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Supply Agreement

Supply Agreement

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 This Supply Agreement involves

Alliance Laundry Systems LLC

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Title: SUPPLY AGREEMENT
Governing Law: New York     Date: 4/8/2010

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Exhibit 10.01

THE USE OF THE FOLLOWING NOTATION IN THIS EXHIBIT INDICATES THAT A CONFIDENTIAL PORTION HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION: [***].

 

SUPPLY AGREEMENT

This Supply Agreement (hereinafter the “Agreement”), dated as of April 1, 2010, is made and entered into by and among Coinmach Corporation (hereinafter, “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 , Seller is a national manufacturer and distributor of Products (as defined herein); and

WHEREAS , Buyer previously entered into a Supply Agreement with Seller, dated as of May 1, 2008 and subsequently extended thru March 31, 2010 (the “Existing Supply Agreement”) which Buyer and Seller wish to terminate and replace with this Agreement; and

WHEREAS , Buyer desires to purchase certain of its requirements for Products (as defined below) from Seller, and Seller desires to sell to Buyer such Products, in each case pursuant to the terms and conditions of this Agreement.

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 12 ), 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 and/or its subsidiaries agrees to purchase from Seller, Buyer’s requirements of Products on the terms and conditions contained herein.

2. Definition of Products . For purposes of this Agreement, the parties agree that the following are the defined “Products” referenced in this Agreement;

(a) Seller’s coin-operated or card-operated washing machines and front load washers;

(b) Seller’s 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. Prices . Seller shall charge [***]. The prices to be charged Buyer will be [***].

[***].

All prices are stated on a FOB shipping point basis, except Seller (a) 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 and stacked washer/dryers) on shipments within the continental United States. For shipments of washer extractors and tumbler dryers, [***]. Buyer will use its commercially reasonable efforts to order and request shipments of equipment in “full truckloads” (as defined below), but it is acknowledged and agreed that the number of units will vary depending on size and mix of models. For purposes hereof, “full truckloads” are defined as full loads of 53' (fifty three foot) long trailers.

The current prices to be charged to Buyer for replacement and repair parts are those set forth in Seller’s published parts price lists at the time of purchase, 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 [***].

 

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Seller reserves the right to select the carrier and shipping point for Products, as long as current transit times are not materially affected and the costs are reasonable and competitive. Payment terms shall be [***]; 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 of such non-payment, such non-payment has continued for a period of 30 days.

4. Rights with Respect to Future Prices . [***].

5. Competitive Products . Subject to the terms hereof and in consideration of Seller’s agreement to provide significant discount pricing, Buyer and/or its subsidiaries agrees to purchase at least [***] of Buyer’s Product requirements from Seller during the term of this Agreement. Notwithstanding the foregoing, if (i) Seller is unable to deliver Products which Buyer has ordered within ten (10) days of the date such Products would otherwise be shipped in the ordinary course of Seller’s business, (ii) Products available from Seller pursuant to this Agreement do not substantially conform to the equipment specifications required by Buyer or are not compatible in any respect or are not able to be used or installed in their present condition without modification for their intended purpose (other than customary modifications routinely made by Buyer, such as reinforced meter cases, dryer ducts, gas lines, pigtails, coin slides, card readers etc.), (iii) despite Buyer’s good faith efforts to solicit a customer to purchase Seller’s equipment, such customer requests the installation or use of equipment from an alternate source, or (iv) Seller refuses or is not able to finance equipment purchases for a customer and such customer decides to buy equipment from an alternate source, then, in each such case, Buyer shall have the right to purchase equipment from any other source (and such purchases by Buyer shall be excluded from the [***] requirement to purchase Products under this Agreement). In the event that specific Product models are unavailable, Buyer has the right to request that Seller substitute upgraded models for delivery at no additional cost to Buyer.

Additionally, any failure by Seller to deliver Products within 45 days from the date such Products are ordered by Buyer shall be deemed to be an Event of Default by Seller hereunder.

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. The parties hereto acknowledge and agree that this undertaking is necessary to permit Buyer to ensure timely responses to competitive new

 

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product developments and to allow Buyer to be more competitive by offering more efficient, customer-friendly laundry equipment services.

7. Forecasting and Logistics . Three (3) business days prior to the beginning of each calendar month, Buyer shall provide Seller a rolling ninety (90) day forecast of monthly requirements for each of the product categories identified in Section 2(a) relating to Buyer’s route business, [except that the first thirty (30) days of the forecast shall be by model.] Quantities provided in the forecast will not be binding on Buyer but shall only serve to evidence a good faith estimate of future requirements.

