<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE TO
Tender Offer Statement under
Section 14(d)(1) or 13(e)(1) of the Securities Exchange Act of 1934
COINMACH LAUNDRY CORPORATION
(Name of Subject Company (Issuer))
CLC ACQUISITION CORPORATION (Offeror)
(Names of Filing Person)
Class A Common Stock, par value $.01 per share
Class B Common Stock, par value $.01 per share
(Title of Class of Securities)
19259L101
(CUSIP Number of Class of Securities)
Bruce V. Rauner
President - CLC Acquisition Corporation
6100 Sears Tower, Chicago, Illinois 60606
(312) 382-2200
(Name, address, and telephone numbers of person authorized
to receive notices and communications on behalf of filing persons)
COPIES TO:
Ronald S. Brody, Esq. Stephen L. Ritchie, Esq.
Mayer, Brown & Platt Kirkland & Ellis
1675 Broadway 200 E. Randolph
New York, New York 10019-5820 Chicago, Illinois 60601
(212) 506-2500 (312) 861-2000
Calculation of Filing Fee
================================================================================
Transaction Value* Amount of Filing Fee
- --------------------------------------------------------------------------------
$178,437,916 $35,688
================================================================================
* Estimated for the purpose of calculating the filing fee only. This amount
assumes the purchase of all outstanding shares of Class A and Class B Common
Stock, each par value $.01 per share, of Coinmach Laundry Corporation at $14.25
per share. The number of shares used in this calculation consists of (i)
13,178,947 shares issued and outstanding as of May 25, 2000, less shares subject
to a rollover agreement which will not be purchased in the offer. The amount of
the filing fee, calculated in accordance with Rule 0-11 under the Securities
Exchange Act of 1934, equals 1/50th of 1% of the value of the shares to be
purchased.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Not applicable Form or Registration No.: Not
applicable
Filing Party: Not applicable Date Filed: Not applicable
[ ] Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[X] third-party tender offer subject to Rule 14d-1.
[ ] issuer tender offer subject to Rule 13e-4.
[X] going-private transaction subject to Rule 13e-3.
[X] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the results
of the tender offer: [ ]
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 1 of 15 Pages
- ------------------------- ------------------
===============================================================================
1 NAME OF REPORTING PERSON
Golder, Thoma, Cressey, Rauner Fund IV, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 3,008,402
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 0
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 3,008,402
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(1)
- ----- -------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(2)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
===============================================================================
- -------------------
(1) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
(2) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 2 of 15 Pages
- ------------------------- ------------------
===============================================================================
1 NAME OF REPORTING PERSON
GTCR Fund VII, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 0
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 0
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 0
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(1)
- ----- -------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(2)
- ----- -------------------------------------------------------------------------
- -------------------
(1) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
(2) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 3 of 15 Pages
- ------------------------- ------------------
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
===============================================================================
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 4 of 15 Pages
- ------------------------- ------------------
===============================================================================
1 NAME OF REPORTING PERSON
GTCR-CLC, LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
Not Applicable
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 0
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 0
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 0
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(1)
- ----- -------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- -------------------------------------------------------------------------------
- -------------------
1 Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 5 of 15 Pages
- ------------------------- ------------------
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(2)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
===============================================================================
- -------------------
(2) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 6 of 15 Pages
- ------------------------- ------------------
===============================================================================
1 NAME OF REPORTING PERSON
Stephen R. Kerrigan
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF, SC
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. citizen
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 687,467(1)
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 1,633,251
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 687,467(1)
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- -------------------------------------------------------------------------------
- -------------------
(1) Includes Shares beneficially owned by MCS, a corporation controlled by
Mr. Kerrigan. Includes Shares underlying options held by MCS to purchase an
aggregate of 308,098 Shares of Class A Common Stock at an exercise price of
$11.90 per share, all of which options are currently exercisable. Includes
Shares underlying options held by Mr. Kerrigan to purchase an aggregate of
(i) 30,000 Shares of Class A Common Stock at an exercise price of
approximately $23.05 per share and (ii) 20,000 Shares of Class A Common
Stock at an exercise price of approximately $10.56 per share, all of which
options are currently exercisable. Does not include Shares underlying
options held by Mr. Kerrigan to purchase an aggregate of (i) 20,000 Shares
of Class A Common Stock at an exercise price of $23.05 per share,
(ii) 30,000 Shares of Class A Common Stock at an exercise price of $10.56
per share, all of which options are not currently exercisable nor become
exercisable within the next 60 days.
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 7 of 15 Pages
- ------------------------- ------------------
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(1)
- ----- -------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(3)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
===============================================================================
- -------------------
(2) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
(3) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 8 of 15 Pages
- ------------------------- ------------------
===============================================================================
1 NAME OF REPORTING PERSON
Mitchell Blatt
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF, SC
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. citizen
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 488,845(1)
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 1,633,251
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 488,845(1)
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(2)
- ----- -------------------------------------------------------------------------
- -------------------
(1) Includes Shares underlying options to purchase an aggregate of (i) 80,000
Shares of Class A Common Stock at an exercise price of $11.90 per share,
(ii) 80,000 Shares of Class A Common Stock at an exercise price of $14.00
per share, (iii) 18,000 Shares of Class A Common Stock at an exercise price
of approximately $23.05 per share and (iv) 12,000 Shares of Class A Common
Stock at an exercise price of approximately $10.56 per share, all of which
options are currently exercisable. Does not include Shares underlying
options to purchase an aggregate of 20,000 Shares of Class A Common Stock
at an exercise price of $11.90 per share, (ii) 20,000 Shares of Class A
Common Stock at an exercise price of $14.00 per share (iii) 12,000 Shares
of Class A Common Stock at an exercise price of approximately $23.05 per
share and (iv) 18,000 Shares of Class A Common Stock at an exercise price
of $10.56 per share, none of which options are currently exercisable nor
become exercisable within the next 60 days.
(2) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
<PAGE>
- ------------------------- ------------------
CUSIP No. 19259L101 13D Page 9 of 15 Pages
- ------------------------- ------------------
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(3)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
===============================================================================
- -------------------
(3) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- -------------------
CUSIP No. 19259L101 13D Page 10 of 15 Pages
- ------------------------- -------------------
===============================================================================
1 NAME OF REPORTING PERSON
Robert M. Doyle
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF, SC
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. citizen
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 227,682(1)
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 1,633,251
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 227,682(1)
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(2)
- -------------------------------------------------------------------------------
- -------------------
(1) Includes Shares underlying options to purchase an aggregate of (i) 131,890
Shares of Class A Common Stock at an exercise price of $11.90 per share,
(ii) 12,000 Shares of Class A Common Stock at an exercise price of
aproximately $23.05 per share and (iii) 8,000 Shares of Class A Common
Stock at an exercise price of $10.56 per share all of which options are
currently exercisable. Does not include Shares underlying options to
purchase an aggregate of (i) 40,000 Shares of Class A Common Stock at an
exercise price of $11.90 per share, (ii) 8,000 Shares of Class A Common
Stock at an exercise price of approximately $23.05 per share and (iii)
12,000 Shares of Class A Common Stock at an exercise price of $10.56 per
share, all of which options are currently exercisable nor become
exercisable within the next 60 days.
(2) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
<PAGE>
- ------------------------- -------------------
CUSIP No. 19259L101 13D Page 11 of 15 Pages
- ------------------------- -------------------
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(3)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
===============================================================================
- -------------------
(3) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- -------------------
CUSIP No. 19259L101 13D Page 12 of 15 Pages
- ------------------------- -------------------
===============================================================================
1 NAME OF REPORTING PERSON
Michael E. Stanky
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF, SC
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. citizen
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 177,692(1)
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 1,633,251
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 177,692(1)
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(2)
- -------------------------------------------------------------------------------
- -------------------
(1) Includes Shares underlying options to purchase an aggregate of (i) 103,521
Shares of Class A Common Stock at an exercise price of $11.90 per share,
(ii) 40,000 Shares of Class A Common Stock at an exercise price of
approximately $14.00 per share and (iii) 6,000 Shares of Class A Common
Stock at an exercise price of $22.31 per share and (iv) 4,000 Shares of
Class A Common Stock at an exercise price of $10.56 per share, all of which
options are currently exercisable. Does not include Shares underlying
options to purchase an aggregate of (i) 10,000 Shares of Class A Common
Stock at an exercise price of $14.00 per share, (ii) 4,000 Shares of Class
A Common Stock at an exercise price of approximately $10.56 per share and
(iii) 6,000 Shares of Class A Common Stock at an exercise price of $10.56
per share, all of which options are not currently exercisable nor become
exercisable within the next 60 days.
(2) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
<PAGE>
- ------------------------- -------------------
CUSIP No. 19259L101 13D Page 13 of 15 Pages
- ------------------------- -------------------
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(3)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
===============================================================================
- -------------------
(3) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
- ------------------------- -------------------
CUSIP No. 19259L101 13D Page 14 of 15 Pages
- ------------------------- -------------------
===============================================================================
1 NAME OF REPORTING PERSON
James N. Chapman
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON:
- ----- -------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [X]
(b) [_]
- ----- -------------------------------------------------------------------------
3 SEC USE ONLY
- ----- -------------------------------------------------------------------------
4 SOURCE OF FUNDS
PF, SC
- ----- -------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) OR 2(E) [_]
- ----- -------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. citizen
- -------------------------------------------------------------------------------
NUMBER OF SOLE VOTING POWER
7
SHARES 51,565(1)
----- ---------------------------------------------
BENEFICIALLY SHARED VOTING POWER
OWNED BY 8 1,633,251
EACH ----- ---------------------------------------------
SOLE DISPOSITIVE POWER
REPORTING 9
PERSON 51,565(1)
----- ---------------------------------------------
WITH SHARED DISPOSITIVE POWER
10 0
- ----- -------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
4,641,653(2)
- -------------------------------------------------------------------------------
- -------------------
(1) Includes Shares underlying options to purchase an aggregate of (i) 28,750
Shares of Class A Common Stock at an exercise price of $11.90 per share,
and (ii) 26,497 shares of Class A Common Stock at an exercise price of
approximately $11.69 per share, all of which options are currently
exercisable. Does not include Shares underlying options to purchase an
aggregate of 36,747 Shares of Class A Common Stock at an exercise price of
approximately $11.69 per share, none of which options are currently
exercisable nor become exercisable within the next 60 days.
(2) Includes the aggregate number of outstanding shares of Class A Common Stock
beneficially owned by all of the members of the Group filing this Amendment
No. 2 (pursuant to Rule 13d-5(b)(1)).
<PAGE>
- ------------------------- -------------------
CUSIP No. 19259L101 13D Page 15 of 15 Pages
- ------------------------- -------------------
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ----- -------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
35.9%(3)
- ----- -------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
===============================================================================
- -------------------
(3) Based upon 12,938,623 shares of Class A Common Stock outstanding as of
May 26, 2000.
<PAGE>
TENDER OFFER
This Tender Offer Statement on Schedule TO (the "Schedule TO") relates to a
tender offer by CLC Acquisition Corporation, a Delaware corporation
("Purchaser") to purchase all outstanding shares of class A common stock, par
value $.01 per share (the "Voting Stock") and class B common stock, par value
$.01 per share (collectively, with the Voting Stock, the "Company Common
Stock"), of Coinmach Laundry Corporation, a Delaware corporation (the
"Company"), for a purchase price of $14.25 per Share, net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions set forth
in the Offer to Purchase dated May 26, 2000 (the "Offer to Purchase") and in the
related Letter of Transmittal (the "Letter of Transmittal" which, together with
the Offer to Purchase, as each may be amended and supplemented from time to
time, constitute the "Offer"). Copies of the Offer to Purchase and the related
Letter of Transmittal are filed with this Schedule TO as Exhibits (a)(1)(i) and
(a)(1)(ii) hereto, respectively. The information set forth in the Offer to
Purchase, including all schedules and annexes thereto, and Letter of Transmittal
is incorporated by reference herein in answer to the items of Schedule TO.
This statement also constitutes Amendment No. 2 to the Schedule 13Ds dated
July 23, 1996, filed by each of (i) Golder, Thoma, Cressey, Rauner Fund IV,
L.P., a Delaware limited partnership, GTCR IV, L.P., a Delaware limited
partnership, and Golder, Thoma, Cressey, Rauner, Inc., a Delaware corporation
and (ii) Stephen R. Kerrigan, Mitchell Blatt, Robert M. Doyle and Michael E.
Stanky, each as previously amended by Amendment No.1 thereto dated December 19,
1997.
Item 1. Summary Term Sheet.
The information set forth in the section of the Offer to Purchase entitled
"Questions and Answers About the Offer and the Merger" is incorporated herein by
reference.
Item 2. Subject Company Information.
(a) Name and Address. The name of the Company is Coinmach Laundry
Corporation. The address of its principal executive office is 55 Lumber Road,
Roslyn, New York 11576.
(b) Securities. The securities which are the subject of the Offer are the
Company's outstanding shares of class A common stock and class B common stock,
each par value $.01 per share. As of May 25, 2000, there were 13,178,947
shares of Company Common Stock outstanding. The information set forth on the
cover page and in the INTRODUCTION of the Offer to Purchase is incorporated
herein by reference.
1
<PAGE>
(c) Trading Market and Price. The information set forth in the section of
the Offer to Purchase entitled "THE TENDER OFFER--Price Range of Shares" is
incorporated herein by reference.
Item 3. Identity and Background of Filing Person.
(a) Name and Address. The name of the filing person is CLC Acquisition
Corporation. The address of its principal executive office is 6100 Sears Tower,
Chicago, Illinois 60606. The information set forth in the section of the Offer
to Purchase entitled "THE TENDER OFFER--Certain Information Concerning
Purchaser" is incorporated herein by reference.
(b) Business and Background of Entities. The information set forth in the
section of the Offer to Purchase entitled "THE TENDER OFFER--Certain Information
Concerning Purchaser" is incorporated herein by reference.
(c) Business and Background of Natural Persons. The information set forth
in the section of the Offer to Purchase entitled "THE TENDER OFFER--Certain
Information Concerning Purchaser" is incorporated herein by reference.
Item 4. Terms of the Transaction.
(a) Material Terms. The information set forth in the section of the Offer
to Purchase entitled "THE TENDER OFFER" is incorporated herein by reference.
(b) Purchases. The information set forth in the section of the Offer to
Purchase entitled "SPECIAL FACTORS--Interests of Certain Persons in the Offer
and the Merger" is incorporated herein by reference.
Item 5. Past Contracts, Transactions, Negotiations and Agreements.
(a) Transactions. The information set forth in the section of the Offer to
Purchase entitled "SPECIAL FACTORS--Related Party Transactions and Transactions
in Common Stock" is incorporated herein by reference.
(b) Significant Corporate Events. The information set forth in the section
of the Offer to Purchase entitled "SPECIAL FACTORS--Background of the Offer and
the Merger; Contacts with the Company" is incorporated herein by reference.
Item 6. Purposes of the Transaction and Plans or Proposals.
(a) Purposes. The information set forth in the section of the Offer to
Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to, Reasons for,
Effects of and Structure of the Offer and the Merger; Plans for the Company" is
incorporated herein by reference.
(b) Use of Securities Acquired. The information set forth in the section of
the Offer to Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to,
Reasons for, Effects of and Structure of the Offer and the Merger; Plans for the
Company" is incorporated herein by reference.
(c) Plans. The information set forth in the section of the Offer to
Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to, Reasons for,
Effects of and Structure of the Offer and the Merger; Plans for the Company" is
incorporated herein by reference.
Item 7. Sources and Amount of Funds or Other Consideration.
(a) Source of Funds. The information set forth in the section of the Offer
to Purchase entitled "THE TENDER OFFER--Source and Amount of Funds" is
incorporated herein by reference.
(b) Conditions. The information set forth in the section of the Offer to
Purchase entitled "THE TENDER OFFER--Source and Amount of Funds" is incorporated
herein by reference.
2
<PAGE>
(d) Borrowed Funds. The information set forth in the section of the Offer
to Purchase entitled "THE TENDER OFFER--Source and Amount of Funds" is
incorporated herein by reference.
3
<PAGE>
Item 8. Interest in Securities of Subject Company.
(a) Securities Ownership. The information set forth in the section of the
Offer to Purchase entitled "SPECIAL FACTORS--Beneficial Ownership of Shares" is
incorporated herein by reference.
(b) Securities Transactions.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
(a) Solicitations or Recommendations. The information set forth in the
section of the Offer to Purchase entitled "SPECIAL FACTORS--Opinion of the
Special Committee's Investment Banker" and "THE TENDER OFFER--Fees and Expenses"
is incorporated herein by reference.
Item 10. Financial Statements.
Not applicable.
Item 11. Additional Information.
(a) Agreements, Regulatory Requirements and Legal Proceedings. The
information set forth in the section of the Offer to Purchase entitled "THE
TENDER OFFER--Effect of the Offer on the Market for the Common Stock; Exchange
Act Registration" and "THE TENDER OFFER--Certain Legal Matters; Regulatory
Approvals" is incorporated herein by reference.
(b) Other Material Information. None.
Item 12. Exhibits.
(a)(1)(i) Offer to Purchase, dated May 26, 2000.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter from the Dealer Manager to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(1)(v) Letter to Clients from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(1)(vi) Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9.
(a)(1)(vii) Summary Advertisement as Published on May 26, 2000.
(a)(1)(viii) Press Release, issued May 15, 2000.
4
<PAGE>
(a)(2) Not applicable.
(a)(3) Exhibit (a)(1)(i) is incorporated herein by reference.
(a)(4) Not applicable.
(a)(5)(i) Agreement and Plan of Merger, dated as of May 12, 2000,
between CLC Acquisition Corporation and the Company.
(a)(5)(ii) Audited financial statements for the Company's 1998 and 1999
fiscal years, beginning on page F-1 of the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1999
(incorporated by reference to the Company's Annual Report on
Form 10-K filed with the Commission on June 28, 1999).
(b) Not applicable.
(c) Opinion of Lazard Freres & Co. LLC, dated May 12, 2000
(incorporated by reference to Exhibit 6 of the
Solicitation/Recommendation Statement on Schedule 14D-9 of the
Company filed with the Commission on May 26, 2000).
(d) Rollover Agreement, dated May 12, 2000, by and among Purchaser
and the Management Group.
(e) Exhibit (a)(5)(iv) is incorporated herein by reference.
(f) Section 262 of the Delaware General Corporation Law (included
as Annex A to the Offer to Purchase filed herewith as
Exhibit (a)(1)(i)).
(g) Not applicable.
(h) Not applicable.
Item 13. Information Required by Schedule 13E-3.
Item 2. Subject Company Information.
(d) Dividends. The Company has not declared or paid any cash
dividends on its Common Stock and does not intend to pay cash dividends on
its Common Stock in the foreseeable future.
5
<PAGE>
(e) Prior Public Offerings. The information set forth in the section
of the Offer to Purchase entitled "THE TENDER OFFER--Certain Information
Concerning the Company" is incorporated herein by reference.
(f) The information set forth in the section of the Offer to Purchase
entitled "THE TENDER OFFER--Certain Information Concerning Purchaser" is
incorporated herein by reference.
Item 4. Terms of the Transactions.
(c) Different Terms. The information set forth in the section of the
Offer to Purchase entitled "SPECIAL FACTORS--Interests of Certain Persons in the
Offer and the Merger" is incorporated herein by reference.
(d) Appraisal Rights. The information set forth in the section of
the Offer to Purchase entitled "SPECIAL FACTORS--Rights of Stockholders
in the Offer and the Merger" is incorporated herein by reference.
(e) Provisions for Unaffiliated Security Holders. None. The
information set forth in the section of the Offer to Purchase entitled
"SPECIAL FACTORS--Rights of Stockholders in the Offer and the Merger" is
incorporated herein by reference.
(f) Eligibility for Listing or Trading. Not applicable.
Item 5. Past Contracts, Transactions, Negotiations and Agreements.
(c) Negotiations or Contracts. The information set forth in the
section of the Offer to Purchase entitled "SPECIAL FACTORS--Background of
the Offer and the Merger; Contacts with the Company" is incorporated herein
by reference.
(e) Agreements Involving the Subject Company's Securities. The
information set forth in the section of the Offer to Purchase entitled
"SPECIAL FACTORS--Related Party Transactions and Transactions in Common
Stock" is incorporated herein by reference.
Item 7. Purposes, Alternatives, Reasons and Effects.
(a) Purposes. The information set forth in the section of the Offer
to Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to, Reasons
for, Effects of and Structure of the Offer and the Merger; Plans for the
Company" is incorporated herein by reference.
(b) Alternatives. The information set forth in the section of the
Offer to Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to,
Reasons for, Effects of and Structure of the Offer and the Merger; Plans
for the Company" is incorporated herein by reference.
(c) Reasons. The information set forth in the section of the Offer to
Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to, Reasons
for, Effects of and Structure of the Offer and the Merger; Plans for the
Company" is incorporated herein by reference.
6
<PAGE>
(d) Effects. The information set forth in the section of the Offer to
Purchase entitled "SPECIAL FACTORS--Purpose of, Alternatives to, Reasons
for, Effects of and Structure of the Offer and the Merger; Plans for the
Company" and "SPECIAL FACTORS--Certain United States Federal Income Tax
Consequences" is incorporated herein by reference.
Item 8. Fairness of the Going-Private Transaction.
(a) Fairness. The information set forth in the section of the Offer
to Purchase entitled "SPECIAL FACTORS--Position of the Management Group and
Purchaser Regarding Fairness of the Offer and the Merger" is incorporated
herein by reference.
(b) Factors Considered in Determining Fairness. The information set
forth in the section of the Offer to Purchase entitled "SPECIAL FACTORS--
Position of Management Group and Purchaser Regarding Fairness of the Offer
and the Merger" is incorporated herein by reference.
(c) Approval of Security Holders. The information set forth in the
section of the Offer to Purchase entitled "SPECIAL FACTORS--Rights of
Stockholders in the Offer and the Merger" is incorporated herein by
reference.
(d) Unaffiliated Representative. The information set forth in the
section of the Offer to Purchase entitled "SPECIAL FACTORS--Background of
the Offer and the Merger; Contracts with the Company" and "SPECIAL FACTORS-
-Recommendation of the Special Committee and the Board of Directors of the
Company; Fairness of the Offer and the Merger" is incorporated herein by
reference.
(e) Approval of Directors. The information set forth in the section
of the Offer to Purchase entitled "SPECIAL FACTORS--Recommendation of the
Special Committee and the Board of Directors of the Company; Fairness of
the Offer and the Merger" is incorporated herein by reference.
(f) Other Offers. None.
Item 9. Reports, Opinions, Appraisals and Negotiations.
(a) Report, Opinion or Appraisal. The information set forth in the
section of the Offer to Purchase entitled "SPECIAL FACTORS--Opinion of the
Special Committee's Investment Banker" is incorporated herein by reference.
(b) Preparer and Summary of the Report, Opinion or Appraisal. The
information set forth in the section of the Offer to Purchase entitled
"SPECIAL FACTORS--Opinion of the Special Committee's Investment Banker" is
incorporated herein by reference.
(c) Availability of Documents. The opinion referred to in the section
of the Offer to Purchase entitled "SPECIAL FACTORS--Opinion of the Special
Committee's Investment Banker" will be made available for inspection and
copying at the principal executive offices of the Company
7
<PAGE>
during regular business hours by any interested equity security holder of
the Company or representative who has been so designated in writing.
