EXHIBIT 10.64
SUPPLY AGREEMENT
This Supply Agreement (hereinafter the "Agreement") is made and entered into by
and among Coinmach Corporation (hereinafter "Coinmach"), Super Laundry Equipment
Corporation (hereinafter "Super Laundry"), (Coinmach and Super Laundry
collectively being referred to herein as "Buyer"), and Alliance Laundry Systems
LLC, a Delaware limited liability company (hereinafter "Seller').
WITNESSETH
WHEREAS, Buyer is in the business of providing vended and non-vended
laundry equipment services for multi-family housing units, owning and operating
their own coin laundries, and is also a distributor of coin laundry and
on-premise laundry equipment and laundromat stores; and
WHEREAS, Buyer wishes to assure itself of an ongoing business relationship
with Seller, which is beneficial to Buyer in terms of assuring that Buyer has
access in sufficient quantities to the Seller's latest products and technology
in the Buyer's business, and other complementary benefits; and
WHEREAS, Buyer previously entered into a Supply Agreement with Seller,
dated as of May 1, 1998; and subsequently revised and extended April 30, 2002,
June 21, 2002, October 22, 2002 and November 26, 2002 (the "Existing Supply
Agreement"); and
WHEREAS, Buyer and Seller now desire to enter into this Agreement, pursuant
to which Buyer will purchase certain of its requirements of the Products from
Seller, in replacement of the Existing Supply Agreement, in order to extend the
term of the relationship between Buyer and Seller, and to put into effect for
the term hereof (as defined in Section 11) the current pricing structure as
reflected on Exhibits A, B, C and D attached hereto.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Requirements Contract - For the term hereof (as defined in Section
11), so long as Seller is a manufacturer of the Products defined in
Section 2 herein and so long as Buyer leases and/or operates premises
on which one or more coin-operated or card-operated washing machines
and/or dryers are located; and/or is an authorized distributor for
Seller's Products in one or more territories, Seller agrees to sell to
Buyer, and Buyer agrees to purchase from Seller, Buyer's requirements
of Products on the terms and conditions contained herein. In the event
Buyer wishes to lease Products, Buyer further agrees to specify to the
lessor that such Products
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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must be purchased from Seller.
2. Definition of Products - For purposes of this Agreement, the parties
agree that the following are the defined "Products" referenced in this
Agreement;
a) All coin-operated or card-operated washing machines and
front load washers;
b) All coin-operated or card-operated dryers, stacked dryers,
and tumbler dryers; and
c) All new replacement and new repair parts for any and all of
Seller's coin-operated or card-operated washing machines,
dryers, frontload washers, stacked dryers and tumbler dryers
owned by, leased to or serviced by Buyer.
3. Price - The prices to be charged Buyer will be **OMITTED PURSUANT TO
CONFIDENTIAL TREATMENT REQUEST**
All prices are stated on an FOB shipping point basis, except Seller
will prepay freight on orders of 42 or more route style products of
Seller's washers and dryers (21 or more for route style stacked
dryers) for shipments within the continental United States and, for
shipments into Mexico, will prepay freight to a destination point
selected by Buyer on the U.S. - Mexican border. For shipments of home
style products to Appliance Warehouse, Seller will prepay freight on
shipments of 12 units or more. For shipments of all products for
distribution, seller will prepay freight on shipments of full
truckloads of equipment [number of units will vary depending on size
and mix of models].
The current prices to be charged Buyer for replacement and repair
parts are those set forth in Seller's published parts price lists,
stated as either a net price or a suggested list price; however, if
such price is listed as a suggested list price, Buyer shall be charged
suggested list price less a **OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST**
Seller reserves the right to select the carrier and shipping point for
Products, as long as current transit times are not materially
affected. Payment terms shall be **OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST**; provided, however, that Seller retains the right
to adjust payment terms in the event that Buyer fails to maintain its
timeliness of payment in all material respects (and after notice there
is no cure within thirty (30) days).
