EXHIBIT 10.34
COINMACH HOLDINGS, LLC
MANAGEMENT CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "AGREEMENT") is made as of March 5,
2003, by and between Coinmach Holdings, LLC, a Delaware limited liability
company (the "Company"), and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("MANAGEMENT STOCKHOLDER"). Except
as otherwise indicated herein, capitalized terms used herein are defined in
SECTION 6 hereof.
WHEREAS, Coinmach Laundry Corporation, a Delaware corporation
("COINMACH LAUNDRY"), will be a wholly-owned subsidiary of the Company on the
Closing Date;
WHEREAS, Coinmach Corporation, a Delaware corporation ("COINMACH
CORPORATION"), is a wholly-owned subsidiary of Coinmach Laundry;
WHEREAS, Appliance Warehouse of America, Inc., a Delaware corporation
("APPLIANCE WAREHOUSE"), was formed as a wholly-owned subsidiary of Coinmach
Corporation;
WHEREAS, Management Stockholder is a senior executive of the Company or
one of the Company's Subsidiaries;
WHEREAS, Management Stockholder acquired shares of common stock, par
value $.01 per share, of Coinmach Laundry (the "NON-EPP COMMON STOCK") in
connection with Coinmach Laundry's going-private transaction in July of 2000;
WHEREAS, Management Stockholder also acquired shares of Class B2
Preferred Stock, par value $.01 per share, of Coinmach Laundry (the "CLC
PREFERRED STOCK") in connection with Coinmach Laundry's going-private
transaction in July of 2000;
WHEREAS, in connection with Coinmach Laundry's equity participation
program (the "CLC EQUITY PARTICIPATION PROGRAM"), Management Stockholder also
acquired shares of common stock, par value $.01 per share, of Coinmach Laundry
(the "EPP COMMON STOCK" and, together with the Non-EPP Common Stock, the "CLC
COMMON STOCK") pursuant to the Coinmach Laundry Corporation Equity Participation
Program Restricted Common Stock Purchase Agreement, dated as of September 6,
2001, by and between Management Stockholder and Coinmach Laundry (the "CLC
EQUITY PURCHASE AGREEMENT");
WHEREAS, Management Stockholder and Coinmach Laundry desire to
terminate the CLC Equity Purchase Agreement and enter into this Agreement, which
shall contain substantially similar terms as the CLC Equity Purchase Agreement;
WHEREAS, in connection with the CLC Equity Participation Program,
Management Stockholder agreed to assign all of the issued and outstanding shares
of EPP Common Stock owned by Management Stockholder to Coinmach Laundry pursuant
to the Senior Management Stock Assignment, dated as of September 6, 2001 (the
"CLC STOCK ASSIGNMENT");
WHEREAS, Management Stockholder desires to replace such CLC Stock
Assignment with an undated instrument of transfer containing customary terms and
conditions of transfer in respect of the securities of the Company received in
exchange for the Contributed Stock (the "INSTRUMENT OF TRANSFER");
WHEREAS, in connection with the purchase of EPP Common Stock under the
CLC Equity Participation Program, Management Stockholder entered into the Senior
Management Promissory Note, dated as of September 6, 2001 (the "CLC PROMISSORY
NOTE"), in favor of Coinmach Laundry;
WHEREAS, Management Stockholder desires to amend and restate the CLC
Promissory Note as set forth in the Amended and Restated Promissory Note, dated
as of the Closing Date (the "AMENDED CLC PROMISSORY NOTE"), with substantially
similar terms as the CLC Promissory Note;
WHEREAS, in connection with the CLC Equity Participation Program,
Management Stockholder entered into the Senior Management Security Agreement,
dated as of September 6, 2001, by and among Management Stockholder, Coinmach
Laundry and the secretary of Coinmach Laundry (the "CLC SECURITY AGREEMENT");
WHEREAS, Management Stockholder desires to amend and restate the CLC
Security Agreement as set forth in the Amended and Restated Security Agreement,
dated as of the Closing Date (the "AMENDED CLC SECURITY AGREEMENT," and together
with the Instrument of Transfer and the Amended CLC Promissory Note, the
"AMENDED EPP DOCUMENTS");
WHEREAS, on or prior to the date hereof, (i) Coinmach Corporation
declared and paid a dividend on its issued and outstanding shares of common
stock, par value $.01 per share, payable in shares of common stock, par value
$.01 per share, of Appliance Warehouse (the "AWA COMMON STOCK"), and (ii)
Coinmach Laundry authorized the declaration of a dividend (the "AWA COMMON STOCK
DIVIDEND") on its issued and outstanding shares of CLC Common Stock in shares of
AWA Common Stock;
WHEREAS, the AWA Common Stock Dividend is payable on the Closing Date
to holders of record of CLC Common Stock as of the Closing Date;
WHEREAS, Management Stockholder desires to contribute to the Company,
and the Company desires to acquire from Management Stockholder, all of (i) the
CLC Common Stock, (ii) the AWA Common Stock (by Management Stockholder's
assignment of its right to receive the AWA Common Stock Dividend), and (iii) the
CLC Preferred Stock (the CLC Preferred Stock, the CLC Common Stock and the AWA
Common Stock being referred to collectively herein as the "CONTRIBUTED STOCK"),
owned (or with respect to which Management Stockholder has the right to
receive), directly or indirectly, by Management Stockholder and listed on
SCHEDULE A attached hereto, in exchange for Common Units and Class C Preferred
Units of the Company in the amounts set forth on SCHEDULE A attached hereto.
