SUPPLY AGREEMENT

Exhibit 10.39

SUPPLY AGREEMENT

     This SUPPLY AGREEMENT (this “Agreement”) is entered into as of [•] (the “Effective Date”), by and among P1 Sub, LLC, a North Carolina limited liability company, P2 Sub, LLC, a North Carolina limited liability company (each, a “Buyer”), and Culligan International Company, a Delaware corporation, with its principal place of business at 0000 Xxxx Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000 (“Culligan”).

RECITALS

     X. Xxxxxxxx is engaged in the business of selling various types of water treatment products; and

     X. Xxxxxxxx desires to provide certain products, and Buyer desires to procure certain products from Culligan in accordance with the terms of this Agreement.

AGREEMENT

     NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

     1. TERM. This Agreement will be for a term beginning on the Effective Date and continuing for a period of one (1) year (the “Initial Term”). Thereafter, it shall automatically renew for periods of one month (each, a “Renewal Term”) unless either party provides notice of termination to the other party at least thirty (30) days before the expiration of the Initial Term or any Renewal Term.

     2. PRODUCTS & PRICING — SALE. Culligan shall sell to Buyer any water treatment and filtration equipment and products described on Attachment A hereto (the “Products”), and Buyer may buy the Products, in each case at the pricing also set forth in Attachment A. The terms and conditions set forth on Attachment B shall also govern the sale of the Products to Buyer.

     3. ADDITIONAL TERMS & CONDITIONS. Any additional terms and/or conditions, whether or not conflicting with the terms and conditions herein and whether offered by Buyer on any purchase order or acknowledgement thereto or any other manner shall be void, unless such terms are agreed to in writing by each party. In case of a conflict between the terms and conditions in an attachment and the provisions of this Agreement, the provisions of this Agreement shall control. Each order accepted by Culligan will constitute a binding obligation under this Agreement for Culligan to sell, and for Buyer to buy and pay for the Products ordered.

     4. LIMITATION ON LIABILITY. Notwithstanding anything else to the contrary, the liability of Culligan arising out of the Agreement, including without limitation any claims for indemnity, shall not exceed the price paid by Buyer for the particular Product(s) that is or are the subject of such claim. The parties waive all claims against each other for any consequential, incidental, indirect, special, exemplary or punitive damages.

     5. DEFAULT; TERMINATION; REMEDIES.

          5.1 Default. The occurrence of any one or more of the following events shall constitute an event of default (“Event of Default”) under this Agreement:

          (a) If either party fails to perform in any material respect, any of the non-monetary obligations imposed upon it by the terms of this Agreement, unless such breach is cured within thirty (30) days after receiving written notice from the non-breaching party, or with respect to breaches not capable of being cured within such 30 day period, the breaching party commences cure within such thirty (30) day period and diligently completes such cure as soon as practicable thereafter (but in no event more than sixty (60) days thereafter);

          (b) If Buyer fails to pay any amounts due under this Agreement after receiving written notice from Culligan and a five (5) day opportunity to cure after receipt of such notice;

          (c) If a either party defaults under Subsection 5.1(a) or 5.1(b) more than twice during any twelve-month period;

          (d) If either party becomes bankrupt;

          (e) If either party becomes insolvent or is unable to pay its debts as they become due in the ordinary course of business;

          (f) If a either party ceases to function as a going concern or to conduct its operations in the normal course of business; or

          (g) If Buyer assigns this Agreement or any right granted under it or delegates any duty imposed by it, other than in accordance with Section 6.1 without Culligan’s prior written consent.

          5.2 Remedies. Upon the occurrence of any Event of Default, then, in addition to any other rights or remedies, pursuant to any applicable law, either party may terminate this Agreement after providing five (5) days written notice to the other party. Buyer’s sole and exclusive remedy against Culligan and its employees, agents, subcontractors, authorized representatives, subsidiaries and affiliates for Products furnished hereunder shall be to require Culligan (a) to repair or replace the Products; or (b) to repay Buyer the fees paid for the non-performing Product, with the remedy provided to be determined by Buyer at its sole option.