4. Rights with Respect to Future Prices - Seller shall have the right to
change the prices charged Buyer for Products, except for "Special"
models, upon sixty (60) days prior written notice. The percentage
increases in prices by Seller shall not exceed the percentage price
increases which are implemented with respect to Seller's other
customers as documented by Seller's published manufacturer's list
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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prices. **OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST**
5. Competitive Product Subject to the terms hereof and in consideration
of Seller's agreement to provide significant discount pricing, Buyer
agrees to purchase at least ** OMITTED PURSUANT TO CONFIDENTIAL
TREATMENT REQUEST ** of its needed Products from Seller during the
term of the Agreement. In addition, if Seller is unable to deliver
Products which Buyer has ordered within ten (10) days of the date such
Products would be shipped in the ordinary course of Seller's business,
Buyer has the right to instead purchase a like number of pieces of
equipment of comparable grade and quality from any other person;
provided that any such failures to deliver Products within 45 days
from the date such Products were ordered shall be deemed to be a
Default hereunder. In the event Buyer requires certain items of
laundry equipment with respect to which none of the Products
manufactured by Seller substantially conform to the specifications of
such equipment as required by Buyer, then, notwithstanding the
provisions contained in the first sentence of this Section 5, Buyer
shall be free to purchase such equipment from any other person.
In the event, Buyer receives a proposal from a customer specifying
certain equipment other than Seller's and after a good faith effort to
convince the customer to purchase Buyers equipment customer demands
other equipment, such equipment will be excluded from the **OMITTED
PURSUANT TO CONFIDENTIAL TREATMENT REQUEST** requirement.
6. Technical Support - Seller will commit resources to work directly with
Buyer on projects mutually beneficial to both parties, including but
not limited to audit control, electronic display, card-actuated
washers and dryers and stacked frontload washer/dryer combinations.
This is required by Buyer to ensure timely response to competitive new
product developments and to allow Buyer to be more competitive by
offering more efficient customer friendly laundry equipment services.
7. Forecasting and Logistics - Three business days prior to the beginning
of each month, the Buyer shall provide Seller a rolling 90 day
forecast of monthly requirements for each of the product categories,
as defined in Section 2 (a) of the Seller's route business except that
the first 30 days of the forecast shall be by model. Quantities
provided in the forecast will not be binding on Buyer but only serve
to evidence the good faith estimate of future requirements.
Buyer and Seller will work cooperatively and use their good faith
efforts to optimize order processing and distribution logistics using
the following guidelines:
a) The locations listed below will order in full truckload
quantities:
Cranbury, NJ Glendale, CA
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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Dallas, TX Syosset, NY
Houston, TX Elkridge, MD
Union City, CA
b) Intermodel shipments (truckloads on trains) will be made to
these locations with the associated estimated transit time:
Location Transit Time
-------------- ------------
Dallas, TX 3-4 days
Glendale, CA 5-6 days
Houston, TX 3-4 days
Union City, CA 3-4 days
c) Buyer must order in increments of 6 for topload washers,
electric dryers, and gas dryers and in increments of 3 for
stacked dryers - gas and stacked dryers - electric.
8. Product Reliability - Buyer will share, with Seller, service history
and product reliability data which is readily available to Buyer
concerning the performance of Seller's products.
9. Warranty - All Products sold to Buyer shall be sold to Buyer with
Seller's standard commercial limited parts warranties, unless
otherwise specified by Seller and mutually agreed to in writing by
Buyer in advance of any sales; except, however, the Speed Queen
branded route and homestyle Washers, Dryers and Stack Dryers shipped
by Seller to Buyer on or after January 27, 1997 shall be sold to Buyer
without warranty, provided, however, that Seller shall reimburse Buyer
for any cost of material incurred by Buyer which is attributable to
Seller's verified "Epidemic Failure" of component parts, as well as
labor allowances to be agreed upon by Seller and Buyer. An "Epidemic
Failure" of a component part occurs when there is in excess of a
**OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST** failure rate
for the preceding twelve (12) months for that component based on
quantities shipped to Buyer. Seller will extend standard warranty on
all electronic control boards of Money Master, Net Master and MDC
products. Seller will continue to extend standard warranty on all
distribution-style products.