NOW THEREFORE, the parties hereto hereby agree as follows:
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Section 1. CONTRIBUTION; ISSUANCE AND VESTING OF COMMON UNITS AND
ISSUANCE OF CLASS C PREFERRED UNITS; CONSENT TO DIVIDEND.
1.1 AUTHORIZATION OF COMMON UNITS AND PREFERRED UNITS. The Company
hereby authorizes the issuance to Management Stockholder of 7,376,400 Common
Units and 3,832.69 Class C Preferred Units.
1.2 CONTRIBUTION OF CONTRIBUTED STOCK AND ISSUANCE OF COMMON UNITS AND
CLASS C PREFERRED UNITS. At the Closing (as defined in SECTION 1.5 below),
subject to the terms and conditions set forth herein, Management Stockholder
shall contribute the CLC Common Stock and the CLC Preferred Stock and assign all
of its right, title and interest in and to the AWA Common Stock Dividend, to the
Company (the "MANAGEMENT STOCK CONTRIBUTION"), and the Company shall issue to
Management Stockholder the number of Common Units and Class C Preferred Units
listed on SCHEDULE A attached hereto in exchange therefor. The Company and
Management Stockholder agree that (i) the fair value of the Common Units
received in exchange for the contributed CLC Common Stock and the AWA Common
Stock is equal to the fair value of the CLC Common Stock and the AWA Common
Stock contributed by Management Stockholder for the Common Units as set forth on
SCHEDULE A, (ii) the fair value of the Class C Preferred Units received in
exchange for the contributed CLC Preferred Stock is equal to the fair value of
the CLC Preferred Stock contributed by Management Stockholder for the Class C
Preferred Units as set forth on SCHEDULE A, (iii) the consideration given by
Management Stockholder is a tax free contribution of property to a partnership
pursuant to Code ss.721, and (iv) each party shall prepare or cause to be
prepared their tax returns in accordance with CLAUSES (I) through (III) above.
The parties hereto hereby acknowledge and agree that upon delivery of the
Dividend Payment Notice to Coinmach Laundry pursuant to SECTION 2.4 hereof, the
Company shall be entitled to receive all of the AWA Common Stock to which
Management Stockholder is entitled pursuant to the AWA Common Stock Dividend
without any further action required to be taken by any party hereto or otherwise
(except as otherwise provided in this SECTION 1.2).
1.3 VESTING OF COMMON UNITS. The Management Stock Contribution shall
include both the Vested Shares and Unvested Shares of EPP Common Stock held by
Management Stockholder under the CLC Equity Purchase Agreement. Management
Stockholder shall receive from the Company at the Closing a number of Common
Units representing the number of Vested Shares of EPP Common Stock held by
Management Stockholder under the CLC Equity Purchase Agreement on the date of
the Closing (together with the other Common Units, the "VESTED COMMON UNITS")
and a number of Common Units representing the number of Unvested Shares of EPP
Common Stock held by Management Stockholder under the CLC Equity Purchase
Agreement on the date of the Closing (the "UNVESTED COMMON UNITS"). 3,117,859 of
the Common Units held by Management Stockholder set forth on SCHEDULE A shall be
subject to the following vesting schedule (expressed as a percentage of
3,117,859 Common Units):
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INSTALLMENT VESTING DATE APPLICABLE TO INSTALLMENT
-------------------- ---------------------------------------------
20% September 6, 2001
20% December 17, 2001
20% December 17, 2002
20% December 17, 2003
20% December 17, 2004
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1.4 NO VOTING RIGHTS. Except as otherwise provided for in the LLC
Agreement, Management Stockholder shall have no voting rights with respect to
the Unvested Common Units.
