Exhibit 10.9
ASSET PURCHASE AGREEMENT
dated as of March 28, 1997
by and between
GLACIER WATER SERVICES, INC.
and
MCKESSON CORPORATION and
MCKESSON WATER PRODUCTS COMPANY
with respect to the assets of its
AQUA-VEND DIVISION
TABLE OF CONTENTS
-----------------
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience only.
ARTICLE I
SALE OF ASSETS AND CLOSING
Page
No.
----
1.01 Assets........................................................ 1
1.02 Liabilities................................................... 4
1.03 Purchase Price; Allocation.................................... 5
1.04 Closing....................................................... 6
1.05 Prorations; Reimbursements.................................... 6
1.06 Further Assurances............................................ 7
1.07 Third-Party Consents.......................................... 8
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF MWP AND MCKESSON
2.01 Organization.................................................. 9
2.02 Authority..................................................... 9
2.03 No Conflicts.................................................. 10
2.04 Governmental Approvals and Filings............................ 10
2.05 Books and Records............................................. 11
2.06 Financial Statements.......................................... 11
2.07 No Undisclosed Liabilities.................................... 11
2.08 Tax........................................................... 11
2.09 Legal Proceedings............................................. 11
2.10 Compliance With Laws and Orders............................... 12
2.11 Benefit Plans; ERISA.......................................... 12
2.12 Real Property................................................. 12
2.13 Tangible Personal Property.................................... 13
2.14 Intellectual Property Rights.................................. 13
2.15 Business Contracts............................................ 14
2.16 Location Agreements........................................... 14
2.17 Licenses...................................................... 14
2.18 Employees; Labor Relations.................................... 15
2.19 Environmental Matters......................................... 15
2.20 Inventory..................................................... 16
2.21 Vehicles...................................................... 16
2.22 Entire Business............................................... 16
2.23 Brokers....................................................... 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GLACIER
-i-
Page
No.
----
3.01 Organization.................................................. 17
3.02 Authority..................................................... 17
3.03 No Conflicts.................................................. 17
3.04 Governmental Approvals and Filings............................ 18
3.05 Brokers....................................................... 18
ARTICLE IV
COVENANTS OF MWP AND MCKESSON
4.01 Delivery of Books and Records, etc............................ 18
4.02 Noncompetition................................................ 18
4.03 Licenses...................................................... 20
ARTICLE V
COVENANTS OF GLACIER
5.01 Nonsolicitation of Employees.................................. 21
5.02 Removal of Property........................................... 21
5.03 Use of Tradename.............................................. 22
5.04 Use of Toll-Free Telephone Number............................. 22
ARTICLE VI
TAX MATTERS AND POST-CLOSING TAXES
6.01 Transfer Taxes............................................... 22
ARTICLE VII
EMPLOYEE BENEFITS MATTERS
7.01 Offers........................................................ 23
7.02 Severance..................................................... 23
7.03 COBRA Continuation Coverage................................... 23
7.04 Benefit Plans................................................. 24
7.05 Welfare Benefit and Worker's Compensation Claims.............. 24
7.06 WARN; Certain Indemnities..................................... 25
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.01 Survival of Representations and Warranties.................... 25
ARTICLE IX
INDEMNIFICATION
9.01 Indemnification............................................... 25
-ii-
Page
No.
----
9.02 Method of Asserting Claim..................................... 27
9.03 Tax Treatment of Indemnity Payments........................... 27
ARTICLE X
DEFINITIONS
10.01 Definitions.................................................. 27
ARTICLE XI
MISCELLANEOUS
11.01 Notices...................................................... 34
11.02 Entire Agreement............................................. 35
11.03 Expenses..................................................... 35
11.04 Confidentiality.............................................. 35
11.05 Waiver....................................................... 36
11.06 Amendment.................................................... 36
11.07 No Third Party Beneficiary................................... 36
11.08 No Assignment; Binding Effect................................ 36
11.09 Headings..................................................... 37
11.10 Governing Law................................................ 37
11.11 Counterparts................................................. 38
EXHIBITS
Exhibit A General Assignment and Xxxx of Sale
Exhibit B Assumption Agreement
Exhibit C Secretary's Certificate of MWP
Exhibit D Opinion of Counsel to MWP and McKesson
Exhibit E Secretary's Certificate of Glacier
-iii-
This ASSET PURCHASE AGREEMENT dated as of March 28, 1997, is made and
entered into by and between GLACIER WATER SERVICES, INC., a Delaware corporation
("Glacier"), and MCKESSON WATER PRODUCTS COMPANY, a California corporation
-------
("MWP") and a wholly-owned subsidiary of MCKESSON CORPORATION, a Delaware
---
corporation ("McKesson"). Capitalized terms not otherwise defined herein have
--------
the meanings set forth in Section 10.01.
-------------
WHEREAS, MWP is engaged through its Aqua-Vend division in the business
of manufacturing and operating coin-operated vending machines which filter and
otherwise reduce impurities from "tap" water and dispense water ("Machines") to
--------
customers (the "Business"); and
--------
WHEREAS, MWP desires to sell, transfer and assign to Glacier, and
Glacier desires to purchase and acquire from MWP, certain of the assets of MWP
relating to the operation of the Business, and in connection therewith, Glacier
has agreed to assume certain of the liabilities of MWP relating to the Business,
all on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and suffi ciency of which are hereby acknowledged,
the parties hereto agree as follows:
ARTICLE I
SALE OF ASSETS AND CLOSING
1.01 Assets. (a) Assets Transferred. On the terms and subject to
------ ------------------
the conditions set forth in this Agreement, MWP will sell, transfer, convey,
assign and deliver to Glacier, and Glacier will purchase and pay for, at the
Closing, free and clear of all Liens, all of MWP's right, title and interest in,
to and under the following Assets and Properties of MWP used or held for use in
connection with the Business, except as otherwise provided in Section 1.01(b),
---------------
as the same shall exist on the Closing Date (the "Assets"):
------
(i) Real Property Leases. The leases and subleases of real property
--------------------
described in Section 1.01(a)(ii)(B) - Real Property LeasesSection
-------
1.01(a)(i) of the Disclosure Schedule leased in connection with the
-------------------------------------
Business, including all "Water Stop" vending machine leases and subleases,
to which MWP is the lessee or sublessee, together with any options to
purchase the underlying property and leasehold improvements thereon, and in
each case all other rights, subleases, licenses, permits, deposits and
profits
1
appurtenant to or related to such leases and subleases (the "Real Property
-------------
Leases");
------
(ii) Inventory. All inventories of bottles, parts, coins in coin-
---------
changing mechanisms in Machines (for which Glacier shall reimburse MWP
pursuant to Section 1.05(c)), office and other supplies, demonstration
equipment, pack aging materials and other accessories related thereto, in
each case, which are used or held for use by MWP in the conduct of the
Business, together with all rights of MWP against suppliers of such
inventories (the "Inventory");
---------
(iii) Tangible Personal Property. All Machines (on location and in
--------------------------
storage) and all furniture, fixtures, equipment, and other tangible
personal property (other than Inventory and Vehicles) used or held for use
by MWP solely in the conduct of the Business (including but not limited to
the Machines and other items listed in Section 1.01(a)(iii) of the
---------------------------
Disclosure Schedule) (the "Tangible Personal Property");
------------------- --------------------------
(iv) Personal Property Leases. The leases of Tangible Personal
------------------------
Property (including but not limited to the leases described in Section
-------
1.01 (a) (iv) of the Disclosure Schedule as to which MWP is the lessee
----------------------------------------
or sublessee, together with any options to purchase the underlying
property (the "Personal Property Leases");
-----------------------
(v) Business Contracts. The Contracts relating to the location and
------------------
placement of Machines and such other customer location agreements (the
"Location Agreements"), Machine maintenance agreements, purchase orders,
--------------------
and marketing, manufacturing and distribution arrangements described in
Section 1.01(a)(v) of the Disclosure Schedule to which MWP is a party and
---------------------------------------------
utilized in the conduct of the Business (the "Business Contracts");
------------------
(vi) Prepaid Expenses. All fees, taxes and other prepaid expenses
----------------
(other than Trade Payments) paid by MWP relating to the Business or the
Assets (the "Prepaid Expenses");
----------------
(vii) Intangible Personal Property. All goodwill, rights, privileges,
----------------------------
claims, causes of action and options relating to the Business and the
Assets, all of MWP's right, title and interest in, to and under the names
"Aqua-Vend" or "The Water Stop" or any derivative thereof, and the Aqua-
Vend logo, and all of MWP's trademarks, applications for trademarks,
unregistered trademarks, Intellectual Property licenses, patents and
applications for patents each as
2
described in Section 1.01(a)(vii) of the Disclosure Schedule (the
-----------------------------------------------
"Intangible Personal Property");
-----------------------------
(viii) Licenses. All Licenses (including applications therefor)
--------
utilized in the conduct of the Business (the "Business Licenses");
-----------------
(ix) Vehicles. The motor vehicles listed in Section 1.01(a)(ix) of
-------- ----------------------
the Disclosure Schedule owned by MWP and used or held for use in the
-----------------------
conduct of the Business (the "Vehicles");
--------
(x) Security Deposits. All utility, tenant and other security
-----------------
deposits deposited by MWP relating or pertaining to the Business or the
Assets (the "Security Deposits");
-----------------
(xi) Books and Records. The Books and Records listed in Section
----------------- -------
1.01(a)(xi) of the Disclosure Schedule used or held for use by MWP in the
--------------------------------------
conduct of the Business or otherwise relating to the Assets, other than the
minute books, stock transfer books and corporate seal of MWP (the "Business
--------
Books and Records");
-----------------
(xii) Trade Payments. All trade bonuses, slotting fees, machine
--------------
placement fees and prepaid commissions paid by MWP relating to the Business
or the Assets (the "Trade Payments"), including, without limitation, those
--------------
listed in Section 1.01(a)(xii) of the Disclosure Schedule; and
-----------------------------------------------
(xiii) Other Assets and Properties. All other Assets and Properties of
---------------------------
MWP used or held for use solely in connection with the Business except as
otherwise provided in Section 1.01(b) (the "Other Assets").
