until the third anniversary of the Closing
Date, none of the Restricted Parties shall, directly or indirectly, whether
alone or in concert with others, and in whatever capacity, hire, employ or
establish a business with any Transferred Employee or solicit or encourage any
Transferred Employee to leave his or her employment or terminate his or her
relationship with Buyer Representative or any Buyer; provided, however, that
general advertising for employees in newspapers, publications, websites and
other mass media shall not be considered a violation of this provision, nor
shall the restrictions set forth in this Section 5.04(d) apply with respect to
any Transferred Employee who answers such advertising without having been
previously directly contacted by the Restricted Parties.
(e) It is the intention of the parties that if any of the restrictions
or covenants contained herein is held to cover a geographic area or to be for a
length of time which is not permitted by applicable law, or is in any way
construed to be too broad or to any extent invalid, such provision shall not be
construed to be null, void and of no effect, but to the extent such provision
would be valid or enforceable under applicable law, a court of competent
jurisdiction shall construe and interpret or reform this Section 5.04 to provide
for a covenant having the maximum enforceable geographic area, time period and
other provisions (not greater than those contained herein) as shall be valid and
enforceable under such applicable law.
(f) Seller agrees that if any of the Restricted Parties violates any of
the covenants in this Section 5.04, monetary damages will be inadequate, and
Buyer Representative and Buyers shall be entitled to injunctive relief as a
matter of right, and to all other rights and remedies, including an accounting
and damages, available under the Operative Documents and applicable law.
5.05. Confidentiality.
(a) Seller will, and will cause its Subsidiaries to, comply with the
terms of the Reciprocal Confidentiality Agreement dated May 31, 2001 (the
"Confidentiality Agreement") between Seller and Buyer Representative with
respect to all "Confidential Information" (as defined therein) regarding Buyer
Representative and its Affiliates.
(b) From and after the Closing, the Asset Sellers and the French
Holding Company will hold, and will use commercially reasonable efforts to cause
their respective officers, directors, employees, accountants, counsel,
consultants, advisors and agents to hold, in confidence, unless compelled to
disclose by judicial or administrative process or by other requirements of law,
all confidential documents and information concerning the Business as of the
Closing, except to the extent that such information can be shown to have been
(i) in the public domain after the Closing through no fault of any Asset Seller
or the French Holding Company or (ii) later lawfully acquired by Seller or any
of its Affiliates from sources other than Buyer Representative or Buyers.
Master Agreement - Page 45
5.06. Resignations. Prior to the Closing, the French Subsidiaries shall
convene ordinary general meetings whose purpose shall be to record the
resignations of all officers and directors of the French Subsidiaries from their
positions with the French Subsidiaries, and to appoint new officers and
directors, in each case effective upon the Closing, provided, however, that if
the French Subsidiary is converted to a societe par actions simplifiee pursuant
to Section 8D.02(b), only the Chairman and General Manager will need to resign
and be replaced, unless otherwise specified by the French Buyer.
5.07. No Negotiation with Third Parties. From the date hereof until the
earlier of the Closing Date or the date on which this Agreement is terminated,
Seller shall not, and shall not knowingly permit any of its Affiliates, agents
or representatives to, directly or indirectly, encourage, solicit or engage in
any discussions or negotiations with, or provide any information to, any Person
(other than Buyer Representative, Buyers or any of their Affiliates) concerning
the possible acquisition by such third party of all or any part of the Business,
the Purchased Assets, the assets of the French Subsidiary or the Purchased
Shares, other than as expressly contemplated or permitted by the Operative
Documents. Seller shall promptly notify Buyer Representative of any contact by
any Person with respect to any such possible acquisition after the date hereof
and prior to the Closing.
5.08. Permits. Seller shall use commercially reasonable efforts to
obtain the written Consent or approval of those Governmental Entities specified
in Schedule 3.05 with respect to Permits. With respect to Permits to be
transferred to a Buyer or reissued in a Buyer's name, Seller and the
Participating Subsidiaries shall use commercially reasonable efforts (but
without any payment of money by Seller or the Participating Subsidiaries) and
cooperate with Buyer Representative and such Buyer in effectuating the transfer
or reissuance of such Permits in such Buyer's name effective as of the Closing,
including providing necessary information and confirming to any Governmental
Entity Seller's or the applicable Participating Subsidiary's readiness to
surrender the Permits in Seller's or such Participating Subsidiary's name upon
the Closing and their subsequent transfer or reissuance to such Buyer. If as of
the Closing Date the transfer or reissuance to any Buyer of any Permit has not
yet occurred for any reason, including administrative delays on the part of the
Governmental Entity processing the transfer request, then following the Closing
and until each such Permit shall have been transferred to such Buyer or reissued
in such Buyer's name, Seller and its Subsidiaries shall use commercially
reasonable efforts to cooperate with such Buyer, at no cost or expense to Seller
or its applicable Subsidiary, to secure to such Buyer, to the extent consistent
with and not in violation of applicable Law or this Agreement, the operational
benefits and practical use of the Permit.
5.09. Accounts Receivable Transition. If, after the Closing, any Asset
Seller receives payment for any account receivable transferred to a Buyer at the
Closing, such Asset Seller shall accept the payment in trust and shall promptly
remit the payment to that Buyer. Each Asset Seller appoints the applicable Buyer
as such Asset Seller's due and lawful attorney-in-fact, effective as of the
Closing Date, solely for the purpose of endorsing such Asset Seller's name on
any check or other instrument of payment made payable to such Asset Seller's
order that is tendered by or for an account debtor in payment of an account
receivable transferred to such
Master Agreement - Page 46
Buyer as part of the Purchased Assets. With respect to the U.K. Business, Seller
shall procure that the U.K. Subsidiary shall execute and deliver a suitable
power of attorney, in such form as may be reasonably required by the U.K. Buyer,
to effect the appointment of the U.K. Buyer as its attorney-in-fact strictly
limited to the above purposes. Each Buyer's appointment as attorney-in-fact is
acknowledged to be coupled with an interest and shall be irrevocable.
5.10. Access to European Management. From the date hereof until the
Closing Date, Seller shall cause each of the U.K. Subsidiary and the French
Subsidiary to make its respective senior management available on reasonable
notice, at reasonable times and for reasonable periods to meet with
representatives of Buyer Representative, the U.K. Buyer and the French Buyer to
review, plan and coordinate the operational transition of the U.K. Business and
the French Subsidiary to the U.K. Buyer and the French Buyer, respectively, to
discuss supply, procurement, staffing and other issues regarding the operations
of the U.K. Business and the French Business, as the case may be, and, at the
applicable Buyer's election, to extend to members of the U.K. Subsidiary's
senior management offers of post-Closing employment with the U.K. Buyer;
provided that any such access shall not unreasonably interfere with the conduct
of the U.K. Business or the French Business. All information disclosed to or
obtained by Buyer Representative, the U.K. Buyer, the French Buyer or any of
their representatives as a result of their interactions with management or other
employees of the U.K. Subsidiary or the French Subsidiary shall be deemed
"Confidential Information" (as defined in the Confidentiality Agreement) under,
and shall be subject to, the Confidentiality Agreement.
5.11. Secondment of U.K. Business Senior Management. Except to the
extent that any of them accept employment with the U.K. Buyer or otherwise is no
longer employed by Seller, the U.K. Subsidiary or another Subsidiary of Seller:
(a) Seller shall cause the U.K. Subsidiary to make available to the
U.K. Buyer the services of the employees of the U.K. Subsidiary listed on
Schedule 5.11 (the "Seconded Employees") following the Closing in accordance
with this Section 5.11. Such post-Closing services by the Seconded Employees
(the "Secondment") shall be provided on the following terms: (i) the Secondment
shall be on up to a full-time basis for a period of ninety (90) days from the
Closing (the "Secondment Period"); (ii) the respective employer shall continue
to pay to each of the Seconded Employees their salaries and continue to maintain
their respective benefits in kind, in each case at the rates and on the terms in
effect as of the Closing Date, for the duration of the Secondment Period as long
as each such Seconded Employee remains an employee of Seller, the U.K.
Subsidiary or another Subsidiary of Seller; (iii) the U.K. Buyer shall reimburse
to the U.K. Subsidiary, against invoices to be rendered on a monthly basis in
arrears, an amount equal to the pro rata portion of the monthly salary, benefits
in kind and National Insurance contributions paid by the U.K. Subsidiary to or
in respect of the Seconded Employees for the Secondment Period and attributable
to the time the Seconded Employees spent providing such post-Closing services;
and (iv) to the extent that any portion of the reimbursement so paid to the U.K.
Subsidiary by the U.K. Buyer attracts value-added Tax, the amount of such
value-added Tax shall be added to the invoice amount and paid by the U.K. Buyer
to the U.K. Subsidiary.
Master Agreement - Page 47
(b) During the Secondment Period, the U.K. Subsidiary will make each of
the Seconded Employees available to assist the U.K. Buyer as the U.K. Buyer may
reasonably request in matters relating to the integration and transitioning of
the operations of the U.K. Business with the operations of the U.K. Buyer. Prior
to the Closing, the Seconded Employees shall confirm in writing their agreement
to the Secondment on the terms set forth in this Section 5.11.
(c) For a further period of ninety (90) days after the expiration of
the Secondment Period, Seller shall cause the U.K. Subsidiary to make the
Seconded Employees available to the U.K. Buyer for occasional telephonic
consultation in connection with the U.K. Business as may be reasonably requested
from time to time by the U.K. Buyer. The U.K. Buyer shall reimburse the Seconded
Employees and U.K. Subsidiary for any out-of-pocket expenses incurred by them in
complying with any such request for telephonic consultation, but shall not
otherwise be required to pay fees or compensation to the Seconded Employees or
to the U.K. Subsidiary for the consultation services.
(d) All information disclosed to or obtained by the Seconded Employees
as a result of their interactions with management or other employees of the U.K.
Buyer during the Secondment Period shall be deemed "Confidential Information"
(as defined in the Confidentiality Agreement) under, and shall be subject to,
the Confidentiality Agreement.
5.12. U.S. Business - Telecommunications Transition Planning. From the
date hereof until the Closing Date, and in furtherance and not in derogation of
the access to be provided pursuant to Section 5.02, Seller shall afford the U.S.
Buyer and the U.S. Buyer's technical consultants access to the Real Property in
the United States that is included in the Purchased Assets so that the U.S.
Buyer may be able to configure, place advance orders for and (if available prior
to the Closing Date) carry out the installation of high-speed data and
telecommunications lines at such of those locations as the U.S. Buyer may
select; provided, however, that U.S. Buyer may not have installed high-speed
data and telecommunications lines at any leased premises for which the lease
requires consent of the lessor until such consent shall have been obtained. From
the date hereof until the Closing Date, Seller shall also make available to the
U.S. Buyer and the U.S. Buyer's technical consultants, as they may reasonably
request from time to time, samples of the digital formats in which Seller
encodes and maintains its electronic data records for the U.S. Business, so that
the U.S. Buyer may undertake the preparation of appropriate software programs to
facilitate the conversion of Seller's data as of the Closing to the formats
utilized by the U.S. Buyer. Any such access by the U.S. Buyer or its technical
consultants shall be exercised in such manner as not to interfere unreasonably
with the conduct of business by Seller or to violate any agreements Seller may
have entered into with any third party, including any lessors or sublessors of
Real Property. All such installations and other transition activity shall be
carried out by the U.S. Buyer at its expense and risk, and Buyer Representative
and the U.S. Buyer shall indemnify, defend and hold harmless Seller from and
against any and all Losses incurred by or asserted against Seller that are
caused by, result from or in any way arise out of Buyer or Buyer Representative
exercising any of their rights under this Section 5.12. In the event that this
Agreement is terminated and the Closing does not occur, the U.S. Buyer shall be
responsible for removing any data or telecommunications lines and associated
equipment so installed at any of
Master Agreement - Page 48
the Real Property, and for restoring such Real Property to its condition prior
to the installation. In no event shall this Section 5.12 be deemed to require
the sharing or exchange prior to Closing of information in violation of the HSR
Act or other applicable Law.
5.13. Aquarelle - L'esprit Fraicheur Trademark. Effective upon and by
virtue of the French Buyer's acquisition of the Purchased Shares at the Closing,
any remaining restrictions in favor of Seller or its Affiliates regarding the
use by the French Buyer or its Affiliates of the trademark "Aquarelle - L'esprit
Fraicheur" shall lapse and terminate effective as of the Closing, and from and
after the Closing, such ownership and use by the French Buyer and its Affiliates
shall be, insofar as Seller and its Affiliates are concerned, unrestricted.
5.14. Business Trademarks; Tradenames. (a) Except as set forth in this
Section 5.14, after the Closing, Seller and its Subsidiaries shall not use,
alone or in concert with others, at any time or in any way, any of the
trademarks or tradenames listed on Index 2.01(p) to the U.S. Purchase Agreement.
Such trademarks and tradenames shall be referred to, collectively or
individually as the context requires, as the "Business Tradenames."
(b) After the Closing, Seller and its Subsidiaries shall have
the right to use the Business Tradenames solely:
(i) in filings with the United States Securities and
Exchange Commission (the "SEC"), to the extent Seller in its good faith judgment
deems it necessary in accordance with the rules and regulations promulgated by
the SEC;
(ii) to the extent Seller in its good faith judgment
deems it necessary in accordance with the rules and regulations of, or pursuant
to any agreement with, any stock exchange or over-the-counter market on which
the securities of the Seller now or in the future are listed or traded; and
(iii) to the extent Seller in its good faith judgment
deems it necessary in accordance with any domestic or foreign, federal, state or
local Law, order, writ, injunction, judgment, decree or other requirement of any
Governmental Entity.
(c) Until the earlier of (i) six months after the Closing Date and (ii)
the date such stocks existing on the Closing Date are exhausted, Seller and its
Subsidiaries shall have the right to use existing supplies, marketing and
advertising materials, brochures and any similar materials containing the
Business Tradenames.
5.15. Insurance Proceeds From Destroyed or Damaged Fixed Assets. (a)
Subject to Section 5.15(b), if (i) between the date of this Agreement and the
Closing, any fixed asset included in the Purchased Assets (other than bottled
water coolers, Bottleless Coolers, refrigerators, microwaves, coffee brewers and
water bottles at Customer locations) is destroyed or sustains damage beyond
ordinary wear and tear by reason of casualty, theft, vandalism, accident or
other cause, and (ii) such destruction or damage is covered by third-party
insurance and Seller or the U.K. Subsidiary actually recovers insurance proceeds
(whether received before
Master Agreement - Page 49
or after the Closing) under the applicable insurance coverage, Seller or the
U.K. Subsidiary, as the case may be, shall turn over to the U.S. Buyer or U.K.
Buyer, respectively, the net insurance proceeds actually recovered under the
applicable insurance coverage with respect to such destroyed or damaged fixed
asset. In lieu of receiving such net insurance proceeds actually recovered, U.S.
Buyer or U.K. Buyer may apply the amount of such net insurance proceeds actually
recovered, on a dollar-for-dollar basis, as a credit against the cash portion of
the U.S. Purchase Price or the U.K. Purchase Price, respectively, payable at
Closing, and such application shall be considered an adjustment to the Aggregate
Purchase Price.
(b) If (i) between the date of this Agreement and the Closing, any
individual fixed asset, or trucks collectively, with a net book value of at
least $75,000 as of the Reference Date included in the Purchased Assets (other
than (x) bottled water coolers, Bottleless Coolers, refrigerators, microwaves,
coffee brewers and water bottles at Customer locations, (y) fixed assets or
trucks sold or otherwise disposed of between the Reference Date and the date of
this Agreement and disclosed pursuant to Section 3.07(h) and (z) obsolete or
surplus fixed assets) shall be missing as of the Closing or shall have been
disposed of after the date of this Agreement in violation of this Agreement, and
(ii) such fixed asset or trucks shall not have been replaced by Seller or its
Affiliates or the loss or disposition thereof shall not have resulted in Seller
or its Affiliates actually recovering insurance proceeds, the net book value of
such fixed asset or trucks shall be applied, on a dollar-for-dollar basis, as a
credit against the cash portion of the Aggregate Purchase Price and such
application shall be considered an adjustment to the Aggregate Purchase Price;
provided, however, that such credit with respect to trucks shall also include
the amount of any applicable insurance deductible. If the amount of such credit
becomes known on or before the Closing, the cash portion of the Aggregate
Purchase Price payable at Closing shall be reduced. If such amount becomes known
after the Closing, such amount shall be paid promptly to Buyer Representative,
on behalf of the applicable Buyer.
ARTICLE VI
COVENANTS OF BUYERS AND BUYER REPRESENTATIVE
6.01. Confidentiality. Until the Closing, Buyer Representative will,
and will cause its Affiliates to, comply with the terms of the Confidentiality
Agreement with respect to all "Confidential Information" (as defined therein)
concerning the Business. Buyer Representative will, and will cause its
Affiliates to, also continue to comply with the terms of the Confidentiality
Agreement with respect to all other "Confidential Information" regarding Seller
and its Affiliates.
6.02. Access. (a) On and after the Closing Date, Buyer Representative
and Buyers will afford promptly to Seller and its agents reasonable access to
all properties, books, records, employees and auditors related to the Business,
to the extent necessary to permit Seller to comply with its obligations in
Sections 2.06 and 2.08 and to determine any matter relating to the Asset
Sellers' or the French Holding Company's rights and obligations hereunder or to
any period ending on or before the Closing Date; provided that any such access
by Seller or its agents
Master Agreement - Page 50
shall not unreasonably interfere with the conduct of the business of Buyer
Representative or any Buyer.
(b) Following the Closing Date, Buyer Representative shall cause Buyers
and the French Subsidiaries to give Seller, the Participating Subsidiaries and
their counsel, financial advisors, auditors and other representatives access on
reasonable notice and at reasonable times to, and permit them to make copies of,
the Books and Records and other information related to the Business as they may
reasonably request in order to (i) prepare the Closing Net Asset Statement, (ii)
verify the Customer Counts and any information related thereto, (iii)
investigate or deal with any Prior Claim or Excluded Liability, (iv) prepare Tax
Returns of Seller, the U.K. Subsidiary or the French Holding Company, or (v)
investigate, evaluate or resolve any claim for indemnification made in
accordance with Article XI or participate in accordance with Article XI in the
conduct or defense of any third-party indemnification claim, or (vi) otherwise
carry out the obligations, or exercise or enjoy the rights, of Seller and its
Affiliates, or determine any matter relating to their rights or obligations,
under this Agreement and the other Operative Documents; provided that access
pursuant to this Section 6.02(b) shall be exercised in such manner as not to
interfere unreasonably with the conduct of business by Buyers.
(c) All information disclosed to or obtained by any party to the
Operative Documents or its counsel, financial advisors, auditors or other
authorized representatives as a result of another party's performance of its
obligations under this Section 6.02 shall be deemed "Confidential Information"
(as defined in the Confidentiality Agreement) under, and shall be subject to,
the Confidentiality Agreement.
6.03. Seller Trademarks; Tradenames. (a) Except as provided in this
Section 6.03, Buyers and their Affiliates shall not use, at any time or in any
way, any of the existing trademarks or tradenames owned or licensed by Seller or
its Subsidiaries other than the Business Tradenames, including without
limitation and for clarification purposes only, the following: Ionics. Such
names shall be referred to, collectively or individually as the context
requires, as the "Seller Tradenames."
(b) Buyers shall have the right to sell existing inventory and to use
existing packaging, labeling, containers, supplies, advertising materials,
brochures, technical data sheets and any similar materials bearing any Seller
Tradename, in a manner consistent with their use by Seller and its Subsidiaries
prior to Closing, until the earlier of (i) six months after the Closing Date and
(ii) the date such stocks existing on the Closing Date are exhausted.
Notwithstanding anything in the immediately preceding sentence, for a period not
to exceed six months after the Closing Date, Buyers shall have the right to use
Seller Tradenames in a manner consistent with their use by Seller and its
Subsidiaries (i) in advertising programs initiated prior to the Closing Date by
Seller and its Subsidiaries that cannot be changed by Buyer using commercially
reasonable efforts or without undue expense, and (ii) on water bottles on which
the Seller Tradenames exist as of the Closing Date; provided, however, that
Buyers shall, in the ordinary course in accordance with a systematic program
which Buyers shall institute, remove or mask the Seller Tradenames appearing on
water bottle labels as and when such water bottles are returned and recycled,
except that Buyers shall not be obligated to remove or mask any Seller Tradename
Master Agreement - Page 51
which is permanently molded into water bottles. Buyer shall comply with all
applicable Laws in any use of the Seller Tradenames.
(c) Buyer Representative shall cause Buyers and their Affiliates to
cease using Seller Tradenames on signage on buildings, cars, trucks and other
fixed assets as soon as possible within a period not to exceed six months after
the Closing Date and to use Seller Tradenames for such purposes only in a manner
consistent with their use by Seller and its Subsidiaries prior to the Closing.
(d) Buyers shall not be obligated to change a Seller Tradename on goods
in the hands of dealers, distributors or customers at the time of the expiration
of a time period set forth in Section 6.03(b). The removal of a Seller Tradename
from any material shall be deemed compliance with Buyer Representative's and
Buyers' covenants not to use Seller Tradenames pursuant to this Section 6.03.
6.04. Customer Relationships. (a) For ninety days following the Closing
Date, Buyer Representative, Buyers and their Affiliates (i) shall use
commercially reasonable efforts to preserve intact the relationships with the
Equipment Customers as of the Closing Date, (ii) shall not change, nor advise of
an intention to change, the price charged to such Equipment Customers for any of
the products or services of the Business as of the Closing Date, and (iii) shall
not decrease the level of service to such Equipment Customers from that being
provided as of the Closing Date.
(b) For ninety days following the Closing Date, each Buyer shall use
commercially reasonable efforts, consistent with such Buyer's normal and
customary collection procedures, to diligently collect in the ordinary course
the accounts receivable of the Business directly or indirectly acquired from
Seller and its Subsidiaries. No Buyer shall take any action or omit to take any
action intended or reasonably likely to result in a delay in the payment of, or
the non-payment of, any account receivable from any Equipment Customer, or the
termination of their customer relationship.
(c) For such period after the Closing Date that payments by Equipment
Customers on account of an equipment lease or rental or delivery of bottled
water or beverage service supplies affects the determination of the number of
Active Customers, Buyer Representative and each Buyer shall permit Seller, the
UK Subsidiary, the French Holding Company or their representatives to (a)
monitor and participate in the collection of outstanding accounts receivable of
the Business and (b) pursue collection of outstanding accounts receivable of the
Business directly with Equipment Customers (provided that such direct collection
efforts are pursued in a manner reasonably acceptable to Buyer Representative,
including the coordination of all such collection efforts and Customer contacts
with Buyer Representative in advance).
Master Agreement - Page 52
ARTICLE VII
COVENANTS OF BOTH PARTIES
7.01. Government Filings and Consents. (a) Subject to the terms and
conditions provided in the Operative Documents, Buyer Representative and Seller
shall use their respective commercially reasonable efforts to take, or cause to
be taken, all actions and do, or cause to be done, all things necessary, proper
or appropriate under applicable laws and regulations to consummate and make
effective the transactions contemplated by the Operative Documents at the
earliest practicable time, including filing Notification and Report Forms under
the HSR Act, and using their respective commercially reasonable efforts to
respond as promptly as practicable to all inquiries received for additional
information or documentation. Buyer Representative and Seller shall use
commercially reasonable efforts to negotiate with any Governmental Entity in
order to consummate the transactions contemplated by the Operative Documents or
to resolve objections to the consummation of such transactions. Notwithstanding
the prior sentence, in no event and under no circumstances shall Buyer
Representative have any obligation, in order to consummate the transactions
contemplated by the Operative Documents or to resolve objections, if any, to the
consummation of such transactions with respect to the U.S. Business and the
French Business only, to: (i) accept or offer to accept an order providing for
the divestiture by Buyer Representative or any Buyer of any part of the Business
or any Purchased Assets, Purchased Shares or other properties, assets,
operations or businesses of Buyer Representative, any Buyer, the French
Subsidiaries or any of their respective Affiliates, (ii) offer or agree to hold
separate such properties, assets, operations or businesses pending divestiture,
or (iii) agree to any other conditions, restrictions or limitations on the
existing operations or businesses of Buyer Representative, Buyers and their
respective Affiliates, or on the French Buyer's ownership of the Purchased
Shares, or on the operation of the Business.
(b) Seller and Buyer Representative acknowledge that while a voluntary
filing is available to the U.K. Buyer at the U.K. Buyer's election under United
Kingdom competition Laws, the U.K. Buyer does not intend to make such a
voluntary filing. The U.K. Buyer accordingly assumes all risks and liabilities
that result or arise from not making such a voluntary filing, including the risk
of any information request, investigation, enforcement proceeding or other
action which may be initiated following the date of this Agreement by
competition authorities in the United Kingdom and the risk of fines, penalties,
damages or other remedies that such authorities may pursue or impose (including
any divestiture of assets or businesses), as a result of the consummation of the
transactions contemplated by the U.K. Purchase Agreement.
7.02. Public Announcements. Neither Buyer Representative or Seller, nor
any of their Affiliates, shall issue any press release or make any public
statement with respect to the Operative Documents or the transactions
contemplated thereby (except as may be required by applicable Law or any listing
agreement with any national securities exchange on which such party's securities
are listed) without the prior written consent of the other party, which consent
shall not be unreasonably withheld or delayed.
Master Agreement - Page 53
7.03. Phone Numbers. Seller, Buyer Representative and their respective
Affiliates shall use their respective commercially reasonable efforts (but
without any payment of money by Seller or its Affiliates) to transfer the phone
numbers used in the Business that are set forth on Schedule 7.03 to Buyer
Representative or the Buyers effective as of the Closing Date.
7.04. Third Party Consents. (a) Anything in this Agreement or the other
Operative Documents to the contrary notwithstanding, nothing in this Agreement
or the other Operative Documents shall constitute an agreement to assign or
transfer any Purchased Asset or any claim or right or any benefit arising
thereunder or resulting therefrom if an attempted assignment or transfer
thereof, without consent of a third party thereto, would constitute a breach or
other contravention thereof or in any way materially adversely affect the rights
of any party to this Agreement or the other Operative Documents thereunder.
Before and after the Closing, Seller and Buyer Representative shall, and shall
cause their respective Affiliates to, cooperate with one another and use their
respective commercially reasonable efforts (but without any payment of money by
Seller or Buyer other than in accordance with this Section 7.04) to obtain third
party consent to the assignment or transfer to the U.S. Buyer or the U.K. Buyer
(as the case may be) of any such Purchased Asset or claim or right or any
benefit arising thereunder as the U.S. Buyer or the U.K. Buyer may request.
Seller shall promptly notify Buyer Representative whenever a third party consent
is obtained. If such consent is not obtained, or if an attempted assignment or
transfer thereof would be ineffective or would adversely affect the rights of
Seller or the U.K. Subsidiary thereunder so that the U.S. Buyer or the U.K.
Buyer (as the case may be) would not in fact receive all such rights, Seller and
Buyer Representative shall, and shall cause their respective Affiliates to, use
their respective commercially reasonable efforts (but without any payment of
money other than in accordance with this Section 7.04) and cooperate with one
another in a mutually agreeable arrangement to provide to the U.S. Buyer or the
U.K. Buyer (as the case may be) the material operational benefits of such
Purchased Asset or claim or right or benefit thereunder or resulting therefrom,
including subcontracting, sublicensing or subleasing to the U.S. Buyer or the
U.K. Buyer (as the case may be), or under other arrangement by which Seller or
the U.K. Subsidiary would enforce for the benefit of the U.S. Buyer or the U.K.
Buyer (as the case may be), any and all rights of Seller or the U.K. Subsidiary
against a third party thereto, with the U.S. Buyer or the U.K. Buyer (as the
case may be) assuming only Seller's or the U.K. Subsidiary's obligations
accruing thereunder in respect of the period after the Closing (other than
obligations based on a breach, or failure to comply, by Seller before the
Closing).
(b) Except as otherwise provided in Section 7.04(c) or agreed by Buyer
Representative and Seller, if a payment is required to obtain any third party
consent to the assignment or transfer to the U.S. Buyer or the U.K. Buyer (as
the case may be) of any such Purchased Asset or claim or right or any benefit
arising thereunder:
(i) for the Contracts set forth on Schedule 7.04(b)(i) 100% of
the amount of such payment shall be borne by, and be the responsibility of,
Buyer Representative; and
(ii) for the Contracts other than those set forth on Schedule
7.04(b)(i), 50% of the amount of such payment shall be borne by and be the
responsibility of Buyer Representative, and 50% of the amount of such payment
shall be borne by and be the responsibility of Seller.
Master Agreement - Page 54
(c)(i) If the parties are required to implement an arrangement as
contemplated by the fourth sentence of Section 7.04(a), the total Permitted
Costs of Buyer Representative, Seller and their respective Affiliates associated
with such arrangement shall be shared so that 50% of such total Permitted Costs
shall be borne by and be the responsibility of Buyer Representative, and 50% of
such total Permitted Costs shall be borne by and be the responsibility of
Seller.
(ii) "Permitted Costs" of a specified Person means the
additional reasonable direct out-of-pocket costs actually incurred and paid by
such Person as a result of the third party not having consented to such
assignment or transfer prior to the Closing.
(A) With respect to leased business premises a Buyer
intends to continue occupying for an extended period after the Closing (all of
which have previously been identified for Seller in writing by Buyer
Representative) but which such Buyer is not permitted to continue occupying
because of the failure to obtain a required third-party consent, "Permitted
Costs" of (1) such Buyer would include the reasonable direct out-of-pocket costs
actually incurred and paid by such Buyer to lease, and prepare for occupancy
(including the installation [possibly on an expedited basis] of high-speed data
and telecommunications lines), comparable replacement premises and to move the
Purchased Assets to such replacement premises and (2) Seller or its Affiliates
would include direct out-of-pocket costs actually incurred and paid by Seller
and its Affiliates to continue to lease the existing premises under the existing
lease.