1.5 CLOSING. The closing of the Management Stock Contribution and the
issuance of the Common Units and Class C Preferred Units (the "CLOSING") shall
take place at the offices of Mayer, Brown, ▇▇▇▇ & Maw, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇ ▇▇▇▇▇ at 10:00 a.m. on the Closing Date, or at such other place designated by
the Company.
1.6 CONSENT TO DIVIDEND. Management Stockholder hereby consents and
agrees to the declaration and payment of the AWA Common Stock Dividend by
Coinmach Laundry prior to the payment of any dividend or other distribution on
such Management Stockholder's CLC Preferred Stock to which such Management
Stockholder may be entitled and expressly agrees, solely in his capacity as a
holder of CLC Preferred Stock, that such Management Stockholder shall not be
entitled to be paid any dividends on its CLC Preferred Stock, including the AWA
Common Stock Dividend, as a condition to the payment of such AWA Common Stock
Dividend.
Section 2. CONDITIONS TO CLOSING. The Company's obligation to issue the
Common Units and Class C Preferred Units to Management Stockholder in connection
with the Management Stock Contribution is subject to the satisfaction as of the
Closing of the following conditions:
2.1 LIMITED LIABILITY COMPANY AGREEMENT. Management Stockholder shall
have entered into the LLC Agreement on the Closing Date and shall have executed
and delivered a counterpart signature page thereto. The LLC Agreement shall be
in full force and effect as of the Closing, and the parties to the LLC Agreement
shall not be in breach of any of the terms thereof.
2.2 REGISTRATION AGREEMENT. Management Stockholder shall have entered
into the Company's registration agreement (the "LLC REGISTRATION AGREEMENT") on
the Closing Date and shall have executed and delivered to the Company a
counterpart signature page thereto. The LLC Registration Agreement shall be in
full force and effect as of the Closing, and the parties to the LLC Registration
Agreement shall not be in breach of any of the terms thereof.
2.3 SECURITYHOLDERS AGREEMENT. Management Stockholder shall have
entered into the Company's securityholders agreement (the "LLC SECURITYHOLDERS
AGREEMENT") on the Closing Date and shall have executed and delivered to the
Company a counterpart signature page thereto. The LLC Securityholders Agreement
shall be in full force and effect as of the Closing, and the parties to the LLC
Securityholders Agreement shall not be in breach of any of the terms thereof.
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2.4 AMENDED EPP DOCUMENTS. Management Stockholder shall have entered
into each of the Amended EPP Documents on the Closing Date and shall have
executed and delivered to the Company a counterpart signature page thereto.
2.5 DELIVERY OF DIVIDEND PAYMENT NOTICE. Management Stockholder shall
have delivered to Coinmach Laundry written notice substantially in the form
attached hereto as EXHIBIT A (the "DIVIDEND PAYMENT NOTICE"), directing and
authorizing Coinmach Laundry to pay to the Company on the Closing Date all of
the AWA Common Stock to which Management Stockholder is entitled pursuant to the
AWA Common Stock Dividend. The Dividend Payment Notice is hereby deemed to
evidence the assignment by Management Stockholder of its right to receive the
AWA Common Stock Dividend pursuant to SECTION 1.2 hereof.
Section 3. REPRESENTATIONS AND WARRANTIES OF MANAGEMENT STOCKHOLDER. As
a material inducement to the Company to enter into this Agreement, Management
Stockholder represents and warrants to the Company that:
3.1 AUTHORIZATION OF TRANSACTIONS. Management Stockholder has full
power and authority to enter into this Agreement and the other agreements
contemplated hereby to which Management Stockholder is a party, and to perform
Management Stockholder's obligations hereunder and thereunder.
3.2 EXECUTION, DELIVERY; VALID AND BINDING AGREEMENTS. This Agreement
has been duly executed and delivered by Management Stockholder, and constitutes,
and the other agreements contemplated hereby to which Management Stockholder is
a party, when executed and delivered by Management Stockholder in accordance
with the terms thereof shall each constitute, a valid and binding obligation of
Management Stockholder, enforceable in accordance with its terms, subject to the
effect of bankruptcy, or other similar laws and to general principles of equity
(whether considered in proceedings at law or in equity).
