Exhibit 10.6
[Certain information marked with two asterisks (**) in this exhibit has been
omitted and filed separately with the Securities and Exchange Commission.
Confidential treatment has been requested with respect to the omitted portions]
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LOCATION AGREEMENT
FOR COIN AND NON-COIN OPERATED MACHINES
Each party to this Agreement will hold in strict confidence from any other
person or entity, the subject matter and the terms and provisions of this
Agreement, unless compelled to disclose such information by governmental or
regulatory authorities.
This Agreement is made on February 11, 1999, between SAFEWAY, INC., herein
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called ACCOUNT, and GW SERVICES, INC., herein called GLACIER, and relates to the
placement and operation of GLACIER'S Water Vending Machines, as follows:
GLACIER is the owner of water processing machine(s), herein called machine(s),
and desires to place the machine(s) at the premises owned or leased by the
ACCOUNT in order to sell processed water to the public.
The ACCOUNT agrees to permit a machine(s) to be placed at its place of business
under the below described terms and conditions:
1. PLACEMENT AND OPERATION OF MACHINES
a) ACCOUNT agrees that GLACIER shall have the right to place a
machine(s) at the specific location(s) designated by ACCOUNT within
the municipality known and numbered (see Exhibit A), and any new
locations acquired by ACCOUNT while under this Agreement, upon
approval by GLACIER. ACCOUNT represents and warrants to GLACIER that
ACCOUNT has full authority to permit GLACIER to operate its water
processing machine(s) at the property described in this paragraph and
that there are no restrictions or agreements with any person or
entity which prohibit the operation of a machine at the property.
ACCOUNT will cause to be removed immediately, any water vending
equipment that provides substantially the same function as GLACIER'S
equipment.
b) GLACIER agrees to place a machine(s) at the location(s) designated by
ACCOUNT and to incur the initial costs of permits and licenses,
water, electrical and drain connection improvements necessary for the
operation of the machine(s).
c) ACCOUNT agrees to provide GLACIER with electrical current and city
tap water at ACCOUNT'S expense during the term of this Agreement in
sufficient amounts to allow the machine(s) to properly operate.
d) GLACIER agrees to maintain the machine(s) in good condition and
repair and in full compliance with all health and safety regulations
of government authorities pertaining to water quality. GLACIER agrees
to maintain in full force and effect any permits or licenses required
by governmental authorities to sell processed water.
e) ACCOUNT agrees to promptly report any damage to, or malfunction of
the machine to GLACIER. ACCOUNT agrees to allow GLACIER, its agents,
contractors, and employees access to the property for the purpose of
maintaining and servicing the machine(s). GLACIER will maintain all
machines in accordance with federal and state standards in effect at
the machine location(s).
f) GLACIER shall have the discretion to determine whether the
machine(s), once placed on ACCOUNT'S property, is sufficiently
profitable to merit continued operation at that location. If GLACIER
determines that the machine(s) is not sufficiently profitable, the
machine(s) shall be removed from the location by GLACIER and this
Agreement will be terminated with respect to that location only.
1 of 7 Initials: /s/ GS /s/ GEC
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LOCATION AGREEMENT
FOR COIN AND NON-COIN OPERATED MACHINES
II. FINANCIAL TERMS AND CONDITIONS
a) This Agreement shall commence on the date of installation of initial
GLACIER machine(s) or upon signature of both parties, whichever is
later, and shall remain in effect for a period of sixty (60) months.
This Agreement will automatically renew for one year at the
conclusion of the initial term and for each anniversary thereafter
until canceled in writing with at least 60 days notice by ACCOUNT or
GLACIER.
b) For non-coin operated machine(s), ACCOUNT agrees to collect and remit
to GLACIER the proceeds from the sale of water dispensed by the
machine(s). ACCOUNT shall make the necessary additions to its in-
store accounting system to enable it to transact the sale of
processed water dispensed by GLACIER'S machine(s). ACCOUNT shall be
responsible for collecting from the customer the sales price, as
determined in accordance with this Agreement, for each gallon of
water dispensed.
c) For non-coin operated machine(s), on a weekly basis, GLACIER's
Service Representative shall record, and ACCOUNT's store
representative shall sign and receive a copy of, the meter reading
from the machine(s) indicating the number of gallons of water
dispensed. Gallons sold shall be computed by GLACIER on a four-week
period based on total gallons dispensed as indicated by the weekly
meter readings, multiplied by the sales price. Gallons sold will be
multiplied by the sales price to determine Gross Sales for the
reporting period.
d) GLACIER will determine the sales price for all locations with regard
to the area and the competitive market.
e) ACCOUNT will earn a Commission based on a percentage of Gross Sales,
which commission shall be calculated in accordance with the
commission structure attached as Exhibit B, and shall be net of taxes
and fees (including but not limited to permits, licenses, regulatory
fees and inspection costs) relating to the operation of the machines
(cumulatively, the Fees). A commission percentage shall be calculated
separately for each location, based on the joint performance of all
machines at that location. GLACIER shall provide a monthly accounting
of pertinent financial data on each machine to ACCOUNT.