          5.3 Effect of Termination. Termination will neither relieve Buyer from paying in accordance with this Agreement, nor relieve any party in default under this Agreement of any of such party’s obligations owing with respect to Products sold or otherwise owing or arising under the Agreement prior to such termination.

     6. GENERAL PROVISIONS.

          6.1 Assignment. Except as provided in Section 6.6, neither party may assign this Agreement or any right granted under it and will not delegate any duty imposed by it without the prior written consent of the other party, which shall not be unreasonably withheld; provided, that Buyer may collaterally assign its rights hereunder to its lenders for security purposes. Any such assignment shall not relieve the assignor from any of its obligations under this Agreement.

          6.2 Relationship between the Parties. The relationship between Culligan and Buyer is that of independent contractors. This Agreement does not create a partnership, franchise or business opportunity under any applicable law. Neither party may incur liability on behalf of the other nor does either party have the authority to represent or bind the other as agent, or in any other capacity.

          6.3 Notices. All approvals and notices under this Agreement must be in writing and shall be deemed to have been duly given or made (i) the third business day after the date of mailing, if delivered by registered or certified mail, postage prepaid; (ii) upon delivery, if sent by hand delivery; (iii) upon delivery, if sent by prepaid courier, with a record of receipt; or (iv) the next day after the date of

dispatch, if sent by cable, telegram, facsimile or telecopy (with a copy simultaneously sent by registered or certified mail, postage prepaid, return receipt requested), to the parties at the following:

                    To Culligan: Culligan International Company
0000 Xxxx Xxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxx, XX 00000
Attention: General Counsel
Facsimile: 000-000-0000

                    To: Buyer: Primo Water Corporation
000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxx-Xxxxx, XX 00000
Attention: Xxxx Xxxxxxxxx
Facsimile: 000-000-0000

or to such other place or places as the parties may designate in writing.

          6.4 Severability. If any term or provision of this Agreement is declared invalid by a court of competent jurisdiction in a final ruling from which no appeal is taken, it will be severable if the operation of the remaining terms and provisions are unimpaired, or if the court replaces the invalid term or provision by such valid term or provision reflecting the intention of the parties.

          6.5 Amendment and Waiver. This Agreement may only be amended by a written agreement signed by all the parties to this Agreement. The observation or performance of any condition or obligation imposed on a party under this Agreement may be waived only in writing by an authorized official of the other party and only to the extent stated in such writing.

          6.6 Culligan Entities. At Culligan’s option, this Agreement may be performed, and all rights hereunder against Buyer may be enforced, in whole or in part, by Culligan, its parent corporation or any one or more of its subsidiaries and affiliates (the “Culligan Entities”) so long as the applicable Culligan Entity is capable of performing such obligations and performs such obligations in accordance with this Agreement.

          6.7 Entire Agreement. This Agreement includes the following Attachments:

Attachment A: Products and Pricing — Sale
Attachment B: Terms and Conditions of Sale

     This Agreement sets forth the entire understanding and agreement between the parties with respect to the subject matter hereof. Any oral or other written understandings or agreements relating to the subject matter of this Agreement are superseded by this Agreement. This Agreement shall inure to the benefit of, and be binding upon the parties and their respective successors and permitted assigns. Any terms which add to, vary from or conflict with these terms and conditions are void. This Agreement may be amended only by a written agreement signed by both parties.