3.3 NO BREACH. The execution and delivery by Management Stockholder of
this Agreement and the other agreements contemplated hereby to which Management
Stockholder is a party, and the fulfillment of and compliance with the
respective terms hereof and thereof by Management Stockholder, does not and
shall not (i) conflict with or result in a breach of the terms, conditions or
provisions of, (ii) constitute a default under (whether with or without the
giving of notice, the passage of time or both), (iii) result in the creation of
any lien upon Management Stockholder's assets or encumbrance upon Management
Stockholder's Contributed Stock pursuant to, (iv) give any third party the right
to modify, terminate or accelerate any obligation under, (v) result in a
violation of, or (vi) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with, any third party or
any court or administrative or governmental body or agency pursuant to, any law,
statute, rule or regulation to which Management Stockholder is subject, or any
organizational document, agreement, instrument, order, judgment or decree to
which Management Stockholder is subject.
3.4 TITLE TO COINMACH LAUNDRY STOCK. Management Stockholder is the
record and beneficial owner of the shares of Contributed Stock shown on SCHEDULE
A attached hereto. On the Closing Date, Management Stockholder shall transfer to
the Company good and marketable title to such shares of Contributed Stock, free
and clear of all liens or other encumbrances of any
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kind. Except for the shares of stock shown on SCHEDULE A attached hereto,
Management Stockholder owns no other shares of CLC Common Stock, AWA Common
Stock or CLC Preferred Stock and is not a party to any option, warrant, right,
contract, call, put or other agreement or commitment providing for the
acquisition or disposition of any capital stock of Coinmach Laundry (other than
this Agreement and the CLC Equity Purchase Agreement). Management Stockholder is
not a party to any voting trust, proxy or other agreement or understanding with
respect to the voting of any capital stock of Coinmach Laundry, Appliance
Warehouse or the Company.
3.5 LITIGATION. There are no actions, suits, proceedings, orders or
investigations pending or, to the best of Management Stockholder's knowledge,
threatened against or affecting Management Stockholder, at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, which
would adversely affect Management Stockholder's performance under this
Agreement, the other agreements contemplated hereby to which Management
Stockholder is a party or the consummation of the transactions contemplated
hereby or thereby.
3.6 BROKERAGE. There are no claims for brokerage, commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement binding upon Management
Stockholder. Management Stockholder shall pay, and hold the Company harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorneys' fees and out-of-pocket expenses) arising in connection
with any such claim.
3.7 ISSUED ENTIRELY FOR OWN ACCOUNT. The Common Units and Class C
Preferred Units to be issued to Management Stockholder are for investment for
Management Stockholder's own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and Management
Stockholder has no present intention of selling, granting any participation in,
or otherwise distributing the same. By executing this Agreement, Management
Stockholder further represents that Management Stockholder does not have any
contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participation to such person or to any third person, with
respect to any of the Common Units or Class C Preferred Units.
3.8 DISCLOSURE OF INFORMATION. Management Stockholder acknowledges that
he or she is aware of the Company's business affairs and financial condition and
has received all the information Management Stockholder considers necessary or
appropriate for deciding whether to acquire the Common Units and Class C
Preferred Units. Management Stockholder further represents that he or she has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the Common Units or Class C Preferred
Units, and the business, properties, prospects and financial condition of the
Company.
3.9 INVESTMENT EXPERIENCE. Management Stockholder acknowledges that it
can bear the economic risk of its investment, and has such knowledge and
experience in financial or business matters that Management Stockholder is
capable of evaluating the merits and risks of an investment in Common Units and
Class C Preferred Units hereunder.
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3.10 RESTRICTED SECURITIES. Management Stockholder acknowledges that
the Common Units and Class C Preferred Units have not been registered under the
Securities Act, are deemed to constitute "restricted securities" under Rule 701
and Rule 144 promulgated under the Securities Act and must be held indefinitely
unless they are subsequently registered under the Securities Act and qualified
under any applicable state securities laws or an exemption from such
registration and qualification is available. Management Stockholder further
acknowledges that the Company is under no obligation to register the Common
Units or Class C Preferred Units.
3.11 RESALES OF RESTRICTED SECURITIES. Management Stockholder
acknowledges that he or she is familiar with the provisions of Rule 701 and Rule
144 under the Securities Act, which Rules, in substance, permit limited public
resale of "restricted securities" acquired, directly or indirectly from the
issuer thereof, in a non-public offering subject to the satisfaction of certain
conditions. Management Stockholder understands that if the Company becomes
subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, Management Stockholder will not be able to resell the Common Units or Class
C Preferred Units under Rule 701 (i) until at least ninety (90) days after the
Company became subject to such reporting requirements (or any longer stand-off
period, as discussed below, may require) and (ii) unless such resale satisfies
those provisions of Rule 144 that are specified in Rule 701(g)(3). Even if the
Company is not subject to such reporting requirements, the Common Units and
Class C Preferred Units may be resold in certain limited circumstances subject
to satisfaction of all of the applicable provisions of Rule 144. Management
Stockholder further acknowledges that in the event all of the applicable
requirements of Rule 144 are not satisfied, registration under the Securities
Act, compliance with Regulation A, or some other registration exemption will be
required in order to resell the Common Units or Class C Preferred Units.