Buyer reserves the right to purchase the Speed Queen branded Washers,
Dryers and Stack Dryers with Seller's standard commercial limited
parts warranties by paying the extra amount specified in Exhibit B
upon sixty (60) days written notice. If the Buyer chooses to buy with
warranty during the term of this Agreement, then the Buyer may not
make another election to buy without warranty during the remainder
of the Agreement.
10. Default and Arbitration - Each of the following shall constitute an
Event of Default under this Agreement:
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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a) Default in the payment when due of any amount owed to either
Party by the other under this Agreement, if such failure
continues for a period of thirty (30) days after payment was due;
b) Default in the obligation to obtain all Products from Seller in
the manner set forth in Sections 1, 2 and 5, if such failure
continues for a period of thirty (30) days after notice by Seller
of such default; and
c) Default in any of Seller's obligations to Buyer hereunder.
Upon the occurrence and continuation of an Event of Default hereunder,
Seller, in the case of an Event of Default under clause A or B of this
Section 10, and Buyer, in the case of an Event of Default under clause A or
C of this Section 10, shall have the non- exclusive right to commence
appropriate proceedings in any state court located in New York, New York,
or in the federal courts for the Southern District of New York, Buyer and
Seller hereby agreeing that it irrevocably submits to the jurisdiction of
such courts and waives, to the fullest extent such party may effectively do
so, the defense of an inconvenient forum to the maintenance of any such
action or proceeding. The foregoing notwithstanding, if there is a dispute
arising out of any of the other terms of this Agreement, such dispute shall
be immediately submitted to arbitration in New York, New York, by a retired
judge provided by the Judicial Arbitration and Mediation Service in
accordance of the commercial rules then in effect of the American
Arbitration Association, and any award of such arbitration shall be final
and binding upon the parties.
11. Term
a) The initial term of this Agreement shall be **OMITTED PURSUANT TO
CONFIDENTIAL TREATMENT REQUEST** commencing on **OMITTED PURSUANT
TO CONFIDENTIAL TREATMENT REQUEST** and ending on **OMITTED
PURSUANT TO CONFIDENTIAL TREATMENT REQUEST**.
b) Buyer shall have the right to terminate this Agreement upon the
occurrence of a "Change of Control" (as hereafter defined)
affecting Buyer and the giving of written notice to Seller
specifying a termination date of not less than 120 days following
the later of the date upon which such "Change of Control"
occurred or the date of such notice. For purposes of this
Agreement, a "Change of Control" shall be deemed to have occurred
upon the earliest of the following events: (i) upon the sale,
transfer or other disposition, on a cumulative basis subsequent
to the date of this Agreement, of equity securities in a party
representing interests sufficient to elect a majority of the
board of
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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directors or other persons responsible for the management or
governance of Buyer or of Coinmach Laundry Corporation, a
Delaware corporation ("CLC"), the sole shareholder of Buyer; (ii)
upon any other occurrence after the date of this Agreement
resulting in the ability of any person or group of persons not
presently in control of Buyer or CLC to, directly or indirectly,
exercise actual control over the direction and management of
Buyer or CLC; or (iii) the sale or other disposition of all or
substantially all of the assets of Buyer; provided, however, that
no Change of Control hereunder shall be deemed to have occurred
following the sale or issuance by Buyer or CLC of any class of
equity securities if such securities are sold in a transaction
pursuant to a registration statement which has been declared
effective by the U.S. Securities and Exchange Commission.
c) Buyer shall have the right to terminate this Agreement upon sixty
(60) days written notice, upon the occurrence of a default
affecting Seller under any of its bank agreements or bond
indentures. Seller must inform Buyer within 10 days of a default
under its debt agreements.
12. Notice - Except as otherwise provided herein, any notice required
hereunder shall be in writing and shall be deemed to have been validly
served, given, or delivered upon (a) deposit in the United States
certified or registered mails, with proper postage prepaid, (b)
deposit with a reputable overnight courier with all charges prepaid,
or (c) delivery, if hand-delivered by messenger, all of which must be
properly addressed to the party to be notified as follows:
If to Seller at: Attn.: Chief Executive Officer
Alliance Laundry Systems LLC
Shepard Street
P.O. Box 990
Ripon, WI 54971-0990
with a copy to: Attn.: Senior Vice President Sales and Marketing
Alliance Laundry Systems LLC
Shepard Street
P.O. Box 990
Ripon. WI 54971-0990
If to Buyer at: Coinmach Corporation
521 East Morehead St., Suite 590
Charlotte, N.C. 28202
Attn. Stephen R. Kerrigan
with a copy to: Mayer, Brown, Rowe & Maw
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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1675 Broadway
New York, New York 10019-5820
Attn.: Ronald S. Brody, Esq.
or to such other address as each party may designate for itself by
like notice.