Buyer and Seller will cooperate with each other and use their respective good faith efforts to optimize order processing and distribution logistics using the following guidelines:

(a) The locations listed below will require orders in full truckload quantities:

 

Cranbury, NJ

  

Monrovia, CA

Dallas, TX

  

Syosset, NY

Houston, TX

  

Elkridge, MD

Union City, CA

  

(b) Intermodel shipments (truckloads on trains) will be made to the following locations with the associated estimated transit time:

 

Location

  

Transit Time

Dallas, TX

  

3-4 days

Monrovia, 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 and stacked washer/dryers.

8. Product Reliability . Buyer and Seller will share with each other service history and product reliability data which is readily available to Buyer concerning the performance of Seller’s products; provided that Seller agrees to treat all such data as confidential information of Buyer and shall not disclose any such data to any third party without Buyer’s prior written approval in accordance with Section 22 hereto.

9. Product Warranty . All Products sold to Buyer shall be sold to Buyer with Seller’s standard manufacturer’s warranty and standard commercial limited parts warranties, in each case in existence at the time of purchase, unless otherwise specified by Seller and mutually agreed to in writing by Buyer in advance of any sale; except [***].

 

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[***]. Seller will continue to extend standard warranty on all distribution-style products and all route style products sold through distribution.

10. Representations and Warranties . Each of Seller and Buyer represents and warrants to the other as of the date hereof that:

(i) such party is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation;

(ii) such party has the power, authority and all other rights necessary and sufficient to enter into and be bound by the terms and conditions of this Agreement and to perform its obligations hereunder; and

(iii) such party has taken all necessary action on its part to authorize the execution, delivery and performance of this Agreement and this Agreement has been duly executed and delivered on behalf of such party and constitutes a legal, valid, binding obligation of such party, enforceable against such party in accordance with its terms.

Seller further represents and warrants to Buyer and covenants as of the date hereof that:

(i) each Product shall be manufactured by Seller and not by any subcontractor or other person or entity, unless in the manufacture of such Products such subcontractor or other person or entity is required to comply with the same product quality and standards applicable to other similar products of Seller and that such Products carry warranties of Seller no less favorable than those provided by Seller on other similar products of Seller;

(ii) each Product shall be manufactured, processed, packaged and shipped by Seller in conformity with all applicable laws and regulations and, upon delivery to Buyer in accordance with the terms and conditions of this Agreement, shall be free of defects, liens, encumbrances or claims of any kind, including, but not limited to, claims of third parties;

(iii) all raw materials purchased, supplies actually supplied or obtained by Seller and all equipment utilized in the manufacture of the Products and parts therefor shall be purchased, supplied, obtained and utilized in compliance with all applicable laws, rules and regulations;

(iv) neither the execution and delivery of this Agreement by Seller nor the performance of Seller’s obligations contemplated hereby will: (a) result

 

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in any violation of or constitute a breach of or default under any of the terms or provisions of: (i) Seller’s formation documents or (ii) without regard to the giving of notice or the passage of time, any contract or any other obligation to which Seller is a party or to which it is subject or bound; (b) violate any judgment, order, injunction, decree or award of any court, administrative agency, arbitrator or governmental body against, or affecting or binding upon, Seller; or (c) constitute a violation by Seller of any applicable law, rule or regulation; and

(v) there are no pending or, to the best of Seller’s knowledge, threatened, judicial, administrative or arbitral actions, claims, suits or proceedings against Seller relating to the activities contemplated by this Agreement or that otherwise could reasonably be expected to have a material adverse effect on Seller’s performance of its obligations hereunder.

11. Default and Arbitration . Each of the following shall constitute an event of default (an “Event of Default”) under this Agreement:

(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 notice of such default is delivered to the applicable party;

(b) Default by Buyer in the obligation to purchase Products from Seller in the manner set forth in Sections 1 and 5 , if such failure continues for a period of thirty (30) days after written notice by Seller of such default; and

(c) Default by Seller in any of Seller’s obligations to Buyer under this Agreement, including but not limited to Seller’s failure to timely deliver Products to Buyer pursuant to Section 5 hereof and Seller’s breach of any representation or warranty of Seller contained in Section 10 hereof.

Upon the occur


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