(B) With respect to leased business premises a Buyer
does not intend to continue occupying for an extended period after the Closing
(all of which have previously been identified for Seller in writing by Buyer
Representative) but which such Buyer is not permitted to continue occupying
because of the failure to obtain a required third-party consent, "Permitted
Costs" of (1) such Buyer would include only the additional reasonable direct
out-of-pocket costs actually incurred and paid by such Buyer to occupy on an
expedited basis replacement premises (for example, the lease costs incurred for
such replacement premises for the period from the Closing through such Buyer's
originally intended move-out date (as specified in the writing previously
delivered to Seller) and the additional costs of expediting the installation of
high-speed data and telecommunications lines) but would not include the costs to
otherwise lease, or prepare for occupancy (including the installation [other
than on an expedited basis] of high-speed data and telecommunications lines),
comparable replacement premises or to move (other than on an expedited basis)
the Purchased Assets to such replacement premises and (2) Seller or its
Affiliates would include direct out-of-pocket costs actually incurred and paid
by Seller and its Affiliates to continue to lease the existing premises under
the existing lease.
(d) To the extent that a party pays or bears an amount which is the
responsibility of, or to be borne by, the other party as contemplated by this
Section 7.04, the other party shall promptly reimburse the paying party for the
amount that is the responsibility of, or to be borne by, the other party
pursuant to this Section 7.04. At least monthly, Buyer Representative and Seller
shall share information relating to such amounts and shall settle any amounts
owed to one another.
Master Agreement - Page 55
(e) Seller will receive in trust for Buyer, and will promptly pay to
Buyer as and when received, all monies received by Seller with respect to any
Purchased Asset or any claim or right or any benefit arising thereunder, except
to the extent the same represents an Excluded Asset.
(f) This Section 7.04 shall not apply to third-party consents required
with respect to Permits, which are governed by Section 5.08.
ARTICLE VIII
TAX MATTERS
PART A - GENERAL PROVISIONS
8A.01. Tax Definitions.
(a) "Taxes" means all federal, state, local and foreign net income,
alternative or add-on minimum, estimated, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, capital profits, lease,
service, license, withholding, social security, payroll, employment, excise,
severance, stamp, occupation, premium, property, environmental, windfall profit,
and other taxes, customs duties, and other governmental fees, assessments and
charges of any kind whatsoever imposed by any Taxation Authority, together with
all interest, penalties, additions to tax and additional amounts in respect of
the foregoing. The term "Tax" means any one of the foregoing Taxes.
(b) "Tax Returns" means all returns, declarations, reports, claims for
refund, information statements and other documents relating to Taxes, including
all accompanying schedules and attachments, and all subsequent amendments, which
are required to be filed with a Taxation Authority. The term "Tax Return" means
any one of the foregoing Tax Returns.
(c) "Taxation Authority" means the Internal Revenue Service, the Inland
Revenue, HM Customs & Excise, the Department of Social Security, and any other
Governmental Entity or other authority whatsoever competent to impose or assess
any Taxes, whether in the United States, the United Kingdom, France, the
European Union or elsewhere.
PART B - U.S. TAXES
8B.01. Tax Representations and Warranties - U.S. Business. Except as
set forth in Schedule 8B.01, Seller hereby represents and warrants to Buyer
Representative that:
(a) With respect to the U.S. Business, Seller has filed, or caused to
be filed, all material Tax Returns required to be filed, and has paid or caused
to be paid all Taxes due and payable as shown on such Tax Returns.
Master Agreement - Page 56
(b) The U.S. Business is not subject to any current waiver of any
statute of limitations or extension of time with respect to potential Tax
assessments or deficiencies.
(c) No federal, state, local or foreign audits, examinations,
investigations or other administrative proceedings or court proceedings are
presently pending (other than those of which neither Seller nor any of its
Subsidiaries has received written notice) with regard to any Tax Returns filed
by or on behalf of Seller or any of its Subsidiaries or Taxes due or alleged to
be due with respect to the U.S. Business.
(d) Neither Seller nor any of its Subsidiaries has entered into any
closing agreement or other settlement with any Taxation Authority involving
Taxes relating to or affecting the U.S. Business which will have effect after
the Closing.
(e) Neither Seller nor any of its Subsidiaries has received any written
claim from a Taxation Authority in a jurisdiction in which neither Seller nor
any of its Subsidiaries files Tax Returns that Seller or any of its Subsidiaries
may be required to pay Taxes in that jurisdiction with respect to the U.S.
Business.
(f) No power of attorney granted by Seller or any of its Subsidiaries
with respect to Taxes relating to or affecting the U.S. Business will have
effect after the Closing.
(g) None of the Assumed Liabilities under the U.S. Purchase Agreement
is an obligation to make any payment the deductibility of which would be
disallowed under Section 280G of the Code.
(h) Seller has not been a member of an affiliated group of corporations
filing a consolidated federal income Tax Return (other than a group the common
parent of which is Seller).
(i) To Seller's knowledge, there are no outstanding (or pending
requests for) rulings, determination letters or similar administrative
pronouncements issued (or to be issued) by any Taxation Authority which will be
(or, if issued, would be) binding upon the U.S. Business after the Closing.
(j) With respect to the U.S. Business, Seller is not a party to any Tax
allocation, Tax sharing or Tax indemnity agreement having effect after the
Closing.
(k) There are no Liens for Taxes upon any property or asset of the U.S.
Business, except Permitted Liens.
8B.02. Tax Covenants - U.S. (a) All transfer, documentary, sales, use,
value-added, stamp and registration Taxes, all conveyance fees, recording fees,
deed stamps and all other such Taxes and fees (including any penalties and
interest) incurred in connection with the purchase and sale of the Purchased
Assets pursuant to the U.S. Purchase Agreement shall be borne and paid by the
U.S. Buyer.
Master Agreement - Page 57
(b) At Seller's option, Buyer Representative shall cause to be made, or
not to be made, a timely election (or elections) under Section 338 of the Code
(each, a "Section 338 Election") with respect to the French Subsidiary (or any
subsidiary thereof), in accordance with the remaining provisions of this Section
8B.02(b). If Seller desires that a Section 338 Election be made with respect to
the French Subsidiary (or any subsidiary thereof), Seller shall notify Buyer
Representative of such intention (the "Section 338 Notice") no later than the
first to occur of (i) six (6) months after the Closing Date or (ii) 90 days
prior to the due date for making the Section 338 Election. The Section 338
Notice shall include all information which is needed under the Code and
applicable Treasury Regulations in order to prepare the appropriate Section 338
Election form (the "Section 338 Form") and all required attachments to such
form, including a draft of any computations which are required to be made in
connection with the Section 338 Election and a draft of a fully-completed
version of the Section 338 Form. Seller shall take all actions reasonably
necessary and appropriate to assist Buyer Representative in the preparation of
the Section 338 Form, and Buyer Representative shall take, or cause to be taken,
all actions reasonably requested by Seller to effect a timely and valid Section
338 Election. As soon as practicable following Buyer Representative's receipt of
the Section 338 Notice, Buyer Representative (x) shall cause the Section 338
Form to be finalized and shall transmit a copy of such finalized Section 338
Form to Seller for its approval (which shall not be unreasonably withheld or
delayed), and shall then (y) cause the French Buyer to execute such approved
Section 338 Form and (z) be responsible for submitting the fully-executed
Section 338 Form on a timely basis to the Internal Revenue Service (with a copy
of such form being delivered to Seller). Buyer Representative's obligation to
submit the fully-executed Section 338 Form on a timely basis to the Internal
Revenue Service shall be deemed satisfied if, prior to the due date for making
the Section 338 Election, Buyer Representative deposits the form with the U.S.
Postal Service by certified U.S. mail, return receipt requested, or delivers the
form to a private overnight delivery service designated pursuant to Section
7502(f) of the Code, in which event Buyer Representative shall not be
responsible for the Internal Revenue Service's failure to receive or process the
form.
(c) Notwithstanding any other provision of this Agreement, Buyer
Representative shall indemnify, defend and hold harmless the Seller Indemnitees,
in accordance with and subject to Article XI (except that the limitations set
forth in Section 11.04(d) shall not apply), from and against any Losses incurred
by or asserted against any of the Seller Indemnitees or caused by, resulting
from, arising from or attributable to a breach of the covenants in this Section
8B.02. These covenants (and this indemnity with respect thereto) shall survive
until ninety (90) days after the expiration of all applicable statutes of
limitations.
(d) Notwithstanding any other provision of this Agreement, Seller shall
indemnify, defend and hold harmless the Buyer Indemnitees, in accordance with
and subject to Article XI (except that the limitations set forth in Section
11.04(d) shall not apply) from and against any Losses incurred by or asserted
against any of the Buyer Indemnitees that are directly caused by, result
directly from or in any way arise directly out of the deemed sale of assets
resulting from any Section 338 Election made at Seller's request pursuant to
Section 8B.02(b) to the extent, if any, that such Losses exceed those that would
result in the absence of a Section 338 Election.
Master Agreement - Page 58
PART C - U.K. BUSINESS
8C.01. Tax Representations and Warranties - U.K. Business. Except as
set forth in Schedule 8C.01, Seller hereby represents and warrants to Buyer
Representative that:
(a) With respect to the U.K. Business, the U.K. Subsidiary has complied
in all material respects with all statutory requirements, regulations, orders,
provisions, directions and conditions relating to National Insurance or PAYE,
and none of its pay practices in relation to any of the U.K. Transferred
Employees has been the subject of any dispute with any Taxation Authority of
which the U.K. Subsidiary has received written notice.
(b) The U.K. Subsidiary has not in relation to the U.K. Business
adopted or operated or been part of any scheme approved, or for which approval
has been sought, under section 202 Income and Corporation Taxes Act 1988 ("TA
88") (charities: payroll deduction scheme) or Chapter III of Part V TA 88
(profit related pay).
(c) To Seller's knowledge, no circumstances exist whereby any power
within section 212 of the Inheritance Tax Act 1984 could be exercised in
relation to any of the U.K. Assets.
(d) To Seller's knowledge, none of the U.K. Assets is subject to an
outstanding Inland Revenue charge (as defined in section 237 of the Inheritance
Tax Act 1984).
(e) All documents under which the U.K. Subsidiary derived title to any
of the U.K. Assets and in respect of which stamp duty was payable at the time of
acquisition have been duly stamped and are in the possession of the U.K.
Subsidiary or under its control.
(f) Neither the U.K. Subsidiary nor its relevant associate (within the
meaning of paragraph 3(7) of Schedule 10 Value Added Tax Act 1994 ("VATA")) has
exercised any election to waive exemption under Schedule 10 VATA in respect of
the whole or any part of any U.K. Real Property.
(g) To Seller's knowledge, as at the date of this Agreement, no U.K.
Transferred Employee is entitled to receive from the U.K. Subsidiary (whether or
not by way of exercise of an option granted to him or her) at any time after the
execution of this Agreement any assessable income in the form of a readily
convertible asset for the purposes of sections 203F, 203FA, 203FB, 203J, 203K
and 203L TA 88 and any regulations made under any of the foregoing (PAYE and
notional payments).
(h) The portion of the U.K. Purchase Price allocated under the U.K.
Offer to such of the U.K. Assets as constitute plant and machinery for purposes
of the Capital Allowances Act 2001 Part II does not exceed the original cost of
the corresponding U.K. Assets to the U.K. Subsidiary.
Master Agreement - Page 59
8C.02. Tax Covenants - U.K. Business.
(a) All stamp duty and registration fees (including any penalties and
interest) incurred in connection with the purchase and sale of the Purchased
Assets pursuant to the U.K. Purchase Agreement and the U.K. Property Contracts
shall be borne and paid by the U.K. Buyer.
(b) If any value-added Tax becomes chargeable as a result of the
transfer of the U.K. Business from the U.K. Subsidiary to the U.K. Buyer, Buyer
Representative and the U.K. Buyer shall be jointly and severally liable for the
payment of the amount of such value-added Tax which shall be paid to the Seller
on written demand within five (5) Business Days of such demand, provided that
Seller delivers to Buyer Representative a copy of an invoice for payment of such
value-added Tax.
PART D -- FRENCH BUSINESS
8D.01. Tax Representations and Warranties - French Business. Except as
set forth in the Disclosure Schedule, Seller hereby represents and warrants to
Buyer Representative that:
(a) Each of the French Subsidiaries has complied in all material
respects with all Laws, orders, provisions, directions or conditions of the
French Taxation Authorities. Each of the French Subsidiaries has timely filed
all appropriate Tax Returns and has paid or caused to be paid all French Taxes
due and payable. The unpaid Taxes of the French Subsidiaries did not as of the
Reference Date exceed the reserves or accrual for actual Taxes with respect to
such French Subsidiaries.
(b) Other than those, if any, of which neither the French Holding
Company nor any of the French Subsidiaries has received written notice, there
are no pending or threatened audits or investigations relating to any Tax
relating to the French Subsidiaries, nor is any of the French Subsidiaries the
subject of any other inspection, inquiry, request for information or notice from
any Taxation Authority. No deficiencies for any Taxes have been proposed,
asserted or assessed in writing against the French Subsidiaries by the French
Taxation Authorities. There are no agreements in effect to extend the period of
limitations for the assessment or collection of any Taxes relating to the French
Subsidiaries, and no requests for any such agreements have been made.
(c) None of the French Subsidiaries has benefited from any favorable
Tax regime in exchange for making undertakings or incurring commitments or
obligations by which any of the French Subsidiaries or their respective assets
are bound. None of the French Subsidiaries shall incur any additional Tax burden
by reason of having obtained or benefited from any favorable Tax regime or
postponement of Tax.
(d) None of the French Subsidiaries shall incur any Tax as a result of
the cessation, by reason of the sale of the Purchased Shares, of any integration
regime applicable to any of the French Subsidiaries.
Master Agreement - Page 60
(e) The French Subsidiaries are the beneficiaries of Tax loss
carryforwards (including deferred depreciation) and carryback receivables, if
any, as set forth in Schedule 8D.01.
(f) None of the French Subsidiaries has, at any time, been engaged in a
trade or business within the United States for purposes of Section 864(b) of the
Code.
8D.02. Tax Covenants - French Business.
(a) Prior to the Closing, Seller shall cause the French Holding Company
or another Affiliate of Seller to purchase from the French Subsidiary all of the
outstanding stock and voting interests of the French Subsidiary's inactive
Subsidiary MidasBest Limited, such that as of the Closing Date MidasBest Limited
shall no longer be a Subsidiary of the French Subsidiary, and the French
Subsidiary shall no longer own any direct or indirect interest in MidasBest
Limited. To the extent commercially reasonable, the purchase and transfer shall
be effectuated in such a manner so as not to incur any Tax Liability or exposure
to Tax on the part of the French Subsidiary or the Second Tier Subsidiary or any
of their respective assets. Any such Tax Liability or exposure to Tax that does
result shall be accrued as a Liability on the Final Closing Net Asset Statement
and, to the extent of the amount so accrued, shall constitute a Permitted French
Subsidiary Liability, and otherwise shall be an Excluded Liability. Seller and
the French Holding Company (or such other transferee as shall be designated by
Seller to purchase from the French Subsidiary all of the outstanding capital
stock and voting interests of MidasBest Limited) shall be solely responsible for
paying any stamp duty, transfer Tax or other Tax imposed or assessable in
respect of such transfer, and Seller shall indemnify, defend and hold harmless
the French Subsidiary and its Affiliates, subject to and in accordance with
Article XI (except that the limitations set forth in Section 11.04(d) shall not
apply) from and against any such Liability.
(b) Prior to the Closing, the French Holding Company shall be entitled,
at Seller's election, to effect the conversion of the French Subsidiary from a
societe anonyme (SA) to a societe par actions simplifiee (SAS) and Seller shall
be entitled to cause an election to be filed with the U.S. Internal Revenue
Service to cause the French Subsidiary to be treated as a "disregarded entity"
for U.S. Federal income tax purposes. The conversion shall be carried out and
completed in accordance with applicable Law on written notice to Buyer
Representative, and the French Holding Company shall make, or shall cause the
French Subsidiary to make, all filings and take all other actions required in
order to effectuate, perfect and complete such conversion prior to the Closing.
Prior to the Closing, the French Holding Company shall be entitled to proceed
with an increase of share capital within the French Subsidiary in order to
finalize the MidasBest transaction.
(c) Seller shall cause the French Holding Company to pay, and shall
indemnify, defend and hold harmless the French Subsidiary and its Affiliates,
subject to and in accordance with Article XI (except that the limitations set
forth in Section 11.04(d) shall not apply) from and against, (i) any stamp duty,
transfer Tax or other Tax which may be imposed on or assessed against the French
Subsidiary, MidasBest Limited, the Second Tier Subsidiary or any of their
Affiliates in connection with (W) the acquisition in April 2000 by the French
Subsidiary of the
Master Agreement - Page 61
capital stock of MidasBest Limited from Bangford Development Inc., (X) the
transfer to MidasBest Limited of certain assets, including coolers, bottles and
customer contracts, by O'Viv, a French company, prior to the stock acquisition,
(Y) any other transactions or dealings between MidasBest Limited and O'Viv or
their respective shareholders or principals, or (Z) any other act or omission in
connection with the series of transactions whereby the French Subsidiary
effectively acquired the business, assets and customers of O'Viv, HCS (Evreux),
Re-Sources (Toulouse), MDA (St Germain en Corbeis), A.D. Nord and Ets Lemoine
(Domart sur la Luce); (ii) any disallowance of the deductibility for Tax
purposes of any interest paid or payable by any of the French Subsidiaries to
Global Water Services, a Panamanian company, or to any other Affiliate of Seller
or the French Holding Company with respect to loans or advances made by any of
them to the French Subsidiaries; and (iii) any stamp duty, transfer Tax, income
Tax or other Tax which may be imposed on or assessed against the French
Subsidiary in connection with the conversion of the French Subsidiary or its
predecessor from a societe a responsabilite limitee (SARL) to a societe anonyme
(SA), the subsequent transfer to the French Holding Company of the outstanding
capital stock of the French Subsidiary, and, if effectuated prior to Closing in
accordance with Section 8D.02(b), the conversion of the French Subsidiary from
an SA to an SAS.
(d) All transfer, documentary, sales, use, value-added, stamp and
registration Taxes and fees (including any penalties and interest) incurred in
connection with the purchase and sale of the Purchased Shares pursuant to the
Share Purchase Agreement shall be borne and paid by French Buyer.
(e) (i) The Final Closing Net Asset Statement shall include accruals
for the Liability for Taxes incurred or payable by the French Subsidiaries in
the ordinary course of the French Business or as expressly required by this
Agreement with respect to periods or portions thereof ending at or prior to the
Closing determined in accordance with Section 2.06(a)(i) and using the financial
and Tax accounting methods, practices and elections, and the applications
thereof, used by the French Subsidiaries in their Tax Returns filed with
Taxation Authorities for the year ended December 31, 2000, together with any
changes in such methods, practices and elections, or applications thereof, made
prior to the date of this Agreement, which have previously been disclosed to
Buyer Representative (the "Accrued French Tax Liability"); provided, however,
that such accruals shall exclude any accruals for Liabilities for Taxes incurred
or payable by the French Subsidiaries which Seller or any of its Affiliates is
obligated to pay or for which Seller or any of its Affiliates is obligated to
reimburse or indemnify Buyer Representative, the French Buyer, the French
Subsidiaries or any of their Affiliates pursuant to this Agreement or any other
Operative Document, all of which shall be Excluded Liabilities. The Accrued
French Tax Liability, in the amount and to the extent reflected on the Final
Closing Net Asset Statement, shall be a Permitted French Subsidiary Liability.
(ii) Except for any differences in the Liability for Taxes
incurred or payable by the French Subsidiaries with respect to periods or
portions thereof ending at or prior to the Closing from the Accrued French Tax
Liability caused by or resulting from, directly or indirectly, (1) any change
not mandated by a Taxation Authority, whenever made (even a change made at the
request or instruction of Buyer Representative to Seller or to any of the French
Master Agreement - Page 62
Subsidiaries), by the Buyer Representative, the French Buyer or any of their
Affiliates or the French Subsidiaries at or after the Closing in such financial
and Tax accounting methods, practices or elections, or the application thereof,
or (2) the inclusion of any of the French Subsidiaries in any group including
the Buyer Representative, the French Buyer, the French Subsidiaries or any of
their Affiliates, if (A) the actual Liability for Taxes incurred or payable by
the French Subsidiaries with respect to periods or portions thereof ending at or
prior to the Closing exceeds (B) the Accrued French Tax Liability, the amount of
such excess shall be an Excluded Liability and, as such, shall be the Liability
of the Seller, the French Holding Company and their Affiliates.
(iii) The Buyer Representative, the French Buyer, or any of
their Affiliates or the French Subsidiaries and their Affiliates after the
Closing (A) shall be responsible for the Accrued French Tax Liability, (B) shall
be responsible for, and shall benefit from, any differences in the Liability for
Taxes incurred or payable by the French Subsidiaries with respect to periods or
portions thereof ending at or prior to the Closing from the Accrued French Tax
Liability caused by or resulting from, directly or indirectly, (1) any change
not mandated by a Taxation Authority, whenever made (even a change made at the
request or instruction of the Buyer Representative to the Seller or to any of
the French Subsidiaries), by the Buyer Representative, the French Buyer or any
of their Affiliates or the French Subsidiaries at or after the Closing in such
financial and Tax accounting methods, practices and elections, or application
thereof, or (2) the inclusion of the French Subsidiaries in any group including
the Buyer Representative, the French Buyer, the French Subsidiaries or any of
their Affiliates, and (C) shall be responsible for any Liabilities for Taxes
incurred or payable by the French Subsidiaries with respect to periods or
portions thereof beginning immediately after the Closing (collectively, the
"Buyer French Tax Liabilities"). The Buyer French Tax Liabilities shall be the
Liabilities of the Buyer Representative, the French Buyer, the French
Subsidiaries or any of their Affiliates, and no portion of the Buyer French Tax
Liabilities (other than the Accrued French Tax Liability) shall be reflected on
the Final Closing Net Asset Statement.
ARTICLE IX
EMPLOYEE AND EMPLOYEE BENEFIT MATTERS
PART A - GENERAL PROVISIONS
9A.01. Employee Benefits Definitions. The following terms, as used
herein, having the following meanings:
"Benefit Arrangement" means each plan, arrangement or policy providing
for severance, insurance coverage (including any self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits, pension or retirement benefits, or for deferred compensation,
profit-sharing, bonuses, stock options, stock appreciation rights or other forms
of incentive compensation or post-retirement insurance, compensation or
benefits, in
Master Agreement - Page 63
each case that (i) is not an Employee Plan and (ii) is maintained or contributed
to by Seller or any of its Subsidiaries, including ERISA Affiliates.
"Defined Contribution Plan" means each Employee Plan which is a
"defined contribution plan" within the meaning of Code Section 414(i) and
intended to be qualified under Code Section 501(a).
"Employee Plan" means each "employee benefit plan," as such term is
defined in Section 3(3) of ERISA, that (i) is subject to any provision of ERISA
and (ii) is maintained or contributed to by Seller or any of its ERISA
Affiliates, as the case may be.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" of any entity means any other entity that, together
with such entity, would be treated as a single employer under Section 414 of the
Code.
"Multiemployer Plan" means each Employee Plan that is a multiemployer
plan, as defined in Section 3(37) of ERISA.
"Pension Plan" means each Employee Plan, other than a Multiemployer
Plan, subject to Title IV of ERISA.
"U.K. Pension Scheme" means the Ionics Company Pension Scheme with
Standard Life covering employees of the U.K. Business.
9A.02. Seller Responsibility for Pre-Closing Date Matters. (a) Seller
shall retain in respect of the U.S. Business, and shall ensure that the U.K.
Subsidiary and the French Holding Company shall retain in respect of the U.K.
Business and the French Business, respectively, all obligations and liabilities
under the Employee Plans and Benefit Arrangements in respect of each employee or
former employee (including any beneficiary or dependent of a current or former
employee) of the Business who is not a Transferred U.S. Employee, a Transferred
U.K. Employee or an employee of the French Subsidiary. Except as expressly set
forth in this Agreement or reflected as Liabilities on the Final Closing Net
Asset Statement, Seller shall also retain in respect of the U.S. Business, and
shall ensure that the U.K. Subsidiary and the French Holding Company shall
retain in respect of the U.K. Business and the French Business, respectively,
all liabilities and obligations in respect of benefits and compensation accrued
as of the Closing Date by Transferred U.S. Employees, Transferred U.K. Employees
and employees of the French Subsidiary under the Employee Plans and Benefit
Arrangements, including wages, salaries and benefits, vacation pay and sick pay,
severance benefits, withholding and reporting obligations, and the employer's
share of payroll Taxes or other employment-related Taxes, and neither Buyer
Representative or Buyers nor any of their Affiliates shall assume or have any
liability with respect to such matters. Except as expressly set forth in this
Agreement, no assets of any Employee Plan or Benefit Arrangement shall be
transferred to Buyer Representative, any Buyer or any of their Affiliates or to
any benefit plan sponsored or maintained by any of them.
Master Agreement - Page 64
(b) Seller shall be responsible for all claims, including claims under
Employee Plans and Benefit Arrangements of Seller and the Participating
Subsidiaries, by or for the employees and former employees of the Business which
arise out of events occurring or conditions existing or arising at any time
prior to the Closing, including: (i) claims under disability plans (both
short-term and long-term); (ii) accidents; (iii) Liability for retiree health
benefits; (iv) entitlements to commissions, productivity bonuses or other
bonuses earned for services rendered prior to the Closing Date; (v) claims for
breach of contract of employment, unfair or wrongful dismissal, infringement of
statutory employment protection rights or statutes prohibiting discrimination on
the basis of sex, race, disability, age, religion or sexual orientation;
provided, however, that if such a claim relates to the conduct of the Business
both prior to and after the Closing, then Seller shall only be responsible for
that portion of such claim attributable to the conduct of the Business prior to
the Closing; and (vi) claims for payment not covered by group insurance of
Seller and its Subsidiaries for costs of medical services, drugs, laboratory
services, hospitalization and other benefits that are delivered, utilized or
received before the Closing Date, or that arise out of medical services,
treatments, hospitalization or other benefits which are begun or rendered before
the Closing Date, including hospitalization or treatments which continue
post-Closing, under any Employee Plan or Benefit Arrangement;.
(c) As used in this Agreement, the term Prior Claims includes all
claims referred to in Section 9A.02(b) and all workers' compensation or similar
claims by employees or former employees of the Business, whether arising out of
accidents, personal injuries, occupational diseases or otherwise, to the extent
that they: (i) are asserted at any time prior to the Closing; or (ii) except for
workers' compensation claims arising out of alleged occupational diseases, arise
out of events or occurrences that take place or conditions that exist or arise
at any time prior to the Closing; or (iii) except for workers' compensation
claims arising out of alleged occupational diseases, involve an alleged injury
or alleged damage occurring prior to the Closing; or (iv) arise out of alleged
occupational diseases in which consultation is sought with a medical
practitioner prior to the Closing. Seller shall be responsible for and shall
pay, or shall cause the U.K. Subsidiary or the French Holding Company to pay,
all Prior Claims. Buyers and Buyer Representative will provide reasonable
cooperation to Seller and Seller's Affiliates at Seller's request in connection
with Seller's or its Affiliate's handling of the Prior Claims, including
production of relevant books and records (including the Books and Records) in
the possession of Buyer Representative or any of its Affiliates.
(d) Seller and the U.K. Subsidiary shall retain responsibility for any
annual, quarterly or other periodic performance, incentive or other management
bonus compensation (collectively, "Bonus Programs") payable to employees of the
U.S. Business and the U.K. Business, including Transferred Employees, which
shall be earned or accrued in accordance with the terms and conditions of such
Bonus Programs in respect of any period ending on or before December 31, 2001.
Seller or the U.K. Subsidiary, as the case may be, shall pay all such Bonus
Program compensation to the employees of the U.S. Business and the U.K.
Business, including Transferred Employees, in the ordinary course in accordance
with the terms and conditions of such Bonus Programs and with Seller's or the
U.K. Subsidiary's customary payment practices and on the customary payment
dates, whether these fall before or after the Closing Date, provided that Seller
and the U.K. Subsidiary shall waive and not enforce, with respect to
Master Agreement - Page 65
Transferred Employees, any practice, policy or procedure which would render the
Transferred Employees ineligible to receive Bonus Program compensation, or cause
them to forfeit such compensation, solely by reason of their becoming employees
of the U.S. Buyer or the U.K. Buyer and no longer being employed by Seller or
the U.K. Subsidiary on the payment dates. Neither Buyer Representative nor the
U.S. Buyer or the U.K. Buyer shall assume any responsibility for the payment or
administration of any Bonus Programs of Seller or the U.K. Subsidiary in respect
of the U.S. Business or the U.K. Business, and such matters shall constitute
Excluded Liabilities. If and to the extent that the French Subsidiary maintains
any Bonus Program, there shall be reflected on the Final Closing Net Asset
Statement as a Liability an appropriate accrual (including the employer's share
of any applicable associated payroll Taxes) for all unpaid Bonus Program
compensation earned or accrued in accordance with the terms and conditions of
such Bonus Programs for any period ending on or before December 31, 2001. If the
relevant measurement period under any Bonus Program of the French Business spans
the Closing Date, with a portion of the measurement period falling before the
Closing Date and the remainder of the measurement period falling after the
Closing Date, the accrual shall be appropriately prorated, and the Liability so
accrued shall, to the extent of the accrued amount, constitute a Permitted
French Subsidiary Liability.
9A.03. No Third Party Beneficiaries. Subject to the Transfer
Regulations, no provision of this Article IX shall create any third party
beneficiary or other rights in any employee or former employee (including any
beneficiary or dependent of an employee or former employee) of Seller or of any
of the Participating Subsidiaries in respect of continued employment (or resumed
employment) with either Buyers or the Business or any of their Affiliates, and,
subject to the Transfer Regulations and subject to the U.K. Buyer's obligations
under Section 9C.02, no provision of this Article IX shall create any such
rights in any such Persons in respect of any benefits that may be provided,
directly or indirectly, under any Employee Plan or Benefit Arrangement or any
employee plan or benefit arrangement that may be established or provided by
Buyer Representative, any Buyer or their Affiliates, or require Buyer
Representative, any Buyer or any of their Affiliates to adopt, continue or
maintain any Employee Plan or Benefit Arrangement of Seller or Seller's
Affiliates or any other employee plan or benefit arrangement, except as
expressly set forth herein. Subject to the Transfer Regulations and subject to
the U.K. Buyer's obligations under Section 9C.02, no provision of this Agreement
shall, except as expressly provided in this Agreement, require Buyer
Representative or any Buyer to assume any Employee Plan or Benefit Arrangement
or to offer or provide any employee plan or benefit arrangement for employees of
the Business or shall constitute a limitation on the rights of Buyer
Representative, Buyers and their Affiliates to amend, modify or terminate any
employee plan or benefit arrangement maintained by them after the Closing Date.