          6.8 Force Majeure. No party shall not be liable to any other party for any breach hereunder, including for failure to deliver or delays in delivery, construction, erection or startup, occasioned by causes beyond the control of such party, its suppliers or subcontractors, including but not limited to unavailability of materials, strikes, labor slowdowns and stoppages, labor shortages, lockouts, fires, floods, earthquakes, storms, droughts, adverse weather, riots, thefts, accidents, embargoes, war (whether or not declared) or other outbreak of hostilities, civil strife, acts of governments, acts of God,

governmental acts or regulations, orders or injunctions, or other reasons, whether similar or dissimilar to the foregoing (each a “Force Majeure Event”). In the event of a Force Majeure Event, (a) the time for such party’s performance shall be reasonably extended; and (b) both parties shall take reasonable steps to adjust all affected dates in this Agreement.

          6.9 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original and which together will constitute one and the same agreement.

          6.10 Headings. The headings and subheadings are for the convenience of the parties only and no special meaning will attach to the headings.

          6.11 Governing Law. This Agreement will be governed by the laws of the State of Illinois without giving effect to any choice or conflict of law principles of any jurisdiction.

          6.12 Survival. The terms of Sections 3, 4, 5.2, 5.3 and 6 shall survive the expiration or termination of this Agreement.

     IN WITNESS WHEREOF, the parties hereto, as of the date first written above, have caused this Agreement to be executed in their respective names by their duly authorized representatives.

P1 SUB, LLC
 

By:  

Title:  

Name: 

P2 SUB, LLC
 

By:  

Title:  

Name: 

CULLIGAN INTERNATIONAL COMPANY
 

By:  

Title:  

Name: 

ATTACHMENT A
PRODUCTS AND PRICING — SALE

Item Number		Description		Price
01019699		1 1/2" BRASS SWEAT CONNECTOR			19.80
01017852		10" GOLD SOFT W/SMART SENSOR			688.00
01019525		18 X 38 BRINE SYSTEM			72.43
00162700		2 CU FT CULLAR D PLUS			138.20
01018891		2" TURBINE METER			216.46
01021402		20' EXTENSION CABLE W/CONN & BOX			25.63
01019613		24 X 50 BRINE SYSTEM			235.28
01019614		30 X 50 BRINE SYSTEM			299.26
01019615		39 X 48 BRINE SYSTEM			332.79
01004765		9 GALLON STORAGE TANK			71.58
D1018801		AP-2 REVERSE OSMOSIS SYSTEM			2,975.00
01018959		AQUA-SENSOR PROBE KIT FOR FRP TANKS			85.31
01013839		BATTERY BACKUP, 3.6V 1/2AA LITHIUM			6.58
P1013677		XXXX CRANK/FOLLOWR (10 TO A PACK)			37.89
01018711		BLFC ELBOW 0.80 GPM			5.84
00490106		BOTTLES 4 OZ. CAPS AND MAILERS			40.70
D1018799		BP4L PLUS RO SYSTEM			2,875.00
01017164		BRINE RECLAIM KIT HF 55E & CSM			526.27
01018952		BRINE RECLAIM KIT, CSM-UP TO 3 UNIT			1,054.53
01018720		BRINE SYSTEM 650 LB 24 X 40			101.37
01018706		BRINE VALVE 40 TALL			25.93
01019526		BRINE VALVE FOR HI-FLO 2			25.93
01017242		XXXXXX VALVE BODY 3" ASSY			1,544.09
00554710		BUSHING, RED BR 1/2"NPTE X 3/8 NPTI			2.53
01001750		BUSHINGS			0.34
01009930		BXL FUSE, 1/2 AMP, 250V			3.12
01019718		BYPASS VALVE, HI-FLO 22			42.33
00162706		CARBON			69.13
01021486		CARBON FILTER, HF-22			789.00
01009644		CARTRIDGE (MEMBRANE) LC-200			203.83
00403304		CARTRIDGE ASSY NORYL BLACK (HF-42)			23.27
01009642		CARTRIDGE FILTER BW TYPE LC 20"			32.52