f) For coin-operated machine(s), GLACIER agrees to pay to ACCOUNT on or
before the 25/th/ of each month, for the previous month's sales
performance, a percentage of the net water sales from each coin-
operated machine per the attached Exhibit B. The amount paid will be
determined by the joint performance of all water processing machines
at any given location.
g) ACCOUNT agrees to honor all promotional coupons or other giveaways
authorized by GLACIER. ACCOUNT will redeem such coupons with GLACIER
in accordance with instructions on the coupons, and GLACIER, upon
receipt of such coupons, will reimburse ACCOUNT the value of the
coupons on a monthly basis.
h) ACCOUNT agrees to and is bound by the terms set forth in the attached
CREDIT AGREEMENT.
III. ADDITIONAL TERMS
a) GLACIER shall provide evidence of Commercial General Liability
Insurance at Account's request. The limits of said coverage shall be
not less than $1,000,000 Combined Single Limit for Bodily Injury,
Death and/or Property Damage. Further, Glacier agrees to place this
insurance with a company rated by A.M. Best and have a "Best" rating
of at least A-,VII.
b) ACCOUNT understands and agrees that the machine(s) shall at all times
remain the property of GLACIER.
c) GLACIER understands and agrees that this Agreement constitutes only a
license to use a portion of the property
2 of 7 Initials: /s/ GS /s/ GEC
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LOCATION AGREEMENT
FOR COIN AND NON-COIN OPERATED MACHINES
described above and shall not be construed to be a lease, easement or
any other interest in real property.
d) During the term of this Agreement, ACCOUNT agrees not to authorize
the placement of another water vending device, either inside or
outside, without first obtaining the consent of GLACIER. ACCOUNT
further agrees not to interfere with sales from or discourage the use
of GLACIER's machine(s) by any means whatsoever.
e) This Agreement shall be binding upon not only the parties hereto, but
their respective heirs, legal representatives, successors and assigns
(except as provided herein).
f) ACCOUNT shall not have the right to assign this Agreement without the
prior written consent of the GLACIER.
g) Any notice which one party desires to give to the other shall be in
writing and shall be either delivered personally or sent by United
States mail, postage prepaid, certified, return receipt requested to
the current address of each party. This Agreement will be governed
under the laws of the state of California.
ACCOUNT NAME: SAFEWAY, INC.
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AUTHORIZED BY: /s/ ▇▇▇▇ ▇▇▇▇▇
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SIGNATURE
▇▇▇▇ ▇▇▇▇▇
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PRINTED NAME
Signed this 8/th/ day of Feb , 1999
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GW SERVICES, INC.
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Vice Pres of Sales
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▇▇▇▇▇ ▇▇▇▇▇▇, Vice President of Sales
3 of 7 Initials: /s/ GS /s/ GEC
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LOCATION AGREEMENT
FOR COIN AND NON-COIN OPERATED MACHINES
CREDIT AGREEMENT
1. AGREEMENT TERMS. The word "Account" means your account with Glacier
Water Services, Inc. The words "you," "your," or "yours" means you and any
person or persons who are also contractually liable under this Agreement. The
words "we," "us," and "our" means Glacier Water Services, Inc., a Delaware
corporation.
2. PROMISE TO PAY. You agree to pay in U. S. Dollars the outstanding
balance of your Account, including applicable finance charges and other late
fees and charges, incurred by you. All checks must be drawn on funds on deposit
in the U.S. We may accept late payments or partial payments or checks and money
orders marked "payment in full" without losing any of our rights under this
Agreement.
3. BILLING. You will receive invoices for bottle purchases at the time
of bottle delivery. You will receive periodic (weekly or monthly) invoices for
water vending. Payment of all invoices is due within 20 days of the date of our
invoice to you (the "Payment Due Date"). In the event that any monthly
commission due you for outside machines exceeds the invoice amount for indoor
water vending, the water vending amount will be deducted from your commission
check and you will not receive an invoice. Bottle invoices must be paid, and
will not be deducted from outside commissions.
4. RETURNED CHECK CHARGES. To the extent not prohibited by law, you will
pay us a $15.00 returned check charge for each check that is returned unpaid.
5. FINANCE CHARGE. If you do not pay in full the outstanding balance on
your Account by the Payment Due Date, you will be obligated to pay us a Finance
Charge at a periodic rate of 1.5% per month (ANNUAL PERCENTAGE RATE: 18.0%) on
the outstanding balance of your Account assessed from the Payment Due Date until
paid in full. The Finance Charge shall be payable on the entire unpaid balance
of your Account, including unpaid Finance Charges from previous periods.
6. NON PAYMENT. If your Account balance is delinquent or in default, we
may suspend or cancel your Account in our discretion. We may remove our water
vending machine(s) from your location in our discretion without further notice
to you if your Account is in default.