Master Agreement - Page 66
PART B - U.S. BUSINESS
9B.01. Employment Representations and Warranties - U.S. Business.
Except as set forth in the Disclosure Schedule, Seller hereby represents and
warrants to Buyer Representative that:
(a) Seller has provided Buyer Representative with an accurate census
(with job titles, hourly wages or salaries, dates of hire and calendar year 2000
W-2 compensation) of all employees, including part-time and seasonal employees,
involved in the U.S. Business as of the date of this Agreement, and will update
the census from time to time pending the Closing at Buyer Representative's
reasonable request.
(b) Except as set forth in Schedule 9B.01: (i) there exist no Contracts
for the employment of any employee in the U.S. Business; (ii) none of the
employees of the U.S. Business is covered by a collective bargaining agreement
or represented by a labor union or collective bargaining unit; (iii) there are
no controversies pending or, to Seller's knowledge, threatened between Seller,
on the one hand, and any employees of the U.S. Business, on the other hand, that
would be reasonably expected to have a Material Adverse Effect; and (iv) to
Seller's knowledge, no labor union is organizing or attempting to organize any
employees of the U.S. Business or claims to represent any employees of the U.S.
Business.
(c) Except as set forth in Schedule 9B.01, since January 1, 2000: (i)
Seller has not received written notice of any outstanding claims or complaints
against Seller (whether under applicable Laws or otherwise) asserted by any
present or former employee of the U.S. Business or any Governmental Entity with
respect to the U.S. Business on account of or for (A) overtime pay, wages,
salary, commissions or other compensation for any period other than the current
payroll period; (B) vacation pay or pay in lieu of vacation time off, other than
vacation time off or pay in lieu earned in respect of the current fiscal year;
(C) coverage under any Employee Plan or Benefit Arrangement; or (D) any
violation of Laws relating to minimum wages or maximum hours of work or other
applicable Laws; and (ii) no Person, including any Governmental Entity, has
asserted or, to Seller's knowledge, threatened a claim against Seller under or
arising out of any Laws relating to discrimination or occupational safety in
employment or employment practices or unfair labor practices in connection with
the U.S. Business. Schedule 9B.01 contains a true and complete list and brief
description of all grievances, arbitration proceedings and wrongful dismissal
claims, whether since resolved or still pending, filed against Seller with
respect to the U.S. Business from January 1, 2000 to date.
9B.02. Employees and Offers of Employment - U.S. Business.
(a) On or prior to the Closing Date, the U.S. Buyer shall offer
employment to those employees of the U.S. Business identified on Schedule 9B.02
(subject to such additions and deletions that occur in the ordinary course of
business and in accordance with this Agreement) at rates of pay comparable to
those paid by Seller prior to the Closing, and otherwise on substantially the
same terms and conditions, subject to the specific provisions of Section 9B.04,
as provided by the U.S. Buyer to its similarly situated employees as of the
Closing Date.
Master Agreement - Page 67
Employees desiring to accept the U.S. Buyer's offer of employment must complete
the U.S. Buyer's standard application form, and undergo the U.S. Buyer's
standard background check and drug test. Those employees of the U.S. Business
who accept and commence employment with the U.S. Buyer are hereinafter
collectively referred to as the "Transferred U.S. Employees." Seller will not
intentionally take any action that would impede, hinder, interfere or otherwise
compete with the U.S. Buyer's effort to hire any Transferred U.S. Employees. The
employment of the Transferred U.S. Employees with Seller shall be terminated by
Seller as of the Closing Date, and Seller shall retain sole responsibility with
respect to Seller's employment arrangements with employees of the U.S. Business
who do not become Transferred U.S. Employees. Seller shall retain all
obligations and liabilities with respect to compliance with the United States
Worker Adjustment and Retraining Notification Act (the "WARN Act") and other
federal, state, local and non-United States laws and regulations relating to the
termination and hiring of employees of the U.S. Business through and including
the Closing. The U.S. Buyer shall assume all obligations and liabilities with
respect to compliance with the WARN Act and other federal, state and local laws
and regulations relating to the termination and hiring of the Transferred U.S.
Employees which occurs from and after the Closing.
(b) Seller shall be responsible for giving the employees of the U.S.
Business any notification required under applicable Laws by reason of the sale
of the U.S. Business to the U.S. Buyer. However, Seller shall consult with Buyer
Representative before issuing any written communications or otherwise making any
public statements to employees of the U.S. Business relating to the transactions
contemplated by the Operative Documents. Seller shall provide Buyer
Representative in advance with copies of any proposed written communications to
employees of the U.S. Business relating to the transactions contemplated by the
Operative Documents. Prior to the Closing Date, Seller shall afford Buyer
Representative and Buyer Representative's agents or representatives the
opportunity to address employees of the U.S. Business either individually or in
groups at reasonable times and locations approved in advance by Seller, provided
that any contact between Buyer Representative and the employees of the U.S.
Business will be conducted in such manner as not to interfere unreasonably with
the conduct of the business of Seller. Seller shall render all reasonable
assistance to encourage the employees of the U.S. Business to accept an offer of
employment from the U.S. Buyer.
(c) Seller shall use commercially reasonable efforts to comply with the
continuation coverage requirements of Sections 601 through 609 of ERISA and
4980B of the Code and with the notice and coverage certification requirements of
Section 701 of ERISA and Section 9801 of the Code with respect to the employees
of the U.S. Business and their dependents and beneficiaries. The U.S. Buyer
shall cooperate with and inform Seller in regard to Transferred U.S. Employees
who enroll in any health and hospitalization benefit plans made available by the
U.S. Buyer.
Master Agreement - Page 68
9B.03. Employee Benefit Representations and Warranties - U.S. Business.
Except as set forth in the Disclosure Schedule, Seller hereby represents and
warrants to Buyer Representative that:
(a) Schedule 9B.03 lists each written Employee Plan and each written
Benefit Arrangement that covers any employee or former employee of the U.S.
Business. With respect to each Benefit Arrangement and each Employee Plan other
than the Defined Contribution Plan, Seller has furnished or made available to
Buyer Representative true and complete copies of summary plan descriptions. With
respect to the Defined Contribution Plan, Seller has furnished or made available
to Buyer Representative true and complete copies of: (i) the plan documents
(including amendments), summary plan descriptions and summaries of material
modifications and other material employee communications; (ii) the most recent
determination letters or opinion letters issued by the Internal Revenue Service;
(iii) the most recent annual reports or returns; and (iv) all related trust
agreements, insurance contracts or other funding agreements which implement such
plans. Schedule 9B.03 separately identifies each Employee Plan that is a Pension
Plan or a Defined Contribution Plan. The Defined Contribution Plan is intended
to be qualified under Code Section 401(a), has received a favorable
determination or opinion letter from the Internal Revenue Service, and Seller is
not aware of any circumstances likely to result in revocation of any such
favorable determination or opinion letter. Neither Seller nor its ERISA
Affiliates have ever contributed to an Employee Plan that is a Multiemployer
Plan.
(b) The Employee Plans (and related trusts and insurance contracts)
comply in form and in operation in all material respects with the requirements
of applicable Laws and regulations, including ERISA and the Code. All
contributions or premiums required to have been paid by Seller under the terms
of the Defined Contribution Plan or applicable Laws have been and will continue
to be made by Seller in a timely fashion, such that as of the Closing Date
Seller shall not have any Liability (other than Liabilities accruing after the
Closing Date) to the Defined Contribution Plan with respect to the Transferred
U.S. Employees. There are no outstanding, unpaid Taxes, penalties or fees owed
or exigible on the part of Seller under the Defined Contribution Plan. There are
no pending proceedings with respect to the Defined Contribution Plan, except for
routine claims in the ordinary course for benefits to participants in or
beneficiaries under an Employee Plan that in the aggregate would not have a
material adverse effect on the condition of such Defined Contribution Plan.
(c) Except as disclosed in Schedule 9B.03, neither Seller nor any
Subsidiary of Seller does now or did at any time in the past six (6) years
sponsor, maintain, operate or contribute to any Pension Plan for the benefit or
the participation of any current or former employees of the U.S. Business or
their dependents. Except as disclosed in Schedule 9B.03, none of the Employee
Plans or Benefit Arrangements provides, or makes available, medical or life
insurance benefits to retired employees or to the beneficiaries or dependents of
retired employees, except for medical coverage mandated by the continuation
requirements of ERISA and the Code.
9B.04. Buyer Benefit Plans - U.S. Business. The active participation by
all Transferred U.S. Employees in each Benefit Arrangement and Employee Plan of
Seller shall cease as of the Closing Date, except as specifically set forth
herein. Seller understands and acknowledges that
Master Agreement - Page 69
the U.S. Buyer will not be adopting or continuing any Benefit Arrangement or
Employee Plan of Seller. Any Transferred U.S. Employee whose employment with the
U.S. Buyer is terminated without cause by the U.S. Buyer within six (6) months
after the Closing Date shall receive severance pay from the U.S. Buyer
calculated at the rate of two (2) weeks of base pay for every year of service,
with a minimum severance of two (2) weeks of base pay and a maximum of thirteen
(13) weeks. Transferred U.S. Employees shall receive service credit, to the
extent such service was recognized under Seller's Employee Plans and Benefit
Arrangements, for their years of service with Seller for purposes of severance
pay eligibility, vacation entitlement and eligibility and vesting under such
other employee plans and benefit arrangements (which may, but need not be, the
U.S. Buyer's existing employee plans and benefit arrangements) as the U.S. Buyer
shall elect to make available, consistent with the requirements of Section
9B.02(a), to employees of the U.S. Business after the Closing, provided that
service credit shall not apply for branch seniority purposes (E.G., priority for
job bidding, vacation scheduling or transfers). All waiting periods for
participation in any health or hospitalization plan which the U.S. Buyer shall
make available to employees of the U.S. Business after the Closing shall be
waived for the Transferred U.S. Employees based upon their service with Seller.
Transferred U.S. Employees who relocate to any existing branch facility of the
U.S. Buyer or to a different branch of the U.S. Business after the Closing shall
be treated as new employees for branch seniority purposes and shall be subject
to the same job rules applicable to similarly situated internally transferring
employees of the U.S. Buyer, which may include loss of priority for job bidding
and vacation scheduling. Subject to the requirements of ERISA and applicable
law, the U.S. Buyer reserves the right to amend, modify or eliminate any of the
U.S. Buyer's employee plans or benefit arrangements at any time before or after
the Closing.
9B.05. Rollovers from Defined Contribution Plan. Effective as of the
Closing Date, the U.S. Buyer shall cause its defined contribution plan that will
cover Transferred U.S. Employees to accept direct rollovers by the Transferred
U.S. Employees of their individual accounts (including any outstanding loan
balance, where applicable) in Seller's Defined Contribution Plan, provided that
(i) Seller shall amend its Defined Contribution Plan or loan procedures if and
to the extent required to permit the direct rollover of outstanding loan
balances by terminated participants, (ii) the decision whether or not to make a
direct rollover shall be made in each case by the individual Transferred U.S.
Employee, and (iii) any transferred loans may have to be modified if and to the
extent required in order to be consistent with the existing loan policies under
the U.S. Buyer's defined contribution plan covering Transferred U.S. Employees.
None of Buyer Representative, U.S. Buyer or any of their Affiliates shall assume
any other obligations or Liabilities arising under or attributable to Seller's
Defined Contribution Plan.
9B.06. Vacation and Sick Leave. (a) On or before the Closing Date,
Seller shall pay each of the Transferred U.S. Employees for all outstanding
unused vacation time accumulated by them as of the Closing Date in accordance
with Seller's policies with respect to payments for unused vacation time then in
effect or, at Seller's election to be exercised by written notice to Buyer
Representative prior to the Closing Date, such amount (inclusive of the
employer's share of applicable payroll Taxes) shall instead be accrued as a
Liability on the Final Closing Net Asset Statement and, to the extent so
accrued, shall constitute an Assumed Liability and be paid by the U.S. Buyer.
Master Agreement - Page 70
(b) On or before the Closing Date, Seller shall pay to all non-exempt
employees of the U.S. Business a cash bonus in respect of their unused
accumulated sick leave in accordance with Seller's standard sick leave policy
for non-exempt employees then in effect.
(c) Under the Seller's existing sick leave policy, exempt employees can
accumulate and carry forward a maximum of sixty (60) days of unused sick leave
and non-exempt employees can accumulate and carry forward a maximum of
forty-eight (48) days of unused sick leave, and the U.S. Buyer shall recognize
and give credit to Transferred U.S. Employees for up to a maximum of thirty (30)
days of unused sick leave accumulated by them prior to the Closing Date under
Seller's sick leave policy. No Liability with respect to accumulated unused sick
leave of Transferred U.S. Employees to be recognized and given credit by U.S.
Buyer shall be reflected on the Final Closing Net Asset Statement.
PART C -- U.K. BUSINESS
9C.01. Employment Representations and Warranties - U.K. Business.
Except as set forth in the Disclosure Schedule, Seller hereby represents and
warrants to Buyer Representative that:
(a) Seller has provided Buyer Representative with an accurate census
(including job titles, hourly wages or salaries, notice periods and dates of
commencement of continuous employment for the purpose of the Employment Rights
Act 1996 ("ERA")) of all employees, including part-time and seasonal employees,
involved in the U.K. Business as of the date of this Agreement who are to be
offered employment by the U.K. Buyer (such employees listed in the census,
subject to such additions and deletions that occur in the ordinary course of
business and in accordance with this Agreement, being the "Transferred U.K.
Employees"), and Seller will update the census from time to time pending the
Closing at Buyer Representative's reasonable request.
(b) Except as set forth in Schedule 9C.01(b), no person is employed or
engaged in the U.K. Business (whether under a contract of employment, worker's
contract or contract for services) except for the Transferred U.K. Employees,
all of whom are directly employed by the U.K. Subsidiary and are engaged in the
U.K. Business.
(c) All remuneration payable and other benefits provided or which the
U.K. Subsidiary (or any transferee of the U.K. Business) is bound to provide
(whether now or in the future) to each Transferred U.K. Employee, (particularly
profit sharing, incentive, bonus and severance arrangements to which the U.K.
Subsidiary is a party, whether legally binding or not), have been disclosed in
Schedule 9C.01(c).
(d) The U.K. Subsidiary has not offered any contract of employment
related to the U.K. Business to any person who is not a Transferred U.K.
Employee. Except as provided in Schedule 9C.01(d), there is no contract of
employment related to the U.K. Business in force
Master Agreement - Page 71
between the U.K. Subsidiary and any of the Transferred U.K. Employees which is
not terminable lawfully by the U.K. Subsidiary at any time and without
compensation (other than any compensation payable under Statutes and Regulations
referred to in clause 9C.01(g)) on one month's notice or otherwise in accordance
with section 86 ERA. There are no consultancy or management services agreements
related to the U.K. Business between the U.K. Subsidiary and any other person,
firm or company, and there are no agreements or other arrangements (binding or
otherwise including recognized customs and practices) relating to the U.K.
Business between the U.K. Subsidiary (or any employers' or trade association of
which the U.K. Subsidiary is a member or which are otherwise incorporated in any
Transferred U.K. Employee's contract of employment) and any trade union or works
council. Except as provided in Schedule 9C.01(d), there are no outstanding pay
negotiations related to the U.K. Business with any Transferred U.K. Employees,
trade union, works council or other body representing employees.
(e) Except as provided in Schedule 9C.01(e), other than as set forth in
the Net Asset Statements, in relation to the U.K. Business, there are no amounts
other than not more than one month's arrears of remuneration accrued or due or,
to Seller's knowledge, for reimbursement of U.K. Business expenses incurred
within a period of three months preceding the date of this Agreement, nor any
moneys or benefits other than in respect of remuneration or emoluments of
employment owing, promised or payable to or for the benefit of any present or
former director, officer, employee or worker of the U.K. Subsidiary, or any
dependent of any such person.
(f) Except as provided in Schedule 9C.01(f), in relation to the U.K.
Business prior to the Closing: (i) no material Liability has been incurred by
the U.K. Subsidiary for breach of any contract of employment, worker's contract
or contract for services or for severance payments or for redundancy payments or
guarantee payments or protective awards or for compensation for unfair dismissal
or for failure to comply with any order for the reinstatement or re-engagement
of any employee or worker or for discrimination or equal pay or for any
Liability accruing from the termination or variation of any contract of
employment, worker's contract or contract for services; (ii) no material payment
has been made or promised by the U.K. Subsidiary in connection with the actual
or proposed termination, suspension or variation of any contract of employment,
worker's contract or contract for services; and (iii) the U.K. Subsidiary has
not in connection with any sale and purchase of the U.K. Business under the U.K.
Purchase Agreement made or agreed to make any payment to or provided or agreed
to provide any benefit or change in terms and conditions of employment for any
of the Transferred U.K. Employees, or their respective dependents.
(g) Insofar as the U.K. Business is concerned: (i) the U.K. Subsidiary
has in relation to each Transferred U.K. Employee and worker (and so far as
relevant to each of its former employees and workers): (A) maintained in all
material respects current and adequate records regarding the service, terms and
conditions of employment of each of such employees and workers; and (B) complied
in all material respects with all collective agreements and recognition
agreements affecting the employees and workers or their conditions of service;
(ii) the U.K. Subsidiary is not in breach in any material respect of any of the
legislation on the employment of children and young persons, including the
Health and Safety (Young Persons) Regulations 1997, the Children (Protection at
Work) Regulations 1998, the Working Time Regulations 1998 or the
Master Agreement - Page 72
National Minimum Wage Act 1999, and is not presently being prosecuted under any
of such provisions; (iii) there is no material liability or claim against the
U.K. Subsidiary outstanding under the Equal Pay Act 1970, the Sex Discrimination
Acts 1975 and 1986, the Race Relations Act 1976, ERA, the Transfer Regulations,
the Social Security and Housing Benefits Act 1982, the Social Security
Contributions and Benefits Act 1992, Trade Union and Labor Relations
(Consolidation) Act ("TULRCA"), the Disability Discrimination Act 1995, the
Working Time Regulations 1998 or the National Minimum Wage Act 1999; and (iv)
within a period of one year preceding the date of this Agreement, the U.K.
Subsidiary has not given notice of any redundancies to the Secretary of State or
started consultations with any independent trade union or workers'
representatives under the provisions of Part IV TULRCA or under the Transfer
Regulations; nor has the U.K. Subsidiary failed to comply in any material
respect with any such obligation under Part IV TULRCA or under the Transfer
Regulations.
(h) In relation to the U.K. Business: (i) the U.K. Subsidiary has
neither received written notice from any Transferred U.K. Employee nor given
written notice to any Transferred U.K. Employee terminating his or her
employment except as expressly contemplated under this Agreement, and the
Closing under the Operative Documents will not entitle any Transferred U.K.
Employee to terminate his or her employment or give rise to any entitlement to
receive a severance payment or liquidated damages; (ii) the U.K. Subsidiary has
complied with all recommendations made by the Advisory Conciliation and
Arbitration Service and with all awards and declarations made by the Central
Arbitration Committee in respect of its employees and workers; (iii) no dispute
exists between the U.K. Subsidiary and a material number or category of its
employees or any trade union(s), works council or other body representing
employees or workers, and there are no wage or other claims of which the U.K.
Subsidiary has received written notice that are outstanding against the U.K.
Subsidiary by any person who is now or has been an employee or worker of the
U.K. Subsidiary; and (iv) the U.K. Subsidiary has not had during the last three
years any form of industrial action (including any strike, work stoppages,
slow-down or work-to-rule by its employees or workers or any lock-out) which has
caused any disruption in the carrying on of the U.K. Business in the ordinary
course.
(i) The U.K. Subsidiary does not recognize and is not a party to any
agreement or arrangement with or commitment to any trade unions or staff
association. Except as provided in Schedule 9C.01(i), to Seller's knowledge,
none of the employees or workers of the U.K. Subsidiary is a member of any trade
union or staff association. Except as provided in Schedule 9C.01(i), there is no
works council or other employee representative body for the U.K. Business, other
than the election of employee representatives as required by the Transfer
Regulations in connection with the transactions contemplated by the Operative
Documents, and, to Seller's knowledge, no application for collective bargaining
recognition by a trade union is pending in relation to the U.K. Subsidiary,
whether voluntarily or under Schedule A1 of TULRCA.
(j) Except as provided in Schedule 9C.01(j), in relation to the U.K.
Business, the U.K. Subsidiary does not have in existence nor is it proposing to
introduce, and none of the Transferred U.K. Employees participates in (whether
or not established by the U.K. Subsidiary), any employee share scheme (as
defined in s743 of the Companies Act 1985) or stock option scheme or any scheme
under which any Transferred U.K. Employee is entitled to a bonus or
Master Agreement - Page 73
commission or remuneration of any other sort calculated by reference to the
whole or part of the turnover, profits or sales of the U.K. Business, the U.K.
Subsidiary, Seller or any other Person, including any profit related pay scheme
established under Chapter III, Part V of TA 88.
(k) Except as provided in Schedule 9C.01(k), to Seller's knowledge,
there is no person previously employed by the U.K. Subsidiary in the U.K.
Business who now has or may in the future have a right to return to work
(whether for reasons connected with maternity leave or absence by reason of
illness or incapacity or otherwise) or a right to be reinstated or re-engaged in
the U.K. Business or to any other compensation.
9C.02. Employees and Offers of Employment - U.K. Business. On or prior
to the Closing Date, the U.K. Buyer shall offer employment to the Transferred
U.K. Employees on substantially the same terms and conditions as provided by
U.K. Subsidiary to such employees as of the Closing Date, including
substantially the same pension terms and conditions as provided under the
Standard Life Plan A disclosed in Schedule 9C.03(a). The U.K. Subsidiary will
not intentionally take any action that would impede, hinder, interfere or
otherwise compete with the U.K. Buyer's effort to hire any Transferred U.K.
Employees. The employment of the Transferred U.K. Employees with the U.K.
Subsidiary shall be transferred from the U.K. Subsidiary to the U.K. Buyer as of
the Closing, and the U.K. Subsidiary shall retain sole responsibility with
respect to the U.K. Subsidiary's employment arrangements with employees of the
U.K. Business who do not become Transferred U.K. Employees.
9C.03. U.K. Pension Plan - U.K. Business.
(a) All material particulars of the U.K. Pension Scheme are disclosed
in Schedule 9C.03(a). Other than the U.K. Pension Scheme and employers national
insurance contributions, there are no pension schemes or arrangements in respect
of which the U.K. Business has any Liability.
(b) Except as provided in Schedule 9C.03(b), in relation to the U.K.
Pension Scheme: (i) the only benefits provided (other than those payable on
death in service) are money purchase benefits as defined in section 181 of the
Pension Schemes Act 1993; (ii) all benefits (other than a refund of
contributions with interest where appropriate) payable under the U.K. Pension
Scheme on the death of a member while in an employment to which the U.K. Pension
Scheme relates or during a period of sickness or disability of a member are
fully insured by a policy with an insurance company; and (iii) there are no
contributions to the U.K. Pension Scheme which are due but unpaid in respect of
a period prior to the date of this Agreement or which as of the Closing will be
due but unpaid in respect of a period prior to the Closing Date.
(c) To Seller's knowledge, no claim has been threatened or made or
litigation commenced against the trustees or administrator of the U.K. Pension
Scheme or against the U.K. Business in respect of any matter arising out of or
in connection with the U.K. Pension Scheme nor, to Seller's knowledge, is any
such claim or litigation pending.
Master Agreement - Page 74
9C.04. Transfer of Undertaking (Protection of Employment) Regulations
(the "Transfer Regulations").
(a) (i) Both Seller and Buyer Representative acknowledge and agree that
the sale of the U.K. Business under the U.K. Offer is a "relevant transfer" for
the purposes of the Transfer of Undertaking (Protection of Employment)
Regulations 1981 ("Transfer Regulations") and that on Closing the contracts of
employment of the Transferred U.K. Employees and U.K. Subsidiary's rights,
powers, duties and liabilities under or in connection with such contracts of
employment shall be transferred to U.K. Buyer pursuant to the Transfer
Regulations.
(ii) If by virtue of the Transfer Regulations any contract of
employment of any person who is not a Transferred U.K. Employee shall have
effect as if originally made between U.K. Buyer and that person, Seller and
Buyer Representative agree that U.K. Buyer may, within 28 days of becoming aware
of the application or probable application of the Transfer Regulations to any
such contract of employment, procure the termination of that contract as soon as
U.K. Buyer wishes.
(b) Subject to Section 9C.04(e), without prejudice to the generality of
Section 9A.02, Seller shall be responsible for any claim or demand or other
legal recourse (excluding any claim or demand arising from any failure by the
U.K. Buyer or its Affiliates to comply with the Transfer Regulations) against
the U.K. Buyer or its Affiliates by all or any of the Transferred U.K. Employees
in connection with or in respect of any fact or matter concerning or arising
from employment with the U.K. Subsidiary prior to the Closing Date which by
virtue of the Transfer Regulations is deemed to be the responsibility of the
U.K. Buyer or any of its Affiliates.
(c) Subject to Section 9C.04(e), without prejudice to the generality of
Section 9A.02, Seller shall be responsible for any claim or demand or other
legal recourse (excluding any claim or demand arising from any failure by the
U.K. Buyer or its Affiliates to comply with the Transfer Regulations) against
the U.K. Buyer or its Affiliates by any trade union recognized by the U.K.
Subsidiary or employee representative(s) in respect of all or any Transferred
U.K. Employees, or any Transferred U.K. Employee, including any claims arising
from the information and consultation process or arising from or connected with
a failure by the U.K. Subsidiary to comply with its legal obligations to such
trade union or employee representatives or any Transferred U.K. Employee.
(d) Subject to Section 9C.04(e), without prejudice to Section
9C.04(a)(ii) or the generality of Section 9A.02, Seller shall be responsible for
all claims or demands or other legal recourse against the U.K. Buyer or its
Affiliates by any employee, agent or contractor of the U.K. Subsidiary other
than a Transferred U.K. Employee who claims (whether correctly or not) that the
U.K. Buyer or any of its Affiliates has inherited liability from the U.K.
Subsidiary in respect of them by virtue of the Transfer Regulations.
(e) The U.K. Buyer shall be responsible for all emoluments, outgoings
and other benefits in respect of the Transferred U.K. Employees (including
without limitation all wages, holiday pay, bonuses, commissions, PAYE, National
Insurance contributions, pension
Master Agreement - Page 75
contributions and otherwise) accruing in respect of periods from and after the
Closing Date, and for such of the foregoing as relate to any period prior to the
Closing Date to the extent (but only to the extent) they are accrued as a
Liability on the Final Closing Net Asset Statement.
(f) Buyer Representative, the U.K. Buyer and their Affiliates hereby
represent and warrant to Seller that any measures (within the meaning of the
Transfer Regulations) that Buyer Representative, U.K. Buyer or any of their
Affiliates intends to take in relation to any Transferred U.K. Employee are
identified in Schedule 9C.04.
(g) Subject to the prompt provision by the U.K. Buyer to the U.K.
Subsidiary of all necessary information, Seller undertakes to Buyer
Representative: (i) that it will inform and, where the Transfer Regulations so
require, consult with appropriate representatives of the Transferred U.K.
Employees or any other "affected employees" (as defined in the Transfer
Regulations) employed by the U.K. Subsidiary, as the case may be, before Closing
and that such information and consultation process shall be commenced by the
U.K. Subsidiary the next working day immediately following the date of
acceptance of the U.K. Offer; and
(ii) that the U.K. Subsidiary shall be in a position to start
requesting nominations for the election of employee representatives the next
working day immediately following the date of acceptance of the U.K. Offer; and
(iii) that the U.K. Subsidiary and the U.K. Buyer will
co-operate fully with one another in relation to the said information and
consultation process and that the U.K. Subsidiary will use the agreed form
documents (prepared by the U.K. Subsidiary in conjunction with the U.K. Buyer)
in disseminating information to the Transferred U.K. Employees during the
information and consultation process; and
(iv) that the U.K. Subsidiary will keep the U.K. Buyer fully
and properly informed of the progress of the information and consultation
process.
PART D - FRENCH BUSINESS
9D.01. Employment Representations and Warranties - French Business.
Except as set forth in the Disclosure Schedule, Seller hereby represents and
warrants to Buyer Representative that:
(a) Seller has provided Buyer Representative with an accurate census
(with job titles, hourly wages or salaries, and dates of hire) of all employees,
including part-time and seasonal employees, involved in the French Business as
of the date of this Agreement, and will update the census from time to time
pending the Closing at Buyer Representative's reasonable request.
(b) Except as set forth in Schedule 9D.01, there exist no Contracts for
the employment of any employee in the French Business. The collective status of
all employees of the French Subsidiaries is defined in all material respects in
Schedule 9D.01, which sets forth
Master Agreement - Page 76
with respect to the French Business, including as to each separate establishment
(where applicable) of any of the French Subsidiaries:
(i) The applicable collective bargaining and company agreements;
(ii) Any exceptional agreements concluded with staff representatives;
(iii) Remuneration and compensation systems, including premiums,
bonuses, commissions and benefits in kind, whether awarded to all employees,
particular categories of employees, or individual employees;
(iv) Company savings schemes and any profit sharing, incentive, bonus
and other arrangements providing remuneration or benefits on the basis of
profits, volume or turnover of the French Business or any establishment of the
French Business;
(v) Undertakings in connection with retirement or health insurance
schemes, insofar as covered employees are entitled to receive benefits
augmenting or in addition to those provided for by Law or applicable collective
bargaining agreements;
(vi) Any other Benefit Arrangements of any kind applicable to the
French Business or made available to any current or former employees of the
French Business or their beneficiaries or dependents;
(vii) Employee handbooks, personnel regulations, codes of conduct,
codes of ethics, workplace rules and any other material internal guidelines or
requirements governing or relating to personnel management, employee conduct,
employee relations or the terms and conditions of employment; and
(viii) Model or form employment Contracts used by any of the French
Subsidiaries.