ATTACHMENT A
PAGE 2

Item Number		Description		Price
00542709		CHECK VALVE FOR BXL PLUS RO			32.97
D1013899		CIRCUIT BOARD FOR BXL SERIES			215.79
01020368		CIRCUIT BOARD FOR MEDALLIST FILTER			94.22
01020747		CIRCUIT BOARD, GBE MODEM KIT			55.35
01020404		CONN. 1 1/2" BRASS NPT			74.28
01019949		CONTROL FOR HC-300 UNIT			664.83
01020370		CONTROL HEAD FOR 10" MED. SOFTENER			299.10
P1019782		COPPER SWEAT ADAPTER KITS			197.21
P0330667		COUPLING (PACK OF 10)			5.92
01005015		CUL RO-B3L PLUS (MEMBRANE)			108.61
01019651		DAUGHTER BOARD			42.62
01019602		DF-14 CARBON FILTER			843.00
01014444		FILTER CULLAR 8 X 44 FIBERGLASS			382.00
01004858		FILTER KIT FOR HOME RO			14.66
01017504		FILTER, GOLD 10" QH HH24 CULLAR			609.00
00310501		FLO CONTROL COUP CR PLT 1			53.37
00447382		FLOW CONTROL FOR HC210			38.48
D1006180		FLOW METER, PRODUCT (XL)			82.31
01010332		FLOW RESTRICTOR			6.15
01020626		GOLD CONVERSION KIT			170.15
01017503		GOLD SERIES FILTER 9"			522.00
01021501		HI FLO 3E HCE-210-2NHWB			1,665.00
01019605		HI-FLO 22 CF-12 CARBON FILTER			751.00
01019607		HI-FLO 22 CF-16 CARBON FILTER			1,113.00
01019603		HI-FLO 22 CULLAR FILTER DF 16			985.00
01021483		HI-FLO 22 DF-14			885.00
01019564		HI-FLO 22 SOFT WS-060			967.00
01019565		HI-FLO 22 SOFT WS-090			1,035.00
01021477		HI-FLO 22 WS-060 SOFT W/GBE CONT.			1,015.00
01021478		HI-FLO 22 WS-090 SOFT W/GBE CONT.			1,088.00
01021479		HI-FLO 22 WS-120 SOFT W/GBE CONT.			1,196.00
01021480		HI-FLO 22 WS-150 SOFT W/GBE CONT.			1,573.00

ATTACHMENT A
PAGE 3

Item Number		Description		Price
01021481		HI-FLO 22 WS-210 SOFT W/GBE CONT.			1,681.00
01021496		HI-FLO 3 HCE-210-2			1,665.00
01019963		HI-FLO 3 SOFT HC-210			1,199.00
01021500		HI-FLO 3E SOFTENER HCE-150-2T NHWB			1,509.00
01019568		HO-FLO 22 SOFTENER-WS-210			1,601.00
01004505		HOME RO UNIT, AC30 3 GAL. TANK			256.00
D1018967		HOUSING ASSY 2 1/2 X 21" (BP-2S+)			127.66
01017389		INJECTOR ASSY CL			132.51
01017397		INJECTOR ASSY.			192.70
01017388		INJECTOR BODY FOR XXXXXX X000			144.16
00403130		INLET MANIFOLD			12.01
01013971		KIT ADAPTER 2.5"-5 ACME FIBERGLASS			26.88
01016565		KIT, ELBOW COPPER ADAPTER-MED SOFT.			19.72
01018621		KIT-FLO-PAK NPT			159.64
01013033		KIT-SEALPACK/BRINE/CAM (SOFT)			28.33
00401802		LOWER PISTON			91.23
00403126		MANIFOLD			15.65
00403128		MANIFOLD ASSEMBLY			13.51
01019618		MANIFOLD KIT, 21" 24" 30"			51.00
01015020		MEDALIST SERIES SOFTENER 8" W/METER			351.00
01014179		MEDALLIST DRIVE MOTOR KIT			52.64
01020366		MEDALLIST FILTER CONTROL HEAD			228.32
01018889		METER CABLE - 5'			16.66
01011188		METER KIT ASSY. FOR 10" MED. SOFT.			81.46
00156001		MINERAL CULLEX 1.0CF BAG HI-FLO 52			63.77
00160702		MINERAL CULLISAN 20 LB. BAG			8.97
00160710		MINERAL CULLISAN 50 LB BAG HF-52			8.27
00162110		MINERAL CULLSAN MED 50 LB BAG			9.29
00163006		MINERAL CULLSAN MEDIA 78L			70.24
00163811		MINERAL CULLSAN U 50# BAG			14.87
00401605		MOTOR MOUNTS FOR B-SERIES			6.77
D1018969		MOUNTING BRACKET WALL BP LONG STYLE			108.78