13. Choice of Law - This Agreement shall be governed by the laws of the
State of New York.
14. Successors and Assigns - This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors, legal representatives, and assigns. This Agreement may not
be assigned, transferred or otherwise conveyed by Seller without
Buyer's prior written consent in the event the proposed assignee or
transferee is a manufacturer, seller or distributor of Products. Such
consent shall not be unreasonably withheld, conditioned or unduly
delayed in the event the proposed assignee or transferee is not a
manufacturer, seller or distributor of Products. This Agreement may
not be assigned, transferred or otherwise conveyed by Buyer without
Seller's prior written consent, which consent shall not be
unreasonably withheld, conditioned or unduly delayed.
15. Counterparts Clause; Telecopy Execution - This Agreement may be
executed in several counterparts, each of which shall be an original
and all of which shall constitute but one and the same instrument.
Delivery of an executed counterpart of this Agreement by telefacsimile
shall be equally as effective as delivery of a manually executed
counterpart of this Agreement. Any party delivering an executed
counterpart of this Agreement by telefacsimile shall also deliver a
manually executed counterpart of this Agreement, but the failure to
deliver a manually executed counterpart shall not affect the validity,
enforceability, and binding effect of this Agreement.
16. Future Acquisitions - Buyer may, in the future, acquire other route
businesses from independent operators and operate such either under a
new wholly-owned subsidiary (if, for example, such acquisition is
structured as a stock purchase with the acquired corporation not
thereafter being merged into one of the entities comprising Buyer) or
under one of Buyer's existing operating entities (if, for example,
such acquisition is structured as. an asset purchase). In the event
that Buyer consummates any such future acquisitions up to a limit of
$50 million in the aggregate, Buyer or its applicable subsidiary shall
remain entitled to the same benefits hereunder as if such person were
a party, as an additional "Buyer," to this Agreement, and in the event
any such acquisition results in a new wholly-owned or controlled
subsidiary of Buyer, Buyer shall cause such new subsidiary up to a
limit of $50 million of acquisitions for such subsidiaries to execute
an agreement, in form and substance satisfactory to Seller, adopting
the terms of this Agreement as a "Buyer" hereunder and agreeing to be
bound by all the terms and provisions hereof; provided, however, that
the foregoing shall not require Buyer or any such new subsidiary to
take any action for acquisitions in excess of $50 million and that is
prohibited by, or would otherwise result in a default under or breach
of, any
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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agreement or instrument to which Buyer or such new subsidiary is a
party and, provided further that, until such time as any such new
subsidiary has adopted this Agreement, Buyer shall cause such new
subsidiary to abide and be bound by the terms hereof in the same
manner as if such new subsidiary were a party hereto. However, in the
event Buyer's new subsidiary is already a party to a non-cancelable
supply agreement (exclusive of a supply agreement which was entered
into by such new subsidiary in contemplation of Buyer's acquisition or
formation of such new subsidiary), Buyer is not bound to cause such
new subsidiary to execute an agreement adopting the terms of this
Agreement or to abide and be bound by the terms hereof in any manner.
Notwithstanding the foregoing provisions, Buyer shall use reasonable
efforts to obtain the cancellation or termination of any provision
preventing a new subsidiary from becoming a party to this Agreement,
provided that Buyer shall not be obligated to expend funds or take any
other action adverse to Buyer's interests in order to obtain such
cancellation or termination, and further provided that upon the
expiration of any such restrictive provision, Buyer shall cause such
new subsidiary to join in and become a party to this Agreement.