--------------- ------------
To the extent any of the Business Books and Records are items
susceptible to duplication and are either (x) used in connection with any of
MWP's businesses other than the Business or (y) are required by Law to be
retained by MWP, MWP may deliver photostatic copies or other reproductions from
which, in the case of Business Books and Records referred to in clause (xi),
information solely concerning MWP's businesses other than the Business has been
deleted.
(b) Excluded Assets. Notwithstanding anything in this Agreement to
---------------
the contrary, the following Assets and Properties of MWP (the "Excluded Assets")
---------------
shall be excluded from and shall not constitute Assets:
(i) Cash. Cash (including coins deposited into Machines for the
----
purchase of water prior to the Closing Date, but excluding coins in coin-
changing mechanisms in the
3
Machines), commercial paper, certificates of deposit and other bank
deposits, treasury bills and other cash equivalents;
(ii) Insurance. Life insurance policies of officers and other
---------
employees of MWP and all other insurance policies whether or not relating
to the operation of the Business;
(iii) Employee Benefit Plans. All assets owned or held by any trust or
----------------------
other funding vehicle established pursuant to any Benefit Plan;
(iv) Tax Refunds. All refunds or credits, if any, of Taxes due to
-----------
MWP;
(v) Corporate Records. All Books and Records of MWP other than those
-----------------
listed in Section 1.01(a)(xi) of the Disclosure Schedule.
----------------------------------------------
(vi) Litigation Claims. Any rights (including indemnification) and
-----------------
claims and recoveries under litigation of MWP against third parties arising
out of or relating to events prior to the Closing Date;
(vii) Excluded Obligations. The rights of MWP in, to and under all
--------------------
Contracts of any nature, the obligations of MWP under which expressly are
not assumed by Glacier pursuant to Section 1.02(b);
---------------
(viii) Leased Vehicles. The motor vehicles leased by MWP, whether or
---------------
not used or held for use in connection with the Business (the "Leased
------
Vehicles");
--------
(ix) Regeneration Facility. All Assets and Properties used or held
---------------------
for use by MWP solely in connection with the regeneration of resins.
(x) Other Assets. The items described in Section 1.01(b)(viii) of the
------------ ----------------------------
Disclosure Schedule; and
-------------------
(xi) Rights under this Agreement. MWP's rights under this Agreement.
---------------------------
1.02 Liabilities. (a) Assumed Liabilities. In connection with the
----------- -------------------
sale, transfer, conveyance, assignment and delivery of the Assets pursuant to
this Agreement, on the terms and subject to the conditions set forth in this
Agreement, at the Closing, Glacier will assume and agree to pay, perform and
discharge when due the following obligations of MWP arising in connection with
the operation of the Business, as the same shall
4
exist on the Closing Date (the "Assumed Liabilities"), and no others:
-------------------
(i) Real Property Lease Obligations. All obligations of MWP under the
-------------------------------
Real Property Leases arising and to be performed on or after the Closing
Date, and excluding any such obligations arising or to be performed prior
to the Closing Date;
(ii) Personal Property Lease Obligations. All obligations of MWP
-----------------------------------
under the Personal Property Leases arising and to be performed on or after
the Closing Date, and excluding any such obligations arising or to be
performed prior to the Closing Date; and
(iii) Obligations under Contracts and Licenses. All obligations of MWP
----------------------------------------
under the Business Contracts and Business Licenses arising and to be
performed on or after the Closing Date, and excluding any such obligations
arising or to be performed prior to the Closing Date.
(b) Retained Liabilities. Except for the Assumed Liabilities, Glacier
--------------------
shall not assume by virtue of this Agreement or the transactions contemplated
hereby, and shall have no liability for, any Liabilities of MWP (including,
without limitation, those related to the Business) of any kind, character or
description whatsoever (the "Retained Liabilities"). MWP shall discharge in a
--------------------
timely manner or shall make adequate provision for all of the Retained
Liabilities, provided that MWP shall have the ability to contest, in good faith,
--------
any such claim relating to any of the Retained Liabilities asserted in respect
thereof by any Person other than Glacier and its Affiliates.
1.03 Purchase Price; Allocation. (a) Purchase Price. The aggregate
-------------------------- --------------
purchase price for the Assets and for the covenant of MWP contained in Section
-------
4.02 is $9,000,000 (the "Purchase Price") and is payable at the Closing in cash,
---- --------------
in the manner provided in Section 1.04.
------------
(b) Allocation of Purchase Price. Glacier and MWP shall negotiate in
----------------------------
good faith to determine the allocation of the consideration paid by Glacier for
the Assets, such allocation to be decided upon within 60 days after the Closing
Date. Each party hereto agrees (i) that any such allocation shall be consistent
with the requirements of Section 1060 of the Code and the regulations
thereunder, (ii) to complete jointly and to file separately Form 8594 with its
Federal income Tax Return consistent with such allocation for the tax year in
which the Closing Date occurs and (iii) that no party will take a position
on any income, transfer or gains Tax Return, before any Governmental or
Regulatory Authority charged with the collection
5
of any such Tax or in any judicial proceeding, that is in any manner
inconsistent with the terms of any such allocation without the consent of the
other party.
1.04 Closing. The Closing will take place at the offices of Milbank,
-------
Tweed, Xxxxxx & XxXxxx, 601 South Xxxxxxxx Street, 30th Floor, Los Angeles,
California, or at such other place as Glacier and MWP mutually agree, at 10:00
A.M. local time on the Closing Date. At the Closing, Glacier will deliver,
among other things, the Purchase Price by wire transfer of immediately available
funds to such account as MWP may reasonably direct by written notice delivered
to Glacier. Simultaneously, (a) MWP will assign and transfer to Glacier good
and valid title in and to the Assets (free and clear of all Liens) by delivery
of (i) a General Assignment and Xxxx of Sale substantially in the form of
Exhibit A hereto (the "General Assignment"), duly executed by MWP, (ii) an
--------- ------------------
assignment of the Intellectual Property in form and substance reasonably
satisfactory to Glacier, (iii) such other good and sufficient instruments of
conveyance, assignment and transfer, in form and substance reasonably acceptable
to Glacier's counsel, as shall be effective to vest in Glacier good title to the
Assets (the General Assignment and the other instruments referred to in clauses
(ii) and (iii) being collectively referred to herein as the "Assignment
----------
Instruments"), and (b) Glacier will assume from MWP the due payment, performance
-----------
and discharge of the Assumed Liabilities by delivery of (i) an Assumption
Agreement substantially in the form of Exhibit B hereto (the "Assumption
--------- ----------
Agreement"), duly executed by Glacier, and (ii) such other good and sufficient
---------
instruments of assumption, in form and substance reasonably acceptable to MWP's
counsel, as shall be effective to cause Glacier to assume the Assumed
Liabilities as and to the extent provided in Sec tion 1.02(a) (the Assumption
----------------
Agreement and such other instruments referred to in clause (ii) being
collectively referred to herein as the "Assumption Instruments"). At the
----------------------
Closing, there shall also be delivered to MWP and Glacier the opinions,
certificates and other contracts, documents and instruments as reasonably
requested by Glacier or MWP.
1.05 Prorations; Reimbursements. The following prorations relating
--------------------------
to the Assets and the ownership and operation of the Business will be made as of
the Closing Date, with MWP liable to the extent such items relate to any time
period prior to the Closing Date and Glacier liable to the extent such items
relate to periods beginning with and subsequent to the Closing Date: (a) rents,
taxes and other items payable by MWP under the Real Property Leases; and (b) the
amount of rents, taxes (including, without limitation, any personal property
taxes) and charges for sewer, water, telephone, electricity and other utilities
relating to the Business and the Assets. In addition, Glacier shall reimburse
MWP for the following items as of the
6
Closing Date: (x) the unamortized portion of all Prepaid Expenses, (y) all
refundable Security Deposits, and (z) coins in coin-changing mechanisms in the
Machines being sold by MWP hereunder. Except as otherwise agreed by the parties,
the net amount of all such prorations and reimbursements will be settled and
paid as soon as reasonably practicable after the Closing Date and at such time
as the amount of the expenses listed in (a) and (b) above are known to the
parties.
1.06 Further Assurances; Post-Closing Cooperation. (a) At any time
--------------------------------------------
or from time to time, at Glacier's request and without further consideration,
MWP shall execute and deliver to Glacier such other instruments of sale,
transfer, conveyance, assignment and confirmation, provide such materials and
infor mation and take such other actions as Glacier may reasonably deem
necessary or desirable in order more effectively to transfer, convey and assign
to Glacier, and to confirm Glacier's title to, all of the Assets, and, to the
full extent permitted by Law, to put Glacier in actual possession and operating
control of the Business and the Assets and to assist Glacier in exercising all
rights with respect thereto, and otherwise to cause MWP to fulfill its
obligations under this Agreement and the Operative Documents.
(b) MWP hereby agrees to fully cooperate and promptly assist Glacier
and its Representatives in a commercially reason able manner: (i) to demand and
receive from time to time any and all the Assets and to make endorsements and
give receipts and releases for and in respect of the same and any part thereof;
(ii) to institute, prosecute, compromise and settle any and all Actions or
Proceedings that Glacier may deem proper in order to collect, assert or enforce
any claim, right or title of any kind in or to the Assets; (iii) to defend or
compromise any or all Actions or Proceedings in respect of any of the Assets;
and (iv) to do all such acts and things in relation to the matters set forth in
the preceding clauses (i) through (iii) as Glacier may reasonably request,
including, without limitation, full and prompt cooperation and assistance with
Glacier's efforts to dispute or reduce any property taxes assessed against the
Business or the Assets by a Governmental or Regulatory Authority. Glacier
hereby agrees to fully cooperate and promptly assist MWP and its counsel in a
commercially reasonable manner to defend or compromise any or all Actions or
Proceedings with respect to the Business.