True and complete copies of all written materials referred to in items (i)
through (viii) inclusive have been provided to Buyer Representative.
(c) None of the French Subsidiaries has any independent sales
representatives who would be deemed "VRP's" within the meaning and subject to
article L.751-1 of the Labor Code. All commercial agency agreements are set
forth in Schedule 9D.01. All such agreements are valid under the law 91-593 of
June 25, 1991 applicable to agency, and do not allow termination, cancellation
or annulment by any Person other than the applicable French Subsidiary. To
Seller's knowledge, no commercial agency agreement has been terminated in a
wrongful ("abusif") or improper ("fautif") manner or without cause ("motif
legitime").
(d) To Seller's knowledge, none of the French Subsidiaries has any
Liability or obligation to former employees in respect of early termination of
Contracts of employment, including temporary contracts or contracts with
commercial agents/traveling representatives
Master Agreement - Page 77
("VRP's") or for the supply of services or for failure to comply with an
obligation to re-employ a former employee.
(e) Each of the French Subsidiaries is in compliance in all material
respects with the requirements of labor and social security legislation, the
collective status described in Schedule 9D.01 and all individual Contracts
relative to employment, agency or other provision of services. Any remuneration,
commission, indemnity, severance or other compensation for any termination of
employment which has occurred prior to the date of this Agreement has been fully
paid.
(f) None of the French Subsidiaries has made any undertaking or
incurred any commitment within the scope of any social plan or other Benefit
Arrangement which has not been performed in full, nor has any of the French
Subsidiaries made any undertaking or incurred any commitment in connection with
any collective dismissal. Neither the French Subsidiaries nor the French Holding
Company or any other Affiliate of Seller has made any undertaking or incurred
any commitment to pay compensation or grant any other benefits to any employee
of the French Business in connection with or as a result of the successful sale
of the Purchased Shares to the French Buyer.
(g) Except as otherwise disclosed in any Schedule to this Agreement,
there are no claims, complaints, litigation or actions pending or, to Seller's
knowledge, threatened against any of the French Subsidiaries or the French
Business by or on behalf of any current or former employee, trade union,
workers' committee or other employee representative. There are no pending
strikes, work stoppages, slowdowns or other labor disputes with any employees of
the French Business. None of the French Subsidiaries is the subject of any
pending or, to Seller's knowledge, threatened investigation or proceeding by the
Labor Inspectorate ("Inspection du Travail").
(h) All workers' committees to have been set up under applicable Law
have been duly created, their members have been validly elected, and their
bylaws ("reglement interieur") have been approved and published in accordance
with applicable Law.
(i) No executive or member of the management staff who is currently
employed by any of the French Subsidiaries has resigned, submitted notice of
resignation or made known his or her intention to resign at any time, whether
prior to or following the Closing Date, except as contemplated by this
Agreement.
(j) Except for statutory obligations arising under the Regime General
de Securite Sociale, the Regimes Supplementaires de Retraite and the Regimes
Complementaires de Retraite, none of the French Subsidiaries has any obligation
(either actual or contingent, and whether legally enforceable or not) to provide
or contribute to the provision of any pension or other retirement benefit for or
in respect of any employees or former employees of the French Business or their
dependents, nor has any proposal been adopted or taken under consideration to
establish or contribute to any such Benefit Arrangement.
Master Agreement - Page 78
9D.02. Employee Benefit Covenants - French Business.
(a) Subject to the requirements of any applicable collective bargaining
agreement or Law, nothing contained in this Agreement shall constitute a
limitation on the right of the French Buyer or the French Subsidiaries to amend,
modify or terminate any Benefit Arrangement after the Closing Date.
(b) Seller shall cause the French Holding Company to pay, and shall
indemnify, defend and hold the French Subsidiary and its Affiliates harmless in
accordance with and subject to Article XI from and against, Losses incurred by
or asserted against any of them as a result of any challenge to the employment
status of the sales representatives of the French Business, including any claim
or determination that any of the sales representatives of the French Business
are VRP's subject to article L. 751-1 of the Labor Code.
9D.03. Employee Consultation Covenant - French Business. Where workers'
committees exist, Seller shall insure that prior to the Closing, the French
Holding Company or the French Subsidiaries duly and timely inform each of the
workers' committees of the contemplated acquisition by the French Buyer of the
Purchased Shares and consult with each of the workers' committees in connection
with the change in control of the French Business as required by Law and the
terms of any applicable collective bargaining agreement or Contract of
employment. Information provided to any workers' committee by or on behalf of
the French Subsidiaries concerning the French Buyer or any aspect of the
anticipated operations of the French Business after the Closing shall be subject
to the prior written approval of the French Buyer, which shall not be
unreasonably withheld or delayed. Seller shall indemnify, defend and hold the
French Business, the French Buyer and its Affiliates harmless in accordance with
and subject to Article XI against any failure, omission or delay on the part of
the French Subsidiaries or the French Holding Company in complying with such
duty to inform and consult.
ARTICLE X
CONDITIONS TO CLOSING
10.01. Conditions to the Obligations of Each Party. The obligations of
each of Buyer Representative and Seller under the Operative Documents to
consummate, or to cause to be consummated, the transactions contemplated to be
consummated at the Closing are subject to the expiration or termination of any
applicable waiting period under the HSR Act.
10.02. Conditions to Obligations of Buyer Representative and Buyers.
The obligations of Buyer Representative and Buyers under the Operative Documents
to consummate, or to cause to be consummated, the transactions contemplated to
be consummated at the Closing are subject to the satisfaction of the following
further conditions, any one or more of which may be waived in writing by Buyer
Representative:
Master Agreement - Page 79
(a) Seller, the U.K. Subsidiary and the French Holding Company shall
have performed in all material respects all of their respective obligations
under the Operative Documents required to be performed by them at or prior to
the Closing Date.
(b) The representations and warranties of Seller contained in this
Agreement and the other Operative Documents shall be true and correct in all
respects both on the date of this Agreement at and as of the Closing Date with
the same force and effect as if such representations and warranties were made
anew at and as of the Closing Date, except: (i) to the extent such
representations and warranties are by their express provisions made as of the
date of this Agreement or another specified date; (ii) for the effect of any
activities or transactions which may have taken place after the date of this
Agreement which are contemplated by this Agreement or another Operative
Document; or (iii) where the failure to be true and correct would not, in the
aggregate, have a Material Adverse Effect; provided, however, that nothing in
this clause (iii) shall be deemed to constitute a waiver by Buyer Representative
of its rights to indemnification under Article XI with respect to a breach of
representation or warranty that does not result in a Material Adverse Effect.
(c) Since the date of this Agreement, no Material Adverse Change shall
have occurred.
(d) Buyer Representative shall have received a certificate signed by an
authorized officer of Seller to the effect that the conditions set forth in
Sections 10.02(a) and 10.02(b) have been satisfied.
(e) With regard to the French Subsidiary, a "mandataire de justice"
(judicial attorney) shall have been appointed, at the request of the French
Holding Company or other interested party, by the local commercial court with
the directive to convene a shareholders meeting of the French Subsidiary to (i)
ratify the nomination of the directors and the Chairman of the Board decided by
the Board Meeting dated as of January 14, 1999, and (ii) ratify and regularize
all decisions of both the board and the shareholders meeting from January 14,
1999 to date, which meeting shall have been convened and held.
(f) The Closing shall not violate any outstanding judgment, order or
decree entered by any court, arbitrator or Government Entity applicable to Buyer
Representative or Buyers, and no proceeding shall be pending or threatened which
seeks to enjoin or which challenges the validity of any of the Operative
Documents or the consummation of the transactions contemplated by the Operative
Documents.
(g) Seller shall have delivered to Buyer Representative, at or prior to
Closing, the following:
(i) The other documents required to be delivered to Buyer
Representative or Buyers pursuant to the Operative Documents, each of which must
be reasonably satisfactory to Buyer Representative or the applicable Buyer in
form and substance;
Master Agreement - Page 80
(ii) A certificate from the secretary (or equivalent) of each
of Seller and the U.K. Subsidiary and from the Counsel of the French Holding
Company, attesting to the incumbency and signatures of the individuals signing
the Operative Documents on behalf of such Person and the other Closing documents
to be signed by such Person, together with certified copies of authorizing
resolutions duly adopted by such Person, authorizing the Operative Documents and
the transactions contemplated by the Operative Documents; and
(iii) An opinion letter addressed to Buyer Representative from
Seller's general counsel, to the effect set forth in Exhibit I and otherwise in
form and substance reasonably satisfactory to Buyer Representative.
(h) Seller, U.K. Subsidiary and the French Holding Company each shall
have executed and delivered to Buyer Representative each of the Ancillary
Agreements to which Seller, U.K. Subsidiary or the French Holding Company, as
the case may be, is a party.
10.03. Conditions to Obligations of Seller, U.K. Subsidiary and French
Holding Company. The obligations of the Seller, the U.K. Subsidiary and the
French Holding Company under the Operative Documents to consummate, or to cause
to be consummated, the transactions contemplated to be consummated at the
Closing are subject to the satisfaction of the following further conditions, any
one or more of which may be waived in writing by Seller:
(a) Buyer Representative and Buyers shall have performed in all
material respects all of their respective obligations under the Operative
Documents required to be performed by them at or prior to the Closing Date.
(b) The representations and warranties of Buyer Representative and the
Buyers contained in this Agreement and the other Operative Documents shall be
true and correct in all respects at and as of the Closing Date with the same
force and effect as if such representations and warranties were made anew at and
as of the Closing Date, except: (i) to the extent such representations and
warranties are by their express provisions made as of the date of this Agreement
or another specified date; or (ii) for the effect of any activities or
transactions which may have taken place after the date of this Agreement which
are contemplated by this Agreement or another Operative Agreement.
(c) Seller shall have received a certificate signed by an authorized
officer of Buyer Representative to the effect that the conditions set forth in
Sections 10.03(a) and 10.03(b) have been satisfied.
(d) The Closing shall not violate any outstanding judgment, order or
decree entered by any court, arbitrator or Governmental Entity applicable to
Seller, the Participating Subsidiaries or the French Holding Company and no
proceeding shall be pending or threatened which seeks to enjoin or which
challenges the validity of any of the Operative Documents or the consummation of
the transactions contemplated by the Operative Documents.
Master Agreement - Page 81
(e) Buyer Representative and Buyers each shall have executed and
delivered to Seller each of the Ancillary Agreements to which Buyer
Representative or such Buyer, as the case may be, is a party.
(f) Buyer Representative shall have delivered to Seller, at or prior to
Closing, the following:
(i) The other documents required to be delivered to Seller,
Participating Subsidiaries or the French Holding Company pursuant to the
Operative Documents, each of which must be reasonably satisfactory to Seller,
the Participating Subsidiary or the French Holding Company, as the case may be,
in form and substance;
(ii) A certificate from the secretary (or equivalent) of Buyer
Representative and each of the Buyers, attesting to the incumbency and
signatures of the individuals signing the Operative Documents on behalf of such
Person and the other Closing documents to be signed by such Person, together
with certified copies of authorizing resolutions duly adopted by such Person,
authorizing the Operative Documents and the transactions contemplated by the
Operative Documents; and
(iii) An opinion letter addressed to Seller from Buyer
Representative's general counsel, to the effect set forth in Exhibit J and
otherwise in form and substance reasonably satisfactory to Seller.
ARTICLE XI
SURVIVAL; INDEMNIFICATION
11.01. Survival. The representations and warranties made by the parties
in this Agreement and the other Operative Documents shall survive the Closing
until the first anniversary of the Closing Date; provided, however, that (i) the
representations and warranties in Article VIII with respect to Taxes shall
survive until ninety (90) days after the expiration of the applicable statute of
limitations; (ii) the representations and warranties in Section 3.23 with
respect to environmental matters shall survive the Closing until the fourth
anniversary of the Closing Date; (iii) the representations and warranties in
Section 3.08(c)(i) shall survive the Closing indefinitely, and the
representations and warranties in Section 3.10 shall survive until the fifth
anniversary of the Closing Date; and (iv) the representation and warranty in
Section 3.19 shall terminate on the Closing. All covenants contained in the
Operative Documents shall survive the Closing and shall continue to remain in
full force and effect after the Closing Date in accordance with their terms.
11.02. Indemnification by Seller. Seller shall indemnify, defend and
hold harmless Buyer Representative, the French Subsidiary and Buyers
(collectively, the "Buyer Indemnitees") from and against any damages, losses,
liabilities, costs and expenses (including reasonable attorneys' fees and
disbursements in connection with any claim, action, suit or proceeding and
including the costs of enforcing any indemnification obligations) (collectively,
"Losses")
Master Agreement - Page 82
incurred by or asserted against any of the Buyer Indemnitees that are caused by,
result directly from or in any way arise directly out of (i) any inaccuracy in,
or breach of, any representation or warranty of Seller, the U.K. Subsidiary or
the French Holding Company set forth in the Operative Documents or in any
document delivered by Seller, the U.K. Subsidiary or the French Holding Company
pursuant to the Operative Documents, (ii) any breach of or failure by Seller,
the U.K. Subsidiary or the French Holding Company to perform any of their
respective obligations or covenants set forth in the Operative Documents, (iii)
Prior Claims or any other Excluded Liabilities or any Liabilities of the French
Subsidiaries that are not Permitted French Subsidiary Liabilities, including any
failure of Seller or any of its Affiliates to pay, perform or satisfy any Prior
Claims or any such other Excluded Liabilities or any such Liabilities of the
French Subsidiaries that are not Permitted French Subsidiary Liabilities in
accordance with their terms, (iv) any failure to comply with applicable bulk
sales Laws in connection with the sale and transfer of the Purchased Assets to
Buyers, or (v) claims by employees or former employees of the Business arising
out of or in connection with their employment relationship with Seller or any of
its Affiliates or the termination of such employment relationship.
11.03. Indemnification by Buyer. Buyer Representative shall indemnify,
defend and hold harmless Seller, the U.K. Subsidiary and the French Holding
Company (collectively, the "Seller Indemnitees") from and against any Losses,
including the costs of enforcing Buyer Representative's indemnification
obligations, incurred by or asserted against any of the Seller Indemnitees that
are caused by, result directly from or in any way arise directly out of (i) any
inaccuracy in, or breach of, any representation or warranty of Buyer
Representative or Buyers set forth in the Operative Documents or in any document
delivered by Buyer Representative or Buyers pursuant to the Operative Documents,
(ii) any breach of or failure by Buyer Representative or Buyers to perform any
of their respective obligations or covenants set forth in the Operative
Documents, (iii) any failure of a Buyer to pay, perform or satisfy the Assumed
Liabilities and the Permitted French Subsidiary Liabilities in accordance with
their terms, (iv) claims by employees of Buyer Representative or by employees of
any Buyer or of any Affiliate of Buyer Representative or any Buyer (including
Transferred Employees) arising out of or in connection with their employment
relationship with Buyer Representative, any Buyer or any Affiliate of Buyer
Representative or any Buyer or the termination of such employment relationship,
(v) the bottling, distribution, labeling, advertising, licensing, marketing or
sale of the products of the Business in any jurisdiction after the Closing Date,
(vi) the use in any way (including the ways expressly permitted by this
Agreement) by Buyer Representative, Buyers or their Affiliates of the Seller
Tradenames or the Business Tradenames, (vii) the structuring or implementation
of the U.K. Purchase Agreement or any of the transactions contemplated thereby
by way of written offer and oral acceptance, including nonpayment of stamp duty
or any other transfer Taxes, documentary Taxes, registration fees, conveyance
fees, recording fees, deed stamps and any other Taxes in respect of the U.K.
Purchase Agreement or any of the transactions contemplated thereby (including
stamp duty or any other transfer Taxes, documentary Taxes, registration fees,
conveyance fees, recording fees, deed stamps and any other Taxes payable
notwithstanding the structuring or implementation of the U.K. Purchase Agreement
or any of the transactions contemplated thereby by way of written offer and oral
acceptance), any investigation, assertion, negotiation, contesting, resolution
or settlement of any claim made by or on behalf of any Taxation Authority or any
other Person in any way involving or relating to the
Master Agreement - Page 83
structuring or implementation of the U.K. Purchase Agreement or any of the
transactions contemplated thereby by way of written offer and oral acceptance
(whether or not related to stamp duty), and any additional actions taken or
required to be taken by any Seller Indemnitee or any of its Affiliates as a
result of structuring or implementing the U.K. Purchase Agreement or any of the
transactions contemplated thereby by way of written offer and oral acceptance;
(viii) any claims by any employee of the Business or Transferred U.S. Employee
related to the requirement to undergo the U.S. Buyer's standard background check
and drug test, and (ix) any failure of a Buyer to pay value-added Tax as
required by Law, this Agreement or the other Operative Documents.
11.04. Limitations. Notwithstanding anything to the contrary in the
Operative Documents, the obligations and liabilities of Seller under the
Operative Documents shall be subject to the following limitations:
(a) The obligations of the parties hereto for indemnification
under Sections 11.02(i) and 11.03(i) shall terminate on expiration of the
applicable survival period described in Section 11.01, except for matters as to
which any indemnified party has made a claim for indemnity or given written
notice of a possible claim for indemnity on or prior to such date, which shall
survive the expiration of such period until such claim is finally resolved in
accordance with the terms of the relevant Operative Documents and any
obligations with respect thereto are fully satisfied.
(b) Seller shall not be liable to the Buyer Indemnitees for
any Loss under Section 11.02(i) unless the aggregate amount for which Seller
would otherwise (but for this Section 11.04(b)) be liable on account thereof
exceeds in the aggregate $2.5 million. If and when such Losses do exceed this
amount, then Seller shall indemnify the Buyer Indemnitees fully for the entire
amount of all such Losses, including the portion below $2.5 million, subject to
the limitations set forth in Sections 11.04(c) and (d). The limitations in this
Section 11.04(b) with respect to Seller's liability for indemnification for
Losses based on inaccuracy in or breach of representation or warranty covered by
Section 11.02(i) shall not apply where the representation or warranty relates to
Taxes. For clarification purposes, the above indemnification amount shall not
take into account any Customer Credit that may be available to Seller pursuant
to Section 2.09(c)(v).
(c) Seller shall only be liable for indemnification pursuant
to the Operative Documents up to an aggregate amount equal to twenty-five
percent (25%) of the cash portion of the Aggregate Purchase Price as subject to
the adjustments contemplated by this Agreement; provided that Seller shall be
liable for indemnification for a breach of or inaccuracy in Section 3.23 up to
an aggregate amount equal to one hundred percent (100%) of the cash portion of
the Aggregate Purchase Price as subject to the adjustments contemplated by this
Agreement.
(d) No party hereto shall make any claim for indemnification
pursuant to the Operative Documents for any single Loss that is less than
$50,000, or for a number of Losses resulting from like-kind claims that
aggregate to less than $50,000, such claims being ignored for purposes of
calculating Losses under this Agreement.
Master Agreement - Page 84
(e) In determining the indemnification liability of any party
under the Operative Documents, there shall be taken into account the Tax impact
of the Losses which gave rise to the indemnity claim, and of the indemnity
payment itself.
(f) No indemnification liability under the Operative Documents
shall attach to any party under this Agreement in respect of any claim:
(i) to the extent that provision or reserve in
respect of the matter or thing giving rise to such claim has been provided for
in the Financial Statements or the Final Closing Net Asset Statement;
(ii) to the extent that such claim relates to any
Loss for which any of the Buyer Indemnitees or Seller Indemnitees, respectively,
is insured and actually recovers thereunder, but only to the extent of the net
insurance proceeds actually recovered; and
(iii) relating to (X) a loss, or decrease in the
number, of Active Customers, or (y) a decrease in the Combined Working Capital
of the Business.
(g) For purposes of this Agreement and the other Operative Documents,
Losses shall not include any consequential, indirect or special damages, whether
or not such damages were reasonably foreseeable.
(h) To the extent that any payment is required to be made by Seller
pursuant to the Operative Documents, such payment shall be offset on a
dollar-for-dollar basis by the unused portion of the Customer Credit, if any.
11.05. Buyer Representative and Seller Acknowledgements.
(a) Buyer Representative acknowledges that neither it nor any Buyer has
relied on, or been induced to enter into this Agreement or any of the other
Operative Documents by, any information, statements, warranties or
representations, written or oral, of any description made, supplied or given by
or on behalf of Seller, any Participating Subsidiary, the French Holding
Company, any of their respective Affiliates or any of their respective officers,
agents, employees or advisers, in relation to any of the transactions
contemplated by this Agreement or the other Operative Documents, the Business,
the assets and liabilities of the Asset Sellers or the French Subsidiary, their
value or amount, or the businesses or affairs of Seller, any Participating
Subsidiary, the French Holding Company, or any of their respective Affiliates,
except for the representations and warranties of Seller and its Subsidiaries set
forth in this Agreement or the other Operative Documents. Buyer Representative
and Buyers irrevocably and unconditionally waive any right they might have to
claim damages or to be indemnified for Losses for breach of any representation
or warranty not contained in this Agreement or in any of the other Operative
Documents or for any misrepresentation not contained in this Agreement or in any
of the other Operative Documents.
Master Agreement - Page 85
(b) Except as otherwise set forth in the U.K. Property Contracts, any
investigation or other examination that may have been made at any time by or on
behalf of a party to whom representations and warranties are made in this
Agreement or in any other Operative Documents shall not limit, diminish,
supersede, act as a waiver of, or in any other way affect the representations
and warranties contained in this Agreement and the other Operative Documents,
and the respective parties may rely on the representations and warranties made
to them in this Agreement and the other Operative Documents irrespective of and
notwithstanding any information obtained by them in the course of any
investigation, examination or otherwise, whether before or after the Closing.
(c) Nothing in this Agreement or any of the other Operative Documents
shall limit or restrict any party's general obligation at Law, to the extent
such general obligation would otherwise apply, to mitigate any loss or damage
which such party may incur in consequence of any matter giving rise to a
potential claim under this Agreement or any other Operative Document.
11.06. Process of Indemnification. (a) Any person seeking
indemnification under the Operative Documents (the "Indemnified Party") shall
give prompt written notice to the persons against whom indemnification is sought
(the "Indemnifying Party") of the assertion of any claim by a third party or the
discovery of any fact upon which the Indemnified Party intends to base a claim
hereunder. The delay or failure of any Indemnified Party to provide notice
hereunder shall not in any way limit its indemnification rights hereunder except
to the extent that the Indemnifying Party demonstrates that its ability to
defend or resolve such claim is adversely affected thereby. Any such notice
shall describe the facts and circumstances upon which the asserted claim for
indemnification is based and shall include the amount of the indemnifiable
Losses (or, if such amount is not then determined, a good faith estimate
thereof) and the basis for the determination of the amount of such Losses.
(b) With respect to a third party claim:
(i) The Indemnifying Party shall have the right to
direct, through counsel of its own choosing reasonably acceptable to the
Indemnified Party, the defense or settlement of any such claim at its own
expense. If the Indemnifying Party elects to assume the defense (whether or not
obligated to) of any such claim, the Indemnified Party may participate in such
defense, but in such case the expenses of the Indemnified Party shall be paid by
the Indemnified Party. If the Indemnifying Party shall fail to defend a
third-party claim or, if after commencing or undertaking any such defense, shall
fail to prosecute or shall withdraw from such defense, the Indemnified Party
shall have the right to undertake the defense thereof at the Indemnifying
Party's expense.
(ii) Notwithstanding anything to the contrary in
clause (i) of this Section 11.06(b), if the Indemnifying Party shall have
acknowledged in writing to an Indemnified Party that the Indemnifying Party is
obligated pursuant to this Article XI to indemnify any Indemnified Party with
respect to such third party claim, the Indemnifying Party shall be obligated to
defend such claim. In such a situation, if the Indemnifying Party and the
Master Agreement - Page 86
Indemnified Party jointly agree that the Indemnified Party shall defend such
claim, (A) such defense shall be at the Indemnifying Party's expense with
counsel chosen by the Indemnified Party and reasonably acceptable to the
Indemnifying Party, (B) prior to paying, settling or agreeing to pay or settle
such claim, the Indemnified Party shall consult with, and seek the prior written
approval (which shall not be unreasonably withheld or delayed) of, the
Indemnifying Party, (C) if the Indemnifying Party consents to such payment or
settlement, the Indemnifying Party shall be obligated to pay, and shall pay, the
amount so consented to, and (D) if the Indemnifying Party does not consent to
such settlement, the Indemnified Party may either settle such third party claim
or continue with the defense of such third party claim to its conclusion and, in
either such event, following such settlement or conclusion, the Indemnified
Party and the Indemnifying Party shall proceed with the arbitration contemplated
by Section 11.06(b)(vii), and the Indemnifying Party shall be obligated to pay,
and shall pay, the amount of Losses determined to be reasonable in such
arbitration or such other amount as the Indemnifying Party and Indemnified Party
may otherwise agree.
(iii) If the Indemnifying Party shall not have
acknowledged in writing to an Indemnified Party that the Indemnifying Party is
obligated pursuant to this Article XI to indemnify any Indemnified Party with
respect to such third party claim, (A) prior to paying, settling or agreeing to
pay or settle such claim, the Indemnified Party may, but is not obligated to,
consult with, and seek the prior written approval (which shall not be
unreasonably withheld or delayed) of, the Indemnifying Party, (B) if the
Indemnifying Party consents to such payment or settlement, the Indemnifying
Party shall be obligated to pay, and shall pay, the amount so consented to, (C)
if the Indemnified Party does not seek the Indemnifying Party's consent to such
settlement, or if the Indemnified Party does not consent to such settlement, the
Indemnified Party may either settle such third party claim or continue with the
defense of such claim to its conclusion and, following such settlement or
conclusion, if it is determined in a final, unappealable judgment that the
Indemnifying Party is obligated pursuant to this Article IX to indemnify the
Indemnified Party with respect to such third party claim, the Indemnified Party
and the Indemnifying Party shall proceed with the arbitration contemplated by
Section 11.06(b)(vii), and the Indemnifying Party shall be obligated to pay, and
shall pay, the amount of Losses determined to be reasonable in such arbitration
or such other amount as the Indemnifying Party and the Indemnified Party may
otherwise agree.
(iv) The Indemnified Party shall provide the
Indemnifying Party with access to its records and personnel reasonably requested
by the Indemnifying Party relating to any such claim during normal business
hours and shall otherwise cooperate with the Indemnifying Party in determining
the validity of any such claim and in the defense or settlement thereof, and the
Indemnifying Party shall reimburse the Indemnified Party for its reasonable
out-of-pocket expenses in connection therewith.
(v) The Indemnifying Party shall not settle any such
claim without the consent (which consent shall not be unreasonably withheld or
delayed) of the Indemnified Party if any relief, other than the payment of money
damages, would be granted against the Indemnified Party or its Affiliates by
such settlement or if the Indemnified Party would be liable to the third party
for the amount of such settlement.
Master Agreement - Page 87
(vi) The party controlling the defense of any third
party claim (whether it is the Indemnifying Party or the Indemnified Party)
shall keep the other party advised of all material developments concerning such
claim and the defense thereof.
(vii) Any determination as to the reasonableness of
Losses with respect to a third party claim required to be made pursuant to
clause (ii) or (iii) of this Section 11.06(b) shall be submitted by the parties
to binding arbitration in New York City, New York, USA under the Commercial
Arbitration Rules of the American Arbitration Association ("AAA") as then in
effect. The arbitration tribunal shall be composed of three (3) arbitrators,
unless the parties agree to the designation of a single arbitrator, and the
arbitration procedure shall be conducted in the English language. In resolving
the merits of any such dispute, the arbitration tribunal shall apply the
applicable governing law specified in Section 13.05. Unless otherwise determined
by the arbitration panel, the costs and fees of the AAA and the arbitrators will
be borne equally by the parties. The award of the arbitration panel will be
final and binding upon the parties and their Affiliates without appeal or
review, except for such limited grounds as may be expressly permitted with
respect to the appeal of arbitral rulings by the laws of the applicable
jurisdiction specified in Section 13.05. Application may be made by any party to
any court of competent jurisdiction permitted by Section 13.10 for entry and
enforcement of judgment based on the arbitral award.
11.07. Purchase Price Adjustment. All indemnification payments made
under the Operative Documents shall be treated as adjustments to the Aggregate
Purchase Price.
11.08. Offset. The Escrow Agent shall release the Escrow Amount in
connection with indemnification claims or otherwise only in accordance with the
procedures set forth in the Escrow Agreement.
11.09. Exclusive Remedies. Except for remedies that cannot be waived as
a matter of law, and except for remedies with respect to the violation of the
covenants in Section 5.04, the remedies set forth in this Article XI shall be
the sole and exclusive remedies of the parties to the Operative Documents under
the Operative Documents from and after the Closing with respect to any
misrepresentation or breach of warranty, or any breach of or failure to perform
any covenant to be performed prior to the Closing by any party under the
Operative Documents.
ARTICLE XII
TERMINATION
12.01. Grounds for Termination. This Agreement and all of the other
Operative Documents may be terminated and the transactions contemplated hereby
and thereby abandoned at any time prior to the Closing:
(a) by mutual written agreement of Seller and Buyer Representative;
Master Agreement - Page 88
(b) by written notice from Seller to Buyer Representative if the
Closing shall not have been consummated on or before April 30, 2002; provided,
however, that the right to terminate this Agreement and the other Operative
Documents under this Section 12.01(b) shall not be available to Seller if a
breach by Seller, the French Holding Company or the U.K. Subsidiary of any of
their respective representations, warranties, covenants or agreements contained
in any of the Operative Documents has been the cause of or resulted in the
failure of the Closing to occur on or before such date; or
(c) by written notice from Buyer Representative to Seller if the
Closing shall not have been consummated on or before April 30, 2002; provided,
however, that the right to terminate this Agreement and the other Operative
Documents under this Section 12.01(c) shall not be available to Buyer
Representative if a breach by Buyer Representative or any Buyer of any of their
respective representations, warranties, covenants or agreements contained in any
of the Operative Documents has been the cause of or resulted in the failure of
the Closing to occur on or before such date.