ATTACHMENT A
PAGE 4

Item Number		Description		Price
01016327		MVP COMMUNICATION CABLE			18.26
01016342		MVP DUPLEX ALT COM CABLE			35.47
00432821		NIPPLE, BR, 1/2" NPT X 3" LONG			5.43
00401858		O-RING			1.21
00308430		O-RING APR#135 EP1.9			0.82
P0308427		O-RING BP COUPLING (PACK OF 50)			14.21
01007377		O-RING, BXL EXTERNAL			3.58
01007378		O-RING, BXL INTERNAL			1.89
01003533		O-RING. HI-FLO 52 WATER SOFT			1.26
01018978		PISTON			67.09
00401803		PISTON ASSM NO HD WTR #6			107.09
00443431		PLUG, 1-1/4 THREADED PVC			4.12
01016267		POWER VALVE SEAL REBUILD KIT			23.28
00472601		PRES. GAUGE KIT 0-200PSI 0.25" NPT			36.64
D1006272		PRESSURE GAUGE KIT			28.19
01004938		PRESSURE GAUGE, 0-400 PSI LOWER MNT			29.04
01011831		PRESSURE GAUGES AND SAMPLE COCKS			50.67
D1013880		PRESSURIZED STORAGE KIT			209.25
00304404		RED BUSHING,BR, 3/8"NPTI X 1/4NPTE			0.68
00449793		RELAY, DPDT, 120/60			33.85
SP01020553		REMOTE MONITOR			133.25
01018712		RETROFIT BRINE VALVE			25.93
D1013843		RO CONTROL BOX FOR BXL ASSY.			519.10
D1006055		RO QUALITY MONITOR			304.64
01009635		RO SYSTEM, LC-200			506.00
00564806		SAMPLE COCKS 0.25" NPT			9.44
01005676		SCREW			0.05
00318530		SCREW CAP			0.34
01018977		SEAL KIT			68.52
01013083		SEAL PACK ASSEMBLY REPLACEMENT			22.87
01000825		SEAT VALVE PLASTIC SNAP IN HI-FLO52			5.34
D1018803		SERIES AP4 RO			4,127.00