(c) Each party will afford the other party, its counsel and its
accountants, during normal business hours, reasonable access to the books,
records and other data relating to the Business in its possession with respect
to periods prior to the Closing and the right to make copies and extracts there
from, to the extent that such access may be reasonably required
7
by the requesting party in connection with (i) the preparation of Tax Returns,
(ii) the determination or enforcement of rights and obligations under this
Agreement, (iii) compliance with the requirements of any Governmental or
Regulatory Authority, (iv) the determination or enforcement of the rights and
obligations of any Indemnified Party or (v) in connection with any actual or
threatened Action or Proceeding. Further each party agrees for a period
extending six (6) years after the Closing Date not to destroy or otherwise
dispose of any such books, records and other data unless such party shall first
offer in writing to surrender such books, records and other data to the other
party and such other party shall not agree in writing to take possession thereof
during the ten (10) day period after such offer is made.
(d) If, in order properly to prepare its Tax Returns, other documents
or reports required to be filed with Governmental or Regulatory Authorities or
its financial statements or to fulfill its obligations hereunder, it is
necessary that a party be furnished with additional information, documents or
records relating to the Business not referred to in paragraph (c) above, and
such information, documents or records are in the possession or control of the
other party, such other party shall use its best efforts to furnish or make
available such information, documents or records (or copies thereof) at the
recipient's request, cost and expense. Any information obtained by McKesson,
MWP or Glacier in accordance with this paragraph shall be held confidential by
such party in accordance with Section 11.04.
-------------
(e) Notwithstanding anything to the contrary contained in this
Section, if the parties are in an adversarial relation ship in litigation or
arbitration, the furnishing of information, documents or records in accordance
with paragraphs (c) or (d) of this Section shall be subject to applicable rules
relating to discovery.
(f) Glacier acknowledges that the listing of Assets in the Disclosure
Schedule referenced in this Agreement has been prepared by MWP on the basis of
the most recent compilation of data that was available to MWP at the time of
preparation and is not necessarily correct in all respects as of the Closing
Date. MWP agrees that the Disclosure Schedules shall be deemed to include all
additions to such compilations from the date of the compilation through the
Closing Date. To the best knowledge of MWP, since the date of such compilations
there have been no material dispositions of Assets outside the ordinary course
of the Business which are not included in such compilations.
1.07 Third-Party Consents. To the extent that any Real Property
--------------------
Lease, Personal Property Lease, Business Contract or Business License is not
assignable without the consent of another party, this Agreement shall not
constitute an assignment
8
or an attempted assignment thereof if such assignment or attempted assignment
would constitute a breach thereof. MWP and Glacier shall use their best efforts
on a commercially reasonable basis to obtain the consent of such other party to
the assignment of any such Real Property Lease, Personal Property Lease, Bus
iness Contract or Business License to Glacier in all cases in which such consent
is or may be required for such assignment. If any such consent shall not be
obtained, MWP shall cooperate with Glacier in any reasonable arrangement
designed to provide for Glacier the benefits intended to be assigned to Glacier
under the relevant Real Property Lease, Personal Property Lease, Busi ness
Contract or Business License, including (i) entering into a mutually
satisfactory subcontracting or similar agreement with Glacier and (ii)
enforcement at the cost and for the account of Glacier of any and all rights of
MWP against the other party thereto arising out of the breach or cancellation
thereof by such other party or otherwise. If and to the extent that such
arrangement cannot be made, Glacier shall have no obligation pursuant to Section
-------
1.02 or otherwise with respect to any such Real Property Lease, Personal
----
Property Lease, Business Contract or Business License.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF MWP AND MCKESSON
MWP and McKesson, jointly and severally, hereby represent and warrant
to Glacier as follows:
2.01 Organization. Each of MWP and McKesson is a corporation duly
------------
organized, validly existing and in good standing under the laws of its state of
incorporation. MWP has full corporate power and authority to conduct the
Business as and to the extent now conducted and to own, use and lease the
Assets. MWP is duly qualified as a foreign corporation and is in good standing
in each jurisdiction in which it conducts the Business or holds any of the
Assets except such jurisdictions, if any, in which the failure to be so
qualified or in good standing would not have a material adverse effect upon the
Business.
2.02 Authority. Each of MWP and McKesson has full corporate power
---------
and authority to execute and deliver this Agreement and the Operative Documents
to which it is a party, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby and thereby, including
without limitation to sell and transfer (pursuant to this Agreement) the Assets.
The execution and delivery by each of MWP and McKesson of this Agreement and the
Operative Documents to which it is a party, and the performance by each of MWP
and McKesson of its obligations hereunder and thereunder, have been
9
duly and validly authorized by the Board of Directors of MWP and McKesson,
respectively, no other corporate action on the part of MWP, McKesson or their
respective stockholders being necessary. This Agreement has been duly and
validly executed and delivered by each of MWP and McKesson and constitutes, and
upon the exe cution and delivery by each of MWP and McKesson of the Operative
Documents to which it is a party, such Operative Documents will constitute,
legal, valid and binding obligations of MWP and McKesson enforceable against MWP
and McKesson in accordance with their terms.
2.03 No Conflicts. The execution and delivery by each of MWP and
------------
McKesson of this Agreement do not, and the execution and delivery by each of MWP
and McKesson of the Operative Docu ments to which it is a party, the performance
by each of MWP and McKesson of its obligations under this Agreement and such
Operative Documents and the consummation of the transactions contemplated hereby
and thereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the articles of incorporation or by-laws (or
other comparable corporate charter documents) of MWP or McKesson;
(b) subject to obtaining the consents, approvals and actions, making
the filings and giving the notices disclosed in Section 2.04 of the Disclosure
------------------------------
Schedule, conflict with or result in a violation or breach of any term or
--------
provision of any Law or Order applicable to MWP, McKesson or any of their Assets
and Properties, except where such conflict could not reasonably be expected to
have a material adverse effect on the Business or the Assets; or
(c) except as disclosed in Section 2.03 of the Disclosure Schedule,
---------------------------------------
(i) conflict with or result in a violation or breach of, (ii) constitute (with
or without notice or lapse of time or both) a default under, (iii) require MWP
or McKesson to obtain any consent, approval or action of, make any filing with
or give any notice to any Person as a result or under the terms of, or (iv)
result in the creation or imposition of any Lien upon MWP, McKesson or any of
their Assets and Properties under, any Contract or License to which MWP or
McKesson is a party or by which any of their Assets and Properties is bound,
except where such conflict, default, failure or result could not reasonably be
expected to have a material adverse effect on the Business or the Assets.
2.04 Governmental Approvals and Filings. Except as disclosed in
----------------------------------
Section 2.04 of the Disclosure Schedule, no consent, approval or action of,
---------------------------------------
filing with or notice to any Governmental or Regulatory Authority on the part of
MWP or McKesson is required in connection with the execution, delivery and per
formance of this Agreement or any of the Operative Documents to
10
which it is a party or the consummation of the transactions contemplated hereby
or thereby.
2.05 Books and Records. Except as set forth in Section 2.05 of the
----------------- -------------------
Disclosure Schedule, none of the Business Books and Records is recorded, stored,
-------------------
maintained, operated or otherwise wholly or partly dependent upon or held by any
means (including any electronic, mechanical or photographic process, whether
computerized or not) which (including all means of access thereto and therefrom)
are not under the exclusive ownership and direct control of one or more
Employees.
2.06 Financial Statements. All of the financial statements to be
--------------------
delivered to Glacier pursuant to Section 4.04 of this Agreement (i) will be
------------
prepared from the Books and Records of MWP in accordance with GAAP, (ii) will
fairly present the financial condition and results of operations of the Business
as of the respective dates thereof and for the respective periods covered
thereby, and (iii) will be compiled from Business Books and Records regularly
maintained by management and used to prepare the financial statements of MWP in
accordance with the principles stated therein. MWP has maintained the Business
Books and Records in a manner sufficient to permit the preparation of such
financial statements in accordance with GAAP, the Business Books and Records
fairly reflect, in all material respects, the income, expenses, assets and
liabilities of the Business and the Business Books and Records provide a fair
and accurate basis for the preparation of the financial statements to be
delivered to Glacier in accordance with Section 4.04.
------------
2.07 No Undisclosed Liabilities. Except as disclosed in Section 2.07
-------------------------- ------------
of the Disclosure Schedule or any other Section of the Disclosure Schedule,
--------------------------
there are no Liabilities against, relating to or affecting the Business or any
of the Assets, other than Liabilities incurred in the ordinary course of
business consistent with past practice which in the aggregate are not material
to the Condition of the Business.
2.08 Taxes. There are no Liens for Taxes upon any of the Assets and,
-----
to the Knowledge of MWP and McKesson, no event has occurred which with the
passage of time or the giving of notice, or both, could reasonably be expected
to result in a Lien for Taxes on any of the Assets. Glacier will not assume or
otherwise become liable for any Taxes relating to the Business or the Assets for
any period ending on or before the Closing Date.
2.09 Legal Proceedings. Except as disclosed in Section 2.09 of the
----------------- -------------------
Disclosure Schedule (with paragraph references corresponding to those set forth
-------------------
below):
11
(a) there are no Actions or Proceedings pending or, to the Knowledge
of MWP or McKesson, threatened against, relating to or affecting MWP or McKesson
with respect to the Business or any of its Assets and Properties which (i) could
reasonably be expected to result in the issuance of an Order restraining,
enjoining or otherwise prohibiting or making illegal the consummation of any of
the transactions contemplated by this Agreement or any of the Operative
Documents or otherwise result in a material diminution of the benefits
contemplated by this Agreement or any of the Operative Documents to Glacier, or
(ii) if determined adversely to MWP or McKesson, could reasonably be expected to
result in any injunction or other equitable relief that would interfere in any
material respect with the Business;
(b) there are no facts or circumstances Known to MWP or McKesson that
could reasonably be expected to give rise to any Action or Proceeding that would
be required to be disclosed pursuant to clause (a) above; and
(c) there are no Orders outstanding against MWP or McKesson with
respect to the Business.
2.10 Compliance With Laws and Orders. Except as disclosed in Section
------------------------------- -------
2.10 of the Disclosure Schedule, each of MWP and McKesson is not, nor has it at
-------------------------------
any time within the last five (5) years been, nor has it received any notice
that it is or has at any time within the last five (5) years been, in violation
of or in default under, in any material respect, any Law or Order applicable to
the Business or the Assets, except where such violation or default could not
reasonably be expected to have a material adverse effect on the Business or the
Assets.
