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Exhibit 10.1
LEHMAN BROTHERS MERCHANT BANKING PARTNERS IV L.P.
c/o LEHMAN BROTHERS INC.
399 PARK AVENUE, 9th FLOOR
NEW YORK, NEW YORK 10022
May 22, 2008
CONFIDENTIAL
Angelica
Corporation
424
South Woods Mill Road
Chesterfield,
MO 63017-3406
This
Letter Agreement is being delivered by Lehman Brothers
Merchant Banking Partners IV L.P. (the “ Fund
”) to Angelica Corporation, a Missouri corporation (the
“ Company
”), in connection with the execution of that certain
Agreement and Plan of Merger, dated as of the date hereof (as
it may be amended from time to time, the “ Merger
Agreement ”), among Clothesline Holdings, Inc., a
Delaware corporation (“ Parent
”), Clothesline Acquisition, Inc., a Missouri
corporation (“ Merger
Sub ”) and the Company, pursuant to which Merger
Sub will merge with and into the Company. Capitalized terms
used but not defined herein shall have the meanings ascribed
to them in the Merger Agreement. The Fund and the Company
hereby agree as follows:
1.
OBLIGATIONS
. To induce the Company to enter into the Merger Agreement,
the Fund hereby absolutely, unconditionally and irrevocably
guarantees to the Company, on the terms and conditions set
forth herein, the payment of the Parent Termination Fee under
Section 7.03(b)(iv) or the Parent Financing Termination Fee
under Section 7.03(b)(v) of the Merger Agreement and, in each
case, any amounts payable by Parent under Section 7.03(d) of
the Merger Agreement, such amount to be paid in cash within
two Business Days (as such terms are defined in the Merger
Agreement) of the failure of Parent to pay the Parent
Termination Fee or the Parent Financing Termination Fee in
accordance with the Merger Agreement. Under no
circumstances shall the maximum amount payable by the Fund
hereunder exceed $10,000,000.
2.
NATURE OF THE
OBLIGATIONS . The Company shall not be obligated to
file any claim relating to the Parent Termination Fee or the
Parent Financing Termination Fee in the event that Parent
becomes subject to a bankruptcy, reorganization or similar
proceeding, and the failure of the Company to so file shall
not affect the Fund’s obligations hereunder. If any
payment to the Company hereunder is rescinded or must
otherwise be returned for any reason whatsoever, the Fund
shall remain liable hereunder with respect to the Parent
Termination Fee or the Parent Financing Termination Fee as if
such payment had not been made (subject to the terms hereof).
This is an unconditional guarantee of payment and not of
collectibility.
3.
CHANGES IN
OBLIGATIONS, CERTAIN WAIVERS . The Fund agrees that the
Company may at any time and from time to time, without notice
to or further consent of the Fund, extend the time of payment
of the Parent Termination Fee and the Parent Financing
Termination Fee, and may also make any agreement with Parent
or with any other person interested in the transactions
contemplated by the Merger Agreement, for the extension,
renewal, payment, compromise, discharge or release thereof, in
whole or in part, or for any modification of the terms thereof
or of any agreement between the Company and Parent or any such
other person without in any way impairing or affecting the
Fund’s obligations under this Letter Agreement. The Fund
agrees that its obligations hereunder shall not be released or
discharged, in whole or in part, or otherwise affected
by: (a) the failure of the Company to assert
any claim or demand or to enforce any right or remedy against
Parent or Merger Sub; (b) any change in the time, place
or manner of payment of the Parent Termination Fee or the
Parent Financing Termination Fee or any rescission, waiver,
compromise, consolidation or other amendment or modification
of any of the terms or provisions of the Merger Agreement or
any other agreement evidencing, securing or otherwise executed
in connection with the Parent Termination Fee or the Parent
Financing Termination Fee (provided that any such change,
rescission, waiver, compromise, consolidation or other
amendment or modification shall be subject to the prior
written consent of Parent to the extent required under the
Merger Agreement); (c) the addition, substitution or
release of any entity or other person interested in the
transactions contemplated by the Merger Agreement (provided
that any such addition, substitution or release shall be
subject to the prior written consent of Parent to the extent
required under the Merger Agreement); (d) any change in
the corporate existence, structure or ownership of Parent or
any other person interested in the transactions contemplated
by the Merger Agreement; (e) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting Parent or
any other person interested in the transactions contemplated
by the Merger Agreement; (f) the existence of any claim,
set-off or other right which the Fund may have at any time
against Parent or the Company, whether in connection with the
Parent Termination Fee, the Parent Financing Termination
Fee or otherwise; or (g) the adequacy of any
other means the Company may have of obtaining payment of the
Parent Termination Fee or the Parent Financing Termination
Fee. To the fullest extent permitted by law, the Fund hereby
expressly waives any and all rights or defenses arising by
reason of any law which would otherwise require any election
of remedies by the Company.
The
Company hereby covenants and agrees that it shall not
institute, and shall cause its subsidiaries and Controlled
Affiliates (as defined below) not to institute, and shall
instruct each affiliate that is not a Controlled Affiliate not
to institute in the name of or on behalf of the Company or any
other person, any proceeding or bring any other claim arising
under, or in connection with, the Merger Agreement or the
transactions contemplated thereby, against the Fund, Parent,
Merger Sub, the Fund Affiliates or Parent Affiliates (as
defined below) except for claims against the Fund under this
Letter Agreement, and the Fund hereby covenants and agrees
that it shall not institute, and shall cause its affiliates
not to institute, any proceeding asserting that this Letter
Agreement is illegal, invalid or unenforceable, in whole or in
part. The Company shall not have any obligation to proceed at
any time or in any manner against, or exhaust any or all of
the
Company’s
rights against, any person liable for the Parent Termination
Fee or the Parent Financing Termination Fee prior to
proceeding against the Fund hereunder. For purposes of this
Letter Agreement, “ Controlled
Affiliate ” of any person means any affiliate
that such person directly or indirectly controls (within the
meaning of Rule 12b-2 of the Securities and Exchange Act of
1934) and, for purposes of this Letter Agreement, includes the
directors and officers of such
person. Notwithstanding anything to the contrary
contained in this Letter Agreement, the Company hereby agrees
that to the extent Parent is relieved by the Company of its
obligations under Sections 7.03(b)(iv), 7.03(b)(v) or 7.03(d)
of the Merger Agreement, the Fund shall be similarly relieved
of its obligations under this Letter Agreement.
4.
NO
WAIVER; CUMULATIVE RIGHTS . No failure on the part of
the Company to exercise, and no delay in exercising, any
right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the
Company of any right, remedy or power hereunder preclude any
other or future exercise of any right, remedy or power. Each
and every right, remedy and power hereby granted to the
Company or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be
exercised by the Company at any time or from time to
time.
5.
REPRESENTATIONS
AND WARRANTIES . The Fund hereby represents and
warrants that:
(a) the
execution, delivery and performance of this Letter Agreement
have been duly authorized by all necessary action and do not
contravene any provision of the Fund’s charter,
partnership agreement, operating agreement or similar
organizational documents or any law, regulation, rule, decree,
order, judgment or material contractual restriction binding on
the Fund or its assets;
(b) all
consents, approvals, authorizations, permits of, filings with
and notifications to, any governmental authority necessary for
the due execution, delivery and performance of this Letter
Agreement by the Fund have been obtained or made and all
conditions thereof have been duly complied with, and no other
action by, and no no
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