ATTACHMENT A
PAGE 5

Item Number		Description		Price
D1018798		SERIES BP RO BP-3L PLUS			2,560.00
01008779		SINGLE AQUA-SENSOR KIT			85.31
01020447		SMART BRINE TANK W/7' CABLE			51.25
01021376		SMF 245			2,051.00
01021377		SMF 000-0 0/0 XXXXXXXXXX XXXXX SOFT			2,699.00
01021375		SOFT SMF - 185, 14 X 65 24/60			1,896.00
01021421		SOFT. CSM 600-2NC SINGLE GBE			4,464.00
01019959		SOFT. HC-120-1.5T			822.00
01019957		SOFT. HF3 HC-60 1.5			725.00
01019960		SOFT. HF3, HC-150-1.5T			931.00
01018691		SOFTENER CONTROL			600.53
01019566		SOFTENER XX-00 XX-000 DO NOT USE			1,139.00
01019567		SOFTENER XX-00 XX-000			1,499.00
01019974		SOFTENER, HCE 300 DUPLEX			1,780.00
01021865		SOFT-MINDER TWIN 9100			728.00
01021864		SOFT-MINDER TWIN 9100 (9")			645.00
01013887		SOLENOID VALVE, 120 V			44.30
01019591		SOLENOID VALVE, 3 WAY 120V			46.48
01021249		SSA INTELL-KIT			164.00
P0445244		SWITCH (PACK OF 10) EACH			5.10
01019962		SYSEM HC-150-2T SINGLE			1,096.00
01018715		SYSTEM BRINE, 375 LB. W/.45 GPM			85.90
01019964		SYSTEM HC-300-2T			1,398.00
01019958		SYSTEM HC-90-1.5T			746.00
01014573		TANK & MANF FBRGL 12 X 52			207.22
A2365030		TANK 16 X 65			233.36
A2365032		TANK FRP21" DIA X 69"H 4"-8U EA			531.93
00441897		TANK REP. FIBERGLASS WITH MANIFOLD			88.84
01016389		TANK, 10X40, 1 CU FT. FOR MED SOFT			216.03
01016390		TANK, 10X54, 1.5 CU FT FOR MED SOFT			274.93
01004776		TANK, 3 GAL. FOR HOME RO SYS.			37.34
A2365033		TANK-24X72 FIBERGLASS FOR HI-FLO 3			614.53

ATTACHMENT A
PAGE 6

Item Number		Description		Price
00308415		TETRASEAL			0.28
00401748		TIMER ASSEMBLY			59.48
01020628		UPGRADE KIT, GOLD 24V			114.80
01003701		VACUUM BREAKER PVC, 1.0" NPT			155.05
01016388		VALVE BRINE ASSY, COMMERCIAL REP.			86.18
00401584		VALVE VACUUM BREAKER BR 3/4" NPT			70.79
01019948		XXXXX, XX0 0" XXX-00"			642.87
01018425		VALVE, MANUAL BYPASS			24.46

All prices are in U.S. Dollars. In addition to the pricing set forth above, Buyer will be responsible for actual freight and taxes.

Payment Terms: Net 30 days

Delivery: FOB Culligan’s dock

Product Changes: Culligan may change its product offering only after sixty (60) days written notice to Buyer. Culligan shall not remove products from its product offering unless Culligan generally ceases to offer such products for sale; provided, however, that Culligan shall not remove products that it provides exclusively or primarily to Buyer from its product offering prior to the end of the Term.

Price Changes: Culligan may change its pricing only after sixty (60) days written notice to Buyer. Culligan shall not increase the pricing set forth above by a percentage that is greater than the percent change in the Index, as measured between the Effective Date and the order date for the applicable Products. The “Index” shall mean the Producer Price Index, Other Commercial & Services Industry Machinery Manufacturing (Industry and Product), NAICS # 333319, Series Id. PCU333319333319), as published by the Bureau of Labor Statistics for the most recent month.

ATTACHMENT B
TERMS AND CONDITIONS OF SALE

Purchase Order Requirements — Equipment Sales

Each Purchase Order shall include:

i.		Description of the Product being ordered
ii.		Quantity being ordered;
iii.		Price of Product being ordered; and
iv.		Required delivery date (at least 5 Business Days after receipt of the Purchase Order).

     1. Acceptance. By signing this Agreement, Buyer (“you” or “your”) agrees to be bound by the following terms and conditions for the purchase of the Products referenced in Attachment A. Whether these terms are included in an offer or an acceptance by Culligan, such offer or acceptance is conditioned on your assent to these terms. Culligan rejects all additional or different terms in any of your forms or documents, except to the extent agreed upon in writing and signed by both parties. No promise, statement or representation by any employee, agent, subcontractor or authorized representative of a Culligan Party will (a) be binding upon Culligan, or (b) relieve you of your obligations herein, unless it appears in a written document signed by you and Culligan. Waiver of any provision of this Order shall not be deemed to constitute a continuing waiver.