2.11 Benefit Plans; ERISA. MWP does not have an obligation to
--------------------
contribute to a "multiemployer plan" within the meaning of Section 3(37) of
ERISA with respect to any Employee or former Employee and no Employee is covered
by a collective bargaining agreement. No transaction contemplated by this
Agreement will result in liability to the Pension Benefit Guaranty Corporation
under Section 4069 of ERISA with respect to Glacier, MWP, McKesson or any
corporation or organization controlled by or under common control with any of
the foregoing within the meaning of Section 4001 of ERISA, and no event,
condition or set of circumstances exists or existed that could result in any
such liability with respect to Glacier, MWP, McKesson or any such corporation or
organization.
2.12 Real Property. (a) MWP has a valid and subsisting leasehold
-------------
estate in and the right to quiet enjoyment of the real properties subject to the
Real Property Leases described in Section 1.01(a)(i) of the Disclosure Schedule
---------------------------------------------
for the full term thereof. Each Real Property Lease is a legal,
12
valid and binding agreement, enforceable in accordance with its terms, of MWP
and of each other Person that is a party thereto, and except as set forth in
Section 2.12(a) of the Disclosure Schedule, there is no, nor has MWP received
------------------------------------------
any notice of any, default (or any condition or event which, after notice or
lapse of time or both, would constitute a default) thereunder. MWP does not owe
any brokerage commissions with respect to any such leased space.
(b) MWP has delivered to Glacier prior to the execution of this
Agreement true and complete copies of all Real Property Leases (including any
amendments and renewal letters).
(c) Except as disclosed in Section 2.12(c) of the Disclosure Schedule,
------------------------------------------
the improvements on the real properties subject to the Real Property Leases are
in good operating condition and in a state of good maintenance and repair,
ordinary wear and tear excepted, are adequate and suitable for the purposes for
which they are presently being used.
2.13 Tangible Personal Property. MWP is in possession of and has
--------------------------
good title to, or has valid leasehold interests in or valid rights under
Contract to use, all the Tangible Personal Property. All the Tangible Personal
Property is free and clear of all Liens other than Liens disclosed in Section
-------
2.13 of the Disclosure Schedule, and is in good working order and condition,
-------------------------------
ordinary wear and tear excepted other than as disclosed in Section 1.01(a)(iii)
--------------------
of the Disclosure Schedule, and its use complies in all material respects with
--------------------------
all applicable Laws.
2.14 Intellectual Property Rights. MWP has interests in or uses only
----------------------------
the Intellectual Property disclosed in Section 1.01(a)(vii) of the Disclosure
--------------------------------------
Schedule in connection with the conduct of the Business, each of which MWP
--------
either has all right, title and interest in or a valid and binding rights under
Contract to use. Except as disclosed in Section 2.14 of the Disclosure
------------------------------
Schedule, (i) MWP has the exclusive right to use the Intellectual Property
--------
disclosed in Section 1.01(a)(vii) of the Disclosure Schedule, (ii) all
-----------------------------------------------
registrations with and applications to Governmental or Regulatory Authorities in
respect of such Intellectual Property are valid and in full force and effect and
are not subject to the payment of any Taxes or maintenance fees or the taking of
any other actions by MWP to maintain their validity or effectiveness, (iii) MWP
has taken reasonable security measures to protect the secrecy, confiden tiality
and value of its trade secrets in respect of the Business and (iv) to the
Knowledge of MWP and McKesson, no such Intellec tual Property is being infringed
by any other Person. Except as disclosed in Section 2.14 of the Disclosure
------------------------------
Schedule, neither MWP nor McKesson has received notice that MWP is infringing
--------
any Intellectual Property of any other Person in connection with the
13
conduct of the Business, no claim is pending or, to the Knowledge of MWP and
McKesson, has been made to such effect that has not been resolved and, to the
Knowledge of MWP and McKesson, MWP is not infringing any Intellectual
Property of any other Person in connection with the conduct of the Business.
2.15 Business Contracts. (a) Section 1.01(a)(v) of the Disclosure
------------------ ------------------------------------
Schedule contains a true and complete list of all material Business Contracts
--------
used or held for use in the Business. Each Business Contract is in full force
and effect and constitutes a legal, valid and binding agreement, enforceable in
accordance with its terms, of each party thereto; and except as disclosed in
Section 2.15(a) of the Disclosure Schedule none of MWP, McKesson or, to the
------------------------------------------
Knowledge of MWP and McKesson, any other party to such Business Contract is, or
has received notice that it is, in violation or breach of or default under any
such Business Contract (or with notice or lapse of time or both, would be in
violation or breach of or default under any such Business Contract) in any
material respect; and
(b) Except as disclosed in Section 2.15(b) of the Disclosure Schedule,
------------------------------------------
(i) the execution, delivery and performance by each of MWP and McKesson of this
Agreement and the Operative Documents to which it is a party, and the
consummation of the transactions contemplated hereby and thereby, will not (A)
result in or give to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (B) result in or give to any
Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (C) result in the creation or
imposition of any Lien upon MWP or McKesson or any of its Assets and Properties
under, any Business Contract, and (ii) neither MWP nor McKesson is a party to or
bound by any Business Contract that has been or could reasonably be expected to
be, individually or in the aggregate with any other Business Contracts,
materially adverse to the Condition of the Business.
2.16 Location Agreements. Except as disclosed in Section 2.16 of the
------------------- -------------------
Disclosure Schedule, the execution, delivery and performance by each of MWP and
-------------------
McKesson of this Agreement and the Operative Documents to which it is a party,
and the consummation of the transactions contemplated hereby and thereby, will
not result in or give to any Person any right to retain any of the unamortized
portion of the Trade Payments paid under each Location Agreement should any such
Location Agreement be terminated prior to its term.
2.17 Licenses. Except as disclosed in Section 2.17 of the Disclosure
-------- ------------------------------
Schedule, (with paragraph references corresponding to those set forth below):
--------
14
(a) MWP owns or validly holds all Licenses that are material,
individually or in the aggregate, to the Business;
(b) Each Business License (other than pending applications therefor)
is valid, binding and in full force and effect, except where a failure to
maintain such License could not reasonably be expected to have a material
adverse effect on the Business or the Assets.
(c) MWP is not, nor has MWP or McKesson received any notice that MWP
is, in default (or with the giving of notice or lapse of time or both,
would be in default) under any Business License, except where such default
could not reasonably be expected to have a material adverse effect on the
Business or the Assets; and
(d) the execution, delivery and performance by each of MWP and
McKesson of this Agreement and the Operative Docu ments to which it is a
party, and the consummation of the transactions contemplated hereby and
thereby, will not (A) result in or give to any Person any right of termi
nation, cancellation, acceleration or modification in or with respect to,
(B) result in or give to any Person any additional rights or entitlement to
increased, additional, accelerated or guaranteed payments under, or (C)
result in the creation or imposition of any Lien upon MWP, McKesson or any
of their Assets and Properties under, any Business License.
2.18 Employees; Labor Relations. Except as disclosed in Section 2.18
-------------------------- ------------
of the Disclosure Schedule, no Employee is presently a member of a collective
--------------------------
bargaining unit and, to the Knowledge of MWP and McKesson, there are no
threatened or con templated attempts to organize for collective bargaining
purposes any of the Employees.
2.19 Environmental Matters. (a) Except as disclosed in Section
--------------------- -------
2.19(a) of the Disclosure Schedule, to the knowledge of MWP or McKesson, neither
----------------------------------
MWP, McKesson nor any previous owner, lessee, tenant, occupant or user of the
real property which is subject to the Real Property Leases (the "Real Property")
-------------
used, generated, manufactured, treated, handled, refined, processed, released,
discharged, stored or disposed of any Hazardous Materials on or under the Real
Property in violation of any Hazardous Materials Laws, or transported any
Hazardous Materials to or from the Real Property in violation of any Hazardous
Materials Laws. Except as disclosed in Section 2.19(a) of the Disclosure
---------------------------------
Schedule, to the knowledge of MWP or McKesson, no underground tanks or
--------
underground deposits of Hazardous Materials exist on, under or in the Real
Property, in each case except in compliance with all Hazardous Materials Laws.
15
(b) Except as disclosed in Section 2.19(b) to the Disclosure Schedule,
------------------------------------------
to the knowledge of MWP or McKesson, as of the Closing Date, there are no (i)
enforcement, clean-up, removal, mitigation or other governmental or regulatory
actions instituted or, to the knowledge of MWP or McKesson, contemplated or
threatened pursuant to any Hazardous Materials Laws affecting the Real Property,
(ii) claims made or threatened by any person or Governmental Body relating to
the Real Property against the Real Property, MWP or McKesson relating to damage,
contribution, cost recovery, compensation, loss or injury resulting from any
Hazardous Materials nor (iii) any occurrence or condition on the Real Property
that could subject to the Real Property to any material restrictions on
occupancy, transferability or use under any Hazardous Materials Laws.
2.20 Inventory. All the Inventory consists of a quality and quantity
---------
usable and salable in the ordinary course of business consistent with past
practice, subject to normal and customary allowances in the industry for damage
and outdated items. All items included in the Inventory are the property of
MWP, free and clear of any Lien, have not been pledged as collateral, are not
held by MWP on consignment from others and conform in all material respects to
all standards applicable to such inventory or its use or sale imposed by
Governmental or Regulatory Authorities.
2.21 Vehicles. Section 1.01(a)(ix) of the Disclosure Schedule
-------- ----------------------------------------------
contains a true and complete list of all motor vehicles owned by MWP and used or
held for use in the conduct of the Business (except for the Leased Vehicles
included in the Excluded Assets). Except as disclosed in Section 2.21 of the
-------------------
Disclosure Schedule, MWP has good and valid title to each Vehicle, free and
-------------------
clear of all Liens.