The party desiring to terminate this Agreement pursuant to clause (b) or (c)
shall give notice of such termination to the other party. If this Agreement is
terminated pursuant to Section 12.01, the other Operative Documents shall
automatically terminate at the same time.
12.02. Effect of Termination. If this Agreement and the other Operative
Documents are terminated as permitted by Section 12.01, such termination shall
be without liability of any party or their respective Affiliates (including, in
the case of Seller, the Participating Subsidiaries and the French Holding
Company, and, in the case of Buyer Representative, Buyers), or any shareholder,
director, officer, employee, agent, consultant or representative of such party
or Affiliate, to the other parties to this Agreement and the other Operative
Documents; provided that if such termination shall result from the willful
failure of any party to fulfill a condition to the performance of the
obligations of another party or to perform a covenant of this Agreement or the
other Operative Documents or from a willful breach by any party to this
Agreement or the other Operative Documents, such party shall be fully liable for
any and all Losses incurred or suffered by the other parties as a result of such
failure or breach.
12.03. Survival Upon Termination. The provisions of Sections 5.02(c),
5.05, the last sentence of Section 5.10, 6.01, 6.02(c), 13.03, 13.05 and 13.10
of this Agreement shall survive any termination of this Agreement and the other
Operative Documents pursuant to Section 12.01.
Master Agreement - Page 89
ARTICLE XIII
MISCELLANEOUS
13.01. Notices. All notices, requests and other communications to any
party hereunder shall be in writing in the English language (including telex,
telecopy or similar writing) and shall be given:
if to Buyer Representative or any Buyer, to:
The Perrier Group of America, Inc.
777 West Putnam Avenue
Greenwich, CT 06830
Attention: J. Mark Evans
Telecopy: (203) 863-0218
with a copy to:
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, NJ 07068
Attention: Stanley Schwartz
Telecopy: (973) 622-3073
if to Seller, to:
Ionics, Incorporated
65 Grove Street
Watertown, MA 02472
Attention: General Counsel
Telecopy: (617) 926-3760
with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Mark H. Burnett
Telecopy: (617) 248-7100
and shall if:
(a) personally delivered, be deemed to have been received at the time
of delivery;
Master Agreement - Page 90
(b) mailed, be deemed to have been delivered on the tenth Business Day
after the date of mailing;
(c) sent by facsimile, be deemed to have been received upon receipt by
the sender of a facsimile transmission report or other appropriate evidence that
the facsimile has been transmitted to the addressee; or
(d) sent by overnight delivery service, be deemed to have been received
on the second Business Day after it was sent;
provided that, in the case of personal delivery or facsimile transmission, if
such delivery or transmission occurs on a day that is not a Business Day or
after 6:00 p.m. (local time) on a Business Day, receipt shall be deemed to have
occurred the next Business Day.
13.02. Amendments; No Waivers.
(a) Any provisions of this Agreement may be amended or waived prior to
the Closing Date if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Buyer Representative and Seller, or in
the case of a waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by either party in exercising any right, power
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. Except as specifically set
forth herein, the rights and remedies herein provided shall be cumulative and
not exclusive of any rights or remedies provided by law.
13.03. Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with the Operative Documents shall be paid by
the party incurring such cost or expense, except that all costs and expenses of
the French Subsidiaries shall be paid by Seller or the French Holding Company.
13.04. Successors and Assigns; Guaranty. The provisions of this
Agreement and the other Operative Documents shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns; provided that no party may assign, delegate or otherwise transfer any
of his, her or its rights or obligations under this Agreement or any of the
other Operative Documents without the prior written consent of the other party
or parties hereto or thereto, as the case may be; and provided further that no
permitted transfer or assignment will relieve the transferring or assigning
party of its obligations under this Agreement and under the other Operative
Documents. Seller and Buyer Representative irrevocably and unconditionally
guaranty to one another the performance by their respective Affiliates under all
of the Operative Documents, in accordance with and subject to the terms of this
Agreement and the other Operative Documents.
Master Agreement - Page 91
13.05. Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without giving effect to
the conflicts of law rules of the State of New York, except that:
(a) The applicable law of England (without giving effect to such
nation's rules of conflicts of law) shall govern (i) the formation of the
contract constituted by acceptance of the U.K. Offer, (ii) the perfection and
effect of the transfer of the Purchased Assets under the U.K. Purchase
Agreement, (iii) the U.K. Property Contracts and (iv) the construction of the
provisions of Sections 8C.02 and 9C.04 of this Agreement; and
(b) The applicable law of France (without giving effect to such
nation's rules of conflicts of law) shall govern (i) the perfection and effect
of the transfer of the Purchased Shares under the Share Purchase Agreement and
(ii) all matters relating to the internal governance of the French Subsidiary
and the Second Tier Subsidiaries and the fulfillment of the prerequisites to the
effective transfer of the Purchased Shares under French law, including the
validity and adequacy of the measures taken by Seller to effect compliance with
the requirements of Section 10.02(e) of this Agreement and Sections 8D.02(a),
8D.02(b) and 9D.03 of this Agreement.
13.06. Counterparts; Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument. This
Agreement shall become effective when each party hereto shall have received a
counterpart, or facsimile of a counterpart, of each of the Operative Documents,
each signed by the other party or parties hereto or thereto.
13.07. Entire Agreement. The Operative Documents, including the
Disclosure Schedule, and the Confidentiality Agreement constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement, promise, understanding, condition or
warranty not set forth in the Operative Documents or the Confidentiality
Agreement has been made or relied upon by either party hereto. None of the
Operative Documents and the Confidentiality Agreement, nor any provision hereof
or thereof, is intended to confer upon any Person other than the parties thereto
any rights or remedies thereunder.
13.08. Bulk Sales Laws. Buyer Representative and Seller each hereby
waive compliance by Seller with the provisions of the "bulk sales," "bulk
transfer" or similar laws of any jurisdiction. In consideration of Buyer
Representative's waiver, Seller shall indemnify, defend and hold the Buyer
Indemnitees harmless in accordance with and subject to Article XI against any
Losses resulting from Seller's failure to so comply.
13.09. Interpretation; Construction.
(a) The terms of the Operative Documents have been fully negotiated by
Seller and Buyer Representative and their respective Affiliates in consultation
with counsel and advisors,
Master Agreement - Page 92
and the wording of this Agreement and the other Operative Documents has been
concluded by all of them as a result of their joint discussions. Accordingly, no
provision of the Operative Documents shall be construed against a particular
party or in favor of another party merely because of which party (or its
representative) drafted or supplied the wording for such provision.
(b) Except where otherwise noted in context, all references to
"Sections" in an Operative Document shall be deemed to refer to the sections or
subsections, as appropriate, of such Operative Document. References to
"Exhibits" in an Operative Document mean the exhibits attached to and made a
part of such Operative Document. References to "Schedules" mean the schedules
comprising the Disclosure Schedule. All references to an Operative Document
shall be deemed to include all exhibits, schedules and appendices thereto.
(c) Section headings appearing in this Agreement or in the other
Operative Documents are inserted solely as reference aids for the ease and
convenience of the reader; they shall not be deemed to modify, limit or define
the scope or substance of the provisions they introduce, nor shall they be
invoked in construing the intent or effect of such provisions.
(d) Where the context requires: (i) use of the singular or plural
incorporates the other, and (ii) pronouns and modifiers in the masculine,
feminine or neuter gender shall be deemed to refer to and include the other
genders.
(e) As used in the Operative Documents, the terms "include[s]" and
"including" mean "including but not limited to"; that is, in each case, the
example or enumeration which follows the use of either term is illustrative, but
not exclusive or exhaustive.
13.10. Jurisdiction. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, the Operative Documents may
be brought against any of the parties only in the United States District Court
for the Southern District of New York or, if such court does not have
jurisdiction over such action or proceeding, in the courts of the State of New
York located in New York County. Each of the parties hereby consents to the
exclusive jurisdiction of such courts (and of the appropriate appellate courts)
in any such action or proceeding and waives any obligation to venue laid
therein. Process in any such action or proceeding may be served on any party
anywhere in the world, whether within or without the State of New York. Each of
the parties hereby irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
such court has been brought in an inconvenient forum. Notwithstanding the
foregoing, any action or proceeding to enforce the covenants of Seller and its
Subsidiaries in Section 5.04 may be brought in any court of competent
jurisdiction.
Master Agreement - Page 93
13.11. Further Assurances. Seller and Buyer Representative agree,
upon request and for no additional consideration, to sign, acknowledge and
deliver any documents and to do anything else (or to cause their respective
Affiliates to do so) which the other may reasonably request in order to perfect
or confirm the transfer of the Purchased Assets, the Purchased Shares and the
Business to Buyers, or to otherwise carry out more completely the purpose and
intent of the Operative Documents consistent with their terms.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Master Agreement - Page 94
IN WITNESS WHEREOF, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
THE PERRIER GROUP OF AMERICA, INC.
By: /s/ J. M. Evans
---------------------------
Name: J. M. Evans
Title: Vice President
IONICS, INCORPORATED
By: /s/ Arthur L. Goldstein
---------------------------
Name: Arthur L. Goldstein
Title: Chairman and Chief Executive Officer
EXHIBIT A
---------
ESCROW AGREEMENT
ESCROW AGREEMENT (this "Agreement"), dated as of December 31, 2001,
among Ionics, Incorporated, a Massachusetts corporation ("Seller"), The Perrier
Group of America, Inc., a Delaware corporation ("Buyer Representative"), and
State Street Bank and Trust Company, a Massachusetts trust company, as Escrow
Agent (the "Escrow Agent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Seller and Buyer Representative are parties to that certain
Master Agreement dated as of November 30, 2001 by and between Seller and Buyer
Representative (the "Master Agreement") whereby certain affiliates of Buyer
Representative (the "Buyers") are acquiring from Seller and certain of its
affiliates (the "Seller Group") a business involving the sale and distribution
of bottled water and beverage service supplies, and the lease, sale and
distribution of bottled water coolers, directly plumbed water coolers and
beverage service equipment, to homes and businesses in portions of the United
States, the United Kingdom and France; and
WHEREAS, Seller and Buyer Representative desire to provide for the
holding in escrow of a portion of the aggregate purchase price to be paid to
Seller, on behalf of the Seller Group, pursuant to the terms of the Master
Agreement and this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
Section 1. Receipt by Escrow Agent. On the date hereof, Buyer
Representative shall deliver $10,000,000 (together with any investment earnings
received from the investment thereof pursuant to Section 2, the "Escrow Funds")
to the Escrow Agent by wire transfer of immediately available funds. Upon
receipt, the Escrow Agent shall promptly acknowledge receipt of the Escrow Funds
in writing. The Escrow Funds are to be held in escrow in an account established
by the Escrow Agent pursuant to the terms and conditions of this Agreement.
Section 2. Investment of the Escrow Funds. (a) The Escrow Agent shall
invest the Escrow Funds at, and pursuant to, the joint written direction of
Seller and Buyer Representative in Eligible Investments (as defined below) and
shall not be responsible or liable for any loss accruing from any investment
made in accordance herewith. Periodic statements will be provided to Seller and
Buyer Representative reflecting transactions executed in connection with the
Escrow Funds. Any earnings from such investment received by the Escrow Agent
shall be deposited in the escrow account established hereunder and shall become
part of the Escrow Funds.
Escrow Agreement - Page 2
(b) Eligible Investments shall mean (i) obligations issued or
guaranteed by the United States of America or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof); (ii) obligations (including certificates of deposit and
banker's acceptances) of, or deposits in, any domestic commercial bank having
capital and surplus in excess of $1,000,000,000; or (iii) repurchase obligations
for underlying securities of the type described in clause (i). No investment
shall have a term of more than 180 days. If otherwise qualified, obligations of
the Escrow Agent (or any of its affiliates) shall qualify as Eligible
Investments.
(c) Absent its timely receipt of such specific written investment
instructions from Seller and Buyer Representative, the Escrow Agent shall invest
the Escrow Funds in the Escrow Agent's Insured Money Market Account (IMMA).
Section 3. Claims Against and Distribution of Escrow Funds. At any
time prior to the termination of this Agreement, Buyer Representative may make
claims against the Escrow Funds for indemnification obligations as provided in
the Master Agreement in accordance with the procedures set forth below.
(a) The Escrow Agent shall disburse Escrow Funds (or any portion
thereof) upon joint written instructions signed by Buyer Representative and
Seller in accordance with the instructions set forth therein.
(b) For the purposes of this Agreement, the term "Notice of Claim"
shall mean a written notice from Buyer Representative of any claim for
indemnification under Section 11.02 of the Master Agreement. The term "Date of
the Notice of Claim" shall mean the date on which the Notice of Claim is
received by the Escrow Agent.
(c) Buyer Representative shall give any Notice of Claim
simultaneously to both Seller and the Escrow Agent. The Notice of Claim shall
(i) indicate the amount of Buyer Representative's claim for indemnification,
(ii) give a reasonably detailed description of the nature of the claim, demand
or facts that serve as a basis therefor and (iii) specify the date the action,
event or circumstance giving rise to the claim first arose or the date Buyer
Representative first became aware of the event. The Escrow Agent shall have no
duty to verify the amount or basis of Buyer Representative's claim for
indemnification.
(d) Within 45 days after the Date of the Notice of Claim, the Escrow
Agent shall deliver to Buyer Representative from the Escrow Funds the amount set
forth in the Notice of Claim, unless:
(i) the claim or demand set forth in the Notice of Claim is
a claim or demand asserted by a third party and the Escrow Agent
shall have received written notice from Seller within 40 days after
the Date of the Notice of Claim advising the Escrow Agent that Seller
has elected to contest such third party claim or demand in accordance
with Section 11.06(b) of the Master Agreement; or
Escrow Agreement - Page 3
(ii) prior to the expiration of 40 days after the Date of
the Notice of Claim, the Escrow Agent shall have received written
notice from the Seller, a copy of which shall be delivered by the
Seller to the Buyer Representative simultaneously with the delivery
thereof to the Escrow Agent, that Seller elects to contest the claim
or demand set forth in the Notice of Claim; or
(iii) prior to the expiration of 40 days after the Date of
the Notice of Claim, the Escrow Agent shall have received written
notice from the Buyer Representative that the claim or demand set
forth in the Notice of Claim has been satisfied other than through
operation of this Agreement.
(e) If Seller has filed with the Escrow Agent a written notification
pursuant to either Section 3(d)(i) or Section 3(d)(ii) hereof, then the Escrow
Agent shall thereafter deliver to Buyer Representative the amount set forth in
such Notice of Claim from the Escrow Amount only in accordance with either: (i)
joint written instructions signed by Buyer Representative and Seller and
received by the Escrow Agent; or (ii) a final, unappealable court order,
received by the Escrow Agent.
(f) The Escrow Agent shall be entitled to assume that any Notice of
Claim it receives pursuant to Section 3(c) has been sent simultaneously to the
Seller by the Buyer Representative, and that any notice it receives from the
Seller pursuant to Section 3(d)(ii) has been sent simultaneously to the Buyer
Representative by the Seller.
Section 4. Release of the Escrow Funds. (a) Promptly after the Escrow
Termination Date (as defined below), the Escrow Agent shall transfer and deliver
to Seller, on behalf of the Seller Group, by wire transfer pursuant to Section
17 hereof, the amount of the Escrow Funds then held by the Escrow Agent, if any
then remains, minus the aggregate amount of the Escrow Funds set forth in any
Notice(s) of Claim(s) received by the Escrow Agent on or prior to the Escrow
Termination Date with respect to which any indemnification claims are pending
and have not been disposed of in accordance with Section 3 as of the Escrow
Termination Date ("Remaining Unresolved Claims"). As used herein, "Escrow
Termination Date" means the date which is (12) twelve months after the date of
this Agreement; or if such date is not a Business Day (as defined below), the
Escrow Termination Date shall be the next succeeding Business Day. As used
herein, "Business Day" shall mean any day other than a Saturday, a Sunday or any
other day on which the Escrow Agent's principal office is closed for business.
(b) The Escrow Agent shall retain and continue to hold and
administer, pursuant to the terms hereof, any of the Escrow Funds retained by
the Escrow Agent after the Escrow Termination Date until the final disposition
of all such Remaining Unresolved Claims in accordance with Section 3. Upon final
disposition of all such Remaining Unresolved Claims pursuant to Section 3, the
Escrow Agent shall then distribute to Seller, on behalf of the Seller Group, the
remainder of the Escrow Funds pursuant to Section 4(a) hereof.
Escrow Agreement - Page 4
(c) Notwithstanding anything in this Agreement to the contrary, under
no circumstances shall the Escrow Agent be required to make any release or
distribution of the Escrow Funds, in whole or in part, sooner than two (2)
business days after the Escrow Agent has received the requisite notices or
paperwork in good form, or passage of the applicable claims period or release
date, as the case may be.
(d) Notwithstanding anything in this Agreement to the contrary, at
any time that the Escrow Agent is authorized or directed or otherwise required
to make a disbursement or distribution from the Escrow Funds to the Seller or
the Buyer Representative, the Escrow Agent may refrain from making such
disbursement or distribution from the Escrow Funds, without liability, if and to
the extent that there are any fees or expenses (including indemnities) then due
to the Escrow Agent from such party pursuant hereto. Upon receipt of payment for
such fees or expenses, the Escrow Agent shall promptly make such disbursements
or distributions to Buyer Representative or Seller, as applicable.
Section 5. Interest Earned on Escrow Funds. (a) The Escrow Funds
shall be for the exclusive benefit of Buyer Representative (on behalf of Buyers)
and Seller (on behalf of the Seller Group), and no other person, corporation or
entity shall have any right, title or interest in or to the Escrow Funds.
(b) Any amounts at any time to be released in accordance with
Sections 3 or 4 of this Agreement shall include any interest earned on the
amounts so released to the date of such release. The parties hereto agree that,
for tax reporting purposes, all interest or other income earned from the
investment of the Escrow Funds in any calendar year shall (i) to the extent such
interest or other income is distributed by the Escrow Agent to any person or
entity pursuant to the terms of this Agreement during such calendar year, be
allocated to such person or entity, and (ii) otherwise be allocable to Buyer
Representative. In addition to any release that may occur pursuant to Section 3
or Section 4, if at any time or times the Buyer Representative (i) certifies in
writing to the Escrow Agent (1) that the Buyer Representative is required to pay
taxes with respect to any interest or other income earned from the investment of
the Escrow Funds that is allocated to Buyer Representative pursuant to this
Section 5(b)(ii) with respect to a calendar year, (2) the amount of such
allocated interest or income, and (3) that such tax payment is due within thirty
(30) days of the date of such certification, and (ii) directs the Escrow Agent
to distribute to Buyer Representative from the remaining Escrow Fund (if any) an
amount equal to such amount of interest or income allocated with respect to such
calendar year multiplied by 50% (the "Tax Distribution Amount"), then the Escrow
Agent shall promptly distribute to the Buyer Representative from the Escrow
Funds (if and to the extent then remaining) such Tax Distribution Amount.
Section 6. Expenses of the Escrow Agent; Duties. (a) Each of the
Buyer Representative and the Seller agrees, jointly and severally, to pay to the
Escrow Agent its fees for the acceptance and administration of this Agreement
(pursuant to the terms of Annex A attached hereto, which may be subject to
reasonable changes on an annual basis by written notice from the Escrow Agent),
and to pay or reimburse the Escrow Agent for any and all reasonable expenses and
costs
Escrow Agreement - Page 5
incurred by the Escrow Agent in connection with this Agreement or the
performance of its duties hereunder (including without limitation reasonable
attorney's fees and expenses). Without limiting the joint and several nature of
their obligations pursuant to the preceding sentence, as between themselves the
Buyer Representative and Seller agree that they shall each share 50% of all of
the fees and expenses of the Escrow Agent in connection with the preparation of
this Agreement and with carrying out its duties hereunder.
(b) The duties and obligations of the Escrow Agent
hereunder shall be determined solely by the express provisions of this Agreement
and no implied duties or obligations shall be read into this Agreement against
the Escrow Agent. The Escrow Agent shall be under no obligation to refer to any
other documents between or among the parties related in any way to this Escrow
Agreement, including without limitation the Master Agreement.
(c) The Escrow Agent shall not be liable to anyone by
reason of any act done or step taken or omitted by it in good faith, unless
caused by or arising out of its own gross negligence or willful misconduct. In
no event shall the Escrow Agent be liable for indirect, special or consequential
damages of any kind (including, but not limited to, lost profits), even if the
Escrow Agent has been advised of the likelihood of such damage and regardless of
the form of action.
(d) The Escrow Agent shall be entitled to rely on, and
shall be protected in acting in reliance upon, any writing furnished to it by
any party hereto in accordance with the terms hereof, and shall be entitled to
treat as genuine, and as the document it purports to be, any letter, paper or
other document furnished to it by any party hereto and believed by the Escrow
Agent to be genuine and to have been signed by the proper party (including,
without limitation wire transfer instructions, whether set forth, herein or in a
separate instruction); and the Escrow Agent shall be entitled to assume in good
faith the genuiness and due authority of any signature.
(e) The Escrow Agent may consult with counsel (which may
include in-house counsel) with respect to any question relating to its duties or
responsibilities hereunder and shall not be liable for any action taken or
omitted in good faith on advice of such counsel. Any reasonable fees and
expenses of such counsel shall be deemed "fees and expenses of the Escrow Agent"
within the meaning of Section 6(a) hereof.
(f) In the event of any disagreement or dispute concerning
the rights and obligations of the Escrow Agent, the Escrow Agent shall be
entitled, at its option, to refuse to comply with the claims or demands of any
party hereto, and its sole obligation shall be to keep safely the Escrow Funds,
until such disagreement or dispute is finally resolved by the mutual written
agreement of the parties involved or by arbitration or a court of competent
jurisdiction (in proceedings which it or any other party may initiate) and the
time for appeal of any such arbitration award or final order shall have expired
without an appeal being made, and in so doing the Escrow Agent shall not be or
become liable to any party.
Escrow Agreement - Page 6
(g) Buyer Representative and Seller jointly and severally
agree to hold harmless and indemnify the Escrow Agent, its directors, officers,
employees and agents from and against all obligations, liabilities, claims,
suits, judgments, losses, damages, costs or expenses of any kind or nature,
including, without limitation, reasonable attorneys' fees and expenses, which
may be imposed on, incurred by, or asserted against the Escrow Agent in
connection with or in any way arising out of this Agreement or the Escrow
Agent's duties hereunder, except as a result of its own gross negligence or
willful misconduct. The foregoing indemnities shall survive the resignation of
the Escrow Agent or the termination of this Agreement. The foregoing indemnities
and agreement to hold harmless shall include, without limitation, any and all
tax liabilities (other than income taxes which the Escrow Agent is obligated to
pay on the fees paid to it hereunder), assessments, additions for late payment,
interest, penalties, and other governmental charges and related costs and
expenses, arising out of or that may be asserted against the Escrow Agent or the
Escrow Funds, or the arrangement established hereby, or any payment or
distribution made in accordance with the terms hereof, including, without
limitation, any of the foregoing arising out of withholding liability and any
false or inaccurate tax related certifications given to, and relied upon by, the
Escrow Agent pursuant to the terms hereof.
(h) The Escrow Agent and any successor escrow agent, as the
case may be, may resign its duties and be discharged from all other further
duties and obligations hereunder at any time upon giving 30 days' written notice
to Seller and Buyer Representative, provided that no such resignation shall
become effective until a successor escrow agent shall have been appointed.
Seller and Buyer Representative shall jointly thereupon designate a successor
escrow agent hereunder within said thirty day period, to whom the Escrow Agent
shall deliver the Escrow Funds. In the absence of such a designation of a
successor escrow agent, the Escrow Agent shall, without further liability or
responsibility, retain the Escrow Funds as custodian thereof until otherwise
directed by Seller and Buyer Representative; provided, however, that if a
successor has not been so designated within sixty (60) days of the Escrow
Agent's notice of resignation, the Escrow Agent shall be entitled, at its
option, to petition a court of competent jurisdiction to appoint a successor
escrow agent.
(i) The Escrow Agent shall not be obliged to take any legal
or other remedial action which might, in its reasonable judgment, cause it to
incur any expenses or liability for which it is not adequately indemnified.
Section 7. Further Documents. Each party hereto hereby agrees to do
such other acts, and execute such further documents as the Escrow Agent or any
other party shall reasonably deem necessary to carry out the provisions of this
Agreement.
Section 8. Notices. Any notices, requests or instructions hereunder
shall be in writing and shall be personally delivered or sent by registered or
certified mail, postage prepaid, or by overnight courier or facsimile
transmission to the parties hereto at the following addresses, or such other
addresses as a party hereto may designate in writing from time to time. Notices
shall be deemed received upon actual receipt or when receipt is refused if
personally delivered, on the second business day after it was sent if sent by
certified mail or overnight courier, or upon receipt
Escrow Agreement - Page 7
by the sender of a facsimile transmission report or other appropriate evidence
that the facsimile has been transmitted to the addressee if sent by facsimile;
provided, however, that notwithstanding the foregoing, in the case of the Escrow
Agent, any notice, request or instruction shall not be deemed to be received by
the Escrow Agent unless and until actually received (at the address provided
herein). Notices, requests or instructions hereunder shall be sent to each party
at its address set forth hereinbelow (or, in each case, at such other address as
any such party may designate from time to time by written notice to the other
parties):
To Buyer Representative:
-----------------------
The Perrier Group of America, Inc.
777 West Putnam Avenue
Greenwich, CT 06830
Attention: J. Mark Evans
Telecopy: (203) 863-0218
With a copy to:
--------------
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, NJ 07068
Attention: Stanley Schwartz
Telecopy: (973) 622-3073
To Seller:
----------
Ionics, Incorporated
65 Grove Street
Watertown, MA 02472
Attention: General Counsel
Telecopy: (617) 926-3760
With a copy to:
--------------
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Mark H. Burnett, Esq.
Telecopy: (617) 248-7100
To the Escrow Agent:
-------------------
State Street Bank and Trust Company
Escrow Agreement - Page 8
If to Escrow Agent:
o If by first class mail, to:
State Street Bank and Trust Company
Global Investors Services Group
Corporate Trust
P.O. Box 778
Boston, Massachusetts 02102-0778
Attention: Ionics/Perrier Escrow
o If by fax addressed as above and sent to the following telecopy
number:
Fax: 617-662-1466
o If by hand, certified or registered mail or overnight courier or
delivery, to:
State Street Bank and Trust Company
Global Investors Services Group
Corporate Trust, 6th Floor
2 Avenue de Lafayette
Boston, Massachusetts 02111-1724
Attention: Ionics/Perrier Escrow
Section 9. Applicable Law. The validity, interpretation and effect of
this Agreement shall be governed exclusively by the internal laws of the
Commonwealth of Massachusetts.
Section 10. Binding Effect. This Agreement shall inure to the benefit
of and be enforceable by and against the Buyer Representative, Seller and the
Escrow Agent and their respective successors and permitted assigns; provided
that Buyer Representative and Seller may not assign, delegate or otherwise
transfer any of their respective rights or obligations under this Agreement
except as permitted by the Master Agreement, and the Escrow Agent may not
assign, delegate or otherwise transfer any of its rights or obligations under
this Agreement except to a successor Escrow Agent in accordance with Section
6(h) of this Agreement. Notwithstanding the foregoing, if the Escrow Agent
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Escrow Agent.
Section 11. Amendments. This Agreement shall not be modified or
amended except pursuant to an instrument in writing executed and delivered on
behalf of each of the parties
Escrow Agreement - Page 9
hereto. No course of conduct shall constitute a waiver of any of the terms and
conditions of this Agreement, unless such waiver is specified in writing, and
then only to the extent so specified. A waiver of the terms and conditions of
this Agreement on one occasion shall not constitute a waiver of the other terms
of this Agreement, or of such terms and conditions on any other occasion.
Section 12. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto on separate counterparts,
each of which, when so executed and delivered, shall be an original, with the
same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received a counterpart, or facsimile of a counterpart, of this Agreement,
signed by each of the other parties hereto.
Section 13. Captions. The captions in this Agreement are included for
convenience of reference only, do not constitute a part hereof and shall be
disregarded in the construction hereof.
Section 14. Certification of Tax Identification Number. Buyer
Representative and Seller agree to provide the Escrow Agent with the applicable
certified tax identification numbers and returning Forms W-9 (or Forms W-8BEN,
in the case of non-U.S. persons) to the Escrow Agent prior to the date on which
any income earned on the investment of the Escrow Funds or any proceeds thereon
is credited to such Escrow Funds. Buyer Representative and Seller understand
that, in the event the applicable tax identification numbers are not certified,
or the applicable forms are not provided, to the Escrow Agent, the Internal
Revenue Code, as amended from time to time, may require withholding of a portion
of any interest or other income earned on the investment of the Escrow Funds.
Section 15. Jurisdiction. Each of the parties hereto hereby
absolutely and irrevocably consent and submit to the non-exclusive jurisdiction
of the United States District Court for the District of Massachusetts, or, if
such court does not have jurisdiction over such action or proceeding, in the
courts of the Commonwealth of Massachusetts, with respect to any actions or
proceedings brought against Buyer Representative and/or Seller by the Escrow
Agent arising out of or relating to this Escrow Agreement. Each of the parties
hereby irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action or proceeding brought in such court has
been brought in an inconvenient forum.
Section 16. Force Majeure. No party hereto shall be responsible for
delays or failures in performance resulting from acts beyond its control. Such
acts shall include but not be limited to acts of God, strikes, lockouts, riots,
acts of war or other hostilities, terrorism, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes or other disasters.
Section 17. Wiring Instructions. Any funds to be paid to or by the
Escrow Agent hereunder shall be sent by wire transfer of immediately available
funds pursuant to the following instructions (or by such method of payment and
pursuant to such instruction as may have been
Escrow Agreement - Page 10
given in advance and in writing to or by the Escrow Agent, as the case may be,
in accordance with Section 8 above):
If to Buyer Representative:
Bank: Bank of America
ABA#: 111000012
AC#: 3750205660
Ref: The Perrier Group of America, Inc.