Item 10. Source and Amounts of Funds or Other Consideration.
(c) Expenses. The information set forth in the section of the Offer
to Purchase entitled "THE TENDER OFFER--Fees and Expenses" is incorporated
herein by reference.
Item 12. The Solicitation or Recommendation.
(d) Intent to Tender or Vote in a Going-Private Transaction. The
information set forth in the section of the Offer to Purchase entitled
"SPECIAL FACTORS--Interests of Certain Persons in the Offer and the Merger"
is incorporated herein by reference.
(e) Recommendations of Others. The information set forth in the
section of the Offer to Purchase entitled "SPECIAL FACTORS--Position of
Management Group and Purchaser Regarding Fairness of the Offer and the
Merger" is incorporated herein by reference.
Item 14. Persons/Assets, Retained, Employed, Compensated or Used.
(b) Employees and Corporate Assets. None.
8
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
SCHEDULE TO
- -----------
CLC ACQUISITION CORPORATION
By: /s/ Vincent J. Hemmer
--------------------------------------------
Name: Vincent J. Hemmer
Title: President
COINMACH LAUNDRY CORPORATION
By: /s/ Mitchell Blatt
--------------------------------------------
Name: Mitchell Blatt
Title: President
SCHEDULE 13D/A
- --------------
GOLDER, THOMA, CRESSEY, RAUNER FUND IV, L.P.
By: GTCR IV, L.P., its General Partner
----------------------------------
By: GOLDER, THOMA, CRESSEY, RAUNER, INC.,
-------------------------------------
its General Partner
By: /s/ Bruce V. Rauner
-------------------------------------
Name: Bruce V. Rauner
Title: Principal
GTCR FUND VII, L.P.
By: GTCR PARTNERS VII, L.P., its General Partner
--------------------------------------------
By: GTCR GOLDER RAUNER, L.L.C., its General Partner
-----------------------------------------------
By: /s/ Bruce V. Rauner
-----------------------------------------------
Name: Bruce V. Rauner
Title: Principal
GTCR-CLC, LLC
By: /s/ Vincent J. Hemmer
-----------------------------------------------
Name: Vincent J. Hemmer
Title: Vice President
/s/ Stephen R. Kerrigan
----------------------------------------------
Stephen R. Kerigan
/s/ Mitchell Blatt
----------------------------------------------
Mitchell Blatt
/s/ Robert M. Doyle
----------------------------------------------
Robert M. Doyle
/s/ Michael E. Stanky
----------------------------------------------
Michael E. Stanky
/s/ James N. Chapman
----------------------------------------------
James N. Chapman
9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Title
- ----- -----
<S> <C>
(a)(1)(i) Offer to Purchase, dated May 26, 2000.
(a)(1)(ii) Letter of Transmittal.
(a)(1)(iii) Notice of Guaranteed Delivery.
(a)(1)(iv) Letter from the Dealer Manager to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(1)(v) Letter to Clients from Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(1)(vi) Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9.
(a)(1)(vii) Summary Advertisement as Published on May 26, 2000.
(a)(1)(viii) Press Release, issued May 15, 2000.
(a)(2) Not applicable.
(a)(3) Exhibit (a)(1)(i) is incorporated herein by reference.
(a)(4) Not applicable.
(a)(5)(i) Agreement and Plan of Merger, dated as of May 12, 2000, between CLC Acquisition
Corporation and the Company.
(a)(5)(ii) Audited financial statements for the Company's 1998 and 1999 fiscal years,
beginning on page F-1 of the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 1999 (incorporated by reference to the Company's Annual
Report on Form 10-K filed with the Commission on June 28, 1999).
(b) Not applicable.
(c) Opinion of Lazard Freres & Co. LLC, dated May 12, 2000 (incorporated by reference
to Exhibit 6 of the Solicitation/Recommendation Statement on Schedule 14D-9 of the
Company filed with the Commission on May 26, 2000).
(d) Rollover Agreement, dated May 12, 2000, by and among Purchaser and the
Management Group.
(e) Exhibit (a)(5)(iv) is incorporated herein by reference.
(f) Section 262 of the Delaware General Corporation Law (included as Annex A to the
Offer to Purchase filed herewith as Exhibit (a)(1)(i)).
(g) Not applicable.
(h) Not applicable.
(1) Joint Filing Agreement.
</TABLE>
10
<PAGE>
EXHIBIT (A)(1)(i)
Offer to Purchase for Cash
Any and All of the Outstanding Shares of Common Stock
of
Coinmach Laundry Corporation
at
$14.25 Net Per Share
by
CLC Acquisition Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO THE AGREEMENT AND PLAN OF MERGER, DATED
AS OF MAY 12, 2000, BETWEEN COINMACH LAUNDRY CORPORATION (THE "COMPANY") AND
CLC ACQUISITION CORPORATION (THE "PURCHASER") AND IS CONDITIONED UPON, AMONG
OTHER THINGS, THERE BEING VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE
EXPIRATION OF THE OFFER THAT NUMBER OF SHARES OF THE COMPANY'S ISSUED AND
OUTSTANDING COMMON STOCK, PAR VALUE $.01 PER SHARE, WHICH, WHEN COMBINED WITH
THE SHARES OWNED BY PURCHASER WOULD RESULT IN PURCHASER OWNING AT LEAST 51% OF
THE COMPANY'S SHARES OF COMMON STOCK ON THE DATE OF PURCHASE. THE OFFER IS
ALSO SUBJECT TO OTHER TERMS AND CONDITIONS DESCRIBED IN THIS OFFER TO
PURCHASE.
THE COMPANY'S BOARD OF DIRECTORS (THE "BOARD OF DIRECTORS") AT A MEETING
HELD ON MAY 12, 2000, BY UNANIMOUS VOTE OF ALL OF THE DIRECTORS, BASED ON,
AMONG OTHER THINGS, THE RECOMMENDATION OF ITS SPECIAL COMMITTEE, (I)
DETERMINED THAT THE MERGER IS ADVISABLE AND THAT THE TERMS OF THE OFFER AND
THE MERGER ARE FAIR TO, AND IN THE BEST INTERESTS OF, THE COMPANY AND ITS
STOCKHOLDERS (OTHER THAN STOCKHOLDERS OF THE PURCHASER), (II) APPROVED THE
OFFER AND THE MERGER AND APPROVED AND ADOPTED THE AGREEMENT AND PLAN OF
MERGER, AND (III) RECOMMENDED THAT THE STOCKHOLDERS OF THE COMPANY TENDER
THEIR SHARES PURSUANT TO THE OFFER AND, IF STOCKHOLDER APPROVAL IS REQUIRED BY
APPLICABLE LAW, APPROVE THE MERGER AND APPROVE AND ADOPT THE AGREEMENT AND
PLAN OF MERGER.
THIS TRANSACTION HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY SECURITIES REGULATORY
AUTHORITY OF ANY STATE PASSED UPON THE FAIRNESS OR MERITS OF THIS TRANSACTION
NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS OFFER
TO PURCHASE. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
---------------
IMPORTANT
Any holder of shares of common stock of the Company desiring to tender all
or any portion of the shares owned by such stockholder should either (i)
complete and sign the Letter of Transmittal (as defined in this Offer to
Purchase) or a copy thereof in accordance with the instructions in the
enclosed Letter of Transmittal and mail or deliver it, together with the
certificate(s) evidencing shares to be tendered, and any other required
documents, to the Depositary (as defined in this Offer to Purchase), (ii)
where applicable, cause the stockholder's broker, dealer, commercial bank,
trust company or custodian to tender the shares pursuant to the procedures for
book-entry transfer of shares or (iii) comply with the guaranteed delivery
procedures, which book entry transfer and guaranteed delivery procedures are
set forth in "THE TENDER OFFER--Procedures for Tendering Shares." Any
stockholder whose shares are registered in "street name" must contact such
stockholder's broker, dealer, commercial bank, trust company or custodian with
whom such stockholder's shares are registered, if the stockholder desires to
tender its shares. See "THE TENDER OFFER--Procedures for Tendering Shares."
Any stockholder who desires to tender shares of the Company's common stock
and whose certificate(s) evidencing the shares are not immediately available,
or who cannot comply with the procedures for book-entry transfer described in
this Offer to Purchase on a timely basis, may tender such shares by following
the procedures for guaranteed delivery set forth in "THE TENDER OFFER--
Procedures for Tendering Shares."
Questions and requests for assistance may be directed to the Information
Agent (as defined herein) at its address and telephone number set forth on the
back cover of this Offer to Purchase. Additional copies of this Offer to
Purchase, the Letter of Transmittal or other related tender offer materials
may be obtained from the Information Agent.
---------------
The Dealer Manager for the Offer is:
Jefferies & Company, Inc.
May 26, 2000
<PAGE>
(This page intentionally left blank)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER........................ ii
INTRODUCTION................................................................ 1
SPECIAL FACTORS............................................................. 3
1. Background of the Offer and the Merger; Contacts with the Company..... 3
2. Recommendation of the Special Committee and the Board of Directors of
the Company; Fairness of the Offer and the Merger.................... 6
3. Position of Management Group and Purchaser Regarding Fairness of the
Offer and the Merger................................................. 8
4. Opinion of the Special Committee's Investment Banker.................. 9
5. Purpose of, Alternatives to, Reasons for, Effects of and Structure of
the Offer and the Merger; Plans for the Company...................... 14
6. Certain United States Federal Income Tax Consequences................. 15
7. Rights of Stockholders in the Offer and the Merger.................... 16
8. The Merger Agreement.................................................. 18
9. Interests of Certain Persons in the Offer and the Merger.............. 25
10. Beneficial Ownership of Shares........................................ 27
11. Related Party Transactions and Transactions in Common Stock........... 29
THE TENDER OFFER............................................................ 30
1. Terms of the Offer.................................................... 30
2. Acceptance for Payment and Payment for Shares......................... 31
3. Procedures for Tendering Shares....................................... 32
4. Withdrawal Rights..................................................... 35
5. Price Range of the Shares............................................. 36
6. Certain Information Concerning the Company............................ 36
7. Certain Information Concerning Purchaser.............................. 37
8. Source and Amount of Funds............................................ 38
9. Effect of the Offer on the Market for the Common Stock; Exchange Act
Registration......................................................... 39
10. Conditions of the Offer............................................... 40
11. Certain Legal Matters; Regulatory Approvals........................... 41
12. Fees and Expenses..................................................... 44
13. Miscellaneous......................................................... 45
SCHEDULE I -- INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE
OFFICERS OF CLC ACQUISITION CORPORATION AND ALL PERSONS
CONTROLLING IT............................................... I-1
ANNEX A-- SECTION 262 OF THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE..................................................... A-1
</TABLE>
i
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE OFFER AND THE MERGER
The following summary highlights certain important and material information
from this offer to purchase but does not purport to be complete. To fully
understand the offer described in this offer to purchase and for a more
complete description of the terms of the offer described in this document, you
should read carefully this entire offer to purchase, the documents
incorporated by reference herein, and the enclosed letter of transmittal. We
have included section references to direct you to a more complete descriptions
of the topics set forth below.
Q: WHO IS OFFERING TO BUY MY SECURITIES?
A: This offer is being made through the Purchaser, CLC Acquisition
Corporation, a newly formed Delaware corporation, which has not conducted
any business other than in connection with the offer and merger described
in this offer to purchase. We were formed by Bruce V. Rauner, our sole
director and stockholder. Mr. Rauner is also a director of the Company and
a principal of the indirect general partner of Golder, Thoma, Cressey,
Rauner Fund IV, L.P. ("GTCR Fund IV"), the largest single stockholder of
the Company, which currently beneficially owns approximately 23% of the
Company's outstanding common stock. GTCR Fund IV has advised us that it
intends to tender substantially all of its shares in the offer. GTCR Fund
VII, L.P. ("GTCR Fund VII"), of which Mr. Rauner is an affiliate, has
agreed to provide us with equity financing through GTCR-CLC, LLC, an
entity it formed together with GTCR Fund IV, to purchase your shares. For
more information about us and our affiliates, see "THE TENDER OFFER--
Certain Information Concerning Purchaser." In connection with the offer,
certain members of the Company's senior management, consisting of Stephen
R. Kerrigan (Chief Executive Officer), Mitchell Blatt (President and Chief
Operating Officer), Robert M. Doyle (Chief Financial Officer and
Secretary), and Michael E. Stanky (Senior Vice President), and a director,
James N. Chapman, have entered into an agreement that requires them to
exchange most of their shares for our equity interests and therefore they
will not tender most of their shares pursuant to the offer. These
individuals currently beneficially own approximately 5.6% of the Company's
outstanding common stock. See "SPECIAL FACTORS--Beneficial Ownership of
Shares." We intend through this offer and contributions of shares by the
individuals described above and GTCR Fund IV to ultimately acquire all of
the Company's outstanding common stock. For more information about us and
our ownership of the Company after consummation of the merger, see "Who
Will Own the Company After the Merger" and "THE TENDER OFFER--Certain
Information Concerning Purchaser."
Q: WHAT ARE THE CLASSES AND AMOUNTS OF SECURITIES SOUGHT IN THE OFFER?
A: We are making the offer for any and all shares of Class A and Class B
common stock of the Company (other than most of the shares held by certain
members of the Company's senior management and a director who have agreed
to contribute their shares to us in exchange for certain of our equity
interests and GTCR Fund IV who has agreed to contribute a small percentage
of its shares to GTCR-CLC, LLC in exchange for certain of its membership
interests). See "INTRODUCTION."
Q: HOW MUCH IS THE PURCHASER OFFERING TO PAY AND WHAT IS THE FORM OF PAYMENT?
A: We are offering to pay $14.25 net per share in cash, without interest. See
"INTRODUCTION" for more information regarding the terms of our offer.
Q: DOES THE PURCHASER HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
A: Yes. We will obtain the funds from GTCR Fund VII, which will be invested
in us through GTCR-CLC, LLC, in exchange for certain of our equity
interests. GTCR Fund VII has issued a binding commitment letter to us,
committing to an investment of up to $192 million. See "THE TENDER OFFER--
Source and Amount of Funds" for more information relating to the financing
of our offer. A portion of these funds may be provided by certain limited
partners of GTCR Fund VII or other institutional investors.
ii
<PAGE>
Q: IS THE PURCHASER'S FINANCIAL CONDITION RELEVANT TO MY DECISION ON WHETHER
TO TENDER IN THE OFFER?
A: No. Since we are paying you in cash for your shares and since the offer is
not conditioned on our ability to obtain financing, we do not believe that
our financial condition is relevant to your decision to tender in the
offer. See "THE TENDER OFFER--Source and Amount of Funds."
Q: HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
A: You may tender your shares into the offer until 5:00 p.m., New York City
time, on July 3, 2000, which is the scheduled expiration date of the
offering period, unless we decide to extend the offering period if the
conditions to our offer are not met or if we provide for a subsequent
offering period. We will purchase all shares that are properly tendered
and not withdrawn promptly following the expiration date if the conditions
to our offer have been met. See "THE TENDER OFFER--Terms of the Offer" for
more information concerning our ability to extend the expiration date.
Q: CAN THE OFFER BE EXTENDED?
A: Yes. If the conditions to the offer are not satisfied by the expiration
date, we may elect to extend the offer by issuing a press release by 9:00
a.m. on the next business day following the scheduled expiration date of
the offer which states the length of the extension and the approximate
number of shares tendered to date. See "THE TENDER OFFER--Terms of the
Offer."
Q: WILL THERE BE A SUBSEQUENT OFFERING PERIOD?
A: Following the satisfaction of all the conditions to the offer and the
acceptance of and payment for all the shares tendered during the offering
period, we may elect to provide a subsequent offering period.
Q: HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
A: We will announce by press release any extension of the offer no later than
9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. See Section 1 of this document for
more information about extension of the offer. If we determine to provide
a subsequent offering period, we will publicly disclose our intention by
issuing a press release no later than 9:00 a.m., New York City time, five
business days prior to the expiration date of the then applicable offering
period.
Q: WHAT ARE THE MOST SIGNIFICANT CONDITIONS OF THE OFFER?
A: We are not obligated to purchase any shares even if validly tendered,
unless those shares, when added to the shares we then own, represent at
least 51% of the Company's outstanding shares. Furthermore, we are not
obligated to purchase any shares, even if validly tendered, if, among
other things, there has occurred any change, condition, event or
development that has a material adverse effect on the Company, the Company
has materially breached its obligations, covenants or agreements under the
merger agreement, or if there has occurred a breach of any material
representation or warranty of the Company contained in the merger
agreement. The offer is not conditioned on the availability of financing.
See "THE TENDER OFFER--Conditions of the Offer."
Q: HOW DO I TENDER MY SHARES?
A: If you hold your shares "of record," you can tender your shares by sending
the enclosed letter of transmittal to First Union National Bank, our
depositary, at the address listed on the enclosed letter of transmittal.
If your broker, dealer, bank, trust company or custodian holds your shares
in "street name" for you, you must direct your broker to tender in
accordance with the book-entry or guaranteed delivery procedures set forth
in this offer to purchase. See "THE TENDER OFFER--Procedures for Tendering
Shares."
iii
<PAGE>
Q: UNTIL WHAT TIME AND HOW CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
A: You can withdraw tendered shares at any time prior to 5:00 p.m. on the
expiration date of July 3, 2000 by sending a notice of withdrawal to First
Union National Bank, our depositary. If the expiration date is extended,
you can withdraw tendered shares at any time prior to the new expiration
date. Additionally, unless tendered shares are accepted for payment by us
pursuant to the offer, you may also withdraw tendered shares at any time
after July 25, 2000. If we choose to provide for a subsequent offering
period, you will not have withdrawal rights with respect to shares
tendered in the subsequent offering period. See "THE TENDER OFFER--
Withdrawal Rights" for more information about your rights to withdraw
tendered shares.
Q: WHAT DOES THE COMPANY'S BOARD OF DIRECTORS THINK OF THE OFFER?
A: Your board of directors recommends the offer and the merger. A special
committee of your board of directors, consisting of two independent or
disinterested directors, together with its own investment banker,
evaluated the fairness of the offer and the merger. The special committee,
with the assistance of its legal advisor and investment banker, negotiated
the terms of the offer and the merger and recommended that the Company's
full board of directors approve the offer and the merger. At a meeting of
your board of directors on May 12, 2000, the board of directors, by
unanimous vote of all of the directors, based on, among other things, the
unanimous recommendation of the special committee, (i) determined that the
merger is advisable and that the terms of the offer and the merger are
fair to, and in the best interests of, the Company and its stockholders,
(ii) approved the offer and the merger and approved and adopted the merger
agreement, and (iii) recommended that the stockholders of the Company
tender their shares in the offer and, if approval of the merger is
required by applicable law, approve the merger and approve and adopt the
merger agreement. See "SPECIAL FACTORS--Recommendation of the Special
Committee and the Board of Directors of the Company; Fairness of the Offer
and the Merger."
Q: DID THE DIRECTORS WHO ARE NOT EMPLOYEES OF OR OTHERWISE AFFILIATED WITH
THE PURCHASER RECEIVE ANY OPINIONS OR APPRAISALS REGARDING THE FAIRNESS OF
THE PER SHARE PRICE PAYABLE IN THE OFFER?
A: Yes. The special committee received a written opinion, dated May 12, 2000,
from its investment banker, Lazard Freres & Co. LLC, to the effect that,
as of that date and based on and subject to the matters described in the
opinion, the $14.25 per share cash consideration to be received by the
Company's stockholders in the offer and the merger is fair to you, from a
financial point of view. See "SPECIAL FACTORS--Opinion of the Special
Committee's Investment Banker" for more information regarding Lazard
Freres' opinion and financial analysis.
Q: IF THE TENDER OFFER CONDITIONS ARE SATISFIED, WILL THE COMPANY CONTINUE AS
A PUBLIC COMPANY?
A: No. If the merger takes place, the Company will no longer be publicly
owned. Even if the merger does not take place, if we purchase all of the
tendered shares, there may be so few remaining stockholders and publicly
held shares that:
. the Company's shares may no longer meet the published guidelines of The
Nasdaq National Market for continued listing and may be delisted from
Nasdaq;
. there may not be a public trading market for the Company's shares; and
. the Company may cease making filings with the Securities and Exchange
Commission or otherwise cease being required to comply with its rules
relating to publicly held companies.
See "SPECIAL FACTORS--Purpose of, Alternatives to, Reasons for, Effects of
and Structure of the Offer and the Merger; Plans for the Company."
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Q: IF PURCHASER CONSUMMATES THE TENDER OFFER, WHAT ARE ITS PLANS WITH RESPECT
TO ALL THE SHARES THAT ARE NOT TENDERED IN THE OFFER?
A: If, after consummation of the tender offer, the shares of common stock
tendered in the offer, when combined with any shares then owned by
Purchaser, constitute at least 51% of the then outstanding shares, we will
cause a merger to occur between us and the Company. See "TENDER OFFER--
Conditions of the Offer." Prior to the merger, shares contributed to us by
certain officers and a director of the Company will be converted into
certain of our equity interests, and shares contributed to GTCR-CLC, LLC
by GTCR Fund IV will be converted into an equity interest in GTCR-CLC,
LLC, which will in turn contribute the shares to us in exchange for our
equity. All remaining shares of the Company's common stock issued and
outstanding immediately prior to the effective time of the merger will be
converted in the merger into and represent the right to receive $14.25 per
share in cash. The effects of the merger and our plans following the
merger are more fully described in "SPECIAL FACTORS--Purpose of,
Alternatives to, Reasons for, Effects of and Structure of the Offer and
the Merger; Plans for the Company."
Q: WHO WILL OWN THE COMPANY AFTER THE MERGER?
A: After the merger (pursuant to which the Company will be the surviving
entity), the Company will be privately held by GTCR-CLC, LLC and certain
members of the Company's senior management and a director of the Company.
It is anticipated that certain limited partners of GTCR Fund VII and other
institutional investors may also invest directly in us and would be
additional owners of the Company following the merger.
Q: IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
A: Stockholders not tendering in the offer will receive in the merger the
same amount of cash per share which they would have received had they
tendered their shares in the offer. If the offer is consummated and the
number of shares we acquired pursuant to the offer, when combined with the
shares already owned by us, is greater than 51% of the outstanding shares,
we will promptly merge with and into the Company. Therefore, if the merger
takes place, the difference to you between tendering your shares and not
tendering your shares is that you will be paid earlier if you tender your
shares in the offer. See "SPECIAL FACTORS--Rights of Stockholders in the
Offer and the Merger."
Q: WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
A: On May 12, 2000, the last trading day before we announced the proposed
offer to purchase shares for $14.25 per share, the last sale price of the
Company's common stock reported on The Nasdaq National Market was $8.00
per share, representing a 78% premium. We advise you to obtain a recent
quotation for your shares in deciding whether to tender your shares. See
"TENDER OFFER--The Price Range of Shares."
Q: IF I OBJECT TO THE PRICE BEING OFFERED, WILL I HAVE APPRAISAL RIGHTS?
A: Yes. You may elect not to tender your shares, dissent from the merger and
have the fair value of your shares paid to you in cash provided that you
comply with the applicable provisions of the Delaware General Corporation
Law. See "SPECIAL FACTORS--Rights of Stockholders in the Offer and
Merger."