Management Stockholder understands that no assurances can be given that any such
registration will be made or any such exemption will be available in such event.
3.12 LEGENDS. Management Stockholder acknowledges and understands that
all certificates representing Common Units or Class C Preferred Units shall have
endorsed thereon the legend described in the Senior Management Agreement and
such other appropriate legends reflecting any other restrictions pursuant to the
LLC Agreement, bylaws, this Agreement and/or applicable securities laws.
3.13 STOP-TRANSFER INSTRUCTIONS. Management Stockholder agrees that, if
required by the Company (or a representative of the underwriters) in connection
with the first underwritten registration of the offering of any securities of
the Company under the Securities Act, Management Stockholder will not sell or
otherwise Transfer or dispose of any Common Units, Class C Preferred Units or
other securities of the Company during such stand-off period (not to exceed
one-hundred eighty (180) days following the effective date of the registration
statement of the Company filed under the Securities Act) as may be requested by
the Company or representatives of the underwriters. Management Stockholder
further agrees that the Company may impose stop-transfer instructions with
respect to the Common Units or Class C Preferred Units and any other of
Management Stockholder's securities that are subject to the foregoing
restrictions until the end of such period.
3.14 INVALID TRANSFERS. Management Stockholder acknowledges and agrees
that the Company shall not be required (i) to transfer on its books any Common
Units or Class C
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Preferred Units that have been sold or otherwise Transferred in violation of any
of the representations, warranties, agreements or other provisions contained in
this Agreement or any other agreement between the Company and Management
Stockholder, or (ii) in any such event, to treat as owner of such Common Units
or Class C Preferred Units, or to accord the right to vote or pay dividends to
any purchaser or other transferee to whom such Common Units or Class C Preferred
Units shall have been so Transferred.
3.15 CLOSING DATE. All of the representations and warranties of
Management Stockholder contained in this SECTION 3 and elsewhere in this
Agreement, and all information delivered by Management Stockholder in any
schedule or attachment hereto or in any writing delivered by Management
Stockholder to the Company, are true and correct on the date of this Agreement
and will be true and correct on the Closing Date, except to the extent that
Management Stockholder shall have advised the Company otherwise in writing prior
to the Closing.
Section 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. As a material
inducement to Management Stockholder to enter into this Agreement and make the
Management Stock Contribution, the Company hereby represents and warrants to
Management Stockholder that:
4.1 ORGANIZATION AND POWER. The Company is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware and is qualified to do business in every jurisdiction in which
the failure to so qualify might reasonably be expected to have a material
adverse effect on the financial condition, operating results, assets, operations
or business prospects of the Company. The Company has all requisite power and
authority and all material licenses, permits and authorizations necessary to own
and operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement.
4.2 AUTHORIZATION; NO BREACH. The execution, delivery and performance
of this Agreement and the Amended EPP Documents (collectively, the "TRANSACTION
DOCUMENTS") have been duly authorized by the Company. Each Transaction Document
constitutes a valid and binding obligation of the Company, enforceable in
accordance with its terms. The execution and delivery by the Company of the
Transaction Documents, the issuance of the Common Units and Class C Preferred
Units hereunder, and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company do not and will not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's Units or assets pursuant to, (iv) give
any third party the right to modify, terminate or accelerate any obligation
under, (v) result in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice to any court or administrative
or governmental body pursuant to, the LLC Agreement, or any law, statute, rule
or regulation to which the Company is subject, or any agreement, instrument,
order, judgment or decree to which the Company is a party or by which it is
bound.
4.3 CLOSING DATE. The representations and warranties of the Company
contained in this SECTION 4 and elsewhere in this Agreement shall be true and
correct in all material respects
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on the Closing Date as though then made, except as affected by the transactions
expressly contemplated by this Agreement.
Section 5. ESCROW OF RESTRICTED SECURITIES; CERTAIN MATTERS REGARDING
THE ESCROW AGENT.
5.1 For so long as Common Units or Class C Preferred Units held by
Management Stockholder are subject to the terms of the Amended CLC Security
Agreement, Management Stockholder irrevocably authorizes the Company to deposit
with the Escrow Agent any certificates evidencing such Common Units or Class C
Preferred Units to be held by the Escrow Agent hereunder. Management Stockholder
hereby irrevocably constitutes and appoints the Escrow Agent as Management
Stockholder's attorney-in-fact and agent for the term of the escrow arrangement
created hereunder to execute with respect to such Common Units or Class C
Preferred Units all documents necessary or appropriate to make such Common Units
or Class C Preferred Units negotiable and to complete any transaction herein
contemplated.