     2. Payment. You shall pay Culligan the full purchase price as set forth in Attachment A, including any applicable taxes (e.g. state, G.S.T., provincial, county, property, etc.), delivery charges and any fees for storage or insurance after delivery to the location you may specify, and you shall reimburse Culligan for any such payments. Payments are due within 30 days after the date of invoice. You shall be charged the lower of 1 ¹/2% interest per month or the maximum legal rate on all amounts not received by the due date and shall pay all of Culligan’s reasonable costs (including attorneys’ fees) of collecting amounts due but unpaid.

     3. Use; Maintenance. The Products are not for use with influent water which is (a) microbiologically unsafe, or (b) of unknown quality without adequate treatment and/or disinfection. You must maintain the Products according to manufacturer instructions using manufacturer-authorized service parts, including replacement of filters and other components. If your water quality, water consumption, water pressure or flow rate change, or if maintenance of the Products is affected by external factors such as sand or sediment or an inadequate water supply, different or additional Products may be required, and these Products should not be used if such quality, consumption, pressure, flow rate change or external factors are outside of specified ranges. You are responsible for all maintenance of and repairs to the Products, except to the extent covered by paragraph 4, below.

     4. Warranty. Culligan warrants to you that the Products shall be free from defects in material and workmanship. If you give Culligan prompt written notice of breach of this warranty within 12 months after delivery (the “Warranty Period”), Culligan shall, at your sole option and as your exclusive remedy, repair or replace the subject parts or refund the purchase price paid for the relevant Product. If Culligan determines that any claimed breach is not, in fact, covered by this warranty, you shall pay Culligan its then customary charges for any repair or replacement made by Culligan. Culligan’s warranty is conditioned on your (a) operating and maintaining the Products in accordance with Culligan’s instructions, (b) not making any unauthorized repairs or alterations, and (c) not being in default of any payment obligation to Culligan. Culligan’s warranty does not cover damage caused by chemical action or abrasive material, misuse or improper installation (unless installed by Culligan). WITH RESPECT TO THE PRODUCTS PURCHASED HEREUNDER, THE WARRANTIES SET FORTH IN THIS SECTION ARE CULLIGAN’S SOLE AND EXCLUSIVE WARRANTIES, AND CULLIGAN MAKES NO OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR PURPOSE.

ATTACHMENT B
PAGE 2

     5. Cancellation. If you cancel or suspend your Order for any reason other than Culligan’s breach, you shall promptly pay Culligan for work performed prior to cancellation or suspension and any other direct costs incurred by Culligan as a result of such cancellation or suspension.

     6. Liens, Insurance & Indemnity

	a.		Purchased Equipment. If you are purchasing the Products, title to the Products and risk of loss shall pass to you at the time the Products are delivered to the carrier for shipment, or when delivered to the location specified by you, whichever comes first. Prior to your full payment of the purchase price, you shall not permit any lien, encumbrance or security interest to attach to the Products or be levied upon the Products under legal process, or dispose of the Products or permit anything to be done that may impair the value of the Products and you shall insure the Products against risk of loss or damage by fire, including extended coverage, theft and such other casualties, in an amount equal to full replacement value.
	b.		Indemnity. You shall pay, hold harmless, indemnify and defend Culligan, its officers, directors, employees, agents, affiliates, subsidiaries and franchisees (the “Culligan Parties”) from and against any loss, liability, claims, suits and costs caused by, arising out of, or relating to any damage to property or injury or death of persons arising out of the unloading, storage, application, handling, use, or disposal of the Products except for that portion of damages directly attributable to the negligence of the Culligan Parties. You agree to obtain insurance in amounts sufficient to cover your obligations hereunder. Your indemnity obligation will survive the expiration, termination or cancellation of this Order.