Q: WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
A: If you have more questions about the tender offer, you should contact the
information agent, MacKenzie Partners, Inc., 156 Fifth Avenue, New York,
NY 10010, Telephone: (212) 929-5500, Contact: Mark Harnett, or the dealer-
manager for the offer, Jefferies & Company, Inc., 11100 Santa Monica
Boulevard, 10th Floor, Los Angeles, CA 90025, Telephone: (310) 575-5200,
Contact: Dan Esters.
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To the Holders of Common Stock of
Coinmach Laundry Corporation:
INTRODUCTION
CLC Acquisition Corporation, a Delaware corporation ("Purchaser"), hereby
offers to purchase any and all of the issued and outstanding shares of Class A
common stock, par value $0.01 per share (the "Voting Shares") and Class B
common stock, par value $0.01 per share (the "Non-Voting Shares" and, together
with the Voting Shares, the "Shares" or "Common Stock"), of Coinmach Laundry
Corporation, a Delaware corporation (the "Company"), at a price of $14.25 per
Share, net to the seller in cash without interest thereon (less any required
withholding taxes) (the "Offer Price"), upon the terms and subject to the
conditions set forth in this Offer to Purchase and in the related Letter of
Transmittal (as they may be amended or supplemented from time to time, shall
together constitute the "Offer").
Holders of Shares (collectively, "Stockholders") whose Shares are registered
in their own name and who tender directly to First Union National Bank, as
depositary (the "Depositary"), will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by Purchaser
pursuant to the Offer. Stockholders of the Company who hold their Shares
through a broker or bank should consult such institution as to whether it
charges any service fees. Purchaser will pay all charges and expenses incurred
in connection with the Offer, including the charges and expenses of the
Depositary and MacKenzie Partners, Inc. (the "Information Agent"). See "THE
TENDER OFFER--Fees and Expenses."
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the offer that number of
shares of Common Stock which, when combined with the shares owned by
Purchaser, would result in Purchaser owning at least 51% of the outstanding
Common Stock on the date of purchase, (2) there not having occurred on or
prior to the date of purchase any change, condition, event or development
having a material adverse effect on the Company, (3) the Company not having
breached in any material respect as of the date of purchase, any of its
covenants, obligations or agreements contained in the Agreement and Plan of
Merger between the Company and the Purchaser, dated May 12, 2000 (the "Merger
Agreement"), (4) the Company not having been in breach, on or prior to the
date the Shares are purchased, of any of its representations or warranties
contained in the Merger Agreement except where any such breach does not have a
material adverse effect on the Company, and (5) the expiration or termination
of any and all waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended and the regulations thereunder. These and
certain other conditions to the consummation of the Offer are more fully
described in "THE TENDER OFFER--Conditions of the Offer."
The Offer is being made pursuant to the terms of an Agreement and Plan of
Merger, dated as of May 12, 2000, between Purchaser and the Company. The
Merger Agreement provides that, among other things, if the Purchaser acquires
enough Shares pursuant to the Offer to hold at least 51% of the outstanding
Common Stock and certain other specified conditions are met, then as promptly
as practicable after the Offer, Purchaser will be merged with and into the
Company (the "Merger"), with the Company continuing as the surviving
corporation (the "Surviving Corporation"). At the effective time of the Merger
(the "Effective Time"), except for Shares held by Stockholders exercising
their appraisal rights in accordance with the Delaware General Corporation Law
(the "DGCL"), each outstanding Share will, by virtue of the Merger and without
any action on the part of the Stockholders, be canceled and be converted into
the right to receive an amount per Share in cash equal to the Offer Price,
without interest (the "Merger Consideration"). The terms and conditions of the
Merger Agreement are more fully described in "SPECIAL FACTORS--The Merger
Agreement."
Subject to appraisal rights under the DGCL, Shares not tendered in the Offer
will be canceled in the Merger and converted into the right to receive the
Merger Consideration. Stockholders who hold their Shares at the time of the
Merger and who fully comply with the statutory appraisal procedures set forth
in the DGCL, the relevant provisions of which are attached as Annex A of this
Offer to Purchase, will be entitled to dissent from the Merger and have the
fair value of their Shares (which may be more than, equal to, or less than the
Merger Consideration) judicially determined and paid to them in cash pursuant
to the procedures prescribed by the DGCL. NO APPRAISAL RIGHTS ARE AVAILABLE TO
STOCKHOLDERS WHOSE SHARES ARE PURCHASED IN THE OFFER. See "SPECIAL FACTORS--
Rights of Stockholders in the Offer and the Merger."
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At a meeting of the Board of Directors held on May 12, 2000, by unanimous
vote of all of the directors, based on, among other things, the unanimous
recommendation of a special committee formed to consider the Offer and Merger
consisting of Dr. Arthur B. Laffer and Mr. Stephen G. Cerri (the "Special
Committee"), the Board of Directors (i) determined that the Merger is
advisable and that the terms of the Offer and the Merger are fair to and in
the best interests of the Company and the Stockholders, (ii) approved the
Offer and the Merger and approved and adopted the Merger Agreement, and (iii)
recommended that the Stockholders of the Company tender their Shares pursuant
to the Offer and, if approval is required by applicable law, approve the
Merger and approve and adopt the Merger Agreement.
The Purchaser was formed by Bruce V. Rauner, a director of the Company and a
principal of the indirect general partner of GTCR Fund IV. Mr. Rauner is the
sole stockholder and sole director of the Purchaser. GTCR Fund IV is the
Company's largest Stockholder and is controlled by certain affiliates of the
Purchaser. GTCR Fund IV currently beneficially owns approximately 23% of the
Common Stock and has indicated that it will tender substantially all of its
Shares on the same terms as all other Stockholders of the Company. GTCR Fund
VII, of which Mr. Rauner is an affiliate, has delivered to Purchaser a binding
commitment letter to provide financing of up to $192 million in exchange for
equity interests in Purchaser. GTCR Fund VII will provide such financing
through GTCR-CLC, LLC, an entity formed by it and GTCR Fund IV. Simultaneously
with the execution of the Merger Agreement, Purchaser entered into a Rollover
Agreement (the "Rollover Agreement") with certain members of the Company's
senior management consisting of: Stephen R. Kerrigan, Chief Executive Officer;
Mitchell Blatt, President and Chief Operating Officer; Robert M. Doyle, Chief
Financial Officer and Secretary; and Michael E. Stanky, Senior Vice President;
and a director of the Company, James N. Chapman (collectively, the "Management
Group"). The Rollover Agreement obligates the Management Group to exchange
certain of their Shares for equity interests of the Purchaser. The Management
Group currently beneficially owns approximately 5.6% of the Common Stock and
has agreed to contribute approximately 89% of the Common Stock beneficially
held by them pursuant to the terms of the Rollover Agreement. See "SPECIAL
FACTORS--Beneficial Ownership of Shares."
The Company has advised Purchaser that Lazard Freres & Co. LLC ("Lazard
Freres"), investment banker to the Special Committee, has delivered to the
Special Committee its written opinion, dated May 12, 2000, to the effect that,
as of that date and based on and subject to the matters described in the
opinion, the $14.25 per Share cash consideration to be received by the
Stockholders (other than Purchaser or the stockholders of Purchaser) in the
Offer and the Merger (collectively, the "Public Stockholders") was fair, from
a financial point of view, to the Public Stockholders. A copy of the Lazard
Freres opinion, which sets forth the assumptions made, procedures followed,
and matters considered by Lazard Freres, is contained in the Company's
Solicitation/Recommendation Statement on Schedule 14D-9 (the "Schedule 14D-9")
filed with the Securities and Exchange Commission (the "SEC"). The Schedule
14D-9 is being mailed to the Stockholders concurrently with the mailing of
this Offer to Purchase. The Schedule 14D-9 may be inspected at, and copies may
be obtained from, the same places and in the manner set forth in "THE TENDER
OFFER--Certain Information Concerning the Company--Additional Information."
Stockholders are urged to read the Fairness Opinion carefully in its entirety.
THIS OFFER TO PURCHASE AND THE LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ CAREFULLY BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
2
<PAGE>
SPECIAL FACTORS
1. Background of the Offer and the Merger; Contacts with the Company
GTCR Fund IV initially acquired an interest in the Company in January 1995.
As principals of the indirect general partner of GTCR Fund IV, Bruce V. Rauner
and David A. Donnini, each of whom is a director of the Company, beneficially
own the Shares held by GTCR Fund IV. Presently, GTCR Fund IV beneficially owns
approximately 23% of the outstanding Shares.
An integral component of the Company's business strategy since January 1995
has been growth through selective acquisitions designed to increase the
Company's installed machine base and achieve economies of scale, increase
operating efficiencies and improve financial performance.
From November 1995 to March 1998, the Company pursued a strategy of rapid
growth through acquisitions, expanding its national presence in the outsourced
laundry equipment services industry. Against the background of limited
opportunities for significant acquisitions, in an effort to preserve capital
and reduce its level of indebtedness, the Company determined to slow its rate
of growth by acquisitions. During this period, the Company's Board of
Directors became concerned that the Company's strong operating performance
within its core business was not appropriately reflected in its share price.
These concerns were discussed internally with management and with the
Company's investment bankers in early 1997, resulting in a determination to
evaluate available strategies and/or opportunities to maximize shareholder
value, including possibly a sale of the Company. Following an active
solicitation process conducted by a nationally recognized investment banking
firm, including meetings with potential acquirors and strategic partners, the
Company received only one acquisition proposal and their proposal was at a
price per share less than the trading price of the Common Stock at that time.
In October 1999, certain members of management and affiliates of GTCR Fund
VII commenced discussions concerning a potential acquisition of the Company
with a view toward taking it private.
As a result of these discussions, on October 12, 1999, GRKC Holding Company,
LLC ("GRKC"), a newly formed entity controlled by two of the Company's present
directors, Mr. Kerrigan (CEO and Chairman) and Mr. Chapman (director and
investment banker to the Company), delivered a written proposal to the Board
of Directors to acquire between 80% and 90% of the Common Stock for a cash
purchase price of $13.00 per share (the "$13 Offer"), to be financed by GTCR
Golder Rauner, L.L.C, an affiliate of GTCR Fund VII, pursuant to the terms of
an equity commitment letter providing up to $155 million in equity financing,
subject to customary conditions.
On October 13, 1999, GRKC received from GTCR Golder Rauner, L.L.C a
commitment letter to provide financing of up to $155 million in exchange for
equity interests in GRKC which contained terms and conditions similar to those
contained in the $13 Offer.
On October 13, 1999, a special meeting of the Board of Directors was held
pursuant to which Mr. Kerrigan notified the Board of Directors of GRKC's
acquisition proposal. The Board of Directors, consisting of Stephen R.
Kerrigan, Mitchel Blatt, David A. Donnini, Bruce V. Rauner, James N. Chapman,
Stephen G. Cerri and Dr. Arthur B. Laffer, of whom Messrs. Kerrigan, Chapman,
Donnini and Rauner had a potential interest in the $13 Offer, determined to
select independent directors to form a special committee to evaluate and
respond to the $13 Offer. At this meeting, the Board of Directors appointed a
special committee consisting of two independent directors, Dr. Arthur B.
Laffer and Stephen G. Cerri, neither of whom was interested in the proposed
transaction or affiliated with GRKC. The Special Committee was authorized to
(i) retain an investment banker (subject to certain financial limitations) to
evaluate the fairness of the $13 Offer to the Stockholders and, if
appropriate, render a fairness opinion with respect thereto, and (ii) engage
legal counsel, to advise the Special Committee with respect to the $13 Offer
and assist the Special Committee in making its recommendations to the Board of
Directors and Stockholders with respect to such offer. The Board of Directors
also authorized, in consideration of the time and effort involved in reviewing
and evaluating the $13 Offer, compensation for each of the independent
directors of the Special Committee in the amount of $25,000.
3
<PAGE>
On October 15, 1999, the law firm of Mayer, Brown & Platt ("Mayer, Brown"),
counsel to GRKC, and the law firm of Skadden, Arps, Slate, Meagher & Flom LLP
("Skadden"), counsel to the Special Committee, discussed the process of
selecting an investment banker and obtaining information about the Company.
On October 20, 1999, GRKC submitted to the Board of Directors an executed
copy of GTCR Golder Rauner, LLC's equity commitment letter. Later that day,
GRKC issued a press release announcing the $13 Offer, subject to the approval
of the Special Committee and other customary conditions.
On November 2, 1999, GRKC and the Special Committee, through their
respective advisors, discussed the desire of the Special Committee to retain
an investment banker for a fee in excess of that authorized by the Board of
Directors. From November 3, 1999 to November 23, 1999, GRKC and the Special
Committee continued such discussions with respect to the retention by the
Special Committee of Lazard Freres and, in particular, the amount of the
compensation requested in light of the Board of Directors' prior
authorization.
On November 15, 1999, GRKC delivered a draft of the Merger Agreement in
respect of the $13 Offer to counsel to the Special Committee.
On November 24, 1999, a special meeting of the Board of Directors was held
pursuant to which the Board of Directors approved the level of compensation
requested by Lazard Freres, and on December 2, 1999, at the request of the
Special Committee, authorized the Special Committee to take any actions such
committee reasonably deemed necessary or appropriate in order to facilitate
its review and consideration of the $13 Offer.
On November 24, 1999, GRKC delivered a letter to the Special Committee
advising the Special Committee that, unless GRKC and the Special Committee
were able to reach an agreement with respect to the $13 Offer by December 13,
1999, it intended to withdraw the $13 Offer and consider other options to
deliver value to the Stockholders.
On November 24, 1999, the Board of Directors received a letter from a
potential bidder indicating an interest in pursuing a transaction to acquire
the Company at a price in excess of $13.00 per share and requesting that the
Company make available appropriate financial and other Company information.
On December 7, 1999, representatives of Skadden and Lazard Freres met with
representatives of GRKC, its investment banker, Jefferies & Company, Inc.
("Jefferies"), and Mayer, Brown to discuss the $13 Offer. At this meeting, Mr.
Chapman and Jefferies provided Lazard Freres with financial analysis relating
to the value of the Company and certain background information regarding the
Company and the $13 Offer.
On January 20, 2000, the Special Committee's advisors met with GRKC's
advisors to respond to the $13 Offer, including the draft Merger Agreement. At
this meeting, the Special Committee's advisors conveyed that it was the
position of the Special Committee that the $13 Offer did not provide adequate
value to the Stockholders. Although there were no further discussions relating
to the value of the Company, other contractual matters discussed at the
meeting included the structure of the proposed transaction, the scope of
representations and warranties contained in the Merger Agreement, treatment of
outstanding options, continuation of indemnification rights for the Company's
directors, "break-up" fees and conditions to the $13 Offer.
On January 26, 2000, Mayer, Brown responded in writing to the Special
Committee's concerns raised at the January 20th meeting and contained in
Skadden's letter of the same date, by addressing the concerns raised by the
Special Committee, including, among other things, extending its offer to all
Stockholders and significantly reducing the amount of the "break-up" fee. GRKC
was not, however, willing to increase its offer price above $13.00 per share.
Between January 27, 2000 and February 3, 2000, Mayer, Brown and Skadden
communicated telephonically on several occasions in an effort to reach an
agreement on price, however, GRKC and the Special Committee were unable to
reach an agreement on price.
4
<PAGE>
On February 3, 2000, GRKC issued a press release announcing the withdrawal
of the $13 Offer as a result of an inability to reach an agreement with the
Special Committee.
During the weeks of April 24, 2000 and May 1, 2000, the Special Committee
and Lazard resumed negotiations with representatives of GTCR Golder Rauner,
L.L.C and had several conversations as to the price at which an acquisition of
the Company might be accomplished.
On May 1, 2000, representatives of affiliates of Purchaser informed the
Special Committee that Purchaser was prepared to increase its original offer
price and offer $14.25 per share of Common Stock for 100% of the outstanding
Common Stock pursuant to a two-step transaction involving a tender offer for
all of the Common Stock followed by a merger of Purchaser with and into the
Company, whereby any outstanding shares of Common Stock would be exchanged for
the right to receive $14.25 per share in cash.
On May 4, 2000, Mayer, Brown delivered to Skadden a revised draft of the
Merger Agreement reflecting the terms and conditions of Purchaser's
acquisition proposal.
From May 5, 2000 through May 12, 2000, Skadden and Mayer, Brown negotiated
the terms of the Merger Agreement, including, among other things, a
significant reduction of the "break-up" fee payable to Purchaser and a limit
on reimbursement of Purchaser's expenses in the event the proposed acquisition
was not consummated.
On May 10, 2000, Bruce V. Rauner, a director of the Company and an affiliate
of GTCR Fund VII, formed Purchaser, CLC Acquisition Corporation, for the
purpose of delivering to the Special Committee a revised acquisition proposal.
At a meeting of the Special Committee held on May 12, 2000, the Special
Committee reviewed the terms of the Offer and the proposed Merger Agreement
with its legal counsel and investment banker. Also at this meeting,
representatives of Lazard Freres delivered to the Special Committee an oral
opinion (which opinion was confirmed by delivery of a written fairness opinion
dated May 12, 2000) to the effect that, as of that date and based on and
subject to the matters described in the opinion, the consideration to be
received by the Public Stockholders pursuant to the Offer and the Merger was
fair, from a financial point of view, to the Public Stockholders. The Special
Committee determined that the Offer, the Merger and the Merger Agreement are
fair to and in the best interests of the Public Stockholders and recommended
that the Board of Directors approve the Offer and the Merger and approve and
adopt the Merger Agreement.
On May 12, 2000, following the meeting of the Special Committee with its
legal counsel and investment banker, the full Board of Directors met
telephonically to consider the recommendations of the Special Committee. The
Board of Directors voted to unanimously approve the Offer and the Merger and
to unanimously approve and adopt the Merger Agreement, and to unanimously
recommend that the Company's stockholders accept the Offer and, if approval is
required by applicable law, approve the Merger and approve and adopt the
Merger Agreement.
On May 12, 2000, following the meeting of the Board of Directors, the Merger
Agreement was executed and delivered by Purchaser and the Company, and the
Rollover Agreement was executed and delivered by Purchaser and each member of
the Management Group.
In a press release issued by the Company on May 15, 2000, the Company
announced that the Board of Directors had approved the Offer and the Merger
and signed the Merger Agreement.
On May 26, 2000, Purchaser commenced the Offer.
5
<PAGE>
2. Recommendation of the Special Committee and the Board of Directors of the
Company; Fairness of the Offer and the Merger.
The Special Committee.
In approving the Merger Agreement, the Offer, the Merger and the other
transactions contemplated by the Merger Agreement and recommending that the
Stockholders tender their shares pursuant to the Offer, the Special Committee
considered a variety of factors, including but not limited to the following:
(i) the opinion of Lazard Freres that, based upon and subject to the
assumptions and qualifications stated in its opinion, the $14.25 per Share
to be received by the Public Stockholders in the Offer and the Merger is
fair to the Public Stockholders from a financial point of view, and the
report and analysis presented to the Special Committee in connection with
the Lazard Freres opinion; a copy of the opinion of Lazard Freres, which
sets forth the assumptions made, the matters considered and the limitations
of the review undertaken by Lazard Freres, is attached as Exhibit 6 to the
Company's Solicitation/Recommendation Statement on Schedule 14D-9.
Stockholders are urged to read the opinion of Lazard Freres in its
entirety;
(ii) the presentation of Lazard Freres that included various valuation
analyses of the Company described below under "--Opinion of the Special
Committee's Investment Banker";
(iii) the Merger Agreement and the transactions contemplated thereby were
the product of arm's-length negotiations between the Purchaser and its
advisors and the Special Committee (none of whose members were employed by
the Company or affiliated with the Purchaser) and its advisors, and the
judgment of the Special Committee that, based upon the negotiations that
had transpired (including the increased offer from $13 to $14.25 per Share)
a price higher than $14.25 per Share could not likely be obtained;
(iv) Coinmach's business, financial condition, results of operations,
prospects, current business strategy, competitive position in its industry
and general economic and stock market conditions;
(v) the historical market prices and recent trading activity of the
Common Stock, including the fact that the Offer Price represents a premium
of approximately 78% over the $8.00 closing price of the shares on Nasdaq
on May 12, 2000, the last full trading day prior to the announcement that
the Company entered into the Merger Agreement with the Purchaser;
(vi) the likelihood that the Company's market price performance in the
foreseeable future would not substantially exceed its recent performance,
considering the fact that the Company's growth opportunities are currently
limited, and the stock price for comparable companies also declined;
(vii) the fact that since the public announcement by GRKC of the $13
Offer on October 20, 1999, no other party had presented the Company with an
acquisition proposal;
(viii) the fact that certain potential bidders were contacted on behalf
of the Special Committee (including entities that were in discussion with
the Company as part of a prior solicitation of acquisition proposals in
early 1997) and that no such entity was willing to present the Company with
an acquisition proposal;
(ix) communications from various Stockholders expressing their views in
favor of, and against, the $13 Offer;
(x) the fact that the Offer provides the Stockholders with liquidity to
dispose of their Shares which may not be available in the public market due
to the low level of trading volume of the Shares;
(xi) the terms of the Merger Agreement, including
. the ability of the Board of Directors to provide access to
information concerning the Company to any third parties who make an
unsolicited bona fide written superior takeover proposal, and to
engage in discussions and negotiate with any such third party;
6
<PAGE>
. the ability of the Board of Directors, in exercising its fiduciary
duties, to withdraw or modify its recommendation to the Stockholders
and terminate the Merger Agreement in order to permit the Company to
enter into a business combination transaction with a third party
which makes a superior takeover proposal;
. the fact that the Company would be required to pay the Purchaser
certain termination fees and expenses in order to accept a superior
takeover proposal and that, while such fees and expense
reimbursement would increase the cost to a third party interested in
acquiring the Company, they would not preclude a third party from
making a superior takeover proposal or from acquiring the Company;
and
. there are no unusual requirements or conditions to the Offer and the
Merger;
(xii) the Offer and the Merger are not conditioned upon the availability
of financing, and the Purchaser has the financial resources to consummate
the Offer and the Merger expeditiously;
(xiii) the fact that the consideration to be paid in the Offer and the
Merger is all cash;
(xiv) the transaction has been structured to include a first-step cash
tender offer for all of the Common Stock, thereby enabling Stockholders who
tender their Common Stock to promptly receive $14.25 per Share in cash, and
the fact that any Public Stockholders who do not tender their Common Stock
will receive the same cash price per Share in the subsequent Merger;
(xv) the possible conflicts of interest of certain directors and members
of management of both the Company and the Purchaser; and
(xvi) the fact that Stockholders who do not tender their Shares pursuant
to the Offer will have the right to dissent from the Merger and to demand
appraisal of the fair value of their Shares under the DGCL, whether or not
a Stockholder vote is required.
In addition to the factors listed above, the Special Committee considered
the fact that the consummation of the Offer and the Merger would eliminate the
opportunity of the Public Stockholders to participate in any potential future
growth in the value of the Company. The Special Committee believed that,
although there can be no assurance as to the level of growth or profits to be
attained by the Company in the future, the $14.25 per Share price to be paid
in connection with the Offer and the Merger adequately compensates the Public
Stockholders for the elimination of such opportunity.
In light of the number and variety of factors the Special Committee
considered in connection with its evaluation of the Offer, the Merger and the
Merger Agreement, the Special Committee did not find it practicable to
quantify or otherwise assign relative weights to any of the foregoing factors
and, accordingly, the Special Committee did not do so.