5.2 The Escrow Agent is a party to this Agreement only for the purpose
of the escrow instructions contained herein. The duties of the Escrow Agent
hereunder are limited to those expressly set forth herein, and may be altered,
amended, modified or revoked only by a writing signed by all of the parties
hereto. The Escrow Agent may rely and shall be protected in relying or
refraining from acting on any instrument reasonably believed by the Escrow Agent
to be genuine and to have been signed or presented by the proper party or
parties. The Escrow Agent shall not be personally liable for any act the Escrow
Agent may do or omit to do hereunder as Escrow Agent while acting in good faith,
and any act done or omitted by the Escrow Agent pursuant to the advice of the
Escrow Agent's attorneys shall be conclusive evidence of such good faith.
5.3 The Escrow Agent shall not be liable in any respect on account of
the identity, authorities or rights of the parties executing or delivering or
purporting to execute or deliver this Agreement or any documents or papers
deposited or called for hereunder.
5.4 If the Escrow Agent reasonably requires other or further
instruments in connection with the instructions contained in this Agreement, the
necessary parties hereto shall join in furnishing such instruments.
5.5 The responsibilities of the Escrow Agent hereunder shall terminate
if the Escrow Agent ceases to be an officer or agent of the Company or any of
its Subsidiaries or if the Escrow Agent resigns by written notice to the
Company. Upon such termination, the Company shall appoint a successor Escrow
Agent. If at the time of such termination, the Escrow Agent has in its
possession any documents, securities or other property belonging to, and then
deliverable to Management Stockholder, it shall deliver all of the same to
Management Stockholder and shall be discharged of all further obligations under
this Agreement.
5.6 In the event of any dispute with respect to the delivery and/or
ownership or right of possession of the Common Units or Class C Preferred Units
held by the Escrow Agent hereunder, the Company and Management Stockholder
authorize and direct the Escrow Agent to retain in its possession without
liability to anyone all or any part of such Common Units or Class C
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Preferred Units until settlement of such disputes by mutual written agreement of
the parties concerned or by a final order, decree or judgment of a court of
competent jurisdiction after the time for appeal has expired and no appeal has
been perfected, but the Escrow Agent shall be under no duty to institute or
defend any such proceedings.
5.7 The Escrow Agent shall be entitled to employ such legal counsel as
it deems reasonably necessary with respect to the obligations of the Escrow
Agent hereunder, and may rely upon the advice of such counsel.
5.8 The Escrow Agent shall not be liable for the outlawing of any
rights under the statute of limitations with respect to the escrow instructions
contained herein.
5.9 Notwithstanding any permitted Transfer of Restricted Securities,
(i) no Restricted Securities shall be released by the Escrow Agent under this
SECTION 5 until such time that all of Management Stockholder's obligations under
the Amended CLC Security Agreement are satisfied in full and (ii) no such
Transfer shall release Management Stockholder from, or modify or alter in any
manner any obligation of Management Stockholder under, the Amended CLC
Promissory Note.
Section 6. DEFINITIONS. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"AGREEMENT" has the meaning set forth in the preamble hereto.
"AMENDED CLC PROMISSORY NOTE" has the meaning set forth in the twelfth
recital paragraph hereto.
"AMENDED CLC SECURITY AGREEMENT" has the meaning set forth in the
fourteenth recital paragraph hereto.
"AMENDED EPP DOCUMENTS" has the meaning set forth in the fourteenth
recital paragraph hereto.
"APPLIANCE WAREHOUSE" has the meaning set forth in the third recital
paragraph hereto.
"AWA COMMON STOCK" has the meaning set forth in the fifteenth recital
paragraph hereto.
"AWA COMMON STOCK DIVIDEND" has the meaning set forth in the fifteenth
recital paragraph hereto.
"CLASS C PREFERRED UNITS" means Units having the rights and obligations
of Class C Preferred Units set forth in the LLC Agreement.
"CLC COMMON STOCK" has the meaning set forth in the seventh recital
paragraph hereto.
"CLC EQUITY PARTICIPATION PROGRAM" has the meaning set forth in the
seventh recital paragraph hereto.
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"CLC EQUITY PURCHASE AGREEMENT" has the meaning set forth in the
seventh recital paragraph hereto.