2.22 Entire Business. The sale of the Assets by MWP to Glacier
---------------
pursuant to this Agreement will effectively convey to Glacier the entire
Business and all of the tangible and intan gible property used by MWP (whether
owned, leased or held under license by MWP, by any of MWP's Affiliates or by
others) solely in connection with the conduct of the Business as heretofore
conducted by MWP (except for the Excluded Assets). Except as disclosed in
Section 2.22 of the Disclosure Schedule, there are no shared facilities or
---------------------------------------
services which are used in connection with the Business and any other business
or operations of MWP or any of MWP's Affiliates.
2.23 Brokers. All negotiations relative to this Agreement and the
-------
transactions contemplated hereby have been carried out by MWP and McKesson
directly with Glacier without the intervention of any Person on behalf of MWP or
McKesson in such manner as to give rise to any valid claim by any Person against
16
Glacier for a finder's fee, brokerage commission or similar payment.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GLACIER
Glacier hereby represents and warrants to MWP and McKesson as follows:
3.01 Organization. Glacier is a corporation duly organized, validly
------------
existing and in good standing under the Laws of the State of Delaware. Glacier
has full corporate power and authority to enter into this Agreement and the
Operative Documents to which it is a party, to perform its obligations hereunder
and thereunder and to consummate the transactions contemplated hereby and
thereby.
3.02 Authority. The execution and delivery by Glacier of this
---------
Agreement and the Operative Documents to which it is a party, and the
performance by Glacier of its obligations here under and thereunder, have been
duly and validly authorized by the Board of Directors of Glacier, no other
corporate action on the part of Glacier or its stockholders being necessary.
This Agreement has been duly and validly executed and delivered by Glacier and
constitutes, and upon the execution and delivery by Glacier of the Operative
Documents to which it is a party, such Operative Documents will constitute,
legal, valid and binding obligations of Glacier enforceable against Glacier in
accordance with their terms.
3.03 No Conflicts. The execution and delivery by Glacier of this
------------
Agreement do not, and the execution and delivery by Glacier of the Operative
Documents to which it is a party, the performance by Glacier of its obligations
under this Agreement and such Operative Documents and the consummation of the
transactions contemplated hereby and thereby will not:
(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the certificate of incorporation or bylaws of
Glacier;
(b) conflict with or result in a violation or breach of any term or
provision of any Law or Order applicable to Glacier or any of its Assets and
Properties; or
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute (with or without notice or lapse of time or both) a default under,
(iii) require Glacier to obtain any consent, approval or action of, make any
filing with or give
17
any notice to any Person as a result or under the terms of, or (iv) result in
the creation or imposition of any Lien upon Glacier or any of its Assets or
Properties under, any Contract or License to which Glacier is a party or by
which any of its Assets and Properties is bound.
3.04 Governmental Approvals and Filings. No consent, approval or
----------------------------------
action of, filing with or notice to any Governmental or Regulatory Authority on
the part of Glacier is required in connection with the execution, delivery and
performance of this Agreement or the Operative Documents to which it is a party
or the consummation of the transactions contemplated hereby or thereby.
3.05 Brokers. All negotiations relative to this Agreement and the
-------
transactions contemplated hereby have been carried out by Glacier directly with
MWP and McKesson without the intervention of any Person on behalf of Glacier in
such manner as to give rise to any valid claim by any Person against MWP or
McKesson for a finder's fee, brokerage commission or similar payment.
ARTICLE IV
COVENANTS OF MWP AND MCKESSON
MWP and McKesson, jointly and severally, covenant and agree with
Glacier that after, for the period specified herein or, if no period is
specified herein, indefinitely, MWP and McKesson will comply with all covenants
and provisions of this Article IV, except to the extent Glacier may otherwise
----------
consent in writing.
4.01 Delivery of Books and Records, etc. On the Closing Date, MWP
-----------------------------------
and McKesson will deliver or make available to Glacier at the locations at which
the Business is conducted all of the Business Books and Records and such other
Assets as are in MWP's or McKesson's possession at other locations, and if at
any time MWP or McKesson discovers in its possession or under its control any
other Business Books and Records or other Assets, it will forthwith deliver such
Business Books and Records or other Assets to Glacier.
4.02 Noncompetition. (a) Each of MWP and McKesson will, for a
--------------
period of five (5) years from the Closing Date, refrain from, either alone or in
conjunction with any other Person, or directly or indirectly through its present
or future Affiliates:
18
(i) participating or engaging in (other than through the beneficial
ownership of 5% or less of any class of securities registered under the
Securities Exchange Act of 1934, as amended), or otherwise lending
assistance (financial or otherwise) to any Person participating or engaged
in, the business of manufacturing and/or operating vending machines which
filter and otherwise reduce impuri ties from "tap" water and dispense such
water to customers (the "Water Vending Business") in any jurisdiction
----------------------
within the United States;
(ii) employing, engaging or seeking to employ or engage (other than
through a general solicitation to which such employee independently
responds) any Person who within the prior 12 months had been an employee of
Glacier or any of its Affiliates engaged in the Business, unless such
employee (A) resigns voluntarily (without any solicitation from MWP or any
of its Affiliates) or (B) is terminated by Glacier or any of its Affiliates
after the Closing Date;
(iii) causing or attempting to cause (A) any client, customer or
supplier of the Business to terminate or materially reduce its business
with Glacier or any of its Affiliates or (B) any officer, employee or
consultant of Glacier or any of its Affiliates engaged in the Business to
resign or sever a relationship with Glacier or any of its Affiliates; or
(iv) disclosing (unless compelled by judicial or administrative
process) or using any confidential or secret information relating to the
Business, Glacier or any customer or supplier of the Business or Glacier;
provided, however, the foregoing shall not prohibit MWP, McKesson or any of
-------- -------
their Affiliates from (i) operating vending machines that dispense water
exclusively in prefilled, prepackaged bot tles, (ii) supplying regenerated resin
to other water companies within the United States, (iii) selling bottles that
transport vended water or such other products that facilitate the sale of vended
water, or (iv) purchasing all or substantially all of the stock or assets of (x)
any other Person engaged in the Water Vending Business so long as the Water
Vending Business is not the principal line of business of such other Person or
(y) any other Person who operates a plant or facility that directly vends water
through machines attached to a central purification facility. If MWP or any of
its Affiliates purchase all or substantially all of the stock or assets of any
other Person pursuant to the preceding clause (iv), MWP or McKesson shall, or
shall cause such Affiliate to, promptly offer the assets comprising the Water
Vending Business of such other Person to Glacier and, if Glacier is interested
in purchasing such assets, the parties shall negotiate
19
in good faith to consummate a sale of such assets to Glacier for fair
consideration. If Glacier determines that it is not interested in purchasing
such assets, or if the parties cannot agree on a fair purchase price for the
assets, MWP or any of its Affiliates may operate such business.
(b) The parties hereto recognize that the Laws and public policies of
the various states of the United States may differ as to the validity and
enforceability of covenants similar to those set forth in this Section. It is
the intention of the parties that the provisions of this Section be enforced to
the fullest extent permissible under the Laws and policies of each jurisdiction
in which enforcement may be sought, and that the unenforceability (or the
modification to conform to such Laws or policies) of any provisions of this
Section shall not render unenforceable, or impair, the remainder of the
provisions of this Section. Accordingly, if any provision of this Section shall
be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such provision in the particular jurisdiction in which such determination is
made and not with respect to any other provision or jurisdiction.
(c) The parties hereto acknowledge and agree that any remedy at Law
for any breach of the provisions of this Section would be inadequate, and MWP
and McKesson hereby consent to the granting by any court of an injunction or
other equitable relief, without the necessity of actual monetary loss being
proved, in order that the breach or threatened breach of such provisions may be
effectively restrained.
4.03 Licenses. MWP and McKesson will make available true and
--------
complete copies of all material Licenses used or held for use in the Business
(and all pending applications for any such Licenses), setting forth the grantor,
the grantee, the function and the expiration and renewal date of each.
4.04 Financial Statements. MWP and McKesson agree to provide to
--------------------
Glacier, within 60 days after the Closing Date and at MWP's sole cost and
expense, true and complete copies of the following financial statements:
(a) the audited balance sheets of the Business as of March 31, 1997,
1996, 1995 and 1994, and the related audited consolidated statements of
operations, Stockholders' equity and cash flows for each of the fiscal years
then ended, together with a true and correct copy of the report on such audited
information by Deloitte & Touche LLP, and all letters from such accountants with
respect to the results of such audits; and
20
(b) the unaudited balance sheets of the Business as of December 31,
1996, and the related unaudited consolidated statements of operations,
stockholders' equity and cash flows for the nine months then ended;
provided, however, that MWP may provide Glacier, in lieu of those items in
-------- -------
paragraphs (a) and (b) above, with the financial state ments of the Business for
those periods and in such form as the Securities and Exchange Commission (the
"Commission") deems necessary to allow Glacier to meet its obligation to file
-----------
such financial statements regarding the transaction contemplated hereby with the
Commission, pursuant to the provisions of the Securities Exchange Act of 1934,
as amended, and the rules and regulations related thereto.
(c) MWP agrees to provide Glacier, within 30 days after the Closing
Date and at MWP's sole cost and expense, (i) the unaudited internal monthly
income statements of the Business for each of the monthly periods ending January
31, 1996 through March 28, 1997, and (ii) the unaudited quarterly income
statements of the Business for each of the quarters ended March 31, June 30,
September 30, and December 31, 1996.
ARTICLE V
COVENANTS OF GLACIER
Glacier covenants and agrees with MWP and McKesson that Glacier will
comply with all covenants and provisions of this Article V, except to the extent
---------
MWP or McKesson may otherwise consent in writing.
5.01 Nonsolicitation of Employees. (a) Glacier will, for a period
----------------------------
of five (5) years from the Closing Date, refrain from, either alone or in
conjunction with any other Person, or directly or indirectly through its present
or future Affiliates, employing, engaging or seeking to employ or engage (other
than through a general solicitation to which such employee indepen dently
responds) any Person who within the prior 12 months had been an employee of
McKesson or any of its Affiliates who have not been engaged in the Business,
unless such employee (A) was transferred to Glacier at Closing in connection
with the sale of the Business, (B) resigns voluntarily (without any solicitation
from Glacier or any of its Affiliates), or (C) is terminated by McKesson or any
of its Affiliates after the Closing Date.