The Board of Directors of the Company.
All of the directors of the Company other than the members of the Special
Committee (comprised of Dr. Laffer and Mr. Cerri) have an interest in the
Offer and the Merger. Accordingly, the Board of Directors based its
determination that the terms of the Offer are fair to the Public Stockholders
primarily upon the conclusion of the Special Committee described above, the
other factors described above under the caption "The Special Committee," and
the factors set forth below:
(i) the Special Committee consisted of independent directors appointed by
the Company's Board of Directors to represent solely the interests of the
Public Stockholders;
(ii) the Special Committee retained and was advised by its own
independent legal counsel and investment banker who negotiated on behalf of
the Special Committee;
(iii) the Special Committee's investment banker, Lazard Freres, assisted
it in evaluating the proposed transaction and provided other financial
advice;
7
<PAGE>
(iv) the Special Committee, with the assistance of its advisors,
evaluated and negotiated the terms of the Offer and the Merger; and
(v) the $14.25 per Share cash purchase price and the other terms and
conditions of the Merger Agreement resulted from active arm's-length
bargaining between the Special Committee and the Management Group and
Purchasers and their respective advisors.
The members of the Board of Directors, including the members of the Special
Committee, evaluated the Offer and the Merger in light of their knowledge of
the business, financial condition and prospects of the Company, and based upon
the advice of financial and legal advisors.
The Board of Directors, including the members of the Special Committee,
believes that the Offer and Merger are procedurally fair because, among other
things: (i) the Special Committee consisted of independent directors appointed
to represent the interests of the Public Stockholders; (ii) the Special
Committee retained and was advised by its own independent legal counsel; (iii)
the Special Committee retained and was advised by Lazard Freres, as its
independent investment banker; (iv) the fact that the $14.25 per Share price
resulted from active arm's-length bargaining between the Special Committee and
the Purchaser and their respective advisors; and (v) the fact that the Special
Committee is a mechanism well established under Delaware law to ensure
fairness in transactions of this type.
The Board of Directors and the Special Committee recognized that the Merger
is not structured to require the approval of a majority of the Stockholders
other than the Purchaser and its stockholders.
The Board of Directors and the Special Committee also recognized that, while
consummation of the Offer and the Merger will result in all Public
Stockholders being entitled to receive $14.25 in cash for each of their
Shares, it will eliminate the opportunity for current Stockholders to
participate in the benefit of increases, if any, in the value of the Company's
business following the Merger. Nevertheless, the Board of Directors and the
Special Committee concluded that this fact did not justify foregoing the
receipt of the immediate cash premium presented by the $14.25 per share price.
Neither the Board of Directors nor the Special Committee considered the
liquidation of the Company's assets and neither considered liquidation to be a
viable course of action. Therefore, no appraisal of liquidation values was
sought for purposes of evaluating the Offer and the Merger.
The foregoing discussion of information and factors considered and given
weight by the Special Committee and the Board of Directors is not intended to
be exhaustive, but is believed to include all of the material factors
considered by the Special Committee and the Board of Directors. In view of the
variety of factors considered in connection with its evaluation of the Offer
and the Merger, the Special Committee and the Board of Directors did not find
it practicable to, and did not, quantify or otherwise assign relative weights
to the specific factors considered in reaching the determinations and
recommendations. In addition, individual members of the Special Committee and
the Board of Directors may have given different weights to different factors.
3. Position of Management Group and Purchaser Regarding Fairness of the Offer
and the Merger.
The Management Group and Purchaser believe the Offer and the Merger to be
substantially and procedurally fair to the Public Stockholders. In addition to
the factors considered by the Board of Directors described above, the
Purchaser and the Management Group considered, among other things, the
following other factors:
(i) the conclusion of the Board of Directors and the Special Committee
that the Offer and the Merger are fair to and in the best interests of the
Public Stockholders;
(ii) the historical and pro forma financial performance of the Company;
8
<PAGE>
(iii) the Offer Price represents a premium of approximately 78% over the
closing market price for the Shares on May 12, 2000, the last full trading
day prior to the announcement of the execution of the Merger Agreement.
(iv) the Offer is not subject to a financing condition;
(v) the Offer provides the Public Stockholders who are considering
selling their Shares with the opportunity to sell their Shares at the Offer
Price without incurring the transaction costs typically associated with
market sales;
(vi) the ability of Public Stockholders who object to the Merger to
obtain "fair value" for their Shares if they exercise and perfect their
appraisal rights under the DGCL;
(vii) the terms of the Merger Agreement were determined through arm's-
length negotiations between the Special Committee and its legal counsel and
investment banker, on the one hand, and representatives of Purchaser, on
the other hand, and provide for the Offer in order to allow Public
Stockholders to receive payment for their Shares in cash on an accelerated
basis;
(viii) the decline in the market value of comparable companies over the
past year;
(ix) over the course of the six-month period following the announcement
of GRKC's original acquisition proposal, notwithstanding that Lazard Freres
conducted a "market check" for interested bidders, the Company did not
receive any bona fide offers to acquire the Company; and
(x) the fact that the Special Committee received the Fairness Opinion
from Lazard Freres to the effect that, as of that date and based on and
subject to the matters described in the opinion, the $14.25 per Share cash
consideration to be received in the Offer and the Merger by the
Stockholders was fair, from a financial point of view, to the Public
Stockholders.
Purchaser and the Management Group have reviewed the factors considered by
the Board of Directors in support of its decision, as described above, and
have no basis to question its consideration of or reliance on these factors.
Purchaser and the Management Group did not find it practicable to assign, nor
did any of them assign, specific relative weights to the foregoing factors in
reaching their opinion as to the fairness of the Offer and the Merger to the
Public Stockholders.
4. Opinion of the Special Committee's Investment Banker.
On May 12, 2000, Lazard Freres delivered its oral opinion to the Special
Committee to the effect that, as of that date, and subject to certain
considerations described by Lazard Freres, the merger consideration to be
received by the Public Stockholders pursuant to the Merger Agreement was fair,
from a financial point of view, to such Public Stockholders. Lazard Freres
confirmed its oral opinion by delivery of its written opinion dated May 12,
2000. The opinion of Lazard Freres does not constitute a recommendation as to
whether Stockholders should tender their Shares or how Stockholders should
vote with respect to the Merger.
The full text of the written opinion of Lazard Freres dated May 12, 2000,
which identifies assumptions made, matters considered and limitations on the
review undertaken in connection with the opinion, is attached as Exhibit 6 to
the Company's Recommendation/Solicitation Statement on Schedule 14D-9 and is
incorporated into this document by reference. You are encouraged to, and
should, read Lazard Freres' opinion in its entirety.
In connection with its opinion, Lazard Freres:
. reviewed the financial terms and conditions of the Merger Agreement;
. analyzed certain historical business and financial information relating
to the Company;
9
<PAGE>
. reviewed various financial forecasts and other data provided to Lazard
Freres by the Company relating to its business;
. held discussions with members of the senior management of the Company
with respect to the business and prospects of the Company and its
strategic objectives;
. reviewed public information with respect to certain other companies in
lines of business it believes to be generally comparable to the business
of the Company;
. reviewed the financial terms of certain business combinations involving
companies in lines of business it believes to be generally comparable to
that of the Company, and in other industries generally;
. reviewed the historical stock prices and trading volumes of the Common
Stock; and
. reviewed such other information and conducted such other financial
studies, analyses and investigations, as Lazard Freres deemed
appropriate.
In conducting its analysis and in arriving at its opinion, Lazard Freres
relied upon the accuracy and completeness of the foregoing information, and
did not assume any responsibility for any independent verification of such
information or any independent valuation or appraisal of any of the assets or
liabilities of the Company, or concerning the solvency or fair value of the
Company. With respect to financial forecasts, Lazard Freres assumed that they
had been reasonably prepared on bases reflecting the best currently available
estimates and judgments of management of the Company as to the future
financial performance of the Company. Lazard Freres assumed no responsibility
for and expressed no view as to such forecasts or the assumptions on which
they were based.
Lazard Freres' opinion was necessarily based on economic, monetary, market
and other conditions as in effect on, and the information made available to
Lazard Freres as of, the date of its opinion.
In rendering its opinion, Lazard Freres assumed, with the consent of the
Special Committee, that the Purchaser's acquisition of the Company would be
consummated on the terms described in the Merger Agreement, without any waiver
of any material terms or conditions by the Company and that obtaining the
necessary regulatory approvals for Purchaser's acquisition of the Company will
not have an adverse effect on the Company.
The following is a summary of the material financial analyses used by Lazard
Freres in connection with providing its oral opinion to the Special Committee
on May 12, 2000. Lazard Freres utilized substantially the same financial
analyses in connection with providing its written opinion attached as Exhibit
6 to the Company's Solicitation/Recommendation Statement on Schedule 14D-9.
The following summaries of financial analyses include information presented
in tabular format. Stockholders should read these tables together with the
text of each summary.
Historical Stock Trading Analysis. Lazard Freres reviewed the historical
trading prices and volumes for the Common Stock. Lazard Freres compared the
trading price and volume data for the Common Stock for the period from October
20, 1998 through October 20, 1999, for the period from January 1, 1999 through
October 20, 1999, for the period from June 30, 1999 through October 20, 1999
and for the period from February 3, 2000 through May 10, 2000. Lazard Freres
reviewed the trading performance of the Common Stock for the period from
October 20, 1998 through May 10, 2000 and for the period from the Company's
initial public offering through May 10, 2000. Lazard Freres also compared the
trading performance of the Common Stock for the period from October 20, 1998
through May 10, 2000 and for the period from the Company's initial public
offering through May 10, 2000 to the trading performance of Mac-Gray
Corporation and the S&P 400 for the comparable periods, respectively.
10
<PAGE>
Selected Companies Analysis. Lazard Freres reviewed and compared certain
financial information for the Company to corresponding financial information,
ratios and public market multiples for the following four publicly traded
corporations (the "Selected Companies"):
. Mac-Gray Corporation;
. ABM Industries Incorporated;
. Encompass Services Corporation; and
. Integrated Electrical Services, Inc.
The Selected Companies were chosen because they are publicly traded
companies with operations or businesses that for purposes of analysis may be
considered similar to the Company's operations or businesses.
Lazard Freres also calculated and compared various financial multiples and
ratios based on information it obtained from SEC filings, publicly available
research reports and the Institutional Brokers Estimate System ("IBES"). The
multiples and ratios for the Company were calculated using $14.25 per Share
and projections provided by the Company, which were then calendarized. The
multiples for each of the Selected Companies were based on the most recent SEC
filings, publicly available research reports, IBES and closing prices on May
10, 2000. Lazard Freres' analyses of the Selected Companies compared the
following to the data for the Company:
. enterprise value (i.e., market value of common equity plus debt for the
Company and Mac-Gray Corporation and market value of common equity plus
debt less cash for ABM Industries Incorporated, Encompass Services
Corporation and Integrated Electrical Services, Inc.) as a multiple of
latest twelve month ("LTM"), estimated 2000 and estimated 2001 sales;
. enterprise value as a multiple of LTM, estimated 2000 and estimated 2001
earnings before interest, taxes, depreciation and amortization
("EBITDA");
. enterprise value as a multiple of LTM, estimated 2000 and estimated 2001
earnings before interest and taxes ("EBIT"); and
. estimated five-year earnings per share growth rate based on IBES
estimates.
The results of these analyses are summarized as follows:
<TABLE>
<CAPTION>
Selected Companies
---------------------------
Company Range Median Mean
------- ----------- ------ ------
<S> <C> <C> <C> <C>
Enterprise Value as a Multiple of:
2001E Sales................................ 1.54x NA 0.19x 0.19x
2000E Sales................................ 1.60x 0.22x-0.82x 0.31x 0.45x
LTM Sales.................................. 1.66x 0.36x-0.84x 0.42x 0.51x
2001E EBITDA............................... 4.8x NA 2.2x 2.2x
2000E EBITDA............................... 5.0x 2.6x-4.0x 3.5x 3.3x
LTM EBITDA................................. 5.2x 4.1x-6.6x 4.6x 5.0x
2001E EBIT................................. 16.2x NA 2.7x 2.7x
2000E EBIT................................. 17.5x 3.2x-9.1x 4.3x 5.5x
LTM EBIT................................... 19.7x 5.1x-10.8x 7.3x 7.7x
IBES Est. 5 Year Growth Rate................ 20.0% 10.0%-17.5% 15.0% 14.4%
</TABLE>
NA: Not Applicable
Based on these analyses and assuming approximately 13.2 million Shares
outstanding and debt of approximately $685 million, Lazard Freres determined
that the implied equity value per Share of the Company ranged from
approximately $6 per Share to $11 per Share.
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<PAGE>
Analysis of Selected Coinmach Acquisitions. Lazard Freres calculated the
implied equity value per Share of the Common Stock based on the LTM EBITDA
multiples for selected acquisitions that the Company made between 1995 and
1998 and the acquisition of the Company by GTCR Fund IV in 1995. Assuming
approximately 13.2 million Shares outstanding and debt of approximately $685
million, Lazard Freres determined that the implied equity value per Share
ranged from approximately $13 per Share to $20 per Share and that, based on
the mean and median range of the LTM EBITDA multiples, the implied equity
value per Share of the Company ranged from approximately $14 per Share to $16
per Share.
Analysis of Selected Coinmach Acquisitions Adjusted for Cost Savings. Lazard
Freres calculated the implied equity value per Share of the Common Stock based
on adjusted LTM EBITDA multiples for selected acquisitions that the Company
made between 1995 and 1998 and the acquisition of the Company by GTCR Fund IV
in 1995. The LTM EBITDA multiples were adjusted to reflect cost savings
related to the respective acquisition. The adjusted LTM EBITDA multiples were
provided to Lazard Freres by Jefferies, which in turn had been provided with
the underlying adjusted LTM EBITDA data by the Company. Assuming approximately
13.2 million Shares outstanding and debt of approximately $685 million, Lazard
Freres determined that the implied equity value per Share of the Company
ranged from approximately $7 per Share to $17 per Share and that, based on the
mean and median range of the adjusted LTM EBITDA multiples, the implied equity
value per Share of the Company ranged from approximately $11 per Share to $12
per Share.
Comparable Leveraged Buyout Premia. Lazard Freres analyzed certain
information relating to leveraged buyout transactions greater than $100
million with all cash offers (that were not subsequently withdrawn) since
January 1, 1994 (the "Buyouts"). Lazard Freres used information provided by
Securities Data Corp. and Factset. For the Buyouts, Lazard Freres compared:
. the final premium (based on the purchase price) to the price one day
prior to announcement of the respective offer;
. the final premium (based on the purchase price) to the price one week
prior to the announcement of the respective offer;
. the final premium (based on the purchase price) to the price four weeks
prior to the announcement of the respective offer, and
. the final purchase price as a percent of the prior 52-week high market
price of the respective stock.
The results of these analyses for the Buyouts are summarized as follows:
<TABLE>
<CAPTION>
Buyouts
---------------------
Low Median High
----- ------ -----
<S> <C> <C> <C>
Final Premium (Discount) to One Day Prior Price.......... (5.2%) 31.7% 129.2%
Final Premium (Discount) to One Week Prior Price......... (8.1%) 37.9% 142.4%
Final Premium (Discount) to Four Weeks Prior Price....... (18.6%) 38.3% 140.4%
Final Price as Percent of Prior 52-Week High Price....... 41.9% 101.3% 177.4%
</TABLE>
Based on the mean and median figures derived from such data and using the
closing price of the Common Stock on May 10, 2000, Lazard Freres determined
that the implied equity value per Share of the Company ranged from
approximately $7 per Share to $24 per Share.
Discounted Cash Flow Analysis. Lazard Freres calculated the net present
value of unlevered free cash flows based on projections provided by the
Company for the years 2001 through 2005 using discount rates ranging from
10.5% to 12.5% and calculated terminal values based on multiples ranging from
4.5x to 5.5x estimated EBITDA in 2005. These terminal values were then
discounted to present value using discount rates ranging from 10.5% to 12.5%
and added to the net present value of the unlevered free cash flows to
determine a range of enterprise values and a range of implied equity values
per Share. Assuming approximately 13.2 million Shares outstanding and debt of
approximately $685 million, Lazard Freres determined that the implied equity
value per Share of the Company ranged from approximately $9 per Share to $23
per Share.
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<PAGE>
Leveraged Buyout Analysis. Using projections provided by the Company, Lazard
Freres analyzed the equity internal rate of return from the Purchaser's
perspective, assuming an internal rate of return from 20% to 30%, the
Company's current level of debt capitalization and that the Purchaser exits
its position in year five at 4.5x to 5.5x EBITDA. Lazard Freres determined
that the implied equity value per Share of the Company ranged from
approximately $12 per Share to $16 per Share.
The preparation of a fairness opinion is a complex process and is not
necessarily susceptible to partial analysis or summary description. Selecting
portions of the analyses or of the summary set forth above, without
considering the analyses as a whole, could create an incomplete view of the
processes underlying Lazard Freres' opinion. In arriving at its fairness
determination, Lazard Freres considered the results of all such analyses. No
company or transaction used in the above analyses as a comparison is directly
comparable to the Company or the contemplated transaction.
The analyses were prepared for the benefit of the Special Committee and the
opinion of Lazard Freres was rendered in connection with its consideration of
the Offer and the Merger. The opinion was not intended to and does not
constitute a recommendation as to whether you should tender your Shares or how
you should vote with respect to the Merger.
The Company has agreed to pay Lazard Freres as compensation for its services
as investment banker of the Special Committee (a) a cash fee of $975,000 upon
the execution of the Merger Agreement, which fee shall be credited against any
fee pursuant to clause (b), and (b) a cash fee equal to 0.365%, payable upon
consummation of the Offer and the Merger, of the aggregate consideration paid
or payable in connection with the Offer and the Merger, including, among other
things, the principal amount of any indebtedness of the Company outstanding
immediately prior to consummation of the Offer and the Merger. The Company
also has agreed to reimburse Lazard Freres for its reasonable out-of-pocket
expenses, including reasonable fees and expenses of legal counsel, and to
indemnify Lazard Freres and related parties, to the full extent lawful, from
and against liabilities, including liabilities under the federal securities
laws, incurred in connection with Lazard Freres' engagement.
As described above, Lazard Freres' opinion to the Special Committee was one
of many factors taken into consideration by the Special Committee in making
its determination to approve the Merger Agreement. The foregoing summary does
not purport to be a complete description of the analyses performed by Lazard
Freres.
Lazard Freres, as part of its investment banking business, is continually
engaged in the valuation of businesses and their securities in connection with
mergers and acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities, private placements
and valuations for estate, corporate and other purposes. Lazard Freres has in
the past provided underwriting services to the Company for which Lazard Freres
received customary fees.
As of the date of its opinion, Lazard Freres was acting as investment banker
to affiliates of the Purchaser for which Lazard Freres may receive fees which
would be customary.
From time to time Laffer Associates, including Dr. Arthur B. Laffer, a
member of the Special Committee, has performed economic consulting services
for the asset management business of Lazard Freres, for which Laffer
Associates has been paid customary fees and expenses.
One of the factors the Special Committee deemed significant in selecting
Lazard Freres as its investment banker was the fact that it is a nationally
recognized investment banking firm with substantial experience in transactions
similar to the Offer and Merger.
Lazard Freres provides a full range of financial, advisory and brokerage
services and in the course of its normal trading activities may from time to
time effect transactions and hold positions in the securities or options on
securities of the Company for its own account and for the account of
customers.
13
<PAGE>
5. Purpose of, Alternatives to, Reasons for, Effects of and Structure of the
Offer and the Merger; Plans for the Company.
Purpose of, Reasons for and Structure of the Offer and the Merger. The
purpose of the Offer and the Merger is to enable Purchaser to acquire all of
the Common Stock. The Offer will enable the Purchaser to acquire as many
Shares not beneficially owned by the Management Group as possible as a first
step in acquiring 100% of the Common Stock. Through the Merger, Purchaser will
acquire all Shares not purchased pursuant to the Offer, contributed to
Purchaser pursuant to the Rollover Agreement or contributed by GTCR Fund IV to
GTCR-CLC, LLC. Upon consummation of the Merger, the Company, as the surviving
entity, will be entirely owned by GTCR-CLC, LLC and the Management Group and
certain limited partners of GTCR Fund VII and other institutional investors
who may determine to invest directly in Purchaser.
Under the DGCL, the approval of the Board of Directors and the affirmative
vote of the holders of a majority of the Common Stock are required to approve
and adopt the Merger Agreement and the transactions contemplated thereby,
including the Merger. While the approval and adoption of the Merger Agreement
and the transactions contemplated thereby requires the affirmative vote of a
majority of the votes cast by all Stockholders entitled to vote thereon,
Purchaser will not consummate the Offer unless it receives tendered Shares in
an amount, when aggregated with its own Shares, is equal to at least 51% of
the Common Stock. Furthermore, if the Offer is consummated and Purchaser
acquires at least 90% of the Shares pursuant to the Offer or otherwise,
Purchaser would be able to effect the Merger pursuant to the "short-form"
merger ("Short-Form Merger") provisions of Section 253 of the DGCL, without
any action by the Board of Directors or the Stockholders. In such event,
Purchaser intends to effect a Short-Form Merger as promptly as practicable
following the purchase of Shares in the Offer.
Alternative Structures Considered by Purchaser. In structuring the
transaction, the Purchaser considered various legal structures to effect the
acquisition of all of the outstanding Shares, including a one-step merger
transaction and a two-step tender offer followed by a merger transaction. The
two-step tender offer and merger structure has been selected by Purchaser in
lieu of the alternative one-step merger structure because Purchaser believes
that the two-step structure can be completed more quickly than a one-step
merger transaction.
Effects of the Offer and the Merger. Following completion of the Offer and
the Merger, the interests of (i) GTCR-CLC, LLC, (ii) certain limited partners
of GTCR Fund VII and other institutional investors who may determine to invest
directly in Purchaser, and (iii) each of the individuals comprising the
Management Group, in the Company's net book value and net earnings will be in
equal or the same proportion to the equity interests acquired by such parties
in the Purchaser. If the Merger is consummated, immediately following the
Merger, such parties will collectively own all the equity interests of the
Company and will be entitled to all benefits resulting from such interests,
including all income generated by the Company's operations and any future
increase in the Company's value. Similarly, such parties will bear the risk of
losses generated by the Company's operations and any future decrease in the
value of the Company after the Merger. Subsequent to the Merger, the Public
Stockholders will cease to have an equity interest in the Company, will not
have the opportunity to participate in the earnings and growth of the Company
after the Merger and will not face the risk of losses generated by the
Company's operations or decline in the value of the Company after the Merger.
Plans for the Company After the Offer and the Merger. Pursuant to the Merger
Agreement, upon completion of the Offer, Purchaser will effect the Merger in
accordance with the Merger Agreement. See "SPECIAL FACTORS--The Merger
Agreement." Upon consummation of the Merger, the Company will become a
privately held corporation. Accordingly, Public Stockholders will not have the
opportunity to participate in the earnings and growth of the Surviving
Corporation after the consummation of the Merger and will not have any right
to vote on corporate matters. In addition, Public Stockholders will not be
entitled to share in any premium which might be payable by an unrelated third-
party acquiror of all of the Common Stock in a sale transaction, if any,
occurring after the consummation of the Merger. No such transactions are
contemplated at this time. However, such Public Stockholders will not face the
risk of losses generated by the Surviving
14
<PAGE>
Corporation's operations or any decrease in the value of the Surviving
Corporation after the consummation of the Merger.