7. DEFAULT - COLLECTION COSTS AND LIQUIDATED DAMAGES. You are in default
if you fail to comply with the terms of this Agreement, including failing to
make a required payment when due. If you are in default, we may charge you
reasonable attorney's fees and court or other collection costs as permitted by
law and as actually incurred by us, including post-judgment motions, contempt
proceedings, garnishment, levy, debtor and third party examinations, discovery,
bankruptcy litigation and appeals of any order or judgment. If we remove our
water vending machines from your location because your Account is in default,
you agree to pay us $1,000.00 as Liquidated Damages to offset the costs that may
be incurred by us in undertaking such removal, whether our actual costs are
greater or less than $1,000.00. You acknowledge that the actual costs of such
removal are difficult or impossible to estimate and that the amount of
Liquidated Damages provided in this paragraph is a reasonable estimate of the
costs of removal, travel, storage and administrative expenses that may be
incurred by us. Notwithstanding our right to receive Liquidated Damages from
you pertaining to removal of our water vending machine(s) pursuant to this
paragraph, we reserve all of our rights to seek damages against you for your
breach of this Credit Agreement, the Location Agreement and any other agreements
between us.
8. GOVERNING LAW. This Agreement shall be governed by, construed under
and interpreted in accordance with the laws of the state of California.
4 of 7 Initials: /s/ GS /s/ GEC
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LOCATION AGREEMENT
FOR COIN AND NON-COIN OPERATED MACHINES
EXHIBIT A
If multiple locations attach store listing as Addendum A
Company / Location Name: SAFEWAY, INC.
(Address where machine is located) --------------------------------------------
LOCATION NAME
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STREET ADDRESS
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CITY / STATE / ZIP CODE
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AREA CODE / PHONE NUMBER
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CONTACT PERSON
AGREEMENT CAN NOT BE PROCESSED WITHOUT THE FOLLOWING INFORMATION
Billing (invoice) information: SAFEWAY, INC.
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MAILING ADDRESS
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CITY / STATE / ZIP CODE
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AREA CODE / PHONE NUMBER
============================================
CONTACT PERSON
Payable (check) information:
MAILING ADDRESS
============================================
CITY / STATE / ZIP CODE
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AREA CODE / PHONE NUMBER
============================================
CONTACT PERSON
5 of 7 Initials: /s/ GS /s/ GEC
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LOCATION AGREEMENT
FOR COIN AND NON-COIN OPERATED MACHINES
EXHIBIT B
FOR EXISTING MARKETS
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Average Gallons Commission
Per Day Percentage
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0-200.00 **
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201+ **
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S/50-60
. **
. **
. **
. **
NEW LOCATON/EXPANSION AREAS
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Average Gallons Commission
Per Day Percentage
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0 - 99.99 **
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100.00 - or greater **
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SC4050
. **
. **
. **
. **
** Confidential treatment requested.
6 of 7 Initials: /s/ GS /s/ GEC
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PREPAID MARKETING FUNDS
The following shall act as an Addendum to the accompanying LOCATION AGREEMENT,
(Agreement), between GW SERVICES, INC., (GLACIER), and SAFEWAY, INC. (ACCOUNT).
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The start date and the term of this Addendum shall be as indicated in Section
II, Paragraph (a) of the Location Agreement. GLACIER will pay ACCOUNT a total
of ** (for ** stores
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listed below) for the full term of the Agreement. Should a store close during
the term, the remaining unamortized amount will be refunded to GLACIER or
transferred to a new location. Should a new store open during the term,
additional funds will be paid on a pro rata basis determined by the months
remaining on the initial term. (The amortized amount is rounded off to **
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per month per location for existing market stores and ** per month
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for new location / expansion area stores as identified on page 6 of this
agreement.
Prepaid Marketing Funds are paid in consideration for developing the water
vending business, as follows:
1. Account demonstration surcharge fee waived.
2. Commission payments reduced to 10% during demonstration periods.
3. To employ new Point of Purchase signage on machines.
4. To include GLACIER a minimum of one weekly advertisement per calendar
quarter.
ACCOUNT: SAFEWAY, INC.
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By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name and Title ▇▇▇▇ ▇▇▇▇▇, Sr. Vice President
Signed this 2/8 day of , 19 99 .
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GW SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President of Sales
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▇▇▇▇▇ ▇▇▇▇▇▇, Vice President, Sales
Signed this 11/th/ day of February , 19 99 .
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*Safeway Northern California ** **
*Safeway/Vons/Pavillions, CA, NV ** **
*Safeway Arizona ** **
*Safeway Seattle, WA ** **
*Safeway Portland, OR ** **
*Safeway Denver, CO ** **
*Safeway Eastern, MD, WA/DC ** **
** Confidential treatment requested.
7 of 7 Initials: /s/ GS /s/ GEC
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