5.02 Removal of Property. To the extent that MWP or McKesson retains
-------------------
any facility or related real property lease that is used in connection with both
the Business and the businesses of MWP or McKesson which are not being
transferred to Glacier
21
under this Agreement, within sixty (60) days after the Closing Date, Glacier
shall remove all Assets and Properties being sold to Glacier hereunder from such
facilities. Such removal shall be at the sole cost and risk of Glacier,
including risk of loss and damage to such Assets and Properties. MWP shall have
no liabi lity to Glacier with respect to such removal and transportation.
Glacier shall be responsible for any repairs to MWP's retained facilities that
become necessary as a result of damage caused by Glacier, its employees or
agents in connection with the removal of Glacier's Assets and Properties.
5.03 Use of Tradename. Within 60 days after the Closing Date,
----------------
Glacier shall remove the trade name "Sparkletts" or any reference thereto from
the Assets.
5.04 Use of Toll-Free Telephone Number. Within 60 days after the
---------------------------------
Closing Date, Glacier will use its best efforts to transfer to Glacier and
assume operation of, with the commerci ally reasonably cooperation of MWP, the
operation and maintenance of the toll-free, customer service telephone number
that is currently displayed on the Machines (the "800 Numbers"). MWP shall
maintain the 800 Numbers and the customer service personnel related thereto
until such time as Glacier notifies MWP that the 800 Numbers have been
transferred. Upon the receipt of appropriate documentation, Glacier shall
promptly reimburse MWP for all reasonable costs incurred by MWP to maintain the
800 Numbers, including salaries of customer service personnel, through the date
that Glacier notifies MWP of such transfer.
ARTICLE VI
TAX MATTERS AND POST-CLOSING TAXES
6.01 Transfer Taxes. McKesson and MWP, on the one hand, and Glacier,
--------------
on the other hand, shall each pay one-half of all sales, use, transfer, real
property transfer, recording, gains, stamp, duty, stock transfer and other
similar taxes and fees or liability for such taxes or fees ("Transfer Taxes")
arising out of or in connection with the transactions effected pursuant to this
Agreement. Within 60 days after the Closing Date, each party shall provide to
the other party copies of all Tax Returns and other documents required to be
filed by such party with respect to Transfer Taxes that arise out of or in
connection with the transactions effected pursuant to this Agreement, with
evidence of payment thereof. McKesson and MWP, on the one hand, and Glacier, on
the other hand, shall indemnify, defend, and hold harmless the other party on an
after-Tax basis with respect to such party's portion of such Transfer Taxes, as
provided in this Section 6.01.
------------
22
ARTICLE VII
EMPLOYEE BENEFITS MATTERS
7.01 Offers. Glacier intends to offer employment to the Employees
------
listed on Exhibit A hereto on an at-will basis on the Closing Date (a
---------
"Probationary Offer"). Each Employee who accepts a Probationary Offer shall be
-------------------
compensated at the same salary paid by MWP immediately prior to the Closing
Date, until such Employee is either terminated within the 90-day period or
offered continued employment (a "Non-probationary Offer") with Glacier. Glacier
----------------------
shall have no obligation to (i) make any Non-probationary Offers to any of the
Employees or (ii) offer compensation substantially the same as the compensation
provided by MWP immediately prior to the Closing Date for Employees given a Non-
probationary Offer.
7.02 Severance. MWP shall make available severance payments and
---------
other benefits in accordance with the terms of MWP's severance plan, as it is in
effect on the Closing Date (the "Severance Plan"), to any Employee who accepts
--------------
a Probationary Offer if that Employee should cease to be employed by Glacier on
or before the 90th day after the Closing Date for any reason other than
voluntary termination by the Employee; provided, however, that MWP shall also
-----------------
make available benefits under the Severance Plan for any Employee who
voluntarily terminates employment with Glacier on or before the 90th day after
the Closing Date if a Non-probationary Offer by Glacier (i) would require the
Employeeto work at a location more than 50 surface miles farther from Employee's
residence than was required when the Employee was employed by MWP, or (ii) would
pay the Employee a salary that was less than 90% of the salary the Employee was
being paid by MWP immediately prior to the Closing Date.
7.03 COBRA Continuation Coverage. MWP shall offer continued coverage
---------------------------
under MWP's group health plan to the extent required by the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended ("COBRA"), to each Employee. MWP
shall pay an amount equal to its current contribution for group health coverage
on behalf of any Employee who accepts a Probationary Offer for such continued
coverage until the 90th day following the Closing Date, provided that: (i) the
--------
Employee has elected to continue coverage; (ii) the Employee pays an amount
equal to the employee's rate of contribution in effect as of the Closing Date
for such continued coverage; and (iii) the Employee remains in the employ of
Glacier during the 90-day period. Glacier shall reimburse MWP for all amounts
paid pursuant to this Section 7.03. MWP and McKesson shall indemnify and hold
------------
harmless Glacier and its Affiliates from and against any Liability, costs, and
expenses, with respect to any obligation of MWP or McKesson to
23
provide health care continuation coverage under COBRA for any Employee who
accepts a Non-Probationary Offer.
7.04 Benefit Plans. Any Employee who accepts a Non-probationary
-------------
Offer and who begins active employment with Glacier (a "Transferred Employee"),
--------------------
shall cease to participate in all Benefit Plans (except as otherwise stated
herein or as may be required by any Laws or by the terms of any Benefit Plan)
and shall be eligible to participate in Glacier's employee pension and welfare
benefit plans, programs, policies and arrangements ("Glacier's Benefit Plans")
-----------------------
as of the effective date of such Transferred Employee's hire date. Glacier
shall provide a Transferred Employee with employee benefits based under
Glacier's current employee benefit plan(s), giving each Transferred Employee
credit for all periods of employment with MWP up to a maximum of 5 years of
employment with MWP. MWP and McKesson shall indemnify and hold harmless Glacier
and its Affiliates from any Liability, costs, and expenses, with respect to any
Liability of MWP or McKesson that may arise under any Benefit Plan.
7.05 Welfare Benefit and Worker's Compensation Claims. (a) MWP shall
------------------------------------------------
retain sole responsibility for all dental, medical, life insurance and
disability expenses and benefits for each Transferred Employee and covered
dependents of such Transferred Employee with respect to claims incurred prior to
the Closing Date by such person. Glacier shall have sole responsibility, in
accordance with the terms of any of Glacier's welfare plans, for expenses and
benefits with respect to claims incurred in respect of the Transferred
Employeeof any Trans ferred Employee on or after the Closing Date. For purposes
of this Section 7.05, a claim is deemed to be incurred when (A) with respect to
------------
medical or dental benefits, the medical or dental services giving rise to such
claim are performed and (B) with respect to life or disability benefits, when
the event giving rise to such claim occurs.
(b) MWP shall retain all Liabilities covered by MWP's workers'
compensation plan to the extent any such Liability arises out of or relates to
work-related illnesses or injuries caused by events occurring prior to the
Closing Date, even if such illnesses or injuries continue after the Closing
Date. Glacier shall be responsible for any such Liability after the Closing
Date, provided, however, that MWP shall reimburse Glacier for any Liability
-------- -------
arising out of or relating to a stress-related claim by any Employee who accepts
a Probationary Offer but does not receive a Non-probationary Offer. Glacier
will reimburse MWP for MWP's costs of providing workers' compensation coverage
for Liabilities that are Glacier's responsibility pursuant to this paragraph
---------
7.05(b).
-------
24
(c) All Employees shall, as of the Closing Date, be covered by
Glacier's workers' compensation plan. Any Employee who does not become a
Transferred Employee shall continue to be covered by MWP's workers' compensation
plan to the extent required by law.
7.06 WARN; Certain Indemnities. Without limiting the generality of
-------------------------
the obligations of MWP and McKesson under Sec tion 7.03, MWP shall indemnify and
-------------
hold harmless Glacier and its Affiliates from and against any and all Liability,
costs and expenses that may arise (i) with respect to any obligations and
liabilities under the Worker Adjustment and Retraining Notification Act of 1988,
as amended, and any similar state law with respect to any Employees terminated
by MWP (at any time after the Closing date) or by Glacier (if such termination
is within 90 days after the Closing date), or (ii) by reason of the severance
from the service of MWP of any Employee not offered, or continued in, employment
by Glacier.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
8.01 Survival of Representations and Warranties. Notwithstanding any
------------------------------------------
right of Glacier (whether or not exercised) to investigate the Business, or any
right of any party (whether or not exercised) to investigate the accuracy of the
representations and warranties of the other party contained in this Agreement,
Glacier, MWP and McKesson have the right to rely fully upon the representations
and warranties of the other contained in this Agreement. The representations and
warranties of Glacier, MWP and McKesson contained in this Agreement will survive
the Closing until the first anniversary of the Closing Date; provided that any
representation or warranty that would otherwise terminate in accordance with the
foregoing will continue to survive with respect to a particular claim for
indemnification if a written notice shall have been timely given under Article
-------
IX on or prior to such termination date, until such claim for indemnification
--
has been satisfied or otherwise resolved.
ARTICLE IX
INDEMNIFICATION
9.01 Indemnification.
---------------
25
(a) MWP and McKesson shall indemnify the Glacier Indemnified Parties
in respect of, and hold each of them harmless from and against, any and all
Losses suffered, incurred or sustained by any of them or to which any of them
becomes subject, resulting from, arising out of or relating to (i) any
misrepresentation, breach of warranty or nonfulfillment of or failure to perform
any covenant or agreement on the part of MWP or McKesson contained in this
Agreement or (ii) a Retained Liability, up to an aggregate amount of $4,500,000;
provided, however, that indemnification for any misrepresentation or breach of
-----------------
warranty under Section 2.08 or Section 2.19 of this Agreement shall not exceed
------------ ------------
an aggregate amount of $9,000,000, taking into account any other sums paid or to
be paid pursuant to this Article XI under an indemnification claim.