The Shares are currently listed for quotation on The Nasdaq National Market.
However, as a result of the Merger and following consummation of the Merger,
the Company will be entirely owned by GTCR-CLC, LLC, certain limited partners
of GTCR Fund VII and other institutional investors who may determine to invest
directly in Purchaser and the individuals comprising the Management Group, and
there will be no public market for the Shares. Following the consummation of
the Merger, Shares will no longer be quoted on The Nasdaq National Market and
Purchaser intends to terminate the registration of the Shares under the
Securities Exchange Act of 1934 (the "Exchange Act"). Accordingly, after the
Merger there will be no publicly traded equity securities of the Company.
Moreover, after the Merger, the Company may deregister the Common Stock in
which event the Company will no longer be legally required to file periodic
reports with the SEC, under the Exchange Act (although it may continue to do
so if contractually required under any agreements governing its indebtedness
or indebtedness of its subsidiaries), and will no longer be required to comply
with the proxy rules of Regulation 14A under Section 14 under the Exchange
Act. In addition, the Company's officers, directors and Stockholders who
beneficially own 10% or more of the Common Stock will be relieved of the
reporting requirements and restrictions on "short-swing" trading contained in
Section 16 of the Exchange Act with respect to the Shares. See "THE TENDER
OFFER--Effect of the Offer on the Market for the Common Stock; Exchange Act
Registration." It is expected that, if Shares are not accepted for payment by
Purchaser pursuant to the Offer and the Merger is not consummated, the
Company's current management, under the general direction of the Board of
Directors, will continue to manage the Company as an ongoing business.
The Merger Agreement provides that the directors of the Company (with the
exception of Messrs. Cerri and Laffer) immediately prior to the Effective Time
(as defined in "THE TENDER OFFER--Terms of the Offer"), and the officers of
the Company immediately prior to the Effective Time, will be the directors and
the officers, respectively, of the Surviving Corporation after the Merger,
until their respective successors are elected or appointed and qualified in
accordance with applicable law.
It is currently expected that the business and operations of the Surviving
Corporation after the Merger will be conducted substantially as they are
currently being conducted by the Company. Other than by virtue of the Merger
and the other transactions contemplated by the Merger Agreement and except as
otherwise described above or elsewhere in this Offer to Purchase, Purchaser
and the Management Group have no current plans or proposals that relate to or
would result in: (i) a change-of-control transaction, such as a merger,
reorganization or liquidation, involving the Surviving Corporation or any of
its subsidiaries; (ii) a sale or transfer of a material amount of assets of
the Surviving Corporation or any of its subsidiaries; (iii) any material
change in the Surviving Corporation's capitalization or dividend policy or
indebtedness; (iv) any change in the management of the Surviving Corporation,
the composition of the Board of Directors (other than the removal of Dr.
Laffer and Mr. Cerri) or any change in any material term of the employment
contract of any executive officer; or (v) any other material change in the
Surviving Corporation's corporate structure or business. However, the
Surviving Corporation's management will review proposals or may propose the
acquisition or disposition of assets or other changes in the Surviving
Corporation's business, corporate structure, capitalization, management or
individual policy that it considers to be in the best interests of the
Surviving Corporation and its Stockholders. Management may, from time to time,
evaluate and revise the Surviving Corporation's business, operations and
properties and make such changes as are deemed appropriate.
6. Certain United States Federal Income Tax Consequences.
The following is a summary of certain federal income tax consequences of the
Offer and the Merger to Stockholders whose Shares are purchased pursuant to
the Offer or who receive cash in the Merger (including any cash received by
dissenting Stockholders, if any, pursuant to the exercise of appraisal
rights). The summary is based on the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), applicable current and proposed United
States Treasury regulations issued thereunder, judicial authority and
administrative rulings and practice, all of which are subject to change,
possibly with retroactive effect, at any time and, therefore, the following
statements and conclusions could be altered or modified. The discussion does
not address Stockholders
15
<PAGE>
in whose hands Shares are not capital assets, nor does it address Stockholders
who hold Shares as part of a hedging, "straddle," conversion or other
integrated transaction, or who received Shares upon conversion of securities
or exercise of warrants or other rights to acquire Shares or pursuant to the
exercise of employee stock options or otherwise as compensation, or to
Stockholders who are in special tax situations (such as insurance companies,
tax-exempt organizations, financial institutions, United States expatriates or
non-U.S. persons). Furthermore, the discussion does not address the tax
treatment of Stockholders who exercise appraisal rights in the Merger, nor
does it address any aspect of foreign, state or local taxation or estate and
gift taxation.
The federal income tax consequences set forth below are included for general
informational purposes only. Because individual circumstances may differ, each
Stockholder should consult such Stockholder's own tax advisor to determine the
applicability of the rules discussed below to such Stockholder and the
particular tax effects of the offer and the Merger, including the application
and effect of state, local and other income tax laws.
The receipt of cash for Shares pursuant to the Offer or the Merger
(including any cash received by dissenting Stockholders, if any, pursuant to
the exercise of appraisal rights) will be a taxable transaction for federal
income tax purposes under the Code. In general, for federal income tax
purposes, a Stockholder will recognize gain or loss in an amount equal to the
difference between its adjusted tax basis in the Shares sold pursuant to the
Offer or converted into the right to receive cash in the Merger and the amount
of cash received therefor. Gain or loss must be determined separately for each
block of Shares (i.e., Shares acquired at the same cost in a single
transaction) sold pursuant to the Offer or converted to cash in the Merger.
Such gain or loss will be capital gain or loss and will be long-term gain or
loss if, on the date the Purchaser accepts the Shares for payment pursuant to
the Offer or, if applicable, the Effective Time, the Shares were held for more
than one year. The deductibility of any capital loss realized by the
Stockholder may be subject to limitations.
Under United States federal income tax backup withholding rules, payments in
connection with the Offer or the Merger may be subject to "backup withholding"
at a rate of 31 percent. Backup withholding generally applies if the
Stockholder fails to furnish the Depositary such Stockholder's correct
taxpayer identification number or furnishes an incorrect taxpayer
identification number. Backup withholding is not an additional tax but merely
an advance payment, which may be refunded to the extent it results in an
overpayment of tax. Certain persons generally are entitled to exemption from
backup withholding, including corporations, financial institutions and certain
foreign individuals. Certain penalties apply for failure to furnish correct
information and for failure to include reportable payments in income. Each
Stockholder should consult with such Stockholder's own tax advisor as to such
Stockholder's qualification for exemption from backup withholding and the
procedure for obtaining such exemption.
All Stockholders tendering Shares pursuant to the Offer should complete and
sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification
necessary to avoid backup withholding (unless an applicable exemption exists
and is proved in a manner satisfactory to Purchaser and the Depositary).
Noncorporate foreign Stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. See
Instruction 9 to the Letter of Transmittal.
7. Rights of Stockholders in the Offer and the Merger.
No appraisal rights are available to Stockholders who tender their Shares in
the Offer. If the Merger is consummated, however, record Stockholders who have
not validly tendered their Shares or voted in favor of the Merger (if a vote
is required) will have certain rights under the DGCL to an appraisal of, and
to receive payment in cash of the fair value of, their Shares (the "Appraisal
Shares"). Stockholders who perfect appraisal rights by complying with the
procedures set forth in Section 262 of the DGCL ("Section 262"), a copy of
which is attached as Annex A to this Offer to Purchase, will have the fair
value of their Appraisal Shares (exclusive of any element of value arising
from the accomplishment or expectation of the Merger) determined by the
Delaware Court of Chancery and will be entitled to receive a cash payment
equal to such fair value from the Surviving
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Corporation. A judicial determination of the fair value of Appraisal Shares
could be based upon any valuation method or combination of methods the court
deems appropriate. The value so determined could be more than, equal to, or
less than the Offer Price or Merger Consideration. In addition, such
Stockholders may be entitled to receive payment of a fair rate of interest on
the amount determined to be the fair value of their Appraisal Shares from the
Effective Time until the date of payment. THE PRESERVATION AND EXERCISE OF
APPRAISAL RIGHTS REQUIRE STRICT ADHERENCE TO THE APPLICABLE PROVISIONS OF THE
DGCL.
Under Section 262, if the Merger is submitted to a vote of the Stockholders
at a meeting thereof, the Company must, not less than 20 days prior to the
meeting held for the purpose of obtaining Stockholder approval of the Merger,
notify each of the Stockholders entitled to appraisal rights that such rights
are available. If the Merger is approved without a vote of the Stockholders,
the Company, either before the Effective Time or within ten days thereafter,
must notify all non-tendering Stockholders of the approval of the Merger and
that appraisal rights are available. In either case, the notice must include a
copy of Section 262. Section 262 requires that the costs associated with the
notices be borne by the Surviving Corporation. If the Merger is submitted to a
vote of the Stockholders at a meeting thereof, a holder of Appraisal Shares
wishing to exercise appraisal rights will be required to deliver to the
Company before the taking of the vote on the Merger, a written demand for
appraisal of such holder's Appraisal Shares. A holder of Appraisal Shares
wishing to exercise such holder's appraisal rights must be the record holder
of such Appraisal Shares on the date the written demand for appraisal is made
and must continue to hold of record such Appraisal Shares through the
Effective Time. Accordingly, a holder of Appraisal Shares who is the record
holder of Appraisal Shares on the date the written demand for appraisal is
made, but who thereafter transfers such Appraisal Shares prior to the
Effective Time, will lose any right to appraisal in respect of such Appraisal
Shares.
If the Merger is approved without a vote of the Stockholders, a holder of
Appraisal Shares wishing to exercise appraisal rights will be required to
deliver to the Company, within 20 days after the date of mailing the notice by
the Company described above, a written demand for appraisal of such holder's
Appraisal Shares.
A demand for appraisal must be executed by or on behalf of the Stockholder
of record and must reasonably inform the Company of the identity of the
Stockholder of record and that such Stockholder intends thereby to demand an
appraisal of such Appraisal Shares.
A person having a beneficial interest in Appraisal Shares that are held of
record in the name of another person, such as a broker, fiduciary, depository
or other nominee, will have to act to cause the execution of the demand for
appraisal to be made by or for the record holder and to follow the requisite
steps properly and in a timely manner to perfect appraisal rights. If
Appraisal Shares are owned of record by more than one person, as in joint
tenancy or tenancy in common, the demand will have to be executed by or for
all joint owners. An authorized agent, including an agent for two or more
joint owners, may execute a demand for appraisal for a Stockholder of record,
provided that the agent identifies the record owner and expressly discloses,
when the demand is made, that the agent is acting as agent for the record
owner. If a Stockholder owns Appraisal Shares through a broker who in turn
holds the Appraisal Shares through a central securities depository nominee
such as CEDE & Co., a demand for appraisal of such Appraisal Shares will have
to be made by or on behalf of the depository nominee and must identify the
depository nominee as the record holder of Appraisal Shares.
A record holder, such as a broker, fiduciary, depository or other nominee,
who holds Appraisal Shares as a nominee for others, will be able to exercise
appraisal rights with respect to the Appraisal Shares held for all or less
than all of the beneficial owners of those Appraisal Shares as to which such
person is the record owner. In such case, the written demand must set forth
the number of Shares covered by the demand. Where the number of Shares is not
expressly stated, the demand will be presumed to cover all Appraisal Shares
standing in the name of such record owner.
Within 120 days after the Effective Time, but not thereafter, the Company or
any Stockholder who has complied with the statutory requirements of Section
262 summarized above and who is otherwise entitled to appraisal rights may
file a petition in the Delaware Court of Chancery demanding a determination of
the fair
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value of such holder's Appraisal Shares. There is no present intention on the
part of Purchaser to file an appraisal petition on behalf of the Company, and
Stockholders who seek to exercise appraisal rights should not assume that the
Company will file such a petition or that the Company will initiate any
negotiations with respect to the fair value of Appraisal Shares. Accordingly,
it will be the obligation of any Stockholder seeking appraisal rights to
initiate all necessary action to perfect any appraisal rights within the time
prescribed in Section 262. Within 120 days after the Effective Time, any
Stockholder who has theretofore complied with the provisions of Section 262
will be entitled, upon written request, to receive from the Company a
statement setting forth the aggregate number of Shares not voting in favor of
the Merger (if applicable) and with respect to which demands for appraisal
were received as well as the number of holders of such Shares. Such statement
must be mailed within ten days after the written request therefor has been
received by the Company.
If a petition for appraisal is timely filed, and after a hearing on such
petition, the Delaware Court of Chancery will determine the Stockholders
entitled to appraisal rights and will appraise the fair value of their
Appraisal Shares, exclusive of any element of value arising from the
accomplishment or expectation of the Merger, together with a fair rate of
interest, if any, to be paid upon the amount determined to be the fair value
of the Appraisal Shares from the Effective Time.
The costs of the proceeding may be determined by the Delaware Court of
Chancery and taxed upon the parties as the Delaware Court of Chancery deems
equitable under the circumstances. However, costs do not include attorneys'
fees or expert witness fees. Upon application of a Stockholder, the Delaware
Court of Chancery may also order all or a portion of the expenses incurred by
any Stockholder, including reasonable attorneys' fees and the fees and
expenses of experts, to be charged pro rata against the value of all of the
Appraisal Shares entitled to appraisal.
At any time within 60 days after the Effective Time, any Stockholder shall
have the right to withdraw its demand for appraisal and to accept the Merger
Consideration. After this period, the Stockholder may withdraw such holder's
demand for appraisal only with the consent of the Surviving Corporation. If
any Stockholder who properly demands appraisal of such holder's Appraisal
Shares under Section 262 fails to perfect, or effectively withdraws or loses
such holder's right to appraisal as provided in the DGCL, the Appraisal Shares
of such Stockholder will be converted into the right to receive the Merger
Consideration. A Stockholder will fail to perfect, or effectively lose or
withdraw, such Stockholder's right to appraisal if, among other things, no
petition for appraisal is filed within 120 days after the Effective Time or if
the Stockholder delivers to the Company a written withdrawal of such
Stockholder's demand for appraisal within the time period specified above.
Except as otherwise disclosed in the Offer to Purchase, none of Purchaser or
the Management Group has made any provision in connection with the Offer or
the Merger to obtain counsel or appraisal services for unaffiliated security
holders at the expense of Purchaser, the Management Group or the Company.
8. The Merger Agreement.
The following is a summary of the Merger Agreement, which is incorporated
herein by reference and a copy of which has been included as Exhibit (a)(5)(i)
to the Schedule TO. The Merger Agreement may be inspected at, and copies may
be obtained from, the same places and in the same manner set forth in "THE
TENDER OFFER--Certain Information concerning the Company--Additional
Information." The summary is qualified in its entirety by reference to the
Merger Agreement.
The Offer. The Merger Agreement provides for the commencement of the Offer
as soon as practicable, and in any event not later than the tenth business day
following the date of the execution of the Merger Agreement. The obligation of
Purchaser to accept for payment or pay for any Shares tendered pursuant to the
Offer is subject to the satisfaction or waiver (to the extent permitted by the
Merger Agreement) of the conditions described in "THE TENDER OFFER--Conditions
of the Offer" (the "Offer Conditions"). The Purchaser may waive any such
condition in whole or in part and make any other changes in the terms and
conditions of the Offer, subject to the terms of the Merger Agreement.
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Under the terms of the Merger Agreement, Purchaser shall have no obligation
to pay interest on the purchase price of tendered Shares, including in the
event the Purchaser exercises its right to extend the period of time during
which the Offer is open. The rights reserved by the Purchaser are in addition
to the Purchaser's rights to terminate the Offer pursuant to "THE TENDER
OFFER--Conditions of the Offer." The Merger Agreement provides that subject to
the terms and conditions of the Offer and the Merger Agreement and the
satisfaction or waiver (to the extent permitted) of all the Offer Conditions
as of the Expiration Date, the Purchaser will accept for payment and pay for
all Shares validly tendered and not withdrawn pursuant to the Offer as soon as
practicable after the Expiration Date. If the Offer Conditions are not
satisfied or, to the extent permitted, waived by the Purchaser as of the
Expiration Date, the Purchaser may extend the Offer from time to time for the
shortest time periods permitted by law and to the extent Purchaser reasonably
believes such extensions are necessary until the consummation of the Offer,
provided that notwithstanding the satisfaction of the Offer Conditions,
Purchaser shall have the right, but not the obligation, to extend the Offer
until August 10, 2000, notwithstanding the prior satisfaction of the Offer
Conditions.
Composition of the Board of Directors After the Offer. The Merger Agreement
provides that, promptly upon payment for the Shares equal to a majority of all
Shares, Purchaser shall be entitled to designate all of the individuals who
shall serve as directors of the Company, and the Company shall promptly take
all actions necessary to cause Purchaser's designees to be so elected,
including, seeking the resignations of Mr. Cerri and Dr. Laffer or, if
necessary, otherwise increasing or decreasing the size of the Board.
The Merger. The Merger Agreement provides that, upon the terms and subject
to the satisfaction or waiver of the conditions thereof (and including those
described in "THE TENDER OFFER--Conditions of the Offer") and in accordance
with the DGCL, at the Effective Time, Purchaser shall be merged with and into
the Company. Following the Merger, the separate corporate existence of
Purchaser shall cease and the Company shall continue as the Surviving
Corporation. At Purchaser's election, any affiliate or direct or indirect
subsidiary of Purchaser may be merged with and into the Company instead of
Purchaser.
Certificate of Incorporation, By-laws, Directors and Officers After the
Merger. The Merger Agreement provides that the certificate of incorporation of
the Surviving Corporation shall be amended at the Effective Time to conform to
the certificate of incorporation of Purchaser, as in effect at the Effective
Time, except (1) the name of the Surviving Corporation will remain Coinmach
Laundry Corporation, (2) any provisions in the certificate of incorporation of
Purchaser naming the incorporator and/or the initial directors shall not
become part of the certificate of incorporation of the Surviving Corporation
and (3) as otherwise prohibited by Delaware law. At the Effective Time, the
By-Laws of Purchaser shall be the By-Laws of the Surviving Corporation until
thereafter amended in accordance with their terms and applicable law except
that the name of the Surviving Corporation shall remain Coinmach Laundry
Corporation. The Merger Agreement further provides that the directors of the
Purchaser immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation and shall hold office until their
respective successors are duly elected and qualified, or their earlier death,
resignation or removal. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, in
each case until their respective successors are duly elected and qualified, or
their earlier death, resignation or removal.
Conversion of Shares. Pursuant to the Merger Agreement, at the Effective
Time, each Share issued and outstanding immediately prior to the Effective
Time (other than any Shares held by Purchaser or any wholly owned subsidiary
of Purchaser, in the treasury of the Company or by any wholly owned subsidiary
of the Company, which Shares, by virtue of the Merger, shall be canceled and
shall cease to exist with no payment being made with respect thereto, and
other than Appraisal Shares) shall be converted into the right to receive in
cash the Offer Price, payable to the holder thereof, and without interest,
upon surrender of the certificate formerly representing such Share.
Conversion of Options. The Merger Agreement provides that, immediately prior
to the Effective Time, each outstanding option to purchase Shares, whether or
not then exercisable or vested, shall become fully exercisable and vested and
shall be canceled by the Company. Each holder thereof shall be entitled to
receive
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immediately following the Effective Time from the Company in consideration for
such cancellation an amount in cash equal to the product of (a) the excess of
the Merger Price over the exercise price per Share thereof and (b) the number
of Shares subject to such stock option (net of taxes required by law to be
withheld with respect thereto).
Appraisal Shares. The Merger Agreement provides that Appraisal Shares shall
not be converted into the right to receive the Merger Price, but shall be
entitled to receive the consideration as shall be determined pursuant to
Section 262 of the DGCL, unless and until such holder fails to perfect or
withdraws or otherwise loses his right to appraisal and payment under the
DGCL. If, after the Effective Time, any such holder fails to perfect or
withdraws or loses his right to appraisal, such Appraisal Shares shall
thereupon be treated as if they had been converted as of the Effective Time
into the right to receive the Merger Price, if any, to which such holder is
entitled, without interest or dividends thereon. The Company shall give
Purchaser prompt notice of any demands received by the Company for appraisal
of Shares, withdrawals of such demands and any other instruments served
pursuant to the DGCL and received by the Company and, prior to the Effective
Time, Purchaser shall have the right to direct all negotiations and
proceedings with respect to such demands. Prior to the Effective Time, the
Company shall not, except with the prior written consent of Purchaser, make
any payment with respect to, or settle or offer to settle, any such demands.
Stockholders Meeting. The Merger Agreement provides that if required, the
Company, acting through its Board of Directors, shall, in accordance with
applicable law, (i) duly call, give notice to, convene and hold a special
meeting of the Stockholders (the "Special Meeting") as soon as practicable
following the consummation of the Offer for the purpose of considering and
taking action under the Merger Agreement; (ii) prepare and file with, and use
its reasonable best efforts to have cleared by, the SEC a preliminary proxy
statement relating to the Merger and the Merger Agreement and use its
reasonable efforts (x) to obtain and furnish the information required to be
included by the SEC in the Proxy Statement (as hereinafter defined) and, after
consultation with Purchaser, to respond promptly to any comments made by the
SEC with respect to the preliminary proxy statement and cause a definitive
proxy statement (the "Proxy Statement") to be mailed to the Stockholders and
(y) to obtain the necessary approvals of the Merger and the Merger Agreement
by the Stockholders; and (iii) subject to the fiduciary obligations of the
Board under applicable law as determined in good faith by a majority of the
Board based on the advice of independent outside legal counsel, (A) include in
the Proxy Statement the recommendation of the Board that the Stockholders vote
in favor of the approval of the Merger and the adoption of the Merger
Agreement and the written Fairness Opinion of the Company's investment banker
that the consideration to be received by the Public Stockholders pursuant to
the Offer and the Merger is fair from a financial point of view to such Public
Stockholders and (B) use its reasonable best efforts to obtain the necessary
adoption of the Merger Agreement. Pursuant to the Merger Agreement, Purchaser
also agrees that it will vote, or cause to be voted, all of the Shares then
owned by it or any of its other subsidiaries in favor of the approval of the
Merger and the adoption of the Merger Agreement.
The Merger Agreement provides that, notwithstanding the foregoing, in the
event Purchaser shall acquire at least 90% of the outstanding Shares of each
class pursuant to the Offer, the parties thereto agree to take all necessary
and appropriate action to cause the Merger to become effective as soon as
practicable after the consummation of the Offer, without a meeting of the
Stockholders, in accordance with Section 253 of the DGCL.
Conduct of Business Pending the Merger. The Company has agreed that, during
the period from the date of the Merger Agreement to the termination of the
Offer, except pursuant to the terms of the Merger Agreement or unless
Purchaser shall otherwise agree in writing, the Company will, and will cause
each of its subsidiaries to conduct its operations only in, and the Company
and its subsidiaries shall not take any action other than in, the ordinary
course of business consistent with past practice and in compliance with
applicable laws. The Company has also agreed that the Company and each of its
subsidiaries shall use commercially reasonable efforts to preserve intact
their business organization, to keep available the services of their present
officers and key employees, and to preserve their present relationships with
customers, suppliers, creditors, business partners and other persons with
which they have significant business relations.