17. Incorporation of Schedules - All Exhibits and Schedules attached
hereto are by this reference incorporated herein and made a part
hereof for all purposes as fully set forth herein
18. Section Headings - Section headings contained in this Agreement are
for convenience and reference only and shall not be deemed a part of
this Agreement.
19. Severability - If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid as applied to any particular
case or in all cases, such circumstances shall not have the effect of
rendering such provision invalid in any other case or of rendering any
of the other provisions of this Agreement inoperative, unenforceable
or invalid.
20. Confidentiality - Each of Buyer and Seller shall maintain, and shall
cause each of their respective employees and officers to maintain, the
confidentiality of this Agreement and of all other confidential
proprietary information concerning the parties hereto and their
respective businesses which is obtained by either party in connection
with the negotiation and performance of the transactions contemplated
herein; provided, however, that each of Buyer and Seller, and their
respective officers and employees, may disclose information concerning
this Agreement or any other such non-public information to their
respective external accountants and attorneys, or as may be required
by any applicable law (including, without limitation, the reporting
obligations of either Buyer or Seller under the Securities Act of
1933, the Securities Exchange Act of 1934, or the rules and
regulations promulgated by the Securities and Exchange Commission), or
by any order of any judicial or administrative proceeding. In
addition, each of Buyer and Seller may disclose any such non-public
information (i) pursuant to any law, rule, regulation, direction,
request or order of any judicial, administrative or regulatory
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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authority or proceeding (whether or not having the force or effect of
law), or (ii) to (a) any person providing financing to either such
party hereto, (b) any rating agency or comparable body in connection
with any financing provided to either party hereto, or (c) any
prospective or actual successor or assignee of either party hereto,
provided that each such person to whom disclosure is made pursuant to
this clause (ii) is informed of the confidential nature of such
information in a manner consistent with the practice of the party
making such disclosure when such party is making disclosure of its own
confidential or proprietary information to persons of a similar
nature. The foregoing notwithstanding, each of Buyer and Seller agree
that they shall use the information contained in this Agreement, and
any other confidential proprietary information which they obtain
concerning the other party, only for the purpose of performing their
duties and obligations under this Agreement, and that they shall not
use or exploit such information for their own benefit, or for the
benefit of any other person, without the other party's prior written
consent.
Notwithstanding the foregoing, Buyer and Seller shall be responsible
for any breach of this confidentiality provision by any of their
respective representatives, agents, advisors or providers of
financing. With respect to any information to be disclosed pursuant to
applicable law, legal process or by any order of any judicial,
regulatory or administrative proceeding, the disclosing party will
promptly notify the non-disclosing party thereof and cooperate with
the non-disclosing party to the extent legally permissible if such
non-disclosing party should seek to obtain an order or other reliable
assurance that confidential treatment will be accorded designated
portions of the confidential information.
21. Complete Agreement - This Agreement, those documents expressly
referred to herein and other documents of even date herewith (i)
embody the complete agreement and understanding among the parties, and
(ii) supersede and preempt any prior agreements (including the
Existing Supply Agreement), summaries of terms and conditions,
understandings, or representations by or among the parties, written or
oral, which may have related to the subject matter hereof in any way.
No waiver of any provision hereof shall be effective unless set forth
by written instrument and executed by the parties hereto.
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**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
BUYER: SELLER:
COINMACH CORPORATION, ALLIANCE LAUNDRY SYSTEMS LLC,
a Delaware corporation a Delaware limited liability company
By: /s/ Stephen R. Kerrigan By: /s/ Jeffrey Brothers
----------------------------- -----------------------------
Title: CEO Title: Senior VP Sales & Marketing
SUPER LAUNDRY EQUIPMENT
CORPORATION, a New York corporation
By: /s/ Stephen R. Kerrigan
-----------------------------
Title: CEO
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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EXHIBIT A
**OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST**
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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Exhibit B
**OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST**
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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EXHIBIT C
**OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST**
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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EXHIBIT D
**OMITTED PURSUANT TO CONFIDENTIAL TREATMENT REQUEST**
**Multiple asterisks throughout this Agreement indicate that the portion of this
document so marked has been omitted as a confidential portion of this document
and has been filed separately with the Securities and Exchange Commission.**
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