"CLC PREFERRED STOCK" has the meaning set forth in the sixth recital
paragraph hereto.
"CLC PROMISSORY NOTE" has the meaning set forth in the eleventh recital
paragraph hereto.
"CLC SECURITY AGREEMENT" has the meaning set forth in the thirteenth
recital paragraph hereto.
"CLC STOCK ASSIGNMENT" has the meaning set forth in the ninth recital
paragraph hereto.
"CLOSING" has the meaning set forth in SECTION 1.5 hereto.
"CLOSING DATE" means March 6, 2003, or such other date as an officer of
the Company or any of its Subsidiaries shall determine.
"CODE" means the United States Internal Revenue Code of 1986, as
amended, and any successor statute.
"COINMACH CORPORATION" has the meaning set forth in the second recital
hereto.
"COINMACH LAUNDRY" has the meaning set forth in the first recital
hereto.
"COINMACH REGISTRATION AGREEMENT" means the Registration Agreement, by
and among CLC Acquisition Corporation, Management Stockholder and each of the
other parties thereto, dated as of July 5, 2000.
"COINMACH STOCKHOLDERS AGREEMENT" means the Stockholders Agreement, by
and among CLC Acquisition Corporation, Management Stockholder and each of the
other parties thereto, dated as of July 5, 2000.
"COMMON UNITS" means Units having the rights and obligations of Common
Units set forth in the LLC Agreement.
"COMPANY" has the meaning set forth in the preamble hereto.
"CONTRIBUTED STOCK" has the meaning set forth in the last recital
paragraph hereto.
"DIVIDEND PAYMENT NOTICE" has the meaning set forth in SECTION 2.5
hereto.
"EPP COMMON STOCK" has the meaning set forth in the seventh recital
paragraph hereto.
"ESCROW AGENT" means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or such other executive officer or
agent of the Company or any of its Subsidiaries as determined by the Company
from time to time.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
-11-
"INSTRUMENT OF TRANSFER" has the meaning set forth in the tenth recital
paragraph hereto.
"LLC AGREEMENT" means the Limited Liability Company Agreement, by and
among the Company and its members, dated as of the Closing Date.
"LLC REGISTRATION AGREEMENT" has the meaning set forth in SECTION 2.2
hereto.
"LLC SECURITYHOLDERS AGREEMENT" has the meaning set forth in SECTION
2.3 hereto.
"MANAGEMENT STOCKHOLDER" has the meaning set forth in the preamble
hereto.
"MANAGEMENT STOCK CONTRIBUTION" has the meaning set forth in SECTION
1.2 hereto.
"NON-EPP COMMON STOCK" has the meaning set forth in the fifth recital
paragraph hereto.
"PERSON" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint share company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"RESTRICTED SECURITIES" means (i) the Common Units issued hereunder,
(ii) the Class C Preferred Units issued hereunder, and (iii) any securities
issued with respect to the securities referred to in CLAUSE (I) or CLAUSE (II)
above by way of a dividend, split, distribution, conversion or in connection
with a combination of securities, or any recapitalization, merger, consolidation
or other reorganization.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"SENIOR MANAGEMENT AGREEMENT" means that certain agreement, dated as of
the Closing Date, by and among Management Stockholder, the Company and Coinmach
Corporation.
"TRANSACTION DOCUMENTS" has the meaning set forth in SECTION 4.2
hereto.
"TRANSFER" means to sell, assign, pledge, offer or otherwise dispose of
any interest in any Units.
"UNITS" has the meaning set forth in the LLC Agreement.
"UNVESTED COMMON UNITS" has the meaning set forth in SECTION 1.3
hereto.
"UNVESTED SHARES" has the meaning set forth in the CLC Equity Purchase
Agreement.
"VESTED COMMON UNITS" has the meaning set forth in SECTION 1.3 hereto.
"VESTED SHARES" has the meaning set forth in the CLC Equity Purchase
Agreement.
-12-
Section 7. MISCELLANEOUS.
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties set forth in this Agreement or in any writing
delivered by the Company or Management Stockholder in connection with this
Agreement shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (regardless of any
investigation, inquiry or examination made by or on behalf of or any knowledge
of any party or on its behalf or the acceptance by any party of a certificate or
opinion).
7.2 TERMINATION OF EXISTING AGREEMENTS. Management Stockholder and
Coinmach Laundry hereby agree and acknowledge that, effective as of the Closing
Date, the Coinmach Stockholders Agreement, the Coinmach Registration Agreement
and the CLC Equity Purchase Agreement are hereby terminated in their entirety
and shall be of no further force or effect.