(b) Notwithstanding the foregoing paragraph (a), MWP and McKesson
shall only be obligated to indemnify the Glacier Indemnified Parties for a
misrepresentation or breach of warranty under Section 2.16 of this Agreement
------------
resulting from, arising out of or relating to a termination of any Location
Agreement after the Closing Date, in an amount not to exceed the unamortized
portion of the Trade Payment, only if (i) Glacier has not committed a material
breach under such terminated Location Agreement after the Closing Date, (ii)
Glacier does not enter into a new location contract with such terminating party
relating to the Water Vending Business after the Closing Date and (iii) Glacier
does not recover the unamortized portion of the Trade Payment from such
terminating party.
(c) No amounts of indemnity shall be payable in the case of a claim by
a Glacier Indemnified Party under this Section 9.01, unless a Glacier
------------
Indemnified Party has suffered, incurred, sustained or become subject to Losses
referred to in such Sections in excess of $90,000 in the aggregate, in which
event a Glacier Indemnified Party shall be entitled to claim indemnity for the
full amount of such Losses.
(d) Glacier shall indemnify the MWP Indemnified Parties in respect of,
and hold each of them harmless from and against, any and all Losses suffered,
incurred or sustained by any of them or to which any of them becomes subject,
resulting from, arising out of or relating to (i) any misrepresentation, breach
of warranty or nonfulfillment of or failure to perform any covenant or agreement
on the part of Glacier contained in this Agreement or (ii) an Assumed Liability.
No amounts of indemnity shall be payable in the case of a claim by an MWP
Indemnified Party under this Section 9.01, unless an MWP Indemnified Party has
------------
suffered, incurred, sustained or become subject to Losses referred to in such
Sections in excess of $90,000 in the aggregate, in which event an MWP
Indemnified Party shall be entitled to claim indemnity for the full amount of
such Losses.
26
9.02 Method of Asserting Claim. In the event that any claim is
-------------------------
asserted against any party hereto, or any party hereto is made a party defendant
in any Action or Proceeding, and such claim, Action or Proceeding involves a
matter which is the subject of a claim for indemnification under this Article,
then such party (an "Indemnified Party") shall give written notice to Glacier or
-----------------
MWP and McKesson, as the case may be (the "Indemnifying Party"), of such claim,
------------------
Action or Proceeding, and such Indemnifying Party shall have the right to join
in the defense of said claim, Action or Proceeding at such Indemnifying Party's
own cost and expense and, if the Indemnifying Party agrees in writing to be
bound by and to promptly pay the full amount of any final judgment from which no
further appeal may be taken and if the Indemnified Party is reasonably assured
of the Indemnifying Party's ability to satisfy such agreement, then at the
option of the Indemnifying Party, such Indemnifying Party may take over the
defense of such claim, Action or Proceeding, except that, in such case, the
Indemnified Party shall have the right to join in the defense of said claim,
Action or Proceeding at its own cost and expense.
9.03 Tax Treatment of Indemnity Payments. Any indemnity payment made
-----------------------------------
under this Agreement shall for all tax purposes be deemed as an adjustment to
the Purchase Price.
ARTICLE X
DEFINITIONS
10.01 Definitions. (a) Defined Terms. As used in this Agreement,
----------- -------------
the following defined terms have the meanings indicated below:
"Actions or Proceedings" means any action, suit, proceeding,
----------------------
arbitration or Governmental or Regulatory Authority investigation or audit.
"Affiliate" means any Person that directly, or indirectly through one
---------
of more intermediaries, controls or is controlled by or is under common control
with the Person speci fied. For purposes of this definition, control of a
Person means the power, direct or indirect, to direct or cause the direction of
the management and policies of such Person whether by Contract or otherwise and,
in any event and without limitation of the previous sentence, any Person owning
ten percent (10%) or more of the voting securities of another Person shall be
deemed to control that Person.
27
"Agreement" means this Asset Purchase Agreement and the Exhibits, the
---------
Disclosure Schedule and the Schedules hereto, as the same shall be amended from
time to time.
"Assets" has the meaning ascribed to it in Section 1.01(a).
------ ---------------
"Assets and Properties" of any Person means all assets and properties
---------------------
of every kind, nature, character and description (whether real, personal or
mixed, whether tangible or intangible, whether absolute, accrued, contingent,
fixed or otherwise and wherever situated), including the goodwill related
thereto, operated, owned or leased by such Person, including without limitation
cash, cash equivalents, investment assets, accounts and notes receivable,
chattel paper, documents, instruments, general intangibles, real estate,
equipment, inventory, goods and intellectual property.
"Assignment Instruments" has the meaning ascribed to it in Section
---------------------- -------
1.04.
----
"Assumed Liabilities" has the meaning ascribed to it in Section
------------------- -------
1.02(a).
-------
"Assumption Agreement" has the meaning ascribed to it in Section 1.04.
-------------------- ------------
"Assumption Instruments" has the meaning ascribed to it in Section
---------------------- -------
1.04.
----
"Benefit Plan" means any Plan established by MWP, or any predecessor
------------
or Affiliate of MWP, existing at the Closing Date or prior thereto, to which MWP
contributes or has contributed on behalf of any Employee, former Employee or
director, or under which any Employee, former Employee or director of MWP or any
beneficiary thereof is covered, is eligible for coverage or has benefit rights.
"Books and Records" of any Person means all files, documents,
-----------------
instruments, papers, books and records relating to the business, operations,
condition of (financial or other), results of operations and Assets and
Properties of such Person, including without limitation, financial statements,
Tax Returns and related work papers and letters from accountants, budgets,
pricing guidelines, ledgers, journals, deeds, title policies, minute books,
stock certificates and books, stock transfer ledgers, Contracts, Licenses,
customer lists, computer files and programs, retrieval programs, operating data
and plans and environmental studies and plans.
28
"Business" has the meaning ascribed to it in the forepart of this
--------
Agreement.
"Business Books and Records" has the meaning ascribed to it in Section
-------------------------- -------
1.01(a)(xi).
-----------
"Business Combination" means with respect to any Person, any merger,
--------------------
consolidation or combination to which such Person is a party, any sale,
dividend, split or other disposition of capital stock or other equity interests
of such Person or any sale, dividend or other disposition of all or
substantially all of the Assets and Properties of such Person.
"Business Contracts" has the meaning ascribed to it in Section
------------------ -------
1.01(a)(v).
----------
"Business Day" means a day other than Saturday, Sunday or any day on
------------
which banks located in the State of California are authorized or obligated to
close.
"Business Licenses" has the meaning ascribed to it in Section
----------------- -------
1.01(a)(viii).
-------------
"Closing" means the closing of the transactions contemplated by
-------
Section 1.04.
------------
"Closing Date" means March 28, 1997.
------------
"Code" means the Internal Revenue Code of 1986, as amended, and the
----
rules and regulations promulgated thereunder.
"Condition of the Business" means the business, condition (financial
-------------------------
or otherwise), results of operations and Assets and Properties of the Business.
"Contract" means any agreement, lease, license, evidence of
--------
Indebtedness, mortgage, indenture, security agreement or other contract (whether
written or oral).
"Disclosure Schedule" means the record delivered to Glacier by MWP
-------------------
herewith and dated as of the date hereof, containing all lists, descriptions,
exceptions and other information and materials as are required to be included
therein by MWP pursuant to this Agreement.
"Employee" means, as at any time, each employee of MWP then engaged
--------
solely in the operation of the Business.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended, and the rules and regulations promulgated thereunder.
29
"Excluded Assets" has the meaning ascribed to it in Section 1.01(b).
--------------- ---------------
"GAAP" means generally accepted accounting principles, consistently
----
applied throughout the specified period and in the immediately prior comparable
period.
"General Assignment" has the meaning ascribed to it in Section 1.04.
------------------ ------------
"Glacier" has the meaning ascribed to it in the forepart of this
-------
Agreement.
"Glacier Indemnified Parties" means Glacier and its officers,
---------------------------
directors, employees, agents and Affiliates.
"Governmental or Regulatory Authority" means any court, tribunal,
------------------------------------
arbitrator, authority, agency, commission, official or other instrumentality of
the United States, any foreign country or any domestic or foreign state, county,
city or other political subdivision.
"Hazardous Materials" shall mean any flammable, explosive, radioactive
-------------------
materials, asbestos, compounds known as polychlorinated biphenyls, chemicals now
known to cause cancer or reproductive toxicity, pollutants, contaminants,
hazardous wastes, toxic substances or related materials, including, without
limitation, any substances defined as or included in the definition of
"hazardous substances," "hazardous wastes," "hazardous materials," or "toxic
substances" under the Hazardous Materials Laws.
"Hazardous Materials Laws" means any and all present and future
------------------------
federal, state and local laws that relate to or impose liability or standards of
conduct concerning the environment, as now or hereafter in effect and as have
been or hereafter may be amended or reauthorized, including without limitation,
the Comprehensive Environmental Response, Compensation and Liability Act (42
U.S.C. 9601 et seq.), Hazardous Materials Transportation Act (42 U.S.C. 1802 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. 6901 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. 1251 et seq.), the Toxic
Substances Control Act (14 U.S.C. 2601 et seq.), the Clean Air Act (42 U.S.C.
7901 et seq.), the National Environmental Policy Act (42 U.S.C. 4231 et seq.),
the Refuse Act (33 U.S.C. 407 et seq.), the Safe Drinking Water Act (42 U.S.C.
300(f) et seq.), and all rules, regulations, codes, ordinances and guidance
documents promulgated or published thereunder, and the provisions of any
licenses, permits, orders and decrees issued pursuant to any of the foregoing.
30
"Indebtedness" of any Person means all obligations of such Person (i)
------------
for borrowed money, (ii) evidenced by notes, bonds, debentures or similar
instruments, (iii) for the deferred purchase price of goods or services (other
than trade payables or accruals incurred in the ordinary course of business),
(iv) under capital leases and (v) in the nature of guarantees of the obligations
described in clauses (i) through (iv) above of any other Person.
"Indemnified Party" has the meaning ascribed to it in Section 9.02.
----------------- ------------
"Indemnifying Party" has the meaning ascribed to it in Section 9.02.
------------------ ------------
"Intangible Personal Property" has the meaning ascribed to it in
----------------------------
Section 1.01(a)(vii).