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Without limiting the generality of the foregoing and except as otherwise
expressly contemplated by the Merger Agreement, the Company has agreed that
the Company and its subsidiaries shall refrain from taking various actions
without the Purchaser's prior written consent until the termination of the
Offer. These prohibitions cover, among other things, limitations on making
changes to their organizational documents, selling their capital stock,
declaring or paying any dividend or other distribution, making changes in
their capital stock, increasing the compensation payable to directors,
officers and employees (except in the ordinary course of business consistent
with past practices), increasing or granting any severance or termination pay
(except to the extent required under existing plans, policies or agreements),
engaging in any material corporate transaction, including acquisitions,
incurring debt outside the ordinary course of business or not under existing
lines of credit, entering into, renewing or amending contracts and making
capital expenditures beyond specified limits, selling, leasing, licensing or
disposing of any material assets (outside the ordinary course of business),
changing accounting or tax policies, settling any material litigation or any
litigation which relates to the transactions contemplated by the Merger
Agreement, changing the key management structure of the Company or any of its
subsidiaries, transferring or granting any rights to intellectual property,
taking any action reasonably likely to expose the Company to any claim that
the Company has violated applicable laws, rules or regulations, adopting a
plan of complete or partial dissolution or liquidation, merger, restructuring,
recapitalization or other reorganization of the Company or any of its active
subsidiaries, paying or discharging any claims, liabilities or obligations
outside the ordinary course of business consistent with past practices,
entering into any collective bargaining agreement and taking any actions that
would make any of the representations and warranties of the Company contained
in the Merger Agreement untrue and incorrect in any material respect or result
in any of the Offer Conditions not being satisfied.
Access to Information. Pursuant to the Merger Agreement, from the date
thereof until the termination or consummation of the Offer, the Company is
required to, and must cause its subsidiaries, and each of their respective
officers, directors, employees, counsel, advisors, representatives and
financing sources (collectively, the "Company Representatives") to, provide
Purchaser and its officers, employees, counsel, advisors and representatives
and financing sources (collectively, the "Purchaser Representatives")
reasonable access (subject to existing confidentiality and other obligations),
consistent with applicable law, during normal business hours and upon
reasonable notice to the offices and other facilities and to the books and
records of the Company and its subsidiaries, and to permit Purchaser and
Purchaser Representatives to make inspections of such as any of them may
reasonably require, and to cause the Company Representatives and the Company's
subsidiaries to furnish Purchaser and Purchaser Representatives to the extent
available with such other information with respect to the business and
operations of the Company and its subsidiaries as Purchaser may from time to
time reasonably request.
Efforts. The Merger Agreement provides that, subject to the terms and
conditions thereof, each of the parties thereto shall use its reasonable good
faith efforts to ensure that the conditions set forth in the Merger Agreement
are satisfied and to consummate and make effective the transactions
contemplated by the Offer, the Merger and the Merger Agreement as promptly as
practicable.
Public Announcements. So long as the Merger Agreement is in effect,
Purchaser and the Company agree to consult with each other before issuing any
press release or otherwise making any public statement with respect to the
transactions contemplated by the Merger Agreement and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with any securities
exchange.
Indemnification. The Merger Agreement provides that the Company will, and
after the Effective Time, Purchaser will cause the Surviving Corporation to,
until the expiration of any applicable statutes of limitation, (i) indemnify
and hold harmless each present and former director, officer, and employee of
the Company (collectively, the "Company Indemnified Parties"), against any
costs and expenses (including reasonable attorneys' fees), judgments, fines,
losses, claims, damages or liabilities (collectively, "Costs") (but only to
the extent such Costs are not otherwise covered by insurance and paid)
incurred in connection with any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative,
arising out of or
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pertaining to matters existing or occurring at or prior to the Effective Time,
including, in any event, in connection with the Offer, the Merger and the
Merger Agreement, whether asserted or claimed prior to, at or after the
Effective Time, to the fullest extent permitted under applicable law and (ii)
keep in effect the provisions in its articles of incorporation and Bylaws
containing the provisions with respect to exculpation of director and officer
liability and indemnification set forth in the articles of incorporation and
Bylaws of the Company on the date of this Agreement to the fullest extent
permitted under applicable law, which provisions shall not be amended,
repealed or otherwise modified in any manner adverse to the Company
Indemnified Parties, without the prior written consent of such persons, except
as required by applicable law.
The Merger Agreement also provides that the Company will, and after the
Effective Time, Purchaser will cause the Surviving Corporation to, use its
reasonable best efforts to cause to be maintained in effect for not less than
six years from the Effective Time the policies of the directors' and officers'
liability insurance maintained by the Company with respect to matters
occurring prior to the Effective Time and providing coverage and containing
terms and conditions which are no less advantageous than those currently in
place, provided, that the Surviving Corporation shall not be required to pay
an annual premium in excess of 150% of the last annual premium paid by the
Company prior to the date thereof (it being understood that if the Surviving
Corporation is unable to obtain the insurance required by the Merger
Agreement, it shall obtain as much comparable insurance as possible for an
annual premium equal to such maximum amount).
No Solicitation of Transactions. The Merger Agreement provides that the
Company shall not, and shall not authorize or permit any of its or its
subsidiaries' directors, members, officers, employees, agents, advisors or
representatives, directly or indirectly, to (a) solicit, initiate or encourage
or take any other action to facilitate any proposal or offer from any person
relating to any acquisition or purchase of assets of, or any equity interest
(other than the exercise of outstanding options) in, the Company or any of its
subsidiaries, or any other tender offer (including a self tender offer) or
exchange offer, merger, reorganization, consolidation, business combination,
recapitalization, restructuring, spin-off, liquidation, dissolution or similar
transaction involving, directly or indirectly, the Company or any of its
subsidiaries (a "Takeover Proposal") or take any other action which may be
reasonably expected to lead to any Takeover Proposal, other than the
transactions contemplated by the Merger Agreement and the Rollover Agreement,
or any other transaction the consummation of which would reasonably be
expected to impede, interfere with, prevent or delay the Offer or the Merger
or which would reasonably be expected to adversely affect the benefits to the
Purchaser of the transactions contemplated thereby, (b) negotiate, explore or
otherwise participate in discussions with any person (other than Purchaser or
its respective directors, members, officers, employees, agents and
representatives), and including any parties with which the Company has
previously engaged in discussions or negotiations with respect to any Takeover
Proposal or potential Takeover Proposal, or furnish to any person (other than
Purchaser or its respective directors, members, officers, employees, agents
and representatives) any information with respect to its business, properties
or assets or any of the foregoing, or otherwise cooperate in any way with, or
assist or participate in, facilitate or encourage, any effort or attempt by
any other person (other than Purchaser or its respective directors, members,
officers, employees, agents and representatives) to do or seek any of the
foregoing or (c) enter into any agreement, arrangement or understanding with
respect to, or endorse, any Takeover Proposal; provided, however, that the
foregoing shall not prohibit the Company from (i) prior to the consummation of
the Offer (A) furnishing information pursuant to a confidentiality agreement
(provided for informational purposes to Purchaser), on terms and conditions
customary for similar transactions, concerning the Company and its businesses,
properties or assets to a third party who has made an unsolicited bona fide
written Takeover Proposal, or (B) engaging in discussions or negotiations with
such a third party who has made an unsolicited bona fide written Takeover
Proposal which did not otherwise result from a breach of these provisions or
(ii) following receipt of an unsolicited bona fide written Takeover Proposal
but prior to consummation of the Offer, failing to make or withdrawing or
modifying its recommendation of the Merger Agreement, but in each case
referred to in the foregoing clauses (i) (B) or (ii) only to the extent that
the Company Board shall have concluded in good faith, on the basis of advice
from outside legal counsel and the Company's investment bankers, that (A) such
Takeover Proposal is more favorable to the Stockholders than the transactions
contemplated by the Offer and the Merger Agreement (taking into account all
legal, financial, regulatory and other aspects of the proposal and the person
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making the proposal), (B) such Takeover Proposal is not conditioned on
obtaining financing (and with respect to which Purchaser has received written
evidence, in form and substance reasonably acceptable to Purchaser, of such
third party's ability to fully finance its Takeover Proposal) and provides for
consideration to the Stockholders payable in cash or shares of capital stock
that for a period of at least two consecutive years immediately preceding the
effective time of the closing of such Takeover Proposal was continuously
registered pursuant to an effective registration statement under the Act and
listed on a national securities exchange or quoted on The Nasdaq National
Market (any such capital stock, "Public Stock") or any combination of cash and
Public Stock, (C) such Takeover Proposal is for at least 100% of the Shares,
and (D) the Company Board's fiduciary duties, as they would exist in the
absence of any limitation in this Agreement, would require the Company Board
to take such action (any Takeover Proposal satisfying each of the immediately
preceding clauses (A), (B), (C) and (D), hereinafter referred to as a
"Superior Proposal"; provided, further, that the Company Board shall not take
any of the foregoing actions referred to in clauses (i) and (ii) until after
prior written notice to Purchaser with respect to such action. After taking
any such action, the Company Board shall promptly advise Purchaser with
respect to the status thereof as developments arise or as requested by
Purchaser. Nothing in the Merger Agreement shall prevent the Company Board
from taking, and disclosing to the Stockholders, a position contemplated by
Rules 14d-9 and 14e-2 promulgated under the Exchange Act with regard to any
tender offer. In addition, if the Company Board receives an unsolicited
Takeover Proposal or any inquiry with respect to or which could lead to any
Takeover Proposal, then the Company shall immediately inform Purchaser orally
and in writing of the terms and conditions of such proposal and the identity
of the person making it and if any Takeover Proposal is in writing, the
Company shall immediately deliver a copy thereof to Purchaser.
Special Meeting. The Merger Agreement provides that the Company shall take
no action to call a special meeting of the Stockholders without the prior
consent of Purchaser unless compelled by legal process, except in accordance
with the Merger Agreement unless and until the Merger Agreement has been
terminated in accordance with its terms.
Disposition of Litigation. The Merger Agreement provides that the Company
will not settle any litigation currently pending, or commenced after the date
thereof, against the Company or any of its directors by any Stockholder
relating to the Offer or the Merger Agreement, without the prior written
consent of Purchaser. The Merger Agreement further provides that the Company
will not voluntarily cooperate with any third party which has sought or may
thereafter seek to restrain or prohibit or otherwise oppose the Offer or the
Merger and will cooperate with Purchaser to resist any such effort to restrain
or prohibit or otherwise oppose the Offer or the Merger, subject, in each
case, to the fiduciary duties of the Board of Directors.
State Takeover Laws. The Company shall, upon the request of Purchaser, take
all reasonable steps to assist in any challenge by Purchaser to the validity
or applicability to the transactions contemplated by the Merger Agreement,
including the Offer and the Merger and the Rollover Agreement, of any state or
foreign takeover law.
Representations and Warranties. The Merger Agreement contains various
customary representations and warranties of the parties thereto including, but
not limited to, representations and warranties by the Company concerning the
Company's capitalization, required filings and consents, the Board of
Directors' approval of the Merger Agreement and the transactions contemplated
thereby, SEC filings and financial statements, absence of certain changes or
events, business, compliance with applicable laws, no conflicts, opinion of
investment banker, absence of litigation, tax matters, insurance matters, and
brokers. Some of the representations are qualified by a Material Adverse
Effect clause. "Material Adverse Effect" includes any change or effect that
would be materially adverse to the assets, liabilities, business, prospects,
operations or condition (financial or otherwise) of the Company and its
subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations under the Merger Agreement or to consummate the transactions
contemplated thereby.
Conditions of the Merger. Under the Merger Agreement, the respective
obligations of Purchaser and the Company to consummate the Merger are subject
to the satisfaction, at or before the Effective Time, of each of the following
conditions: (i) if required by DGCL, the Stockholders shall have duly adopted
the Merger
23
<PAGE>
Agreement and approved the transactions contemplated by the Merger Agreement
pursuant to the requirements of the Company's certificate of incorporation and
applicable law (which the Company has represented shall be solely the
affirmative vote of a majority of the outstanding Shares), (ii) Purchaser
shall have accepted for payment and paid for Shares pursuant to the Offer in
accordance with the terms thereof; (iii) the consummation of the Merger shall
not be restrained, enjoined or prohibited by any law, legal requirement,
order, judgment, decree, injunction or ruling of a court of competent
jurisdiction or any governmental entity and there shall not have been any
statute, rule or regulation enacted, promulgated or deemed applicable to the
Merger by any governmental entity which prevents the consummation of the
Merger; provided that the party invoking this condition shall have used its
reasonable best efforts to prevent the entry of such order, judgment, decree,
injunction or ruling and to appeal as promptly as practicable any such order,
judgment, decree, injunction or ruling.
Termination Events. The Merger Agreement can be terminated and the Offer and
the Merger contemplated thereby may be abandoned at any time notwithstanding
approval thereof by the Stockholders:
(a) by mutual written consent of Purchaser and the Company;
(b) by Purchaser or the Company, if there shall be any statute, law, rule
or regulation that makes consummation of the Offer or the Merger illegal or
prohibited or if any court or other governmental entity of competent
jurisdiction or located or having jurisdiction within the United States or
any country or economic region in which either the Company or Purchaser,
directly or indirectly, has material assets or operations shall have
issued, enacted, entered, promulgated or enforced any final order,
judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Offer or the Merger and
such order, judgment, decree, injunction or ruling shall have become
nonappealable;
(c) by Purchaser or the Company if (i) the Offer is terminated or
withdrawn pursuant to its terms without any Shares being purchased
thereunder or (ii) if Purchaser shall have failed to pay for Shares
pursuant to the Offer within 90 days following the date of the Merger
Agreement; provided, however, that neither the Purchaser nor the Company,
as the case may be, may terminate the Merger Agreement as described in this
paragraph, if Purchaser's termination or withdrawal of the Offer or failure
to pay for Shares pursuant to the Offer has been caused by or results from
the failure of such terminating party to perform any of its covenants or
agreements contained in the Merger Agreement or a breach of such party's
representations and warranties contained in the Merger Agreement;
(d) by the Company if (i) the Offer shall not be commenced within ten
business days following the date of execution of the Merger Agreement,
provided, that the failure to so commence has not been caused by and does
not result from the failure of the Company to perform any of its
representations, warranties, covenants or agreements contained in the
Merger Agreement, (ii) Purchaser shall have breached any of its
representations, warranties, covenants or agreements contained in the
Merger Agreement which breach materially adversely affects Purchaser's
ability to consummate the Offer, and, with respect to any such breach that
is reasonably capable of being cured, which shall not have been cured prior
to the earlier of (A) 10 business days following notice of such breach and
(B) two business days prior to the Expiration Date, (iii) Purchaser shall
have terminated the Offer, or (iv) prior to the purchase of Shares pursuant
to the Offer, any person shall have made a bona fide Takeover Proposal that
is a Superior Proposal (after taking into account any revised proposal made
by Purchaser during the Three-Day Period (as defined below)); provided,
however, that (1) such Superior Proposal did not result from a breach of
the provisions described in "No Solicitation Transactions," above, (2) on
the basis of advice from outside legal counsel and the Company's investment
bankers and acting in good faith, the Company Board or the Special
Committee shall have withdrawn its recommendation to the Stockholders that
the Offer and the Merger is fair and advisable and in the best interests of
the Company, and (3) prior to such termination by the Company, the Company
Board shall, if requested by Purchaser in connection with a revised
proposal made by Purchaser, negotiate in good faith with Purchaser in
respect of such revised proposal for not less than three (3) business days
(the "Three-Day Period"); and provided, further, that such termination
under this clause (d)(iv) shall not be effective until the Company has
reimbursed Purchaser for all of its fees and expenses as described below;
24
<PAGE>
(e) by Purchaser prior to the purchase of Shares pursuant to the Offer,
if (i) there shall have been a breach of any representation or warranty on
the part of the Company contained in the Merger Agreement which would
reasonably be expected to have a Material Adverse Effect on the Company or
which would materially adversely affect (or materially delay) the
commencement or consummation of the Offer, (ii) there shall have been a
breach of any covenant or agreement on the part of the Company contained in
the Merger Agreement which would reasonably be expected to have a Material
Adverse Effect on the Company or which would materially adversely affect
(or materially delay) the commencement or consummation of the Offer or the
Merger, which, in the case of clause (i) or (ii), if such breach is
reasonably capable of being cured, such breach shall not have been cured
prior to the earlier of (A) 10 business days following notice of such
breach and (B) two business days prior to the Expiration Date, (iii) the
Company shall effect, or enter into any agreement with respect to, a
transaction with any person pursuant to a Takeover Proposal (other than the
Purchaser) or the Company Board has resolved to do so, (iv) the Company
Board shall have withdrawn or modified in a manner adverse to Purchaser its
approval or recommendation of the Offer or the Merger or shall have
recommended another offer or transaction, or shall have resolved to effect
any of the foregoing or (v) the Minimum Condition (as defined in "THE
TENDER OFFER--Conditions of the Offer") shall not have been satisfied by
the Expiration Date; or
(f) by the Company, if the Company enters into a written agreement with
respect to a Superior Proposal in accordance with the terms of this
Agreement, including, without limitation, payment of all fees and expenses
as described below.
Termination Fees and Expenses. The Merger Agreement provides that (i) if the
Merger Agreement is terminated by the Company as described under paragraph
(d)(iv) under "Termination Events", or by the Purchaser as described under
paragraph (e)(i), (ii), (iii) or (iv) under "Termination Events"; or (ii) the
transactions contemplated by the Merger Agreement are not consummated through
no fault of the Purchaser, and the Company, within one year of the termination
of the Merger Agreement, enters into a transaction with another person which
is the result of a Takeover Proposal, then the Company shall pay to Purchaser
a cash fee of $8.0 million (the "Fee"). In addition to any amounts described
in the immediately preceding sentence, the Merger Agreement provides that all
Expenses (as hereinafter defined) incurred by the parties to the Merger
Agreement shall be borne solely and entirely by the Company, and that the
Company shall without exception, at the request of Purchaser, whether or not
the Offer has been withdrawn, terminated or consummated, promptly (but not
later than three business days after receipt of written invoices from
Purchaser evidencing such Expenses) reimburse Purchaser for all such Expenses;
provided that, if the Offer is not consummated, the Company's obligation to
reimburse Purchaser's Expenses is limited to $1,500,000. For purposes of this
subsection, "Expenses" means all out-of-pocket fees and expenses actually
incurred by Purchaser, whether before or after the execution and delivery of
the Merger Agreement, in connection with the transactions contemplated by the
Merger Agreement and the Rollover Agreement, including, without limitation,
reasonable fees and expenses payable to all banks, investors, investment
banking firms and other financial institutions, and their respective agents
and counsel, all fees and reasonable expenses of counsel, accountants, experts
and consultants to Purchaser and its investors, and, further, including
without limitation fees and reasonable expenses of, or incurred in connection
with, any litigation or other proceedings to collect the Fee or any of the
fees, costs and expenses described above.
9. Interests of Certain Persons in the Offer and the Merger.
In considering the recommendations of the Board of Directors and the Special
Committee, Stockholders should be aware that certain officers and directors of
Purchaser and the Company have interests in the Offer and the Merger which are
described below and which may create certain potential conflicts of interest.
Mr. Bruce V. Rauner, a director of the Company, is an affiliate of GTCR Fund
VII and the sole stockholder and sole director of Purchaser. GTCR Fund VII has
issued a binding commitment letter to Purchaser, committing to an investment
of up to $192 million to be made through GTCR-CLC, LLC. For more information
concerning the Purchaser, see "THE TENDER OFFER--Certain Information
Concerning Purchaser."
25
<PAGE>
Each of Stephen R. Kerrigan (Chief Executive Officer of the Company),
Mitchell Blatt (President and Chief Operating Officer of the Company), Robert
M. Doyle (Chief Financial Officer and Secretary of the Company), Michael E.
Stanky (Senior Vice President of the Company) and James N. Chapman (a director
of the Company), have entered into a Rollover Agreement with the Purchaser
that obligates them to exchange certain of their shares of Common Stock for
equity interests in the Purchaser. Accordingly, such persons, who currently
beneficially own in the aggregate 5.6% of the Common Stock, will not tender
most of their shares pursuant to this Offer. We believe that such persons will
tender in the Offer all their Shares that are not subject to the Rollover
Agreement.
As of May 26, 2000, the Management Group and executive officers of the
Company (other than Messrs. Laffer and Cerri), as a group, beneficially owned
an aggregate of 3,746,550.81 Shares (representing approximately 29% of the
then outstanding Shares). As of May 26, 2000, Messrs. Laffer and Cerri, the
members of the Special Committee, each beneficially owned an aggregate of
95,000 options to purchase shares of Common Stock (the "Independent Director
Options") (together representing 1.31% of the then outstanding Shares), and
Mr. Cerri beneficially owned 5,500 Shares. The Independent Director Options
held by Messrs. Laffer and Cerri will be treated in the Offer and the Merger
in the same manner as options held by other holders of options to purchase
Common Stock. See "--The Merger Agreement." Certain Shares beneficially owned
by the Management Group will not be tendered in the Offer and will be
converted into equity interests of the Surviving Corporation. The members of
the Special Committee, in addition to the compensation described below, will
each be entitled to receive an aggregate of approximately $104,670 for their
Independent Director Options upon consummation of the Offer and the Merger
(based upon the number of Independent Director Options owned as of May 26,
2000). In addition, we believe that Mr. Cerri currently intends to tender the
5,500 shares that he owns, for which he would receive $78,375.
Each of Dr. Laffer and Mr. Cerri is entitled to receive compensation in the
amount of $25,000 for his service on the Special Committee, which compensation
is not contingent upon the consummation of the Offer or the Merger.
The Special Committee and the Board of Directors were aware of these actual
and potential conflicts of interest and considered them along with the other
matters described under "--Recommendation of the Special Committee and the
Board of Directors; Fairness of the Offer and the Merger."
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<PAGE>
10. Beneficial Ownership of Shares.
The following table sets forth certain information, as of May 26, 2000,
regarding the ownership of Common Stock by GTCR Fund IV, each director or
executive officer of Purchaser and the Company, and each person believed to be
the beneficial owner of more than 5% of the outstanding common stock of the
Company. In addition, Purchaser understands that all directors and executive
officers of the Company (other than the Management Group with respect to their
Shares subject to the Rollover Agreement) currently intend to tender their
Shares pursuant to the Offer, except to the extent that tendering would
subject any such director or executive officer to "short-swing profit" under
Section 16(b) of the Exchange Act. Except as indicated below, the executive
officers and directors of Purchaser do not own any Shares.
<TABLE>
<CAPTION>
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Class/1/
---------------- -------------------- ----------
<S> <C> <C>
Golder, Thoma, Cressey, Rauner, Fund IV,
L.P........................................ 3,008,402 23.3%
6100 Sears Tower
Chicago, IL 60606
Strong Capital Management, Inc............. 1,927,425/2/ 14.9%
100 Heritage Reserve
Menomonee Falls, WI 53051
Prudential Insurance Company of America.... 1,100,800/3/ 8.5%
751 Broad Street
Newark, NJ 07102-3777
Robert Fleming, Inc........................ 1,014,805/4/ 7.8%
320 Park Avenue, 11th Floor
New York, NY 10022
Capital Guardian Trust Company............. 615,300/5/ 4.9%
333 South Hope Street,
52nd Flr.