If to Seller:
Bank: Fleet National Bank
ABA#: 011000138
AC#: 0045599002
Ref: Ionics, Incorporated
If to the Escrow Agent:
Bank: State Street Bank and Trust Company
ABA#: 011000028
AC#: 9903-990-1
Attn: Corporate Trust
Ref: Ionics/Perrier Escrow (Account # 129169-010)
Section 18. Reproduction of Documents. This Agreement and all
documents relating thereto, including, without limitations, (a) consents,
waivers and modifications which may hereafter be executed, and (b) certificates
and other information previously or hereafter furnished, may be reproduced by
any photographic, photostatic, microfilm, optical disk, micro-card, miniature
photographic or other similar process. The parties agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
[The remainder of this page is intentionally left blank.]
Escrow Agreement - Page 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
IONICS, INCORPORATED
By: /s/ Stephen Korn
Name: Stephen Korn
Title: Vice President and Clerk
THE PERRIER GROUP OF AMERICA, INC.
By: J. M. Evans
Name: J. M. Evans
Title: Vice President
STATE STREET BANK AND TRUST COMPANY, as Escrow
Agent
By: /s/ Chi C. Ma
Name: Chi C Ma
Title: Vice President
Annex A
-------
Fee Schedule
------------
ACCEPTANCE FEE: waived
- ---------------
ANNUAL ADMINISTRATIVE FEES: $2,500.00 per year or part thereof
- ---------------------------
SWEEP FEE: 40 basis points per annum of
- ---------- the average daily net assets
(SSgA or selected other Money
Market Funds)
WIRE FEE: $25.00 per wire
- ---------
EXTRAORDINARY ADMINISTRATIVE EXPENSES
- -------------------------------------
Fees for services not specifically set forth in this schedule will be determined
by appraisal. Such services may include, but not be limited to, additional
responsibilities and services incurred in connection with amendments or
extensions of the governing documents, unusual cash and/or investment
transactions, calculations, reports or notices, or in case of litigation.
OUT-OF-POCKET EXPENSES
- ----------------------
Any out-of-pocket expenses incurred by us will be billed at cost. These items
will include, but not be limited to, legal costs, travel expenses, document
duplication and facsimiles, courier services, etc.
ESCROW AGENT'S COUNSEL
- ----------------------
Escrow Agent's Counsel fees and disbursements will be billed at cost.
BILLING AND PAYMENTS
- --------------------
The Acceptance Fee and first year Annual Fee will be payable at closing.
Subsequent Annual Fees will be payable in advance at each anniversary of
closing. Other fees, charges and reimbursements will be billed as incurred.
Annual fees are not pro-rated for less than a year.
GOOD FUNDS AVAILABILITY
- -----------------------
Funds to make any payments must be on deposit in sufficient time to avoid
Daylight Overdrafts under Fed Guidelines.
EXHIBIT F
---------
UNITED STATES ASSET PURCHASE AGREEMENT
dated as of
November 30, 2001
by and between
GREAT SPRING WATERS OF AMERICA, INC.
and
IONICS, INCORPORATED
UNITED STATES ASSET PURCHASE AGREEMENT
This United States Asset Purchase Agreement dated as of November 30,
2001 (this "Agreement") by and between GREAT SPRING WATERS OF AMERICA, INC., a
Delaware corporation ("Buyer") and a direct, wholly owned subsidiary of The
Perrier Group of America, Inc., a Delaware Corporation ("Buyer Representative"),
and IONICS, INCORPORATED, a Massachusetts corporation ("Seller"):
WITNESSETH:
WHEREAS, Buyer Representative and Seller have entered into the Master
Agreement dated as of the date hereof (the "Master Agreement"), which
contemplates the transfer to certain Affiliates of Buyer Representative of
Seller's business, conducted directly and through certain of its Subsidiaries,
involving the sale and distribution of bottled water and beverage service
supplies, and the lease, sale and distribution of bottled water coolers,
directly plumbed (so-called "bottleless") water coolers and beverage service
equipment, to homes and businesses in portions of the United States, United
Kingdom and France (the "Business");
WHEREAS, Seller conducts the portion of the Business conducted in the
United States (the "U.S. Business"); and
WHEREAS, Buyer desires to purchase from Seller, and Seller desires to
sell to Buyer, substantially all of the assets of the U.S. Business, upon the
terms and subject to the conditions set forth in this Agreement and the Master
Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties, covenants and agreements contained in this
Agreement and the Master Agreement, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.01 Common Definitions. Unless otherwise defined or specified in
this Agreement, capitalized terms used in this Agreement that are defined in the
Master Agreement shall have the meanings assigned to them in the Master
Agreement, and the rules of construction (including the provisions of Article
XIII of the Master Agreement) and documentary conventions set forth in the
Master Agreement shall apply to this Agreement.
1.02 Additional Definitions. Each of the following terms is defined
in the Section of this Agreement set forth opposite such term:
U.S. Asset Purchase Agreement - Page 2
Term Section
---- -------
Assumed Contracts 2.01
Agreement Preamble
Assumed Liabilities 2.03
Business Recitals
Business Premises 2.01
BuyerPreamble
Buyer Representative Preamble
Excluded Assets 2.02
Excluded Contracts 2.02
Excluded Liabilities 2.04
Master Agreement Recitals
Other Businesses 2.02
Purchased Assets 2.01
Purchase Price 2.05
Seller Preamble
Trademarks 2.01
Transfer Costs 2.03
U.S. Business Recitals
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to the conditions
contained in this Agreement and the Master Agreement, Buyer shall purchase from
Seller, and Seller shall sell, transfer, assign and deliver (or cause to be
sold, transferred, assigned and delivered) to Buyer, at the Closing, free and
clear of Liens other than Permitted Liens, all of Seller's right, title and
interest in and to the assets, properties and business owned or held by Seller
of every kind and description, wherever located, real, personal or mixed,
tangible or intangible, that are either (i) used exclusively in, arise
exclusively from, or relate exclusively to, the conduct of the U.S. Business as
the same shall exist on the Closing Date or (ii) are identified on an Index to
this Section 2.01, other than the Excluded Assets (the "Purchased Assets"), and
specifically including all right, title and interest of Seller in, to and under
the following:
(a) the list of all Customers of the U.S. Business as of
the Closing Date, together with all customer-based intangibles;
(b) all bottled water coolers, directly plumbed (so-called
"bottleless") water coolers, refrigerators, microwaves, coffee brewers and water
bottles owned or held by Seller for use in the conduct of the U.S. Business,
wherever located;
U.S. Asset Purchase Agreement - Page 3
(c) the real property and leases of, and other interests
in, real property listed on Index 2.01(c), in each case together with all
buildings, fixtures, improvements and leasehold improvements erected thereon
(the "Business Premises");
(d) (i) the vehicles and forklifts identified and listed
(by vehicle type and serial number) in Part A of Index 2.01(d); and (ii) all
other tangible personal property and interests therein, including machinery,
equipment (including production equipment, water treatment lines and bottling
lines), furniture, office equipment, communications equipment, computer
hardware, racks, storage tanks, spare and replacement parts, fuel and other
tangible personalty but excluding the items referred to in Section 2.01 (b) and
(e), that is:
(A) located at, based out of, or normally found
at or about, any of the Business Premises; or
(B) located at, based out of, or normally found
at or about Seller's facilities in Watertown, Massachusetts or Ludlow,
Massachusetts and either (1) used or held for use exclusively in the U.S.
Business or (2) listed on Part B of Index 2.01(d); or
(C) otherwise used or held for use exclusively in
the U.S. Business; or
(D) listed on Part B of Index 2.01(d).
(e) all supplies and inventories either (i) located at any
of the Business Premises; or (ii) located at Seller's facilities in Watertown,
Massachusetts, Ludlow, Massachusetts or anywhere else that are used or held for
use exclusively in the U.S. Business;
(f) all rights under all Contracts, including the Material
Contracts listed on Index 2.01(f), to which Seller is a party and which either
(i) pertain exclusively to the U.S. Business or (ii) are listed on Index
2.01(f), other than the Excluded Contracts (collectively, the "Assumed
Contracts");
(g) all accounts, notes and other receivables generated
exclusively in the conduct of the U.S. Business, other than accounts, notes and
other receivables due from Affiliates of Seller;
(h) all prepaid expenses and deposits relating exclusively
to the U.S. Business, including prepaid ad valorem taxes, leases and rentals;
(i) all of Seller's rights, claims, credits, causes of
action or rights of set-off against third parties relating to the Purchased
Assets, including unliquidated rights under manufacturers' and vendors'
warranties;
U.S. Asset Purchase Agreement - Page 4
(j) to the extent transferable, all existing and pending
Permits relating exclusively to the U.S. Business or the occupancy of any of the
Business Premises, whether issued in Seller's name or in the name of any other
Person and used by Seller under license or other understanding or arrangement,
written or oral, including those Permits listed on Index 2.01(j);
(k) a copy of all Books and Records relating exclusively to
the U.S. Business, the Purchased Assets or the Transferred U.S. Employees,
including personnel records in respect of the Transferred U.S. Employees
(subject to the provisions of clause (x) of the final sentence of Section
5.02(a) of the Master Agreement) and vehicle registration and inspection
certificates for the vehicles and forklifts identified in Part A of Index
2.01(d) and for all leased vehicles used exclusively in the U.S. Business, other
than Books and Records related to employees of the U.S. Business other than the
Transferred U.S. Employees and those Books and Records described in Section
2.02(i) of this Agreement;
(l) to the extent transferable, all customer analyses,
market reports and customer surveys prepared for or at the request of Seller
that relate to the bottled water business in the United States and have
potential application to the U.S. Business;
(m) all computer software listed on Index 2.01(m);
(n) all copyrights in the marketing materials used or held
for use exclusively in the U.S. Business;
(o) the domain name registrations listed on Index 2.01(o);
(p) the trademarks identified on Index 2.01(p) with the
registration or application numbers and in the countries or territories
identified on Index 2.01(p) (the "Trademarks"); and
(q) all goodwill associated with, and the going concern
value of, the U.S. Business and the Purchased Assets, other than as identified
in Section 2.02(d), together with the right to represent to third parties that
Buyer is the successor to the U.S. Business.
2.02. Excluded Assets. Notwithstanding anything to the contrary set
forth in Section 2.01, Seller shall not sell, transfer, assign or deliver (or
cause to be sold, transferred, assigned or delivered) to Buyer, and Buyer shall
not purchase and acquire from Seller, any of the following assets and
properties, which shall remain the exclusive property of Seller (collectively,
the "Excluded Assets"):
(a) Seller's cash and cash equivalents on hand and in
banks, certificates of deposit and marketable securities;
U.S. Asset Purchase Agreement - Page 5
(b) Seller's real property, and interests in real property,
located in Watertown, Massachusetts (including the premises at 65 Grove Street
and 58 Irving Street) or in Ludlow, Massachusetts, together with all buildings,
fixtures and improvements erected thereon;
(c) Seller's interests in the entities identified on Index
2.02(c);
(d) all Intellectual Property (including the Seller
Tradenames), including all interests therein and goodwill associated therewith,
other than as identified in Section 2.01(a), (n), (o) and (p);
(e) all rights of Seller under any loan agreement or letter
of credit;
(f) all rights of Seller to Tax refunds (except to the
extent, if any, that the Tax in respect of which the refund applies shall have
been included within prepaid expenses on the Final Net Closing Asset Statement
or the accrued Liabilities set forth on the Final Closing Net Asset Statement
shall have been reduced by the amount of the refund), and proceeds of insurance
policies (subject to the provisions of Section 5.15(a) and (b) of the Master
Agreement);
(g) all rights of Seller and its Affiliates under (i) this
Agreement, the Master Agreement and other Operative Documents, (ii) all
Contracts to which Seller is a party that pertain in any part to the businesses
of Seller and its Affiliates other than the U.S. Business ("Other Businesses")
and that are not identified as Assumed Contracts on Index 2.01(f), (iii) any
Contract pertaining exclusively to an Excluded Asset or an Excluded Liability
(including all insurance policies and Contracts), and (iv) any Contract which
pertains exclusively to the U.S. Business that was made or entered into in
breach or violation of the Master Agreement, unless Buyer expressly elects by
written notice delivered to Seller prior to the Closing to include such Contract
as an Assumed Contract (collectively, the "Excluded Contracts");
(h) all assets or properties that are located at Seller's
corporate headquarters or other business locations of Seller (including Seller's
facilities located in Watertown, Massachusetts [including the premises at 65
Grove Street and 58 Irving Street] and Ludlow, Massachusetts), other than the
Business Premises, that are either (i) used exclusively in the Other Businesses,
or (ii) used in common in the U.S. Business and the Other Businesses and are not
listed on an Index to Section 2.01;
(i) the corporate seals, incorporation documents, by-laws,
Tax Returns and other Tax records, minute books and stock record books of
Seller, and such other records of Seller that relate exclusively to the
organization or capitalization of Seller; and
(j) any assets or properties sold or otherwise disposed of
in the ordinary course of the operation of the U.S. Business, but not in
violation of any provisions of this Agreement or the Master Agreement, during
the period from the date hereof through the Closing.
U.S. Asset Purchase Agreement - Page 6
2.03. Assumption of Liabilities. As partial consideration for the
sale, transfer, assignment and delivery of the U.S. Business and the Purchased
Assets and upon the terms and subject to the conditions set forth in this
Agreement and the Master Agreement, Buyer shall assume, pay and perform from and
after the Closing the following obligations, contracts and liabilities of Seller
arising exclusively out of the conduct of the U.S. Business (collectively, the
"Assumed Liabilities"), but no others:
(a) the accrued expenses and trade accounts payable
(excluding amounts due to Affiliates of Seller) of the U.S. Business that have
been incurred exclusively in the ordinary course of the U.S. Business through
the Closing Date, in the amounts and to the extent reflected in the Final
Closing Net Asset Statement;
(b) all Liabilities and obligations relating to Customer
deposits relating exclusively to the U.S. Business, but only in the amount and
to the extent reflected on the Final Closing Net Asset Statement;
(c) all Liabilities accruing from and after the Closing
Date under the Assumed Contracts (other than Liabilities attributable to any
breach or failure by Seller to comply with the terms thereof on or before the
Closing);
(d) all transfer, documentary, sales, use, value-added,
stamp and registration Taxes, all conveyance fees, recording fees, deed stamps
and all other such Taxes and fees (including any penalties and interest)
incurred in connection with the purchase and sale of the Purchased Assets
between Buyer and Seller at Closing pursuant to this Agreement and the Master
Agreement ("Transfer Costs"); and
(e) any other specifically identified Liabilities of Seller
relating to the U.S. Business that are expressly assumed by Buyer Representative
or Buyer at the Closing pursuant to any other provision of this Agreement or the
Master Agreement or any other Operative Documents.
2.04. Excluded Liabilities. Notwithstanding any provision in this
Agreement, the Master Agreement or any other Operative Document to the contrary,
Buyer is assuming only the Assumed Liabilities and is not assuming any other
Liability, Contract or obligation of Seller or any of its Affiliates (or any
predecessor owner of all or part of their respective business and assets) of
whatever nature, whether presently in existence or arising or asserted
hereafter, and no such assumption by Buyer shall be implied or construed by
operation of law or otherwise or shall be attributed to Buyer as a putative
successor to Seller. All such other Liabilities, Contracts and obligations shall
be retained by and remain obligations and Liabilities of Seller (all such
Liabilities, Contracts and obligations not being assumed being herein referred
to as the "Excluded Liabilities"). Without limiting the foregoing, none of the
following shall be Assumed Liabilities for the purposes of this Agreement or any
of the other Operative Documents:
U.S. Asset Purchase Agreement - Page 7
(a) any obligation or Liability for Tax imposed by any
Taxation Authority on Seller or any of its Affiliates (i) with respect to the
Other Businesses, (ii) or with respect to the operations of the U.S. Business or
the acquisition, ownership or holding of the Purchased Assets at any time or for
any period prior to the Closing, or (iii) for income Taxes incurred as a result
of the consummation of the transactions contemplated by this Agreement, other
than Transfer Costs arising on the purchase and sale of the Purchased Assets
between Buyer and Seller pursuant to this Agreement and the Master Agreement;
(b) any Liability or obligation of Seller or any of its
Affiliates for money borrowed, including purchase money financing provided by
any vendor, whether such Liabilities and obligations were incurred in the
operation of the U.S. Business or otherwise;
(c) any Liability or obligation relating to an Excluded
Asset;
(d) any Prior Claims; and
(e) any Liability or obligation contained in the respective
agreements relating to Seller's acquisition of any water cooler business or
bottled water business.
2.05. Purchase Price. The purchase price for the Purchased Assets
(the "Purchase Price") shall be the sum of (a) subject to the adjustments
contemplated by the Master Agreement, consideration with a value equal to United
States $77 million and (b) the assumption by Buyer of the Assumed Liabilities.
The Purchase Price shall be paid in accordance with Section 2.02 of the Master
Agreement.
2.06. Closing. The closing of the purchase and sale of the Purchased
Assets and the assumption of the Assumed Liabilities hereunder shall take place
at the time and place provided in Section 2.05 of the Master Agreement. Buyer
and Seller shall use all commercially reasonable efforts, on or prior to the
Closing, to execute and deliver all such instruments, documents and certificates
as may be necessary or advisable for the consummation at the Closing of the
transactions contemplated by this Agreement in accordance with its terms and
with the terms of the other Operative Documents, in each case in form and
substance reasonably satisfactory to Seller and Buyer, including deeds and
related conveyancing documents with respect to the conveyance of the owned
Business Premises and leasehold assignments in the case of leased Business
Premises (conforming in each case to the respective local customs and norms of
the jurisdictions where each such Business Premises is located), bills of sale,
instruments of assumption, endorsements, assignments and other agreements and
instruments of transfer, conveyance and assignment, in form suitable for
recording and filing, as reasonably necessary or appropriate to vest in Buyer
all right, title and interest in, to and under the Purchased Assets and the U.S.
Business, in each case free and clear of Liens other than Permitted Liens, and
for Buyer to assume the Assumed Liabilities. The Closing shall not take place
under this Agreement unless all transactions contemplated by the Operative
Documents close simultaneously.
U.S. Asset Purchase Agreement - Page 8
2.07. Transfer Costs. All Transfer Costs incurred in
connection with the purchase and sale of the Purchased Assets between Seller and
Buyer pursuant to this Agreement and the Master Agreement shall be borne and
paid by Buyer.
2.08. Access Rights. Nothing in this Agreement shall
diminish the rights of Buyer Representative and Buyer to have access under
Section 5.02 of the Master Agreement.
2.09. Third Party Consents. Section 7.04 of the Master
Agreement shall govern matters related to third party consents.
ARTICLE III
MISCELLANEOUS
3.01. Termination. This Agreement shall terminate and the
transactions contemplated hereby shall be abandoned prior to the Closing only if
the Master Agreement is terminated, or as otherwise may be agreed to in writing
by Seller and Buyer Representative.
3.02. Further Assurances. If at any time after the Closing, Buyer
shall reasonably consider it advisable that any further conveyance, agreements,
documents, instruments and assurances of law or any other things are necessary
or appropriate to vest, perfect, confirm or record in Buyer the title to any of
the Purchased Assets, Seller shall execute and deliver, upon Buyer's request and
for no additional consideration, any and all proper conveyances, agreements,
documents, instruments and assurances of law, and do all things reasonably
necessary or proper to vest, perfect, confirm or record title to the Purchased
Assets and the U.S. Business in Buyer and otherwise to carry out the provisions
of this Agreement.
3.03. Successors and Assigns. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns; provided that neither Seller nor
Buyer may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the other;
and provided further that no permitted transfer or assignment will relieve the
transferring or assigning party of its obligations under this Agreement.
3.04. Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York, without giving effect to
the conflicts of law rules thereof. Any dispute, claim or controversy relating
to or arising out of this Agreement shall be asserted and adjudicated in
accordance with the provisions of Section 13.10 of the Master Agreement.
3.05. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument. This Agreement shall become
effective when each party hereto shall have received a
U.S. Asset Purchase Agreement - Page 9
counterpart hereof, in either original or facsimile, as well as counterparts to
the other Operative Documents, signed by the other parties hereto and thereto.
3.06. Bulk Sales Laws. Buyer and Seller each hereby waive compliance
by Seller with the provisions of the "bulk sales", "bulk transfer" or similar
laws of any state. In consideration of Buyer's waiver, Seller shall indemnify,
defend and hold Buyer and the other Buyer Indemnitees harmless subject to and in
accordance with Article XI of the Master Agreement from and against any Losses
resulting from Seller's failure to so comply.
3.07. Master Agreement Controls. If there is any conflict between the
provisions of this Agreement and the provisions of the Master Agreement, the
provisions of the Master Agreement shall control.
3.08. Amendments; No Waivers. (a) Any provisions of this Agreement
may be amended or waived prior to the Closing Date if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
Buyer and Seller, or in the case of a waiver, by the party against whom the
waiver is to be effective.
(b) No failure or delay by either party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
U.S. Asset Purchase Agreement - Page 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective authorized officers as of the
date first above written.
GREAT SPRING WATERS OF AMERICA, INC.,
Buyer
By: /s/ J. M. Evans
Name: J. M. Evans
Title: Vice President
IONICS, INCORPORATED, Seller
By: /s/ Arthur L. Goldstein
Name: Arthur L. Goldstein
Title: Chairman and Chief Executive Officer
EXHIBIT G
---------
OFFER LETTER
[ON LETTERHEAD OF SPRINGBAR WATERCOOLERS LIMITED]
To: IONICS (U.K.), LIMITED
November 30, 2001
RE: OFFER FOR PURCHASE - U.K. AQUA COOL BUSINESS
Dear Sirs:
We, Springbar Watercoolers Limited ("we" or the "Offeror"), understand that you,
Ionics (U.K.), Ltd. ("you" or the "Offeree"), conduct a business involving the
sale and distribution of bottled water and beverage service supplies and the
lease, sale and distribution of bottled water coolers, directly plumbed
(so-called "bottleless") water coolers and beverage service equipment to homes
and businesses in the United Kingdom (the "U.K. Business"). We hereby offer to
purchase the U.K. Business and the assets relating thereto, as described in the
Appendix to this letter, as a going concern, upon and subject to the terms set
forth below and in the Appendix to this letter (collectively, the "Offer").
The Offer remains open for acceptance by you until 6:00 p.m. Eastern Standard
Time today (or such later date and time as we may notify in writing to you), and
will not be revoked or amended by us until that date and time. You can accept
the Offer only by having an officer, authorised for and acting on behalf of you
as the Offeree, within that period:
(a) communicate the Offeree's acceptance of the Offer by telephone or
in person to any officer of the Offeror; and
(b) execute and date on behalf of the Offeree a contract to enter into
the purchase and sale of certain freehold property and the
assignments of certain leasehold properties in England in the form
annexed hereto as Annex A (the "English Business Premises
Contract") and a contract to enter into the assignment of a certain
leasehold property in Scotland in the form annexed hereto as Annex
B (the "Scottish Business Premises Contract", and together with the
English Business Premises Contract, the "Property Contracts"); and
(c) accept our payment of the sum of(pound)100 by way of a
non-refundable deposit.
Acceptance of the Offer, as aforesaid, shall constitute the agreement of Offeree
and Offeror, which shall be binding on Offeree and Offeror, respectively, in the
terms of the Appendix of this letter and the Property Contracts and shall
constitute the warranty and undertaking of the Offeree and Offeror to perform,
observe and discharge all agreements, covenants,
guarantees, indemnities and obligations which are expressed herein and in the
Appendix to this letter to be binding on the Offeree and Offeror respectively.
Yours faithfully
/s/ Philip O'Brien
an officer duly authorised
for and on behalf of
Springbar Watercoolers Limited
-2-
APPENDIX
TERMS AND CONDITIONS
U.K. Asset Purchase Terms and Conditions - Page 2
ARTICLE I
DEFINITIONS
1.01 Common Definitions. Unless otherwise defined or specified in
this Offer, capitalized terms used in this Offer that are defined in the Master
Agreement (the "Master Agreement"), dated of even date herewith, between Ionics,
Incorporated, a Massachusetts corporation, and The Perrier Group of America,
Inc., a Delaware corporation (the "Buyer Representative"), in an agreed form
which is attached hereto as Index 1.01 shall have the meanings assigned to them
in the Master Agreement, and the rules of construction (including the provisions
of Article XIII of the Master Agreement) and documentary conventions set forth
in the Master Agreement shall apply to this Offer.
1.02 Additional Definitions. Each of the following terms is defined
in the Section of this Offer set forth opposite such term:
Term Section
---- -------
Assumed Contracts 2.01(e)
Assumed Liabilities 2.04
Bottled Water Equipment 2.01(b)
Business Premises 2.03
Business Records 2.01(f)
Buyer Representative 1.01
Claim Rights 2.01(j)
Closing 2.10(a)
Commercial Information 2.01(g)
Computer Software 2.01(l)
Copyrights 2.01(m)
Customer List 2.01(a)
Domain Name Registrations 2.01(n)
Excluded Assets 2.02
Excluded Contracts 2.02(f)
Excluded Liabilities 2.05
Excluded Personal Property 2.02(g)
Goodwill 2.01(o)
Master Agreement 1.01
Offer Cover Letter
Offeree Cover Letter
Offeror Cover Letter
Other Businesses 2.02(f)
Permits 2.01(k)
Personal Property 2.01(c)
Prepayment and Deposits 2.01(i)
Purchased Assets 2.01
U.K. Asset Purchase Terms and Conditions - Page 3
Purchase Price 2.08
Receivables 2.01(h)
Stamp Duty 2.11
Stock 2.01(d)
VAT 2.09
VATA 2.09
Wimbledon Property 2.03
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to the conditions
contained in this Offer and the Master Agreement, Offeror shall purchase from
Offeree, and Offeree shall sell, transfer, assign and deliver (or cause to be
sold, transferred, assigned and delivered) to Offeror, at the Closing, free and
clear of Liens other than Permitted Liens, all of Offeree's right, title and
interest in and to the assets, properties and business owned or held by Offeree
of every kind and description, wherever located, real, personal or mixed,
tangible or intangible, that are either (i) used exclusively in, arise
exclusively from, or relate exclusively to, the conduct of the U.K. Business as
the same shall exist on the Closing Date or (ii) are identified on an Index to
this Section 2.01, other than the Excluded Assets (the "Purchased Assets"), and
specifically including all right, title and interest of Offeree in, to and under
the following:
(a) the list of all Customers of the U.K. Business as of
the Closing Date (the "Customer List"), together with all customer-based
intangibles;
(b) all bottled water coolers, directly plumbed (so-called
"bottleless") water coolers, refrigerators, microwaves, coffee brewers and water
bottles owned or held by Offeree for use in the conduct of the U.K. Business,
wherever located (collectively, the "Bottled Water Equipment");
(c) (i) the vehicles and forklifts identified and listed
(by vehicle type and registration number) in Part A of Index 2.01(c); and (ii)
all other tangible personal property and interests therein, including machinery,
equipment (including production equipment, water treatment lines and bottling
lines), furniture, office equipment, communications equipment, computer
hardware, racks, storage tanks, spare and replacement parts, fuel and other
tangible personalty, but excluding the Bottled Water Equipment and the Stock,
that is:
(A) located at, based out of, or normally found
at or about any of the Business Premises other than the Wimbledon Property; or
(B) located at, based out of, or normally found
at or about the Wimbledon Property, except only for such tangible personal
property as constitutes Excluded Personal Property under Section 2.02(g) of this
Offer (collectively, the "Personal Property");
U.K. Asset Purchase Terms and Conditions - Page 4
(d) all supplies and inventories either (i) located at any
of the Business Premises other than the Wimbledon Property; or (ii) located at
the Wimbledon Property or anywhere else that are used or held for use
exclusively in the U.K. Business (collectively, the "Stock");
(e) all rights under all Contracts, including the Material
Contracts listed on Index 2.01(e), to which Offeree is a party and which either
(A) pertain exclusively to the U.K. Business or (B) are listed on Index 2.01(e),
other than the Excluded Contracts (collectively, the "Assumed Contracts");
(f) a copy of all Books and Records related exclusively to
the U.K. Business, the Purchased Assets or the Transferred U.K. Employees, other
than Books and Records related to employees of the U.K. Business other than the
Transferred U.K. Employees and those Books and Records described in Section
2.02(h), subject, in each case, to the provisions of clause (x) of the final
sentence of Section 5.02(a) of the Master Agreement (collectively, the "Business
Records");
(g) to the extent transferable, all customer analyses,
market reports and customer surveys prepared for or at the request of Offeree
that relate to the bottled water business in the U.K. and have potential
application to the U.K. Business (the "Commercial Information");
(h) all accounts, notes and other receivables generated
exclusively in the conduct of the U.K. Business, other than accounts, notes and
other receivables due from Affiliates of Offeree (collectively, the
"Receivables");
(i) all prepaid expenses and deposits relating exclusively
to the U.K. Business, including prepaid ad valorem taxes, leases and rentals
(collectively the "Prepayments and Deposits");
(j) all of Offeree's rights, claims, credits, causes of
action or rights of set-off against third parties relating to the Purchased
Assets, including unliquidated rights under manufacturers' and vendors'
warranties (collectively, the "Claim Rights");
(k) to the extent transferable, all existing and pending
Permits related exclusively to the U.K. Business or the occupancy of any of the
Business Premises, whether issued in Offeree's name or in the name of any other
Person and used by Offeree under license or other understanding or arrangement,
written or oral, including those Permits listed on Index 2.01(k) (collectively,
the "Permits");
(l) all computer software listed in Index 2.01(l) (the
"Computer Software");
(m) all copyrights in the marketing materials used
exclusively in the U.K. Business (the "Copyrights");
U.K. Asset Purchase Terms and Conditions - Page 5
(n) the domain name registrations listed on Index 2.01(n)
(the "Domain Name Registrations"); and
(o) all goodwill associated with the U.K. Business or the
Purchased Assets, other than as identified in Section 2.02(c), together with the
right to represent to third parties that Offeror is the successor to the U.K.
Business ("Goodwill").