--------------------
"Intellectual Property" means all patents and patent rights,
---------------------
trademarks and trademark rights, trade names and trade name rights, service
marks and service xxxx rights, service names and service name rights, brand
names, inventions, processes, formulae, copyrights and copyright rights, trade
dress, business and product names, logos, slogans, trade secrets, industrial
models, processes, designs, methodologies, computer programs (including all
source codes) and related documentation, technical information, manufacturing,
engineering and technical drawings, know-how and all pending applications for
and registrations of patents, trademarks, service marks and copyrights.
"Inventory" has the meaning ascribed to it in Section 1.01(a)(ii).
--------- -------------------
"Knowledge" or "Known" means, with respect to any corporation, the
--------- -----
knowledge of any officer, director or employee of such corporation.
"Laws" means all laws, statutes, rules, regulations, ordinances and
----
other pronouncements having the effect of law of the United States, any foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liabilities" means all Indebtedness, obligations and other
-----------
liabilities of a Person (whether absolute, accrued, contingent, fixed or
otherwise, or whether due or to become due).
"Licenses" means all licenses, permits, certificates of authority,
--------
authorizations, approvals, registrations, franchises and similar consents
granted or issued by any Governmental or Regulatory Authority.
31
"Liens" means any mortgage, pledge, assessment, security interest,
-----
lease, lien, adverse claim, levy, charge or other encumbrance of any kind, or
any conditional sale Contract, title retention Contract or other Contract to
give any of the foregoing.
"Loss" means any and all damages, fines, fees, penalties,
----
deficiencies, losses and expenses (including without limitation interest, court
costs, fees of attorneys, accountants and other experts or other expenses of
litigation or other proceedings or of any claim, default or assessment).
"MWP" has the meaning ascribed to it in the forepart of this
---
Agreement.
"MWP Indemnified Parties" means MWP and its officers, directors,
-----------------------
employees, agents and Affiliates.
"Operative Documents" means, collectively, the General Assignment and
-------------------
the other Assignment Instruments, and the Assumption Agreement and the other
Assumption Instruments.
"Order" means any writ, judgment, decree, injunction or similar order
-----
of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Other Assets" has the meaning ascribed to it in Section 1.01(a)(xiv).
------------ --------------------
"Person" means any natural person, corporation, general partnership,
------
limited partnership, proprietorship, other business organization, trust, union,
association or Governmental or Regulatory Authority.
"Personal Property Leases" has the meaning ascribed to it in Section
------------------------ -------
1.01(a)(iv).
-----------
"Plan" means any bonus, incentive compensation, deferred compensation,
----
pension, profit sharing, retirement, stock purchase, stock option, stock
ownership, stock appreciation rights, phantom stock, leave of absence, layoff,
vacation, day or dependent care, legal services, cafeteria, life, health,
accident, disability, workmen's compensation or other insurance, severance,
separation or other employee benefit plan, practice, policy or arrangement of
any kind, whether written or oral, including, but not limited to, any "employee
benefit plan" within the meaning of Section 3(3) of ERISA.
"Prepaid Expenses" has the meaning ascribed to it in Section
---------------- -------
1.01(a)(vi).
-----------
32
"Purchase Price" has the meaning ascribed to it in Section 1.03(a).
-------------- ---------------
"Real Property Leases" has the meaning ascribed to it in Section
-------------------- -------
1.01(a)(i).
----------
"Representatives" are the officers, directors, employees, agents,
---------------
counsel, accountants, financial advisors, consultants and other representatives
of a specified company.
"Retained Liabilities" has the meaning ascribed to it in Section
-------------------- -------
1.02(b).
-------
"Security Deposits" has the meaning ascribed to it in Section
----------------- -------
1.01(a)(x).
----------
"Tangible Personal Property" has the meaning ascribed to it in Section
-------------------------- -------
1.01(a)(vii).
------------
"Tax Returns" means all tax returns, reports, statements and other
-----------
documents (including any amendments) required to be supplied to any Governmental
or Regulatory Authority with respect to Taxes.
"Taxes" means all taxes, charges, fees, levies or other assessments,
-----
including but not limited to all net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, withholding, payroll,
employment, social security, unemployment, excise, estimated, stamp, occupation,
property or other taxes, fees, assessments or charges of any kind whatsoever,
including all interest and penalties thereon, and additions to tax or additional
amounts imposed by any taxing authority, domestic or foreign, upon a Person or
its Assets and Properties.
"Trade Payments" has the meaning ascribed to it in Section
-------------- -------
1.01(a)(xii).
------------
"Vehicles" has the meaning ascribed to it in Section 1.01(a)(ix).
-------- -------------------
(b) Construction of Certain Terms and Phrases. Unless the context of
-----------------------------------------
this Agreement otherwise requires, (i) words of any gender include each other
gender; (ii) words using the singular or plural number also include the plural
or singular number, respectively; (iii) the terms "hereof," "herein," "hereby"
and derivative or similar words refer to this entire Agreement; (iv) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; and (v) the phrases "ordinary course of business" and "ordinary
course of business consistent with past practice" refer to the business and
33
practice of MWP in connection with the Business. Whenever this Agreement refers
to a number of days, such number shall refer to calendar days unless Business
Days are specified. All accounting terms used herein and not expressly defined
herein shall have the meanings given to them under GAAP.
ARTICLE XI
MISCELLANEOUS
11.01 Notices. All notices, requests and other communications
-------
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:
If to Glacier, to:
Glacier Water Services, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxxx X. Xxxxx
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx
000 Xxxxx Xxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
If to MWP, to:
McKesson Water Products Company
0000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn: Xx. Xxxxxxx Xxxxxx
with a copy to:
McKesson Corporation
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Facsimile No.: (000) 000-0000
Attn: Vice President and General Counsel
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section,
34
be deemed given upon delivery, (ii) if delivered by facsimile transmission to
the facsimile number as provided in this Section, be deemed given upon
receipt,if delivered by mail in the manner described above to the address as
provided in this Section, be deemed given upon receipt (in each case regardless
of whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.
11.02 Entire Agreement. This Agreement and the Operative Documents
----------------
and the other agreements contemplated hereby and thereby supersede all prior
discussions and agreements between the parties with respect to the subject
matter hereof and thereof between the parties, and contain the sole and entire
agreement between the parties hereto with respect to the subject matter hereof
and thereof.
11.03 Expenses. Except as otherwise expressly pro vided in this
--------
Agreement, each party will pay its own costs and expenses incurred in connection
with the negotiation, execution and closing of this Agreement and the Operative
Documents and the transactions contemplated hereby and thereby.
11.04 Confidentiality. Each party hereto will hold, and will use its
---------------
best efforts to cause its Affiliates, and their respective Representatives to
hold, in strict confidence from any Person (other than any such Affiliate or
Representative), unless (i) compelled to disclose by judicial or administrative
process (including without limitation in connection with obtaining the necessary
approvals of this Agreement and the transactions contemplated hereby of
Governmental or Regulatory Authorities) or by other requirements of Law or (ii)
disclosed in an Action or Proceeding brought by a party hereto in pursuit of its
rights or in the exercise of its remedies hereunder, all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's Representatives in connection with this
Agreement or the trans actions contemplated hereby, except to the extent that
such documents or information can be shown to have been (a) previously known by
the party receiving such documents or information, (b) in the public domain
(either prior to or after the furnishing of such documents or information
hereunder) through no fault of such receiving party or (c) later acquired by the
receiving party from another source if the receiving party is not aware that
such source is under an obligation to another party hereto to keep such
documents and information confidential; provided that following the Closing the
--------
foregoing restrictions will not apply
35
to Glacier's use of documents and information concerning the Business, the
Assets or the Assumed Liabilities furnished by MWP hereunder. In the event the
transactions contemplated hereby are not consummated, upon the request of the
other party, each party hereto will, and will cause its Affiliates and their
respective Representatives to, promptly redeliver or cause to be redelivered all
copies of documents and information furnished by the other party in connection
with this Agreement or the transactions contemplated hereby and destroy or cause
to be destroyed all notes, memoranda, summaries, analyses, compilations and
other writings related thereto or based thereon prepared by the party furnished
such documents and information or its Representatives.
11.05 Waiver. Any term or condition of this Agreement may be waived
------
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party of any term or condition of this Agreement, in any one or more instances,
shall be deemed to be or construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion. All remedies, either under
this Agreement or by Law or otherwise afforded, will be cumulative and not
alternative.
11.06 Amendment. This Agreement may be amended, supplemented or
---------
modified only by a written instrument duly executed by or on behalf of each
party hereto.
11.07 No Third Party Beneficiary. The terms and pro visions of this
--------------------------
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Article IX.
----------
11.08 No Assignment; Binding Effect. Neither this Agreement nor any
-----------------------------
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other party hereto and any attempt to
do so will be void, except (a) for assignments and transfers by operation of Law
and (b) that Glacier may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights under Article IX)
----------
to a wholly-owned subsidiary, provided that any such subsidiary agrees in
writing to be bound by all of the terms, conditions and provisions contained
herein, but no such assignment shall relieve Glacier of its obligations
hereunder. Subject to the preceding sentence, this Agreement is binding upon,
inures to the benefit of and is enforceable by the parties hereto and their
respective successors and assigns.
36
11.09 Headings. The headings used in this Agreement have been
--------
inserted for convenience of reference only and do not define or limit the
provisions hereof.
11.10 Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the Laws of the State of California applicable to a
contract executed and performed in such State, without giving effect to the
conflicts of laws principles thereof.
37
11.11 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been duly exe cuted and
delivered by the duly authorized officer of each party as of the date first
above written.
GLACIER WATER SERVICES, INC.
By: /s/ Xxxxx X. Xxxxx
___________________________
Xxxxx X. Xxxxx
Chief Executive Officer and
Chairman of the Board
MCKESSON WATER PRODUCTS COMPANY
By: /s/ Xxxxxxx X. Xxxxxx
___________________________
Xxxxxxx X. Xxxxxx
President
MCKESSON CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
____________________________
Xxxxxxx X. Xxxxxx
Vice President
38