Los Angeles, CA 90071
Dimensional Fund Advisors, Inc............. 778,600/6/ 6.1%
1299 Ocean Avenue
11th Floor
Santa Monica, CA 90401
Officers and Directors
Stephen R. Kerrigan........................ 687,467/7/ 5.2%
Mitchell Blatt............................. 488,845/8/ 3.7%
Robert M. Doyle............................ 227,682/9/ 1.7%
Michael E. Stanky.......................... 177,691/10/ 1.4%
John E. Denson............................. 33,711/11/ *
Bruce V. Rauner............................ 3,008,402/12/ 23.3%
David A. Donnini........................... 3,008,402/13/ 23.3%
James N. Chapman........................... 51,565/14/ *
Arthur B. Laffer........................... 67,000/15/ *
Stephen G. Cerri........................... 72,500/16/ *
------------- -----
All Officers and Directors as a group (10
persons).................................. 4,814,863/17/ 35.3%
</TABLE>
27
<PAGE>
- --------
* Percentage of Shares beneficially owned does not exceed 1% of Common Stock
outstanding.
1 Share percentage ownership is rounded to nearest tenth of 1% and reflects
the effect of dilution as a result of outstanding options to the extent
such options are, or within 60 days from May 26, 2000 will become,
exercisable. Shares underlying any option which was exercisable on May 26,
2000 or becomes exercisable within the 60 day period thereafter are deemed
outstanding only for purposes of computing the share ownership and share
ownership percentage of the holder of such option.
2 Based on a report on Schedule 13G/A filed by Strong Capital Management,
Inc. ("Strong") with the SEC on May 10, 2000. Strong has sole voting power
as to 1,501,600 Shares and sole investment power as to 1,927,425 Shares.
3 Based on a report on Schedule 13G/A filed by Prudential Insurance Company
of America ("Prudential") with the SEC on January 31, 2000. Prudential has
sole voting power as to 284,400 Shares and shared voting power as to
816,400 Shares. Prudential has sole investment power as to 284,400 Shares
and shared investment power as to 816,400 Shares.
4 Based on a report on Schedule 13G/A filed by Robert Fleming Inc. with the
SEC on February 7, 2000.
5 Based on a report on Schedule 13G filed by Capital Guardian Trust Company
("Capital") with the SEC as of December 31, 1999. Capital has sole voting
power as to 494,100 Shares and sole investment power as to 615,300 Shares.
Capital has disclaimed beneficial ownership of all Shares pursuant to Rule
13d-4 of the Securities Exchange Act of 1934, as amended.
6 Based on a report on Schedule 13G filed by Dimensional Fund Advisors, Inc.
("Dimensional") with the SEC on February 4, 2000. Dimensional has sole
voting power as to 778,600 Shares and sole investment power as to 778,600
Shares. Dimensional disclaims beneficial ownership of all such Shares.
7 Includes shares of common stock beneficially owned by MCS Capital, Inc.
("MCS"), a corporation controlled by Mr. Kerrigan. Includes Shares
underlying options held by MCS to purchase an aggregate of 308,098 shares
of common stock at an exercise price of $11.90 per share, all of which
options are currently exercisable. Includes shares underlying options held
by Mr. Kerrigan to purchase an aggregate of (i) 30,000 shares of common
stock at an exercise price of approximately $23.05 per share and (ii)
20,000 shares of common stock at an exercise price of approximately $10.56
per share, all of which options are currently exercisable. Does not
include shares of common stock underlying options held by Mr. Kerrigan to
purchase an aggregate of (i) 20,000 shares of common stock at an exercise
price of approximately $23.05 per share and (ii) 30,000 shares of common
stock at an exercise price of approximately $10.56 per share, none of
which options are currently exercisable nor become exercisable within the
next 60 days.
8 Includes shares of common stock underlying options to purchase an
aggregate of (i) 80,000 shares of common stock at an exercise price of
$11.90 per share, (ii) 80,000 shares of common stock at an exercise price
of $14.00 per share, (iii) 12,000 shares of common stock at an exercise
price of approximately $23.05 per share and (iv) 12,000 shares of common
stock at an exercise price of approximately $10.56 per share, all of which
options are currently exercisable. Does not include shares of common stock
underlying options to purchase an aggregate of (i) 20,000 shares of common
stock at an exercise price of $11.90 per share, (ii) 20,000 shares of
common stock at an exercise price of $14.00 per share, (iii) 18,000 shares
of common stock at an exercise price of approximately $23.05 per share and
(iv) 18,000 shares of common stock at an exercise price of $10.56 per
share, none of which options are currently exercisable nor become
exercisable within the next 60 days.
9 Includes shares of common stock underlying options to purchase an
aggregate of (i) 131,890 shares of common stock at an exercise price of
$11.90 per share, (ii) 12,000 shares of common stock at an exercise price
of approximately $23.05 per share and (iii) 8,000 shares of common stock
at an exercise price of $10.56 per share, all of which options are
currently exercisable. Does not include shares of common stock underlying
options to purchase an aggregate of (i) 40,000 shares of common stock at
an exercise price of $11.90 per share, (ii) 8,000 shares of common stock
at an exercise price of approximately $23.05 per share and (iii) 12,000
shares of common stock at an exercise price of $10.56 per share, all of
which options are not currently exercisable nor become exercisable within
the next 60 days.
10 Includes shares of common stock underlying options to purchase an
aggregate of (i) 103,521 shares of common stock at an exercise price of
$11.90 per share, (ii) 40,000 shares of common stock at an exercise price
of $14.00 per share, (iii) 6,000 shares of common stock at an exercise
price of approximately $22.31 per share and (iv) 4,000 shares of common
stock at an exercise price of $10.56 per share, all of which options are
currently exercisable. Does not include shares of common stock underlying
options to purchase an aggregate of (i) 10,000 shares of common stock at
an exercise price of $14.00 per share, (ii) 4,000 of common stock shares
of common stock at an exercise price of approximately $22.31 per share and
(iii) 6,000 shares of common stock at an exercise price of $10.56 per
share, none of which options are currently exercisable nor become
exercisable within the next 60 days.
11 Represents shares of common stock underlying options to purchase an
aggregate of (i) 28,756 shares of common stock at an exercise price of
$11.90 per share, (ii) 3,000 shares of common stock at an exercise price
of approximately $23.31 per share and (iii) 4,000 shares of common stock
at an exercise price of $10.56 per share, all of which options are
currently exercisable. Does not include shares of common stock underlying
options to purchase an aggregate of (i) 2,000 shares of common stock at an
exercise price of approximately $23.31 per share and (ii) 6,000 shares of
common stock at an exercise price of $10.56 per share, none of which
options are currently exercisable nor become exercisable within the next
60 days.
12 All such Shares are held by GTCR Fund IV, of which GTCR IV, L.P. ("GTCR
IV"), is the general partner. Mr. Rauner is a principal of Golder, Thoma,
Cressey, Rauner, Inc., the general partner of GTCR IV. Mr. Rauner
disclaims beneficial ownership of such Shares.
13 All such Shares are held by GTCR Fund IV, of which GTCR IV is the general
partner. Mr. Donnini is a principal of Golder, Thoma, Cressey, Rauner,
Inc., the general partner of GTCR IV. Mr. Donnini disclaims beneficial
ownership of such Shares.
14 Includes shares of common stock underlying options to purchase an
aggregate of (i) 28,756 shares of common stock at an exercise price of
$11.90 per share, and (ii) 13,248 shares of common stock at an exercise
price of approximately $11.69 per share, all of which
28
<PAGE>
options are currently exercisable. Does not include shares of common stock
underlying options to purchase an aggregate of 52,996 shares of common stock
at an exercise price of approximately $11.69 per share, none of which
options are currently exercisable nor become exercisable within the next 60
days.
15 Includes shares of common stock underlying options to purchase an
aggregate of (i) 60,000 shares of common stock at an exercise price of
$14.00 per share, and (ii) 7,000 shares of common stock at an exercise
price of approximately $11.69 per share, all of which options are
currently exercisable. Does not include shares of common stock underlying
options to purchase an aggregate of 28,000 shares of common stock at an
exercise price of $11.69 per share, none of which options are currently
exercisable nor become exercisable within the next 60 days.
16 Represents shares of common stock underlying options to purchase an
aggregate of (i) 60,000 shares of common stock at an exercise price of
$14.00 per share, and (ii) 7,000 shares of common stock at an exercise
price of approximately $11.69 per share, all of which options are
currently exercisable. Does not include shares of common stock underlying
options to purchase an aggregate of 28,000 shares of common stock at an
exercise price of $11.69 per share and, none of which options are
currently exercisable nor become exercisable within the next 60 days.
17 In calculating the shares of common stock beneficially owned by executive
officers and directors as a group, 3,008,402 Shares owned by GTCR Fund IV
and included in the beneficial ownership amounts of each of Messrs. Rauner
and Donnini are included only once. In calculating the percentage of
Shares beneficially owned by executive officers and directors as a group,
the shares of common stock underlying all options which are currently
exercisable or become exercisable within the next 60 days are deemed
outstanding.
11. Related Party Transactions and Transactions in Common Stock.
The Company paid Mr. Chapman, a director of the Company, $320,000, $120,000
and $180,000 during each of the fiscal years ended 1998, 1999 and 2000,
respectively, for general financial advisory and investment banking services.
The Company and GTCR Fund IV, the holder of 3,008,402 shares of Common Stock
(or approximately 23% of the outstanding Common Stock), MCS Capital, Inc., a
corporation controlled by Mr. Kerrigan ("MCS"), the holder of 329,369 shares
of Common Stock (or approximately 2.5% of the outstanding Common Stock),
Mitchell Blatt, the holder of 298,845 shares of Common Stock (or approximately
2.3% of the outstanding Common Stock), President and Fellows of Harvard
College ("Harvard"), the holder of 70,273 shares of Common Stock (or
approximately 0.5% of the outstanding Common Stock), and Robert M. Doyle,
Michael E. Stanky, Charles Prato, James N. Chapman, Michael Marrus, David
Tulkop, Russel Harrison, Sash A. Spencer and Mary Spencer, the holders of an
aggregate of 175,104 shares of Common Stock (or approximately 1.4% of the
outstanding Common Stock), are parties to a Voting Agreement, dated July 23,
1996 (the "Voting Agreement"), pursuant to which such Stockholders agreed to
vote their shares of Common Stock so that the Board of Directors will consist
of (i) two persons designated by GTCR Fund IV (currently Messrs. Rauner and
Donnini), (ii) two persons who are officers, employees or members of
management of the Company and are designated by the holders of a majority of
Common Stock held by executive officers of the Company (currently Messrs.
Kerrigan and Blatt), (iii) two persons jointly designated by GTCR Fund IV and
Mr. Kerrigan (currently Mr. Chapman and Dr. Laffer), and (iv) one person
designated by GTCR Fund IV and approved by Mr. Kerrigan (currently Mr. Cerri).
The Voting Agreement provides that it shall terminate at such time as GTCR
Fund IV holds in the aggregate less than twenty percent of all issued and
outstanding Voting Shares. GTCR Fund IV has informed Purchaser that it intends
to tender all of its Shares in the Offer (other than such shares to be
contributed to GTCR-CLC, LLC in exchange for an equity interest in GTCR-CLC,
LLC). Accordingly, upon consummation of the Offer, the Voting Agreement will
terminate in accordance with its terms.
On March 27, 2000, the Depositary, acting on behalf of the Company pursuant
to the 1998 Employee Stock Purchase Plan, purchased 6,500 shares of Common
Stock at a price of $9.75 per share, in open market transactions effected
through an unaffiliated broker-dealer, and the Company held those shares as
treasury stock. On March 31, 2000, the Company sold 5,732.370 shares of Common
Stock to certain of its employees pursuant to the 1998 Employee Stock Purchase
Plan.
29
<PAGE>
THE TENDER OFFER
1. Terms of the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any extension or
amendment), Purchaser will accept for payment and pay for any and all Shares
validly tendered prior to the Expiration Date and not withdrawn in accordance
with the procedures set forth below in "--Withdrawal Rights" as soon as
practicable after the Expiration Date. The term "Expiration Date" means 5:00
p.m., New York City time, on July 3, 2000 unless and until Purchaser, in its
sole discretion (but subject to the terms of the Merger Agreement), shall have
extended the period of time during which the Offer is open, in which event the
term "Expiration Date" shall mean the latest time and date at which the Offer,
as so extended by Purchaser, shall expire.
The Offer is subject to certain conditions set forth in "--Conditions of the
Offer." If the Offer Conditions are not satisfied or any of the events
specified in "--Conditions of the Offer" have occurred prior to the Expiration
Date, Purchaser, subject to the terms of the Merger Agreement, expressly
reserves the right (but is not obligated) to (i) terminate the Offer and not
accept for payment any Shares and return all tendered Shares to tendering
Stockholders, (ii) waive all the unsatisfied conditions and, subject to
complying with the terms of the Merger Agreement and the applicable rules and
regulations of the SEC, accept for payment and pay for all Shares validly
tendered prior to the Expiration Date and not theretofore withdrawn, (iii)
extend the Offer and, subject to the right of Stockholders to withdraw Shares
until the Expiration Date, retain the Shares that have been tendered during
the period or periods for which the Offer is extended or (iv) amend the Offer.
Subject to the terms of the Merger Agreement, the applicable rules and
regulations of the SEC and applicable law, Purchaser expressly reserves the
right, in its sole discretion, at any time and from time to time, to waive any
Offer Condition or otherwise amend the Offer in any respect by giving oral or
written notice of such waiver or amendment to the Depositary.
The Merger Agreement provides that, if the Offer Conditions are not
satisfied or waived by the Purchaser, as of the Expiration Date, Purchaser may
extend the Offer from time to time for the shortest time periods permitted by
law and to the extent Purchaser reasonably believes such extensions are
necessary until the consummation of the Offer (it being understood that,
notwithstanding the satisfaction of the Offer Conditions, the Purchaser shall
have the right, but not the obligation, to extend the Offer until August 10,
2000). During any such extension, all Shares previously tendered and not
withdrawn will remain subject to the Offer. Tendering Stockholders will
continue to have the right to withdraw any tendered Shares during such
extension. See "--Withdrawal Rights." Under no circumstances will interest be
paid on the purchase price for tendered Shares, whether or not the Offer is
extended.
Any such extension, delay, termination, waiver or amendment will be
followed, as promptly as practicable, by public announcement thereof, with
such announcement in the case of an extension to be made no later than 9:00
a.m., Eastern time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of
Rule 14e-1 of the Exchange Act. Subject to applicable law (including Rules
14d-4(c), 14d-6(d) and 14e-1 under the Exchange Act, which require that
material changes be promptly disseminated to Stockholders in a manner
reasonably designed to inform them of such changes) and without limiting the
manner in which Purchaser may choose to make any public announcement,
Purchaser will have no obligation to publish, advertise or otherwise
communicate any such public announcement other than by issuing a press release
to the public or as otherwise may be required by applicable law.
If Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer, or if it waives a material Offer Condition,
Purchaser will extend the Offer to the extent required by Rules 14d-4(c), 14d-
6(d) and 14e-1 under the Exchange Act. The minimum period during which an
offer must remain open following material changes in the terms of the Offer or
information concerning the Offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought, a minimum period of ten business days is
generally required to allow for adequate dissemination to Stockholders and
investor response.
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<PAGE>
Pursuant to Rule 14d-11 under the Exchange Act, Purchaser may, subject to
certain conditions, include a subsequent offering period following the
expiration of the Offer on the Expiration Date (the "Subsequent Offering
Period"). Rule 14d-11 provides that Purchaser may include a Subsequent
Offering Period so long as, among other things, (1) the Offer remained open
for a minimum of 20 business days and has expired, (2) the Offer was for all
outstanding Shares, (3) Purchaser accepts and promptly pays for all Shares
tendered during the Offer, (4) Purchaser announces the results of the Offer,
including the approximate number and percentage of Shares deposited, no later
than 9:00 a.m., New York City time, on the next business day after the
Expiration Date and immediately begins the Subsequent Offering Period, (5)
Purchaser immediately accepts and promptly pays for Shares as they are
tendered in the Subsequent Offering Period and (6) Purchaser pays the Offer
Price for all Shares tendered during the Subsequent Offering Period. Purchaser
will be able to include a Subsequent Offering Period if it satisfies the
conditions above. In a public release, the SEC expressed the view that the
inclusion of a Subsequent Offering Period would constitute a material change
to the terms of the Offer requiring Purchaser to disseminate new information
to the Stockholders.
A Subsequent Offering Period, if one is included, is not an extension of the
Offer. A Subsequent Offering Period would be an additional period of time,
following the expiration of the Offer, in which Stockholders may tender Shares
not tendered during the Offer. Purchaser does not currently intend to include
a Subsequent Offering Period in the Offer, although it reserves the right to
do so in its sole discretion.
During a Subsequent Offering Period, tendering Stockholders will not have
withdrawal rights, and Purchaser will promptly purchase and pay for any Shares
tendered at the same price paid in the Offer.
The Company has provided Purchaser with the Company's stockholder lists and
security position listings in respect of the Shares for the purpose of
disseminating this Offer to Purchase, the Letter of Transmittal and other
relevant materials to Stockholders. This Offer to Purchase, the Letter of
Transmittal and other relevant materials will be mailed to record holders of
Shares whose names appear on the Company's list of stockholders and will be
furnished, for subsequent transmittal to beneficial owners of Shares, to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Company's list of
stockholders or, where applicable, who are listed as participants in the
security position listing of The Depository Trust Company.
2. Acceptance for Payment and Payment for Shares.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), Purchaser will purchase, by accepting for payment, and
will pay for, all Shares validly tendered prior to the Expiration Date (and
not properly withdrawn in accordance with "--Withdrawal Rights") as promptly
as practicable after the Expiration Date. Subject to applicable rules of the
SEC and the terms of the Merger Agreement, Purchaser expressly reserves the
right, in its discretion, to delay acceptance for purchase of, or payment for,
Shares in order to comply, in whole or in part, with any applicable law. See
"--Terms of the Offer," and "--Certain Legal Matters; Regulatory Approvals."
The reservation by Purchaser of the right to delay the acceptance for
purchase of, or payment for, the Shares is subject to the provisions of Rule
14e-1(c) under the Exchange Act, which requires the Purchaser to pay the
consideration offered or to return the Shares deposited by, or on behalf of,
Stockholders, promptly after the termination or withdrawal of the Offer.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of (i) the certificates
evidencing such Shares (the "Certificates") or timely confirmation of a book-
entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at The Depository Trust Company (the "Book-Entry Transfer
Facility"), pursuant to the procedures set forth in "--Procedures for
Tendering Shares", (ii) the Letter of Transmittal (or a manually signed
facsimile thereof), properly completed and duly executed with any required
signature guarantees, or an Agent's Message (as defined
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<PAGE>
below) in connection with a book- entry transfer and (iii) any other documents
required to be included with the Letter of Transmittal under the terms and
subject to the conditions thereof and of this Offer to Purchase.
The term "Agent's Message" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from a participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that
Purchaser may enforce such agreement against such participant.
For purposes of the Offer, Purchaser will be deemed to have accepted for
payment (and thereby purchased) Shares validly tendered and not properly
withdrawn as and when Purchaser gives oral or written notice to the Depositary
of Purchaser's acceptance for payment of such Shares. Upon the terms and
subject to the conditions of the Offer, payment for Shares accepted pursuant
to the Offer will be made by deposit of the purchase price therefor with the
Depositary, which will act as agent for tendering Stockholders for the purpose
of receiving payments from Purchaser and transmitting payments to such
tendering Stockholders whose Shares have been accepted for payment.
UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE
PAID BY PURCHASER, REGARDLESS OF ANY DELAY IN MAKING SUCH PAYMENT OR EXTENSION
OF THE EXPIRATION DATE.
If any validly tendered Shares are not accepted for payment for any reason
pursuant to the terms and conditions of the Offer, or if Certificates are
submitted evidencing more Shares than are tendered, certificates evidencing
Shares not purchased will be returned, without expense, to the tendering
Stockholder (or, in the case of Shares tendered by book-entry transfer into
the Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedure set forth in "--Procedures for Tendering Shares", such Shares will
be credited to an account maintained at the Book-Entry Transfer Facility), as
promptly as practicable following the expiration or termination of the Offer.
IF, PRIOR TO THE EXPIRATION DATE, PURCHASER INCREASES THE CONSIDERATION TO
BE PAID PER SHARE PURSUANT TO THE OFFER, PURCHASER WILL PAY SUCH INCREASED
CONSIDERATION FOR ALL SUCH SHARES PURCHASED PURSUANT TO THE OFFER, WHETHER OR
NOT SUCH SHARES WERE TENDERED PRIOR TO SUCH INCREASE IN CONSIDERATION.
Purchaser reserves the right to assign to any other direct or indirect
wholly owned subsidiary of Purchaser, the right to purchase all or any portion
of the Shares tendered pursuant to the Offer, but any such assignment will not
relieve Purchaser of its obligations under the Offer and will in no way
prejudice the rights of tendering Stockholders to receive payment for Shares
validly tendered and accepted for payment pursuant to the Offer.
3. Procedures for Tendering Shares.
Valid Tender of Shares. In order for Shares to be validly tendered pursuant
to the Offer, a Stockholder must, prior to the Expiration Date, either (i)
deliver to the Depositary at one of its addresses set forth on the back cover
of this Offer to Purchase (a) a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees, (b) the Certificates representing Shares to be tendered
and (c) any other documents required to be included with the Letter of
Transmittal under the terms and subject to the conditions thereof and of this
Offer to Purchase, (ii) cause such Stockholder's broker, dealer, commercial
bank or trust company to tender applicable Shares pursuant to the procedures
for book-entry transfer described below or (iii) comply with the guaranteed
delivery procedures described below.
THE METHOD OF DELIVERY OF CERTIFICATES, THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE OPTION AND RISK OF THE TENDERING STOCKHOLDER, AND
32
<PAGE>
THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE
DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Shares at the Book-Entry Transfer Facility for purposes of the Offer
within two business days after the date of this Offer to Purchase. Any
financial institution that is a participant in the Book-Entry Transfer
Facility's system may make book-entry delivery of Shares by (i) causing such
securities to be transferred in accordance with the Book-Entry Transfer
Facility's procedures into the Depositary's account and (ii) causing the
Letter of Transmittal to be delivered to the Depositary by means of an Agent's
Message. Although delivery of Shares may be effected through book-entry
transfer, either the Letter of Transmittal (or a manually signed facsimile
thereof), properly completed and duly executed, together with any required
signature guarantees, or an Agent's Message in lieu of the Letter of
Transmittal, and any other required documents, must, in any case, be
transmitted to and received by the Depositary prior to the Expiration Date at
one of its addresses set forth on the back cover of this Offer to Purchase, or
the tendering Stockholder must comply with the guaranteed delivery procedures
described below. Delivery of documents or instructions to the Book-Entry
Transfer Facility in accordance with the Book-Entry Transfer Facility's
procedures does not constitute delivery to the Depositary.
Signature Guarantee. All signatures on a Letter of Transmittal must be
guaranteed by a member in good standing of the Securities Transfer Agents
Medallion Program, or by any other firm which is a bank, broker, dealer,
credit union or savings association (each of the foregoing being referred to
as an "Eligible Institution" and collectively as "Eligible Institutions"),
unless the Shares tendered thereby are tendered (i) by the registered holder
of Shares who has not completed the box labeled "Special Delivery
Instructions" or the box labeled "Special Payment Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
Instruction 1 to the Letter of Transmittal.