2.02. Excluded Assets. Notwithstanding anything to the contrary set
forth in Section 2.01, Offeree shall not sell, transfer, assign or deliver (or
cause to be sold, transferred, assigned or delivered) to Offeror, and Offeror
shall not purchase or acquire from Offeree, any of the following assets and
properties, which shall remain the exclusive property of Offeree (collectively,
the "Excluded Assets"):
(a) Offeree's cash and cash equivalents on hand and in
banks, certificates of deposit and marketable securities;
(b) Offeree's interests in the entities identified on Index
2.02(b);
(c) all Intellectual Property (including the Business
Tradenames and Seller Tradenames), including all interests therein and goodwill
associated therewith, other than as identified in Section 2.01(a), (m) and (n);
(d) all rights of Offeree under any loan agreement or
letter of credit;
(e) all rights of Offeree to Tax refunds (except to the
extent, if any, that the Tax in respect of which the refund applies shall have
been included within prepaid expenses on the Final Closing Net Asset Statement,
or the accrued Liabilities set forth on the Final Closing Net Asset Statement
shall have been reduced by the amount of the refund) and proceeds of insurance
policies (subject to the provisions of Section 5.15(a) and (b) of the Master
Agreement);
(f) all rights of Offeree and its Affiliates under (i) this
Offer, the Master Agreement and the other Operative Documents, (ii) all
Contracts to which Offeree is a party that pertain in any part to the businesses
of Offeree and its Affiliates other than the U.K. Business ("Other Businesses")
and that are not identified as Assumed Contracts on Index 2.01(e) of this Offer,
(iii) the lease agreements in respect of the leased Business Premises that are
the subject of the U.K. Property Contracts, (iv) any Contract pertaining
exclusively to an Excluded Asset or an Excluded Liability (including all
insurance policies and Contracts), and (v) any Contract which pertains
exclusively to the U.K. Business that was made or entered into in breach or
violation of the Master Agreement, unless Buyer expressly elects by written
notice delivered to Offeree prior to the Closing to include such Contract as an
Assumed Contract (collectively, the "Excluded Contracts");
U.K. Asset Purchase Terms and Conditions - Page 6
(g) the assets and personal property located at the
Wimbledon Property that are not used exclusively in the U.K. Business, but only
to the extent specifically listed on Index 2.02(g) (collectively, "Excluded
Personal Property");
(h) the corporate seals, incorporation documents,
memorandum and articles of association, Tax Returns and other Tax records,
minute books and statutory books of Offeree, and such other records of Offeree
that relate exclusively to the incorporation or capitalization of Offeree,
together with any VAT, National Insurance, PAYE or other Books and Records
Offeree is required by Law or Section 2.10 to retain; and
(i) any assets or properties sold or otherwise disposed of
in the ordinary course of the operation of the U.K. Business, but not in
violation of any provisions of this Offer or the Master Agreement, during the
period from the date hereof through the Closing.
2.03. Business Premises. At the Closing, (i) subject to and in
accordance with the English Business Premises Contract in the form annexed
hereto as Annex A, the leasehold properties listed on Part A of Index 2.03 shall
be assigned to Offeror, and all of Offeree's right, title and interest in and to
the real property owned by Offeree located at 12 Waterside Way, London SW17,
England, together with all buildings, fixtures and improvements erected thereon
(the "Wimbledon Property"), shall be sold by Offeree to Offeror; and (ii)
subject to and in accordance with the Scottish Business Premises Contract in the
form annexed hereto as Annex B, the leasehold property listed on Part B of Index
2.03 shall be assigned to Offeror. The leasehold and freehold properties that
are the subject of the English Business Premises Contract and the Scottish
Business Premises Contract shall hereinafter collectively be referred to as the
"Business Premises."
2.04. Assumption of Liabilities. As partial consideration for the
sale, transfer, assignment and delivery of the U.K. Business and the Purchased
Assets and upon the terms and subject to the conditions set forth in this Offer
and the Master Agreement, Offeror shall assume, pay and perform from and after
the Closing the following obligations, contracts and liabilities of Offeree
arising exclusively out of the conduct of the U.K. Business (collectively, the
"Assumed Liabilities"), but no others:
(a) the accrued expenses and trade accounts payable
(excluding amounts due to Affiliates of Offeree) of the U.K. Business that have
been incurred exclusively in the ordinary course of the U.K. Business through
the Closing Date, in the amounts and to the extent reflected on the Final
Closing Net Asset Statement;
(b) all Liabilities and obligations relating to Customer
deposits relating exclusively to the U.K. Business, but only in the amount and
to the extent reflected on the Final Closing Net Asset Statement;
(c) all Liabilities accruing from and after the Closing
Date under the Assumed Contracts (other than Liabilities attributable to any
breach or failure by Offeree to comply with the terms thereof on or before the
Closing);
U.K. Asset Purchase Terms and Conditions - Page 7
(d) subject to and in accordance with the provisions of
Article IX of the Master Agreement, all obligations relating to the Transferred
U.K. Employees imposed on Offeror by any Law, statute, rule, regulation or
common law (whether under TULRCA, the Transfer Regulations, or ERA); and
(e) any other specifically identified Liabilities of
Offeree relating to the U.K. Business that are expressly assumed by Buyer
Representative or Offeror at the Closing pursuant to any other provision of this
Offer, the U.K. Property Contracts, the Master Agreement or any other Operative
Documents.
2.05. Excluded Liabilities. Notwithstanding any provision in this
Offer, the Master Agreement or any other Operative Document to the contrary,
Offeror is assuming only the Assumed Liabilities and is not assuming any other
Liability, Contract or obligation of Offeree or any of its Affiliates (or any
predecessor owner of all or part of their respective business and assets) of
whatever nature, whether presently in existence or arising or asserted
hereafter. All such other Liabilities, Contracts and obligations shall be
retained by and remain obligations and Liabilities of Offeree (all such
Liabilities, Contracts and obligations not being assumed being herein referred
to as the "Excluded Liabilities"). Without limiting the foregoing, none of the
following shall be Assumed Liabilities for the purposes of this Offer:
(a) any Liability or obligation for Tax imposed by any
Taxation Authority on Offeree or any of its Affiliates (i) with respect to the
Other Businesses, (ii) with respect to the operations of the U.K. Business or
the acquisition, ownership or holding of the Purchased Assets at any time or for
any period prior to the Closing, or (iii) for any income Taxes incurred as a
result of consummation of the transactions contemplated by this Offer, other
than Stamp Duty arising on the purchase and sale of the Purchased Assets between
Offeror and Offeree pursuant to this Offer and as provided in Section 2.09;
(b) any Liability or obligation of Offeree or any of its
Affiliates for money borrowed, including purchase money financing provided by
any vendor, whether such Liabilities and obligations were incurred in the
operation of the U.K. Business or otherwise;
(c) any Liability or obligation relating to an Excluded
Asset;
(d) any Prior Claims; and
(e) any Liability or obligation of Offeree contained in the
respective agreements relating to Offeree's acquisition of any water cooler
business or bottled water business.
2.06. Data Protection Act 1998. The Offeror undertakes to comply in
all material respects with the provisions of the Data Protection Act 1998
following the Closing in relation to the Customer List and other Purchased
Assets, including obtaining any necessary consent from any individuals as
necessary for Offeror's lawful use of relevant information.
U.K. Asset Purchase Terms and Conditions - Page 8
2.07. Purchase Price. The purchase price for the Purchased Assets
(the "Purchase Price") shall be the sum of (a) subject to the adjustments
contemplated by the Master Agreement, United States $122.0 million less
(pound)290,126.36 which represents the aggregate purchase price for the
leaseholds being transferred pursuant to the U.K. Property Contracts in cash and
(b) the assumption by Offeror of the Assumed Liabilities. The Purchase Price
shall be paid in accordance with Section 2.02 of the Master Agreement.
2.08. Allocation of Purchase Price. Subject to the adjustments
contemplated by the Master Agreement (and, in particular, any alterations
necessary to the allocations below so as to ensure that if and to the extent
that the categories of assets listed below appear in the Final Closing Net Asset
Statement they are accorded the same value hereunder as they are given in the
Final Closing Net Asset Statement), the Purchase Price shall be allocated to the
Purchased Assets approximately as follows:
in 000s
-------
For the Bottled Water Equipment and Personal Property US$ 16,921
For the Stock US$ 704
For the Receivables US$ 8,068
For the Prepayments and Deposits US$ 380
For the Assumed Liabilities US$ (1,897)
For the Goodwill, Customer Lists, Business Records, Commercial US$ 97,413
Information, Claims Rights, Permits, Computer Software,
Copyrights, Domain Name Registrations, Assumed Contracts and
all other Purchased Assets
Any allocations of adjustments to the Purchase Price shall be made in accordance
with Section 2.10 of the Master Agreement. The Final Closing Net Asset Statement
shall separately set forth the values for Bottled Water Equipment and Personal
Property.
2.09. Value Added Tax ("VAT").
(a) Offeror and Offeree intend and shall use all reasonable
endeavours to secure that section 49(1) Value Added Tax Act 1994 ("VATA") and
article 5 of the Value Added Tax (Special Provisions) Order 1995 will apply to
the transfer of the U.K. Business pursuant to any contract constituted by
acceptance of this Offer. Accordingly:
(i) Offeror and Offeree shall, to the extent
required by Law, on the Closing Date or as soon as reasonably
practicable after that date give notice of such transfer to HM
Customs & Excise; and
(ii) Offeree shall make a request to HM Customs &
Excise under section 49(1)(b) VATA. Offeree undertakes to preserve
all Books and Records related to
U.K. Asset Purchase Terms and Conditions - Page 9
VAT for such period as may be required by Law or, in the case of
Books and Records that relate to capital items within the capital
goods scheme, 11 years, and during that time to permit Offeror or its
agents reasonable access to inspect or copy them at Offeror's expense
in accordance with Section 5.02 of the Master Agreement. If HM
Customs & Excise refuses to make a direction, Offeree shall within 20
days of the receipt of written notification of such refusal deliver
such Books and Records to Offeror, although Offeree shall be entitled
to either retain a copy of such Books and Records or subsequently
have access for itself or its agents to inspect or copy them at the
Offeree's expense.
(b) If HM Customs & Excise determines that all or part of
the consideration for the sale and purchase of the Purchased Assets and the
Business Premises is subject to VAT, Offeree shall issue Offeror with a VAT
invoice and Offeror shall pay to Offeree an amount equal to the VAT specified in
the invoice within five days of receipt of such invoice by Offeror.
2.10. Closing.
(a) If this Offer is accepted, the closing of the purchase
and sale of the Purchased Assets and the Business Premises and the assumption of
the Assumed Liabilities hereunder (the "Closing") shall take place at the time
and place provided in Section 2.05 of the Master Agreement.
(b) At Closing, Offeree shall (i) deliver to Offeror (which
may consist of delivery by turning over to Offeror possession and control of the
Business Premises where they are customarily maintained) such of the Purchased
Assets which are capable of being transferred by delivery, including the Stock,
Bottled Water Equipment, Personal Property, Business Records, Commercial
Information and Customer List, and (ii) with respect to any specific Purchased
Assets or classes of Purchased Assets as Offeror may reasonably request, deliver
to Offeror appropriate documents of transfer, conveyance and assignment, in each
case in form and substance reasonably satisfactory to Offeree and Offeror,
including bills of sale, endorsements, assignments and other instruments, in
form suitable for recording and filing, as reasonably necessary or appropriate
to vest in Offeror all right, title and interest in, to and under such Purchased
Assets and the U.K. Business.
(c) At Closing, the transactions contemplated by the
English Business Premises Contract and the Scottish Business Premises Contract
shall be completed concurrently with the transaction contemplated by this Offer,
except to the extent that the U.K. Property Contracts provide for later
completion.
(d) At Closing, Offeree and Offeror will each deliver to
the other executed copies of all Ancillary Agreements to which it is a party.
(e) The Closing shall not take place under this Offer or
any other Operative Document unless all transactions contemplated by the
Operative Documents close simultaneously.
U.K. Asset Purchase Terms and Conditions - Page 10
(f) Upon the Closing, all transactions contemplated to be
consummated at the Closing shall be deemed to have occurred.
2.11. Stamp Duty. Notwithstanding any other provision in the contract
constituted by acceptance of this Offer or in any other Operative Document to
the contrary, all transfer, documentary, and stamp duty Taxes, registration
fees, conveyance fees, recording fees, deed stamps and all other such Taxes and
fees (including any penalties and interest) incurred in connection with the
purchase and sale of the Purchased Assets and the assumption of the Assumed
Liabilities (collectively, "Stamp Duty") shall be borne and paid by Offeror.
2.12 Access Rights. Nothing in this Agreement shall diminish the
rights of Buyer Representative and Buyer to have access under Section 5.02 of
the Master Agreement.
2.13 Third Party Consents. Section 7.04 of the Master Agreement shall
govern matters related to third party consents.
ARTICLE III
MISCELLANEOUS
3.01. Termination. The contract constituted by acceptance of this
Offer shall terminate and the transactions contemplated by it shall be abandoned
prior to the Closing only if the Master Agreement is terminated, or as otherwise
may be agreed to in writing by Offeree and Offeror.
3.02. Further Assurances. If at any time and from time to time after
the Closing, Offeror shall reasonably consider it advisable that any further
conveyance, agreements, documents, instruments and assurances of law or any
other things are necessary to vest, perfect, confirm or record in Offeror the
title to any of the Purchased Assets, Offeree shall execute and deliver, upon
Offeror's request and for no additional consideration, any and all proper
assignments, conveyances, agreements, documents, instruments and assurances of
law, and do all things reasonably necessary or proper to vest, perfect, confirm
or record title to the Purchased Assets and the U.K. Business in Offeror and
otherwise to carry out the provisions of this Offer.
3.03. Successors and Assigns. The provisions of the contract
constituted by acceptance of this Offer shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns; provided that neither Offeror nor Offeree may assign, delegate or
otherwise transfer any of its rights or obligations under this Offer or the
contract constituted by acceptance of this Offer without the prior written
consent of the other; and provided further that no permitted transfer or
assignment will relieve the transferring or assigning party of its obligations
under this Offer or the contract constituted by acceptance of this Offer.
3.04. Governing Law and Jurisdiction. The applicable laws of England
(without giving effect to such nation's rules of conflicts of law) shall govern
(i) the formation of the contract
U.K. Asset Purchase Terms and Conditions - Page 11
constituted by acceptance of this Offer and (ii) the perfection and effect of
the transfer of the Purchased Assets. Otherwise, the contract constituted by
acceptance of this Offer shall be construed in accordance with and governed by
the law of the State of New York, U.S.A., without giving effect to the conflicts
of law rules of the State of New York. Any dispute, claim or controversy
relating to or arising out of the contract constituted by acceptance of this
Offer shall be asserted and adjudicated in accordance with the provisions of
Section 13.10 of the Master Agreement.
3.05. Entire Agreement.
(a) If this Offer is accepted, the contract constituted by
its acceptance (including all agreements required to be delivered pursuant to
its terms) shall, together with the U.K. Property Contracts, the Master
Agreement, the other Operative Documents, including the Disclosure Index, and
the Confidentiality Agreement, constitute the entire agreement between Offeree
and Offeror in relation to the sale and purchase of the U.K. Business and the
Purchased Assets, and supersede all previous agreements, understandings and
negotiations involving the parties hereto with any bearing on the sale and
purchase of the U.K. Business or the Purchased Assets.
(b) Nothing in this Offer shall be read or construed as
excluding any liability or remedy in respect of fraud.
3.06. No Third Party Rights. Nothing in this Offer or in the contract
constituted by acceptance of this Offer is intended to confer on any Person any
right to enforce any term of this Offer which that Person would not have had but
for the Contracts (Rights of Third Parties) Act 1999.
3.07. Notices. All notices, requests and other communications to
Offeree or Offeror under the contract constituted by acceptance of this Offer
shall be in writing in the English language (including telex, telecopy or
similar writing) and shall be given:
if to Offeror, to:
Springbar Watercoolers Limited
Trinity Court, Church Street
Rickmansworth
Hertfordshire WD3 1LD
Attention: Philip O'Brien
Telecopy: +44 (0) 1923 897608
U.K. Asset Purchase Terms and Conditions - Page 12
with a copy to:
The Perrier Group of America, Inc.
777 West Putnam Avenue
Greenwich, CT 06830
Attention: J. Mark Evans
Telecopy: (203) 863-0218
- and -
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, NJ 07068
Attention: Stanley Schwartz
Telecopy: (973) 622-3073
if to Offeree, to:
Ionics, Incorporated
65 Grove Street
Watertown, MA 02472
Attention: General Counsel
Telecopy: (617) 926-3760
with a copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Mark H. Burnett
Telecopy: (617) 248-7100
and shall if:
(a) personally delivered, be deemed to have been received at the time
of delivery;
(b) mailed, be deemed to have been delivered on the tenth Business
Day after the date of mailing;
(c) sent by facsimile, be deemed to have been received upon receipt
by the sender of a facsimile transmission report or other appropriate evidence
that the facsimile has been transmitted to the addressee; or
U.K. Asset Purchase Terms and Conditions - Page 13
(d) sent by overnight delivery service, be deemed to have been
received on the second Business Day after it was sent;
provided that, in the case of personal delivery or facsimile transmission, if
such delivery or transmission occurs on a day that is not a Business Day or
after 4:00 p.m. (local time) on a Business Day, receipt shall be deemed to have
occurred the next Business Day.
3.08. Amendments; No Waivers. (a) Any provisions of the contract
constituted by acceptance of this Offer may be amended or waived prior to the
Closing Date if, and only if, such amendment or waiver is in writing and signed,
in the case of an amendment, by Offeror and Offeree, or in the case of a waiver,
by the party against whom the waiver is to be effective.
(b) No failure or delay by Offeror or Offeree in exercising any
right, power or privilege under the contract constituted by acceptance of this
Offer shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
3.09. Master Agreement Controls. If there is any conflict between the
provisions of the contract constituted by acceptance of this Offer and the
provisions of the Master Agreement, the provisions of the Master Agreement shall
control.
* * *
Annex A
-------
THIS AGREEMENT is made the 30th day of November 2001
BETWEEN
(1) IONICS (U.K.) LIMITED company number 1966229 whose registered
office is at 12 Waterside Way London SW17 0XH ('the Seller') and
(2) SPRINGBAR WATERCOOLERS LIMITED company number 01963471 whose
registered office is at Trinity Court Church Street Rickmansworth
Hertfordshire WD3 1LD (`the Buyer')
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement
"THIS AGREEMENT": means this document as varied by any subsequent
documentation
"THE ANCILLARY OCCUPATIONAL LEASE DOCUMENTS": means the documents
listed in Part II of all sections of the second schedule
"THE BUYER'S SOLICITORS": means CMS Cameron McKenna of Mitre House
160 Aldersgate Street London EC1A 4DD (reference RJC)
"COMPLETION": means actual completion of the sale and purchase of
the Properties or any of them pursuant to this Agreement
"THE COMPLETION DATE": means the date on which completion of the
sale of the Properties or any of them is scheduled to take place in
accordance with this Agreement
"THE COMPLETION MONEYS": means the Purchase Price (or any
outstanding balance of it) as adjusted by all sums due between the
parties at Completion under this Agreement
"THE ELECTED PROPERTY": means that leasehold property described in
Section F of Part I of the First Schedule hereto
"THE GENERAL CONDITIONS": means the Standard Conditions of Sale
(3rd Edn)
"THE MASTER AGREEMENT": means a master agreement of even date
herewith and made between The Perrier Group of America, Inc. (1)
and Ionics, Incorporated (2) (a copy of which is annexed hereto)
"THE OCCUPATIONAL LEASES": means the tenancies or occupations
subject to which the Seller holds any of the Properties and
described in Part I of all sections of the second schedule and
'Occupational Lease' means any one of those tenancies
"THE PROPERTIES": means the freehold and/or leasehold properties
described in Part I of all sections of the first schedule,
'Property' means any one of those Properties and 'Property'
followed by a number means whichever of the
properties described in Part I of any section of the first schedule
bears to that number
"THE PURCHASE PRICE": means(pound)1,960,004.92
"THE SELLER'S SOLICITORS": means Steele & Co of 2 The Norwich
Business Park, Whiting Road, Norwich NR4 6DJ
"TENANT COVENANT": has the meaning given in the Landlord and Tenant
(Covenants) Act 1995 Section 28(1) and `tenant covenants' shall be
construed accordingly
"THE TRANSFER": means the assignments or transfers of the
Properties or any of them
"VAT": means an amount equal to the value added tax as charged in
accordance with VATA or any equivalent or substituted tax
"VATA": means the Value Added Tax Act 1994 or any equivalent tax
Act
"VAT INVOICE": means an invoice complying with the provisions of
regulations 13 and 19 of the VAT Regulations 1995
1.2 words importing one gender shall be construed as importing any
other gender
1.3 words importing the singular shall be construed as importing the
plural and vice versa
1.4 where any party comprises more than one person the obligations and
liabilities of that party under this Agreement shall be joint and
several obligations and liabilities of those persons
1.5 the clause headings do not form part of this Agreement and shall
not be taken into account in its construction or interpretation
1.6 any reference to a clause or a paragraph or a schedule is to one in
this Agreement so numbered
1.7 any reference in the first schedule and the second schedule to the
Property is to the property described in the heading of the
relevant section of those schedules
1.8 in the absence of any contrary provision any reference to a statute
includes any statutory modification or re-enactment of it and any
and every order instrument regulation direction or plan made or
issued under the statute deriving validity from it
2. AGREEMENT FOR SALE
2.1 The Seller shall sell and the Buyer shall buy the Properties at the
Purchase Price
2.2 The Purchase Price shall be apportioned as follows:
2.2.1 to Property 1(pound)1,700,000
2.2.2 to Property 2(pound)12,408.52
to Property 3(pound)69,977.10
to Property 4(pound)8,599.54
to Property 5(pound)8,138.63
to Property 6(pound)105,896.61
to Property 7(pound)48,508.40
to Property 8(pound)6,475.12
to Property 9(pound)1.00
3. COMPLETION
3.1 Completion of the sale and purchase of Property 1 and payment of
the Completion Moneys and of any applicable VAT shall take place on
the Closing Date referred to in the Master Agreement
3.2 Completion of the sale and purchase of Properties 2 to 9 shall take
place on the later of the Closing Date referred to in the Master
Agreement and the fifth working day from and including the date on
which the Seller's Solicitors give notice to the Buyer's Solicitors
that the relevant reversioner's formal consent to assignment has
been granted in respect of the relevant Property
4. TITLE GUARANTEE
4.1 The Seller sells the Properties with full title guarantee
4.2 The transfer or assignment of all Properties which are leasehold
shall contain the following declaration:
"It is agreed that the covenants which are implied by the Law of
Property (Miscellaneous Provisions) Act 1994 Section 4 shall be
limited so as not to extend to any breach of the covenants relating
to repair and decoration of the Property"
4.3 The Law of Property (Miscellaneous Provisions) Act 1994 Section
6(2)(a) shall have effect as though all matters now recorded in all
registers open to or capable of public inspection are to be
considered to be within the actual knowledge of the Buyer
4.4 The Transfer shall contain the modifications set out above
5. POSSESSION
The Properties are sold subject to:
5.1 the Occupational Leases
5.2 the Ancillary Occupational Lease Documents
5.3 the presence of any third party chattels in the nature of tenant's
fixtures and fittings but not further or otherwise
6. TITLE
6.1 In respect of such of the Properties title to which is registered
at HM Land Registry title shall be deduced in accordance with the
Land Registration Act 1925 Section 110 save that copies of the
entries on the register the filed plan and any documents referred
to shall be office copies
6.2 In respect of such of the Properties as are unregistered leasehold
land title shall commence with the leases under which the Seller
holds such Properties
6.3 Title having been deduced prior to the date of this Agreement the
Buyer accepts the Seller's title to the Properties and shall be
deemed to purchase with full knowledge of the title in all respects
and shall not raise any requisitions or make any objection in
relation to the title but the Buyer may raise requisitions arising
out of:
6.3.1 events occurring after the date of this Agreement but
prior to the Completion Date
6.3.2 matters revealed by pre-Completion searches which are
not registered at the date of this Agreement
6.3.3 any matter registered at H M Land Registry after the
date and time of the relevant office copies in respect
of any of the Properties as specified in Part 1 of
Section A of the First Schedule
6.4 The Seller does not have the documents noted as missing in the
relevant section of Part III of the first schedule and/or Part II
of the second schedule and the Buyer may not raise any requisition
or objection on that account and no acknowledgement for production
or undertaking for safe custody will be given but so that copies
(and where available certified copies) shall be produced on
Completion to the Buyer
7. ENCUMBRANCES
7.1 The Properties are sold subject to and (where appropriate) with the
benefit of:
7.1.1 the matters contained or referred to in the property
proprietorship and charges registers of the titles to
the Properties other than any subsisting financial
charges
7.1.2 the documents described in Part II of Section A of the
first schedule
7.1.3 in the case of any Property which is leasehold the
exceptions reservations covenants and conditions
contained in the lease described in Part II of Section
B onwards of the first schedule and to the documents
ancillary to the lease briefly described in Part III of
Section B onwards of the first schedule
7.1.4 the Occupational Leases set out in Part I of the
relevant section of the second schedule and the
Ancillary Occupational Lease Documents set out in Part
II of the relevant section of the second schedule and
7.2
7.2.1 The Transfer of Property 1 shall contain a covenant by
the Buyer that the Buyer will (by way of indemnity
only) observe and perform the covenants conditions and
other matters contained or referred to in the documents
referred to in clause 7.1.1 and will indemnify and keep
the Seller fully and effectually indemnified against
all actions proceedings damages cost claims and
expenses which may be suffered or incurred by the
Seller in respect of breach or non-observance of those
covenants and conditions and obligations following the
Completion Date
7.2.2 In respect of Property 1 the Buyer shall also at
Completion enter into the Deed of Covenant referred to
at clause 2(c) of the Transfer dated 21 February 1994
referred to at entry 1 of the Charges Register of Title
Number TGL95595
7.3 The Transfer of each Property which is leasehold shall contain
covenants by the Buyer that the Buyer will:
7.3.1 (by way of indemnity only) observe and perform the
covenants conditions and other matters contained or
referred to in the documents referred to in clause
7.1 (if any)
7.3.2 (where the lease is not a new tenancy for the purposes
of the Landlord and Tenant (Covenants) Act 1995) during
the term granted by the lease pay the rents reserved by
and comply with the covenants on the part of the tenant
and the conditions and provisions contained in the
lease
7.3.3 (where the lease is a new tenancy for the purposes of
the Landlord and Tenant (Covenants) Act 1995) until the
Buyer is released from the tenant covenants in the
lease pursuant to the Landlord and Tenant (Covenants)
Act 1995 pay the rents reserved by and comply with the
obligations of the tenant in the lease
7.4 The Transfer shall be engrossed by the Buyer's Solicitors and the
engrossment shall be executed by the Buyer before the Completion
Date
8. MATTERS AFFECTING THE PROPERTIES
The Properties are sold subject to the following matters:
8.1 all local land charges whether registered or not before the date of
this Agreement and all matters capable of registration as local
land charges whether or not actually so registered
8.2 all notices served and orders demands proposals or requirements
made by any local public or other competent authority whether
before or after the date of this Agreement
8.3 all actual or proposed charges notices orders restrictions
agreements conditions contraventions or other matters arising under
any statute
8.4 all easements quasi-easements rights exceptions or other similar
matters including rights of way, drainage, water, watercourses,
light, rights of adjoining owners affecting the Properties, and
liability to repair or covenants to repair roads, pavements, paths,
ways, passages, sewers, drains, gutters, fences and other like
matters whether or not apparent on inspection or disclosed in any
of the documents referred to in this Agreement and without any
obligation on the Seller to provide evidence of the creation of or
to define or apportion any such liability
8.5 matters discoverable by inspection of the Properties before the
date of this Agreement
8.6 matters relating to the Properties about which the Seller does not
know
8.7 matters disclosed or which would be disclosed by any searches or as
a result of enquiries (formal or informal and made in person in
writing or orally) made by or for the Buyer or which a prudent
buyer ought to make; and
8.8 overriding interests as defined in the Land Registration Act 1925
Section 70(1) or matters which would be overriding interests if the
title were registered
9. MASTER AGREEMENT
9.1 The provisions of sections 1, 2.02, 3.08, 3.23, 7.04, 8C.01, 8C.02,
10, 11, 12 and 13 of the Master Agreement shall be deemed
incorporated herein as if expressly set out with references to UK
Subsidiary and UK Real Property (but to the extent only of property
within England and Wales) being construed as references to Seller
and Properties respectively and with references to the Wimbledon
Property being construed as references to Property 1
9.2 Save as to Property 8 the Properties shall be deemed to be those
which the Buyer intends to continue occupying for an extended
period in accordance with Section 7.04(c)(ii)(A) of the Master
Agreement
10. INCORPORATION OF CONDITIONS OF SALE AND DOCUMENTS
10.1 The General Conditions as amended by the third schedule shall apply
to this Agreement and are incorporated in it in so far as they are
applicable to a sale by private treaty and are not varied by or
inconsistent with the terms of this Agreement
10.2 If there is any conflict between the General Conditions as amended
and the terms of this Agreement the terms of this Agreement prevail
11. RESTRICTION ON ASSIGNMENT AND SUB-SALE
11.1 This Agreement is personal to the Buyer and is not capable of being
assigned without the consent of the Seller
11.2 The Seller shall not be required to transfer the Properties:
11.2.1 to anyone other than the Buyer named in this Agreement or a
permitted assignee
11.2.2 except by one Transfer of each Property at the Purchase Price
apportioned to such Property by clause 2.2
12. MERGER ON COMPLETION
The provisions of this Agreement shall not merge on completion of
the Transfer so far as they remain to be performed
13. VAT PROVISIONS
13.1 The Seller and the Buyer intend and shall use all reasonable
endeavours to secure that section 49(1) VATA and article 5 of the
Value Added Tax (Special Provisions) Order 1995 will apply to the
transfer of the Properties pursuant to this Agreement. Accordingly:
13.1.1 The Seller and the Buyer shall to the extent required
by law at Completion or as soon as reasonably
practicable after that date give to the extent required
by law notice of such transfer to HM Customs & Excise;
and
13.1.2 The Seller shall make a request to HM Customs & Excise
under section 49(1)(b) VATA. The Seller undertakes to
preserve all books and records related to VAT for such
period as may be required by law or, in the case of
books and records that relate to capital items within
the capital goods scheme, 11 years, and during that
time to permit the Buyer or its agents reasonable
access to inspect or copy them at the Seller's expense
on reasonable notice and at reasonable times. If HM
Customs & Excise refuses to make a direction, the
Seller shall within 20 days of the receipt of written
notification of such refusal deliver such books and
records to the Buyer, although the Seller shall be
entitled either to retain a copy of
such books and records or subsequently have access for
itself and its agents to inspect or copy them at the
Seller's expense.
