EXHIBIT
10.11
**Multiple asterisks throughout this
Agreement indicate that the portion of this document so marked has
been omitted pursuant to a request for confidential treatment and
has been filed separately with the Securities and Exchange
Commission.**
SUPPLY
AGREEMENT
This Supply Agreement (hereinafter
the “Agreement”), dated as of January 4, 2006, 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 January 1, 2003 (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) 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. Prices .
Seller shall charge Buyer **OMITTED
PURSUANT TO CONFIDENTIAL TREATMENT REQUEST** 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 (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) for
shipments within the continental United States and, (b) will
prepay freight to a destination point selected by Buyer on the
U.S.—Mexican border for shipments into Mexico. For shipments
of washer extractors and tumbler dryers, **OMITTED PURSUANT TO
CONFIDENTIAL TREATMENT REQUEST** Buyer will use its commercially
reasonable efforts to order and request shipments in full
truckloads (number of units will vary depending on size and mix of
models). Full truckloads are defined as 53’ (fifty three
foot) long trailers.
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 and the costs are
reasonable and competitive. 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 of such non-payment, such
non-payment has continued for a period of 30 days.
4. Rights with Respect to
Future Prices . **OMITTED PURSUANT TO CONFIDENTIAL TREATMENT
REQUEST**
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 **OMITTED PURSUANT TO CONFIDENTIAL
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TREATMENT REQUEST** 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 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 **OMITTED PURSUANT TO
CONFIDENTIAL TREATMENT REQUEST** 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 were
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. This undertaking 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 relating to Buyer’s route
business, as defined in Section 2(a) , 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 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
order in full truckload quantities:
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Cranbury, NJ
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Glendale,
CA
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Dallas,
TX
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Syosset,
NY
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Houston,
TX
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Elkridge,
MD
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Union City, CA
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(b) Intermodel shipments (truckloads
on trains) will be made to these locations with the associated
estimated transit time:
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Location
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Transit Time
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Dallas, TX
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3-4 days
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Glendale, CA
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5-6
days
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Houston, TX
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3-4
days
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Union City, CA
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3-4
days
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(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 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 at the time of purchase, unless otherwise
specified by Seller and mutually agreed to in writing by Buyer in
advance of any sales; except that Speed Queen branded route and
home style Washers, Dryers and Stack Dryers shipped by Seller to
Buyer on or after the date hereof shall be sold to Buyer without
warranty, provided, further, 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 and
other related costs and expenses 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 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
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(iii) such party has taken all
necessary action on its part to authorize the execution and
delivery 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