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SUPPLY AGREEMENT

Supply Agreement

SUPPLY AGREEMENT | Document Parties: ALLIANCE LAUNDRY SYSTEMS LLC You are currently viewing:
This Supply Agreement involves

ALLIANCE LAUNDRY SYSTEMS LLC

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Title: SUPPLY AGREEMENT
Governing Law: New York     Date: 3/9/2006

SUPPLY AGREEMENT, Parties: alliance laundry systems llc
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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:

 

 

 

 

Cranbury, NJ

  

Glendale, CA

Dallas, TX

  

Syosset, NY

Houston, TX

  

Elkridge, MD

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:

 

 

 

 

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 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


 
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