13.2 If HM Customs & Excise determines that all or part of the
consideration for the sale and purchase of the Properties is
subject to VAT, the Seller shall issue the Buyer with a VAT invoice
and the Buyer shall pay to the Seller an amount equal to the VAT
specified in the invoice within 5 days of receipt of such invoice
by the Buyer.
13.3 Each of the Seller and the Buyer warrants to the other that it is
and will remain until Completion a registered taxable person for
the purposes of VATA
13.4 The Seller warrants to the Buyer that the Seller has elected to
waive exemption from VAT under Schedule 10 to the VATA in respect
of the Elected Property and that it will prior to Completion
produce to the Buyer's Solicitors a certified copy of its
notification to Customs of the election and of an acknowledgment of
receipt and any required permission granted by Customs and that it
will not on or before Completion revoke such election such that the
sale hereunder (but for Article 5) would be a standard rated supply
for VAT purposes
13.5 The Buyer warrants to the Seller that:
13.5.1 the Buyer has elected or will prior to Completion elect
to waive exemption from VAT under Schedule 10 to the
Value Added Tax Act 1994 in respect of the Elected
Property with effect from and including Actual
Completion
13.5.2 it will not on or before Completion revoke any such
election
13.5.3 it will not less than five working days prior to
Completion produce to the Seller's Solicitors a
certified copy of its notification of election and an
acknowledgment of receipt thereof from Customs; and
13.5.4 from and after Completion the business transferred to
it pursuant to this agreement will be carried on by it
as a going concern
13.6 The Seller warrants to the Buyer that the Seller has not elected
and will not elect to waive exemption from VAT under Schedule 10 to
VATA in respect of Property 1.
14. CONSENTS RELATING TO PROPERTIES WHICH ARE LEASEHOLD
14.1 The following provisions apply to any Property which is leasehold
and in relation to which the consent of a reversioner or other
third party is required to effect a lawful transfer or assignment
to the Buyer and in respect of any such property but not otherwise
this agreement is conditional upon the grant of such third party
consent in respect of each of the Properties
14.2 The Seller shall use all reasonable endeavours (which shall be
deemed to include an obligation to institute court proceedings
against the relevant lessor where in the reasonable opinion of the
Seller or the Buyer the requisite consent is being unlawfully
withheld but so that all costs in respect of such proceedings shall
be
divided equally between the parties in accordance with Section
7.04 (b)(ii) of the Master Agreement) to obtain the requisite
consent and the Buyer shall provide such support as the Seller may
reasonably require provided that:
14.2.1 the Seller shall be under no obligation to give or
procure the giving of any guarantees, lodge any monies
by way of deposit or pay or expend any other monies
other than solicitors' and agents' costs in respect of
any application for the requisite consent and an
authorised guarantee agreement in such form as the
reversioner may lawfully require
14.2.2 the Buyer shall if so lawfully required by the
reversioner execute a licence or other deed containing
a direct covenant by the Buyer with the reversioner to
pay the rent reserved by and to perform and observe all
the covenants and conditions on the part of the tenant
contained in the lease under which the Seller holds the
Property and all or any documents ancillary or
supplemental thereto (whether or not expressed to be
so) for the residue of the term thereby granted and the
Buyer undertakes to execute such licence or other deed
and to deliver it duly executed to the Seller's
Solicitors within three working days of receipt of the
engrossment by the Buyer's Solicitors PROVIDED THAT if
such licence in respect of any Property has not been
granted within a period of 26 weeks (or such longer
period as the Seller and the Buyer may agree in
writing) from the Closing Date referred to in the
Master Agreement either the Seller or the Buyer may
rescind this agreement in respect of each Property but
not further or otherwise by giving written notice to
the other in which event Standard Condition 7.2 will
apply and for the avoidance of doubt the provisions of
Section 7.04(c) of the Master Agreement shall have
effect
14.2.3 the Buyer shall to the extent lawfully required by the
reversioner procure the giving of any guarantees or
provision of rent deposits as appropriate
14.3 In order to obtain any requisite consent the Buyer shall supply
such information and references as may be required by the
reversioner and is within the Buyer's power to supply
14.4 The Buyer shall be entitled to enter and remain upon the leasehold
Properties with effect from the Completion date and prior to the
grant of formal licence for the purpose of trading therefrom
subject to the Buyer :
14.4.1 paying to the Seller from and including the date of
such entry a sum equivalent to the rents reserved and
payable pursuant to the lease by which the relevant
Property is held
14.4.2 observing and performing the obligations on the part of
the lessee contained in the lease
15. GOVERNING LAW
This Agreement shall be construed in accordance with and governed
by English Law.
16. NATURE OF THIS AGREEMENT
This Agreement is not a deed and has not been executed by the
parties to it as a deed
17. NOTICES
All notices, requests and other communications to the Seller or the
Buyer under this Agreement shall be in writing in the English
language (including telex, telecopy or similar writing) and shall
be given,
if to the Buyer, to:
Springbar Watercoolers Limited
Trinity Court, Church Street
Rickmansworth
Hertfordshire WD3 1LD
Attention: Philip O'Brien
Telecopy: +44 (0) 1923 897608
with a copy to:
The Perrier Group of America, Inc.
777 West Putnam Avenue
Greenwich, CT 06830
Attention: J Mark Evans
Telecopy: (203) 863 0218
-and-
Orloff, Lowenbach, Stifelman & Siegel, P.A.
101 Eisenhower Parkway
Roseland, NJ07068
Attention: Stanley Schwartz
Telecopy: (973) 622 3073
if to the Seller to:
Ionics (U.K.) Limited
12 Waterside Way
Wimbledon
London SW17 0XH
with a copy to:
Ionics, Incorporated
65 Grove Street
Watertown, MA 02172
Attention: General Counsel
Telecopy: (617) 926 4304
with a further copy to:
Testa, Hurwitz & Thibeault, LLP
125 High Street
Boston, MA 02110
Attention: Mark H Burnett
Telecopy: (617) 248 7100
and shall if:
17.1 personally delivered, be deemed to have been received at the time
of delivery;
17.2 mailed, be deemed to have been delivered on the tenth working day
after date of mailing;
17.3 sent by facsimile, be deemed to have been received upon receipt by
the sender of a facsimile transmission report or other appropriate
evidence that the facsimile has been transmitted to the addressee;
or
17.4 sent by overnight delivery service, be deemed to have been received
on the second working day after it was sent;
provided that, in the case of personal delivery or facsimile
transmission, if such delivery or transmission occurs on a day that
is not a working day or after 6.00 p.m. (local time) on a working
day, receipt shall be deemed to have occurred the next working day.
18. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
No term of this Agreement is enforceable under the Contracts
(Rights of Third Parties) Act 1999 by a person who is not a party
to this Agreement
19. TERMINATION
This Agreement is conditional upon the Master Agreement becoming
unconditional and if the Master Agreement shall terminate because
(without limitation) it has not become unconditional then this
Agreement shall terminate simultaneously
20. BIRMINGHAM SALTLEY
20.1 The Seller acknowledges that it has been in negotiations to enter
into an agreement for lease of premises at Saltley Birmingham and
that the Buyer wishes to continue such negotiations following the
date of this Agreement.
20.2 The Seller shall give all reasonable assistance to the Buyer in
connection with such ongoing negotiations including (but not
limited to) providing such draft documents search results replies
to enquiries and other information as has been
obtained from the prospective landlord and any third party in
relation to the proposed transaction.
20.3 The Buyer shall use reasonable endeavours to ensure that the said
agreement for lease is made assignable to the Seller
20.4 The Buyer agrees to use reasonable endeavours to procure that it is
not obliged to complete the lease of the premises at Birmingham
Saltley before the Closing Date as referred to in the Master
Agreement
20.5 In the event of this Agreement terminating pursuant to clause 19
and the Buyer having entered into the agreement for lease:
20.5.1 if the agreement for lease is assignable the Buyer will assign it
to the Seller
20.5.2 if the agreement for lease is non-assignable the Buyer will
following completion of the lease pursuant thereto use reasonable
endeavours to assign the lease to the Seller
21. STAMP DUTY
For the avoidance of doubt the Seller shall have no liability to
pay ad valorem stamp duty or make a contribution towards stamp duty
costs on any original Transfer
22. WARRANTY OF RENTS
The Seller hereby warrants that the rents specified in Part II of
each Section of the First Schedule are the current rents payable in
respect of the leasehold Properties and that no review of rent
under any of the leases pursuant to which the Properties are held
is outstanding at the date of this agreement
23. INDEMNITY
The Seller will indemnify the Buyer against all actions proceedings
claims losses expenses damages and liability arising from:
23.1 the contravention of building regulations prescribed pursuant to
the Building Act 1984 in respect of Property 1
23.2 the Seller's failure to obtain the formal consent of the lessor of
Property 6 to alterations comprising inter alia the construction of
a new canopy, the addition of two windows and the installation of a
mezzanine floor.
FIRST SCHEDULE
THE PROPERTIES
SECTION A: PROPERTY NO 1
PART I
DESCRIPTION OF PROPERTY
All that freehold property situate at and known as 12 Waterside Way, Wimbledon,
London SW17 0XH (formerly known as Plot D2 and H Waterside Way Industrial
Estate, Plough Lane, Wimbledon) registered with title absolute at HM Land
Registry under title number TGL95595 Date and time of office copy entries 10th
August 2001 at 15:45:02
PART II
ANCILLARY TITLE DOCUMENTS AFFECTING THE PROPERTY
NUMBER DATE NATURE PARTIES REMARKS
1 21st February Transfer (1) London Borough Referred to in
1994 of Merton clause 7.1.2
(2) The Seller
SECTION B: PROPERTY NO 2
PART I
DESCRIPTION OF THE PROPERTY
All that unregistered leasehold property situate at and known as Units 1 and 2,
Chainbridge Industrial Park, Tundry Way, Blaydon, Tyne and Wear, NE21 5SJ
comprised in and demised by the lease briefly described in Part II of this
section of this schedule
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
24th August 2001 (1) Olnato Ltd 10 Years from 24th (pound)45,500 p.a. (pound)45,500 p.a.
(2) The Seller August 2001
SECTION C: PROPERTY NO 3
PART I
DESCRIPTION OF THE PROPERTY
All that leasehold property situate at and known as Unit 6, Circle South,
Wharfside Way, Trafford Park, Manchester, M17 1NF comprised in and demised by
the lease briefly described in Part II of this section of this schedule and
registered with title absolute at HM Land Registry under title number GM815594
Date and time of office copy entries 26th September 2001 at 14:02:08
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
9th June 1999 (1) Trafford Park 25 Years from 25th March (pound)70,428 p.a. (pound)70,428 p.a.
Estates Limited 1998
(2) The Seller
SECTION D: PROPERTY NO 4
PART I
DESCRIPTION OF THE PROPERTY
All that unregistered leasehold property situate at and known as Unit 2, Aintree
Court, National Road, Hunslet, Leeds West Yorkshire comprised in and demised by
the lease briefly described in Part II of this section of this schedule
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
19th May 1995 (1) South Parade 15 Years from 19th May (pound)16,700 (pound)19,350
Properties Ltd 1995
(2) The Seller
SECTION E: PROPERTY NO 5
PART I
DESCRIPTION OF THE PROPERTY
All that unregistered leasehold property situate at and known as Unit 4,
Stanstead Road, Boyatt Wood Industrial Estate, Eastleigh, Hampshire, SO50 4RZ
comprised in and demised by the underlease briefly described in Part II of this
section of this schedule
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
17th April 1998 (1) Kings Road Tyres and 17th April 1998 to 24th (pound)24,950 p.a. (pound)26,000
Repairs Ltd September 2004
(2) The Seller
PART III
DOCUMENTS ANCILLARY TO THE LEASE UNDER WHICH SELLER HOLDS THE PROPERTY
NUMBER DATE NATURE PARTIES REMARKS
1 21st December 1979 Head Lease (1) The I.T.C. Pension Trust Ltd
(2) Kings Road Tyres and Repairs
Ltd
(3) Thames Haulage Holdings Ltd
2 11th March 1998 Consent to Lease (1) Bank of Scotland
3 11th March 1998 Exclusion Order (1) Lambeth County Court
4 17th April 1998 Licence to Underlet (1) Imperial Investments Ltd Certified Copy
and Change Use (2) Kings Road Tyres and
Repairs Ltd
(3) The Seller
(4) The KRT Group Ltd
SECTION F: PROPERTY NO 6
PART I
DESCRIPTION OF THE PROPERTY
All that unregistered leasehold property situate at and known as Ionics House,
Dean Road, Severnside Industrial Estate, Avonmouth, Bristol, BS11 8AT comprised
in and demised by the lease briefly described in Part II of this section of this
schedule
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
21st December 1990 P&O Holdings Ltd (1) 25th December 1990 21 Years from(pound) 51,000
Wyseplant Ltd (2)
PART III
DOCUMENTS ANCILLARY TO THE LEASE UNDER WHICH SELLER HOLDS THE PROPERTY
NUMBER DATE NATURE PARTIES REMARKS
1 11th June 1998 Assignment (1) Wyseplant Ltd (2)
Castlewyse Ltd
2 13th September 2000 Licence (1) Maxxiom Ltd (2) The
Seller
3 25th September 2000 Licence to Assign (1) P & O Property Holdings
Limited
(2) Maxxiom Ltd (3) The
Seller
4 26th September 2000 Assignment (1) Maxxiom Ltd
(2) The Seller
5 25th September 2000 Deed of Variation (1) P & O Property Holdings
Ltd
(2) Maxxiom Ltd
SECTION G: PROPERTY NO 7
PART I
DESCRIPTION OF THE PROPERTY
All that leasehold property situate at and known as Unit 2, Travellers Close,
Travellers Lane, Welham Green, Hertfordshire, AL9 7JL comprised in and demised
by the lease briefly described in Part II of this section of this schedule and
registered with title absolute at HM Land Registry under title number HD213049
Date and time of office copy entries 1st August 2001 at 12:33:53
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
30th July 1986 (1) Goswell Plating 25 Years from 7th (pound)18,000 p.a. (pound)60,000 pa
Works Ltd March 1986
(2) SLD Pumps Ltd
SECTION H: PROPERTY NO 8
PART I
DESCRIPTION OF THE PROPERTY
All that unregistered leasehold property situate at and known as Units 6, 7, 8
and 9 Bordesley Green Trading Estate, Bordesley Green Road, Birmingham, B8 1BZ
comprised in and demised by the leases briefly described in Part II of this
section of this schedule
PART II
LEASES UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
25th March 1996 (Unit 8) (1) A & J 6 Years from 25th (pound)7,182 p.a. (pound)12,500 p.a.
Mucklow (Properties) March 1996
Ltd
(2) The Seller
25th March 1996 (Unit 9) (1) A & J Mucklow 6 Years from 25th (pound)7,182 p.a. (pound)12,500 p.a.
(Properties) Ltd March 1996
(2) The Seller
Undated (Unit 7) (1)A & J Mucklow 24th June 2000 to 24th (pound)13,168 (pound)13,168
(Properties) Ltd March 2002
(2) The Seller
5th February 2001 (1) A & J Mucklow 25th December 2000 to (pound)12,500 p.a (pound)12,500 p.a.
(Unit 6) (Properties) Ltd 24th March 2002
(2) The Seller
SECTION I: PROPERTY NO 9
PART I
DESCRIPTION OF THE PROPERTY
ALL THAT UNREGISTERED LEASEHOLD PROPERTY SITUATE AT AND KNOWN AS LAND AT
NATIONAL ROAD HUNSLET LEEDS COMPRISED IN AND DEMISED BY THE LEASE BRIEFLY
DESCRIBED IN PART II OF THIS SECTION OF THIS SCHEDULE
PART II
LEASE UNDER WHICH THE SELLER HOLDS THE PROPERTY
DATE OF LEASE PARTIES TERM INITIAL RENT CURRENT RENT
18th September 2001 (1) Geoffrey Towers 3 years from (pound)10,400 p.a. (pound)10,400 p.a.
(2) The Seller 13 June 2001
SECOND SCHEDULE
SECTION A: PROPERTY NO 1
PART I
THE OCCUPATIONAL LEASES
NUMBER PART LET DATE PARTIES CURRENT RENT INITIAL RENT
1 Electricity 22nd August 1994 (1) The Seller (pound)0.05 p.a. (pound)0.05 p.a.
Substation (2) London Electricity
SECTION B: PROPERTY NO 2
None
SECTION C: PROPERTY NO 3
None
SECTION D: PROPERTY NO 4
None
SECTION E: PROPERTY NO 5
None
SECTION F: PROPERTY NO 6
PART I
THE OCCUPATIONAL LEASES
NUMBER PART LET DATE PARTIES CURRENT RENT INITIAL RENT
Northern Yard 9th July 2001 (1) The Seller Ltd (pound)10,000 p.a. (pound)10,000 p.A.
(2)Maxxiom Ltd
PART II
ANCILLARY OCCUPATIONAL LEASE DOCUMENTS
NUMBER DATE NATURE PARTIES REMARKS
1 12th June 2001 Exclusion Order Bath County Court
2 9th July 2001 Licence to Underlet Part (1) P & O Property Holdings
Ltd
(2) The Seller
(3) Maxxiom Ltd
3 9th July 2001 Licence to Alter (1) P & O Property Holdings Ltd
(2) The Seller
(3) Maxxiom Ltd
SECTION G: PROPERTY NO 7
PART I
THE OCCUPATIONAL LEASES
NUMBER PART LET DATE PARTIES CURRENT RENT INITIAL RENT
1 part of Unit 2 8th September 1999 (1) The Seller Ltd (pound)3,000 p.a. (pound)3,000 p.a.
(2) SLD Pumps Ltd
PART II
ANCILLARY OCCUPATIONAL LEASE DOCUMENTS
NUMBER DATE NATURE PARTIES REMARKS
1 9th August 1999 Licence to Assign (1) Goswell
alter and underlet Investments Ltd
(2) SLD Pumps Ltd
(3) The Seller
2 17th August 1999 Exclusion Order Mayors and City of
London County Court
3 8th September 1999 Underlease (1) The Seller Missing
(2) SLD Pumps Ltd
SECTION H: PROPERTY NO 8
None
SECTION I: PROPERTY NO 9
None
THIRD SCHEDULE
AMENDMENTS TO THE STANDARD CONDITIONS OF SALE (3RD EDITION)
1. Standard Conditions 2.2,3.4, 4.3.2, 4.5.2, 4.5.5, 5.1.3, 5.2.2(b),
5.2.2(e), 5.2.2(g), and 5.2.3 shall not apply
2. The Standard Conditions shall be varied as follows:
2.1 In Standard Condition 5.2.2(f) the words 'nor change its use and is
TO comply with all statutory obligations relating to the property
and indemnify the seller against all liability arising as a result
of any breach of such obligation' shall be added at the end;
2.2 In Standard Conditions 6.5.1 the words 'actual completion' shall be
added after the word `after' and the remainder of that Standard
Condition shall be deleted
2.3 In Standard Condition 6.8.2(b) the words 'or if reasonable evidence
is produced that the property would be released from all such
mortgages' shall be added immediately after the words 'free of all
mortgages'
2.4 In Standard Condition 7.1.1 the words 'or in negotiations leading
to it' and 'or was' shall be deleted
Signed by John Pott ) /s/ John Pott
for and on behalf of the Seller )
THIRD SCHEDULE
AMENDMENTS TO THE STANDARD CONDITIONS OF SALE (3RD EDITION)
3. Standard Conditions 2.2,3.4, 4.3.2, 4.5.2, 4.5.5, 5.1.3, 5.2.2(b),
5.2.2(e), 5.2.2(g), and 5.2.3 shall not apply
4. The Standard Conditions shall be varied as follows:
4.1 In Standard Condition 5.2.2(f) the words 'nor change its use and is
TO comply with all statutory obligations relating to the property
and indemnify the seller against all liability arising as a result
of any breach of such obligation' shall be added at the end;
4.2 In Standard Conditions 6.5.1 the words 'actual completion' shall be
added after the word 'after' and the remainder of that Standard
Condition shall be deleted
4.3 In Standard Condition 6.8.2(b) the words 'or if reasonable evidence
is produced that the property would be released from all such
mortgages' shall be added immediately after the words 'free of all
mortgages'
4.4 In Standard Condition 7.1.1 the words 'or in negotiations leading
to it' and 'or was' shall be deleted
Signed by Philip O'Brien ) /s/ Philip O'Brien
duly authorized
for and on behalf of the Buyer )
Exhibit H
---------
SHARE PURCHASE AGREEMENT
dated as of
November 30, 2001
by and between
SOCIETE FRANCAISE DES EAUX REGIONALES
and
IONICS FRANCE, S.A.
SHARE PURCHASE AGREEMENT
------------------------
This SHARE PURCHASE AGREEMENT dated as of November 30, 2001 (the
"Agreement") by and between:
IONICS FRANCE, S.A., a French SOCIETE ANONYME with a share capital of
250,000 French francs, having its registered office at 83, Avenue de
Neuilly 94120 Fontenay sous Bois, registered with the Creteil Trade
and Company Registry under n(degree)B 562 109 561 represented by its
General Manager Mr. Christian Cuillery;
(a wholly owned subsidiary of IONICS, INCORPORATED (the "Parent") and
hereinafter referred to as "Seller"),
In the first part,
and:
- ---
SOCIETE FRANCAISE DES EAUX REGIONALES, a French SOCIETE ANONYME with
a share capital of 9,774,400 French francs, having its registered
office at 20, rue Rouget de L'Isle - TSA 40001, 92793 Issy les
Moulineaux, Cedex 9, registered with the Nanterre Trade and Company
Registry under n(degree)B 692 044 316 represented by its Chairman Mr.
Roland Chazal;
(hereinafter referred to as "Buyer"),
-----
In the second part,
WITNESSETH:
-----------
WHEREAS, THE PERRIER GROUP OF AMERICA, INC. ("Buyer
Representative") and Parent have entered into the Master Agreement dated as of
the date hereof (the "Master Agreement") which contemplates the transfer of the
Parent's business, conducted directly and through certain of its Subsidiaries
(including the Company, as defined below), involving the sale and distribution
of bottled water and beverage service supplies and the lease, sale and
distribution of bottled water coolers (including directly plumbed, so-called
"bottleless" water coolers) and beverage service equipment to homes and
businesses in portions of the United States, United Kingdom and France (the
"Business");
WHEREAS, AQUA COOL, S.A., a French SOCIETE ANONYME and a
wholly owned subsidiary of Seller (the "Company"), conducts the portion of the
Business conducted in France (the "French Business"); and
WHEREAS, Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, all the outstanding shares of capital stock and voting
rights of the Company (including the
French Share Purchase Agreement - Page 2
shares presently owned by the nominee shareholders) (the "Shares"), upon the
terms and subject to the conditions set forth in the Master Agreement and in
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
and agreements contained herein and in the Master Agreement and other good and
valuable consideration, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise defined or specified in this Agreement,
capitalized terms used in this Agreement that are defined in the Master
Agreement shall have the meanings assigned to them in the Master Agreement, and
the rules of construction (including the provisions of Article XIII of the
Master Agreement) and documentary conventions set forth in the Master Agreement
shall apply to this Agreement. Additional defined terms introduced in this
Agreement are defined as set forth in the Preamble and Recitals.
ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale. Upon the terms and subject to the
conditions contained herein and in the Master Agreement, Buyer shall purchase
from Seller, and Seller shall sell to Buyer, at the Closing, the Shares free and
clear of Liens.
2.02. Purchase Price. The purchase price for the Shares
shall be, subject to the adjustments contemplated by the Master Agreement,
United States $19.0 million in cash. The purchase price shall be paid in
accordance with Section 2.02 of the Master Agreement.
2.03. Closing. The Closing of the purchase and sale of the
Shares hereunder shall take place at the time and place provided for in Section
2.05 of the Master Agreement. The Closing shall not take place hereunder unless
all transactions contemplated by the Operative Documents close simultaneously.
2.04. Conversion to SAS. Subject to and in accordance with
the Master Agreement, Seller shall be entitled, at Seller's election, to effect
the conversion of the Company from a societe anonyme (SA) to a societe par
actions simplifee (SAS) prior to the Closing.
French Share Purchase Agreement - Page 3
ARTICLE III
CLOSING DELIVERIES
3.01. Closing Deliveries. On the Closing Date, Seller
shall deliver to Buyer:
(i) Duly completed and signed transfer orders
("ordres de mouvement") providing for transfer of
the ownership of all of the Shares to Buyer,
together with the share movements register and
the shareholder accounts of the Company, which
shall reflect such transfer;
(ii) The corporate registers and all other
corporate organizational, formational and
capitalization documents of the Company and
(except for MidasBest Limited, whose shares shall
have been repurchased from the Company by Seller
or one of its Affiliates prior to the Closing, in
accordance with the Master Agreement) the Second
Tier Subsidiaries;
(iii) A certified copy of the minutes of the
ordinary general meetings required by Section
5.06 of the Master Agreement;
(iv) A certified copy of the minutes of the
shareholders' meeting required by Section
10.02(e) of the Master Agreement;
(v) A certified copy of the resolution of the
Company's board of directors approving the sale
of the Shares and Buyer as a shareholder in the
Company;
(vi) A certified extract from the minutes of the
meeting of the Company's workers' committee
certifying that it was consulted concerning the
contemplated sale of the Shares; and
(vii) Such other documents as Buyer may
reasonably request in order to complete, perfect
or evidence the consummation of the transactions
contemplated by this Agreement.
3.02. Transfer Tax. Buyer shall pay (or reimburse Seller in
full for) any stamp duty or transfer Taxes (including any penalties or interest)
that is payable or becomes due in connection with the transfer of the Shares to
Buyer at Closing in accordance with this Agreement and the Master Agreement.
French Share Purchase Agreement - Page 4
ARTICLE IV
MISCELLANEOUS
4.01. Termination. This Agreement shall terminate and the
transactions contemplated hereby shall be abandoned prior to the Closing only if
the Master Agreement is terminated, or as otherwise may be agreed to in writing
by Parent and Buyer Representative.
4.02. Notices and Communications. All notices and
communications provided for herein shall be deemed to have been duly given if
delivered to the Persons and in the manner set forth in the Master Agreement.
4.03. Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns; provided that neither
Seller nor Buyer may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the prior written consent of the other;
and provided further that no permitted transfer or assignment will relieve the
transferring or assigning party of its obligations under this Agreement.
4.04. Further Assurances. From time to time after the
Closing, at the request of Buyer and for no additional consideration, Seller
will execute and deliver to Buyer such other documents, and take such other
action, as Buyer may reasonably request in order to consummate more effectively
the transactions contemplated hereby and to vest in Buyer good, valid and
marketable title to the Shares, free and clear of Liens.
4.05. No Third Party Rights. Nothing contained in this
Agreement is intended to confer any rights or benefits on any Person other than
Seller and Buyer.
4.06. Governing Law and Jurisdiction. The perfection and
effect of the transfer of the Shares, and all matters relating to the internal
governance of the Company and the Second Tier Subsidiaries and the fulfillment
of the prerequisites to the effective transfer of the Shares under French law,
including the validity and adequacy of the measures taken by Seller to effect
compliance with the requirements of Section 10.02(e) of the Master Agreement and
Sections 8D.02(a) and (b) and 9D.03 of the Master Agreement, shall be governed
by French law. Otherwise, this Agreement shall be construed in accordance with
and governed by the law of the State of New York, U.S.A., without giving effect
to the conflicts of law rules of the State of New York. Any dispute, claim or
controversy relating to or arising out of this Agreement shall be asserted and
adjudicated in accordance with Section 13.10 of the Master Agreement.
4.07. Master Agreement Controls. If there is any conflict
between the provisions of this Agreement and the provisions of the Master
Agreement, the provisions of the Master Agreement shall control.
4.08. Counterparts. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto
French Share Purchase Agreement - Page 5
were upon one and the same instrument. This Agreement shall become effective
when each party shall have received a counterpart hereof, in either original or
facsimile, as well as counterparts of the other Operative Documents, signed by
the other parties hereto and thereto.
Done at ______________________ , on 30 November, 2001, in
two original counterparts.
IONICS FRANCE, S.A., Seller
By: /s/ Stephen Korn
Name: Stephen Korn
Title: Attorney-in-Fact
SOCIETE FRANCAISE DES EAUX REGIONALES, Buyer
By: /s/ J. M. Evans
Name: J. M. Evans
Title: Attorney-in-Fact
The following schedules (or similar attachments) to this Exhibit 2.1 have
not been filed with the Commission:
1. Exhibit B1 to the Master Agreement -- Watertown Lease Agreement
between Ionics, Incorporated and Great Spring Waters of America, Inc.
2. Exhibit B2 to the Master Agreement -- Ludlow Lease Agreement between
Ionics, Incorporated and Great Spring Waters of America, Inc.
3. Exhibit C to the Master Agreement -- Letter Agreement between Ionics,
Incorporated and The Perrier Group of America, Inc. Regarding Western
DWS Business
4. Exhibit E to the Master Agreement -- Transition Services Agreement
between Ionics, Incorporated and The Perrier Group of America, Inc.
5. Exhibit I to the Master Agreement - Legal Opinion of General Counsel
of Ionics, Incorporated
6. Exhibit J to the Master Agreement - Legal Opinion of General Counsel
of Great Spring Waters of America, Inc.
7. Disclosure Schedule to the Master Agreement
8. All Indices to the United States Asset Purchase Agreement
9. All Indices to U.K. Asset Purchase Terms and Conditions
10. Annex B to the Offer Letter for the Purchase of the U.K. Aqua Cool
Business - Scottish Business Premises Property Contract
The Company hereby agrees to furnish supplementally a copy of any omitted
schedule (or similar attachment) to the Commission upon request.