7.3 REMEDIES. Management Stockholder shall have all rights and
remedies set forth in this Agreement and all rights and remedies which
Management Stockholder has been granted at any time under any other agreement or
contract and all of the rights which Management Stockholder has under any law.
Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law.
7.4 CONSENT TO AMENDMENTS. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of
Management Stockholder. No other course of dealing between the Company and
Management Stockholder or any delay in exercising any rights hereunder shall
operate as a waiver of any rights of any such Person.
7.5 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of either of the parties hereto shall bind and inure to the benefit of the
respective permitted successors, assigns, heirs, executors and administrators of
the parties hereto whether so expressed or not; PROVIDED, HOWEVER, that
Management Stockholder may not assign its rights hereunder without the prior
written consent of the Company.
7.6 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
7.7 COUNTERPARTS. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
-13-
7.8 DESCRIPTIVE HEADINGS; INTERPRETATION. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a Section
of this Agreement. The use of the word "including" in this Agreement shall be by
way of example rather than by limitation.
7.9 FURTHER ASSURANCES. Management Stockholder will execute and
deliver such further instruments of conveyance and transfer and take such
additional action as the Company may reasonably request to effect, consummate,
confirm or evidence the transfer to the Company of the Contributed Stock and any
other transactions contemplated hereby.
7.10 GOVERNING LAW. The Delaware Limited Liability Company Act shall
govern all issues concerning the relative rights of the Company and the holders
of its Common Units and Class C Preferred Units. All other questions concerning
the construction, validity and interpretation of this Agreement and the exhibits
and schedules hereto shall be governed by and construed in accordance with the
internal laws of the State of Delaware, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware.
7.11 ENTIRE AGREEMENT; AMENDMENT. This Agreement between the Company
and Management Stockholder constitutes the full and entire understanding and
agreement between the parties with regard to the subject matter hereof and
thereof, and no party will be liable or bound to any other party in any manner
by any warranties, representations or covenants except as specifically set forth
herein. Except as expressly provided herein, neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge or termination is sought.
7.12 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation of this section being untrue.
7.13 NOTICES. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to Management Stockholder at the address set forth
on the signature page hereto and to the Company at the address indicated below:
Coinmach Holdings, LLC
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with copies, which will not constitute notice to the company, to:
----------------------------------------------------------------
GTCR-CLC, LLC
c/o GTCR ▇▇▇▇▇▇ ▇▇▇▇▇▇, L.L.C.
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.C.
Mayer, Brown, ▇▇▇▇ & Maw
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Contribution
Agreement on the date first written above.
COINMACH HOLDINGS, LLC
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
MANAGEMENT STOCKHOLDER:
/S/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Address:
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
For purposes of Section 7.2 only:
COINMACH LAUNDRY CORPORATION
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Financial Officer
ESCROW AGENT:
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
SCHEDULE A
MANAGEMENT STOCKHOLDER SCHEDULE OF CONTRIBUTED STOCK EXCHANGED FOR UNITS
---------------------------------------------- ---------------------------------
CONTRIBUTED STOCK UNITS
---------------------------------------------- ---------------------------------
7,376,400 shares of CLC Common Stock 7,376,400 Common Units
441.311967 shares of AWA Common Stock
---------------------------------------------- ---------------------------------
3,832.69 shares of CLC Preferred Stock 3,832.69 Class C Preferred Units
---------------------------------------------- ---------------------------------
EXHIBIT A
FORM OF DIVIDEND PAYMENT NOTICE
[ ], 2003
Coinmach Holdings, LLC
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Re: Dividend Payment Notice authorizing Coinmach Laundry
Corporation to pay to Coinmach Holdings all of the
AWA Common Stock beneficially owned by Management
Stockholder pursuant to the AWA Common Stock Dividend
-----------------------------------------------------
Ladies and Gentlemen:
Pursuant to SECTION 2.5 of that certain Contribution Agreement, dated
as of the date hereof (the "CONTRIBUTION AGREEMENT"), by and between the
undersigned (the "MANAGEMENT STOCKHOLDER"), and Coinmach Holdings, LLC, a
Delaware limited liability company ("COINMACH HOLDINGS"), Management Stockholder
hereby directs and authorizes Coinmach Laundry Corporation, a Delaware
corporation, to pay to Coinmach Holdings all of the AWA Common Stock to which
Management Stockholder is entitled pursuant to the AWA Common Stock Dividend on
the Closing Date. All capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Contribution
Agreement.
Management Stockholder has caused this Dividend Payment Notice to be
executed and delivered as of the date first above written.
[Management Stockholder]
_______________________________