If a Certificate is registered in the name of a person other than the signer
of the Letter of Transmittal, or if payment is to be made, or a Certificate
not accepted for payment or not tendered is to be returned to, a person other
than the registered holder(s), then the Certificate must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name(s) of the registered holder(s) appear(s) on the Certificate, with the
signature(s) on such certificate or stock powers guaranteed as described
above. See Instructions 1, 5 and 7 to the Letter of Transmittal.
Guaranteed Delivery. If a Stockholder desires to tender Shares pursuant to
the Offer and such Stockholder's Certificates are not immediately available or
time will not permit all required documents to reach the Depositary on or
prior to the Expiration Date or the procedures for book-entry transfer cannot
be completed on a timely basis, such Shares may nevertheless be tendered if
all the following guaranteed delivery procedures are duly complied with:
. such tender is made by or through an Eligible Institution;
. a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by Purchaser, is received by the
Depositary as provided below prior to the Expiration Date; and
. the certificates for all tendered Shares in proper form for transfer,
together with a properly completed and duly executed Letter of
Transmittal (or a manually signed facsimile thereof) with any required
signature guarantee (or, in the case of a book-entry transfer, a Book-
Entry Confirmation along with an Agent's Message) and any other
documents required by such Letter of Transmittal, are received by the
Depositary within three Trading Days after the date of execution of the
Notice of Guaranteed Delivery. A "Trading Day" is any day on which The
Nasdaq National Market is open for business.
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<PAGE>
Any Notice of Guaranteed Delivery may be delivered by hand, transmitted by
facsimile transmission or mailed to the Depositary and must include a
guarantee by an Eligible Institution in the form set forth in the Notice of
Guaranteed Delivery.
Other Requirements. Notwithstanding any other provision hereof, payment for
Shares accepted for payment pursuant to the Offer will, in all cases, be made
only after timely receipt by the Depositary of (i) certificates evidencing
such Shares or a Book-Entry Confirmation of the delivery of such Shares
(unless Purchaser elects, in its sole discretion, to make payment for such
Shares pending receipt of the Certificates or a Book-Entry Confirmation, if
available, with respect to such Certificates), (ii) a properly completed and
duly executed Letter of Transmittal (or a manually signed facsimile thereof)
with any required signature guarantees (or, in the case of a book-entry
transfer, an Agent's Message) and (iii) any other documents required by the
Letter of Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE OF THE SHARES TO BE PAID BY PURCHASER, REGARDLESS OF ANY
EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
Tender Constitutes an Agreement. The valid tender of Shares pursuant to one
of the procedures described above will constitute a binding agreement between
the tendering Stockholder and Purchaser on the terms and subject to the
conditions of the Offer.
Determination of Validity. All questions as to the validity, form,
eligibility (including, but not limited to, time of receipt) and acceptance
for payment of any tendered Shares pursuant to any of the procedures described
above will be determined by Purchaser, in its sole discretion, whose
determination will be final and binding on all parties. Purchaser reserves the
absolute right to reject any or all tenders of any Shares determined by it not
to be in proper form or if the acceptance for payment of, or payment for, such
Shares may, in the opinion of Purchaser's counsel, be unlawful. Purchaser also
reserves the absolute right, in its sole discretion, to waive any of the Offer
Conditions (subject to the terms of the Merger Agreement) or any defect or
irregularity in any tender with respect to Shares of any particular
Stockholder, whether or not similar defects or irregularities are waived in
the case of other Stockholders. No tender of Shares will be deemed to have
been validly made until all defects and irregularities have been cured or
waived. None of Management Group, Purchaser or any of their respective
affiliates, the Depositary, or any other person or entity will be under any
duty to give any notification of any defects or irregularities in tenders or
incur any liability for failure to give any such notification. Purchaser's
interpretation of the terms and conditions of the Offer (including the Letter
of Transmittal and the instructions thereto) will be final and binding.
Appointment As Proxy. By executing a Letter of Transmittal (or delivering an
Agent's Message) as set forth above, a tendering Stockholder irrevocably
appoints each designee of Purchaser as such Stockholder's attorney-in-fact and
proxy, with full power of substitution, to vote in such manner as such
attorney-in-fact and proxy (or any substitute thereof) shall deem proper in
its sole discretion, and to otherwise act (including pursuant to written
consent) to the full extent of such Stockholder's rights with respect to the
Shares tendered by such Stockholder and accepted for payment by Purchaser (and
any and all dividends, distributions, rights or other securities issued or
issuable in respect of such Shares on or after May 26, 2000). All such proxies
shall be considered coupled with an interest in the tendered Shares and shall
be irrevocable. This appointment will be effective if, when, and only to the
extent that, Purchaser accepts such Shares for payment pursuant to the Offer.
Upon such acceptance for payment, all prior proxies given by such Stockholder
with respect to such Shares and other securities will, without further action,
be revoked, and no subsequent proxies may be given (and, if given, will not be
deemed effective). The designees of Purchaser will, with respect to the Shares
and other securities for which the appointment is effective, be empowered to
exercise all voting and other rights of such Stockholder as they in their sole
discretion may deem proper at any annual, special, adjourned or postponed
meeting of the Company's Stockholders, by written consent in lieu of any such
meeting or otherwise. Purchaser reserves the right to require that, in order
for Shares to be deemed validly tendered, immediately upon Purchaser's
acceptance for payment of such Shares, Purchaser must be able to exercise all
rights (including, without limitation, all voting rights) with respect to such
Shares and receive all dividends and distributions.
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<PAGE>
Backup Withholding. Under United States federal income tax law, the amount
of any payments made by the Depositary to Stockholders (other than corporate
and certain other exempt Stockholders) pursuant to the Offer may be subject to
backup withholding tax at a rate of 31 percent. To avoid such backup
withholding tax with respect to payments made pursuant to the Offer, a non-
exempt, tendering Stockholder must provide the Depositary with such
Stockholder's correct taxpayer identification number and certify under
penalties of perjury that such Stockholder is not subject to backup
withholding tax by completing the Substitute Form W-9 included as part of the
Letter of Transmittal. If backup withholding applies with respect to a
Stockholder or if a Stockholder fails to deliver a completed Substitute Form
W-9 to the Depositary or otherwise establish an exemption, the Depositary is
required to withhold 31 percent of any payments made to such Stockholder. See
"SPECIAL FACTORS--Certain United States Federal Income Tax Consequences" of
this Offer to Purchase and the information set forth under the heading
"Important Tax Information" contained in the Letter of Transmittal.
4. Withdrawal Rights.
Tenders of Shares made pursuant to the Offer are irrevocable, except that
Shares tendered pursuant to the Offer may be withdrawn at any time prior to
the Expiration Date and, unless theretofore accepted for payment by the
Purchaser pursuant to the Offer, may also be withdrawn at any time after July
25, 2000. If Purchaser extends the Offer, is delayed in its acceptance for
payment of Shares or is unable to purchase Shares validly tendered pursuant to
the Offer for any reason, then, without prejudice to Purchaser's rights under
the Offer, the Depositary may, nevertheless, on behalf of Purchaser, retain
tendered Shares and such Shares may not be withdrawn except to the extent that
tendering Stockholders are entitled to withdrawal rights as described in this
Section 4. Any such delay in acceptance for payment will be accomplished by an
extension of the Offer to the extent required by law.
For a withdrawal to be effective, a written, telegraphic, telex or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of this Offer to Purchase.
Any notice of withdrawal must specify the name of the person who tendered the
Shares to be withdrawn, the number of Shares to be withdrawn, and the name of
the registered holder of such Shares, if different from that of the person who
tendered such Shares. If Certificates evidencing Shares to be withdrawn have
been delivered or otherwise identified to the Depositary, then, prior to the
physical release of such Certificates, the serial numbers shown on such
Certificates must be submitted to the Depositary and the signature(s) on the
notice of withdrawal must be guaranteed by an Eligible Institution, unless
such Shares have been tendered for the account of an Eligible Institution.
Shares tendered pursuant to the procedure for book-entry transfer as set forth
in "--Procedures for Tendering Shares" may be withdrawn only by means of the
withdrawal procedures made available by the Book-Entry Transfer Facility, must
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Shares and must otherwise comply with the
Book-Entry Transfer Facility's procedures. However, withdrawn Shares may be
re-tendered at any time prior to the Expiration Date by following one of the
procedures described in Section 3.
Withdrawals of tendered Shares may not be rescinded without Purchaser's
consent. Any Shares properly withdrawn will thereafter be deemed not validly
tendered for purposes of the Offer.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by Purchaser in its sole discretion,
which determination will be final and binding. None of Purchaser, the
Management Group or any of their respective affiliates, the Depositary, or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification.
Any Shares properly withdrawn may be re-tendered at any time prior to the
Expiration Date by following any of the procedures described in "--Procedures
for Tendering Shares."
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<PAGE>
5. Price Range of the Shares.
The primary market for the Shares is The Nasdaq National Market. The ticker
symbol for the Shares is "WDRY." The following table sets forth, for the
periods indicated, the high and low closing sales prices per share of Common
Stock as reported on The Nasdaq National Market. The Company did not pay cash
dividends on its Common Stock during the periods set forth below.
<TABLE>
<CAPTION>
High Low
---- ---
<S> <C> <C>
Fiscal Quarter Ended:
June 30, 1998........................................... $28.00 $20.00
September 30, 1998...................................... 23.50 8.75
December 31, 1998....................................... 19.25 5.50
March 31, 1999.......................................... 16.875 9.375
<CAPTION>
High Low
---- ---
<S> <C> <C>
Fiscal Quarter Ended:
June 30, 1999........................................... $13.625 $9.125
September 30, 1999...................................... 12.625 9.563
December 31, 1999....................................... 11.813 8.750
March 31, 2000.......................................... 10.375 7.563
</TABLE>
On May 25, 2000, the last full trading day prior to the date of this Offer
to Purchase, the closing market price per Share on The Nasdaq National Market
was $13.6875. Stockholders are urged to obtain current market quotations for
the Company's Common Stock prior to tendering any Shares.
6. Certain Information Concerning the Company.
The Company. The information concerning the Company contained in this
Offer to Purchase, including financial information, has been taken from or is
based upon publicly available documents and records on file with the SEC and
other public sources. None of Purchaser, the Management Group or any of their
respective affiliates assumes any responsibility for the accuracy or
completeness of the information concerning the Company contained in such
documents and records or for any failure by the Company to disclose events
which may have occurred or may affect the significance or accuracy of any such
information but which are unknown to them. The following description of the
Company and selected information has been adopted from the Company's Form 10-K
for the fiscal year ended March 31, 1999, and is qualified in its entirety by
reference to such report.
The Company's headquarters are located at 55 Lumber Road, Roslyn, New York
11576, and its telephone number is (516) 484-2300. The Company's mailing
address is the same as that of its headquarters. The Company also maintains a
corporate office in Charlotte, North Carolina.
The Company is a supplier of outsourced laundry equipment services for
multi-family housing properties in the United States. At March 31, 1999, the
Company owned and operated approximately 765,000 washers and dryers in
approximately 75,000 locations on routes located throughout the United States
and in 163 retail laundromats located throughout Texas and Arizona. The
Company, through its wholly-owned subsidiary, Super Laundry Equipment Corp.,
is also a laundromat equipment distribution company.
In January 1995, management, with its equity sponsor, GTCR Fund IV, acquired
Coinmach Corporation and initiated a strategy of growth through acquisitions.
The Company was incorporated on March 31, 1995 under the name SAS Acquisitions
Inc. in the State of Delaware and is the sole stockholder of all of the Common
Stock of Coinmach Corporation, its primary operating subsidiary.
In July 1996, the Company completed an initial public offering of 4,120,000
shares of its Common Stock at an initial public offering price of $14.00 per
share. In August 1996, the underwriters in the public offering
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<PAGE>
exercised an over-allotment option with respect to the purchase of an
additional 63,642 shares of Common Stock. In December 1997, the Company
completed a secondary offering of 4,600,000 shares of its Common Stock at a
price of $19.75 per share, including the issuance of 600,000 shares in
connection with the exercise of an underwriters' over-allotment option granted
in connection therewith. In connection with the secondary offering, 2,665,000
shares of Common Stock were sold by the Company and 1,935,000 shares of Common
Stock were sold by certain Stockholders. The aggregate proceeds received by
the Company, after the underwriter's discount and payment of all expenses in
connection with the secondary offering, were approximately $48.4 million.
Although we have no knowledge that any such information is untrue, we take
no responsibility for the accuracy or completeness of information contained in
this Offer to Purchase with respect to the Company or any of its subsidiaries
or affiliates or for any failure by the Company to disclose events that may
have occurred or may affect the significance or accuracy of any such
information.
Financial Information. Certain financial information relating to the Company
is hereby incorporated by reference to the audited financial statements for
the Company's 1998 and 1999 fiscal years set forth in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1999 (the "1999 10-
K"), beginning on page F-1 of such report. This report may be inspected at,
and copies may be obtained from, the same places and in the manner set forth
under "--Available Information," below.
Available Information. The Company is subject to the information and
reporting requirements of the Exchange Act and is required to file reports,
proxy statements and other information with the SEC relating to its business,
financial condition and other matters. Such reports, proxy statements and
other information is required to be disclosed in reports filed with the SEC.
These reports and other information should be available for inspection at the
public reference facilities of the SEC located in Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and also should be available for
inspection and copying at prescribed rates at regional offices of the SEC
located at Seven World Trade Center, New York, New York 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of this material
may also be obtained by mail, upon payment of the SEC's customary fees, from
the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549.
Electronic filings filed through the SEC's Electronic Data Gathering, Analysis
and Retrieval, or EDGAR, system, including those made by or in respect of the
Company, are publicly available through the SEC's home page on the Internet at
http://www.sec.gov.
7. Certain Information Concerning Purchaser.
Ownership and Management. Purchaser, a newly incorporated Delaware
corporation, has not conducted any business other than in connection with the
Offer and the Merger Agreement. All of the issued and outstanding shares of
capital stock of Purchaser are currently held by Bruce V. Rauner. Stephen R.
Kerrigan, Chief Executive Officer of the Company, Mitchell Blatt, President
and Chief Operating Officer of the Company, Robert M. Doyle, Chief Financial
Officer and Secretary of the Company, Michael E. Stanky, Senior Vice President
of the Company, and James N. Chapman, a director of the Company have entered
into a Rollover Agreement that obligates them to exchange 265,369, 298,845,
59,467, 23,746 and 9,561 Shares, respectively, for equity interests in the
Purchaser. Accordingly, such persons will not tender such Shares pursuant to
this Offer. GTCR Fund VII has issued a commitment letter to the Purchaser,
committing to an investment of $192 million in exchange for equity interests
of the Purchaser, which investment will be made through GTCR-CLC, LLC, an
entity formed by GTCR Fund VII and GTCR Fund IV, of which GTCR Fund IV is the
sole managing member. GTCR Fund IV will contribute a small percentage of its
shares of Common Stock in exchange for an interest in GTCR-CLC, LLC, which
will in turn contribute the shares to us in exchange for our equity and tender
its remaining shares of Common Stock in the Offer. GTCR Fund VII will also
hold an interest in GTCR-CLC, LLC. Certain limited partners of GTCR Fund VII
and other institutional investors may invest directly in Purchaser in exchange
for certain equity interests of Purchaser (in which case there will be a pro-
rata reduction in GTCR Fund VII's investment in Purchaser under the terms of
its equity commitment).
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Because (i) the consideration for the Shares in the Offer consists solely of
cash, (ii) the Offer is not subject to any financing condition, and (iii)
Purchaser has offered to acquire all of the outstanding Shares in the Offer,
Purchaser believes the financial condition of Purchaser and its affiliates is
not material to a decision by a holder of Shares whether to sell, tender or
hold Shares pursuant to the Offer.
The name, business address, citizenship, present principal occupation and
employment history for the past five years of each of the directors and
executive officers of Purchaser and other control persons required to be
included herein are set forth in Schedule I to this Offer to Purchase.
During the last five years, neither of Purchaser, nor, to the best of
Purchaser's knowledge, any of the persons listed in Schedule I to this Offer
to Purchase (i) has been convicted in a criminal proceeding (excluding traffic
violations and similar misdemeanors) or (ii) was a party to any judicial or
administrative proceeding that resulted in a judgment, decree or final order
enjoining the person from future violations of, or prohibiting activities
subject to, federal or state securities laws, or a finding of any violation of
federal or state securities laws.
Except as set forth in "SPECIAL FACTORS--Beneficial Ownership of Shares" (i)
neither of Purchaser, nor, to the best of Purchaser's knowledge, any of the
persons listed in Schedule I to this Offer to Purchase, or any associate or
majority-owned subsidiary of Purchaser or the Company, beneficially owns or
has any right to acquire, directly or indirectly, any equity securities of the
Company and (ii) neither of Purchaser, nor to the best of its knowledge, any
of the persons or entities referred to above has effected any transaction in
such equity securities during the past 60 days.
Except as described in this Offer to Purchase, neither of Purchaser, nor, to
the best of Purchaser's knowledge, any of the persons listed in Schedule I to
this Offer to Purchase has any contract, arrangement, understanding or
relationship with any other person with respect to any securities of the
Company, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, joint ventures, loan or option arrangements, puts or calls,
guarantees of loans, guarantees against loss or the giving or withholding of
proxies. Except as set forth in this Offer to Purchase, in the past two years,
neither of Purchaser, nor, to the best of Purchaser's knowledge, any of the
persons listed on Schedule I to this Offer to Purchase has had any business
relationship or transaction with the Company or any of its executive officers,
directors or affiliates that is required to be reported under the rules and
regulations of the SEC applicable to the Offer. Except as set forth in this
Offer to Purchase, in the past two years, there have been no contracts,
negotiations or transactions between any of Purchaser or its affiliates or, to
the best of Purchaser's knowledge, any of the persons listed in Schedule I to
this Offer to Purchase, on the one hand, and the Company or its affiliates, on
the other hand, concerning a merger, consolidation or acquisition, tender
offer or other acquisition of securities, an election of directors or a sale
or other transfer of a material amount of assets.
Available Information. Purchaser is not subject to the informational
reporting requirements of the Exchange Act, nor is it required to file reports
and other information with the SEC relating to its businesses, financial
condition or other matters. Except as otherwise disclosed in this Offer to
Purchase, Purchaser has not made, and is not making, any provision in
connection with the Offer or the Merger to grant unaffiliated security holders
access to the books and records of Purchaser.
8. Source and Amount of Funds.
The Offer is not conditioned upon any financing arrangements. The amount of
funds required by Purchaser to purchase all of the outstanding Common Stock
pursuant to the Offer, to pay the amounts due to the holders of the Company's
options and to pay related fees and expenses is expected to be approximately
$190 million.
Contemporaneously with the consummation of the Offer, GTCR-CLC, LLC and
certain limited partners of GTCR Fund VII and other institutional investors
who may determine to invest directly in the Purchaser will contribute cash in
exchange for equity interests in Purchaser to the extent not prohibited by
applicable law, in an amount sufficient to allow Purchaser to acquire all of
the Shares pursuant to the Offer. GTCR Fund VII has
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<PAGE>
sufficient committed capital to fund the offer and has issued a commitment
letter to the Purchaser, subject to certain conditions, committing to an
investment of $192 million in exchange for equity interests of the Purchaser.
GTCR Fund VII will make such cash investment through GTCR-CLC, LLC.
9. Effect of the Offer on the Market for the Common Stock; Exchange Act
Registration.
Market For Shares. The purchase of Shares pursuant to the Offer will reduce
the number of Shares that might otherwise trade publicly and could adversely
affect the liquidity and market value of the remaining Shares held by the
public.
Stock Quotation. Shares are traded primarily on The Nasdaq National Market.
According to published guidelines of the National Association of Securities
Dealers ("NASD"), the Shares might no longer be eligible for quotation on The
Nasdaq National Market if, among other things, the number of Shares publicly
held was less than 1,100,000, there were fewer than 400 holders of round lots,
the aggregate market value of the publicly held Shares was less than
$15,000,000, total assets or total revenues were less than $50,000,000 and
there were fewer than four registered and active market makers for the Shares.
Shares held directly or indirectly by directors, officers or beneficial owners
of more than 10 percent of the Shares are not considered as being publicly
held for this purpose. According to the Company, as of May 24, 2000, there
were approximately thirty-five holders of record of shares of Class A Common
Stock (not including beneficial holders of Shares in street name) and one
holder of shares of non-voting Class B Common Stock (not including beneficial
holders of Shares in street name) and, as of May 25, 2000, there were
12,938,623 shares of Class A Common Stock outstanding and 240,324 shares of
non-voting Class B Common Stock outstanding.
If as a result of the purchase of Shares pursuant to the Offer or otherwise,
the Shares no longer meet the requirements of the NASD for continued inclusion
in any tier of Nasdaq, and the Shares are no longer included in any tier of
The Nasdaq National Market, the market for such Shares could be adversely
affected. It is possible that the Shares would be traded or quoted on other
securities exchanges or in the over-the-counter market, and that price
quotations would be reported by such exchanges, or other sources. The extent
of the public market for the Shares and the availability of such quotations
would, however, depend upon the number of Stockholders and/or the aggregate
market value of the Shares remaining at such time, the interest in maintaining
a market in the Shares on the part of securities firms, the possible
termination of registration of the Shares under the Exchange Act and other
factors.
Exchange Act Registration. The Shares are currently registered under the
Exchange Act. Such registration under the Exchange Act may be terminated upon
application of the Company to the SEC if the Shares are neither listed on a
national securities exchange nor held by 300 or more holders of record.
Termination of registration under the Exchange Act would substantially reduce
the information required to be furnished by the Company to its Stockholders
and to the SEC and would make certain provisions of the Exchange Act no longer
applicable to the Company, such as the short-swing profit recovery provisions
of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy
statement pursuant to Section 14(a) of the Exchange Act in connection with
stockholders' meetings, the related requirement of furnishing an annual report
to stockholders and the requirements of Rule 13e-3 under the Exchange Act with
respect to "going private" transactions. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 promulgated under
the Securities Act may be impaired or eliminated. Purchaser intends to seek to
cause the Company to apply for termination of registration of the Common Stock
under the Exchange Act as soon after the consummation of the Offer as the
requirements for such termination are met.
Margin Regulations. The Shares are currently "margin securities," as such
term is defined under the regulations of the Federal Reserve Board, which has
the effect, among other things, of allowing brokers to extend credit on the
collateral of the Shares. Depending upon factors similar to those described
above regarding listing and market quotations, it is possible that, following
the Offer, the Shares would no longer constitute "margin securities" for the
purposes of the margin regulations of the Federal Reserve Board and therefore
could no longer
39
<PAGE>
be used as collateral for loans made by brokers. In any event, the Shares will
cease to be "margin securities" if registration of the Shares under the
Exchange Act is terminated.
10. Conditions of the Offer.
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act
(relating to Purchaser's obligation to pay for or return tendered Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment
or, subject to the restriction referred to above, payment for, any Shares
tendered pursuant to the Offer, and may amend or terminate the Offer (whether
or not any Shares have theretofore been purchased or paid for) to the extent
permitted by this Agreement if, (i) there shall not have been tendered and not
properly withdrawn prior to expiration of the Offer at least the number of
Shares that when combined with the Shares already owned by Purchaser shall
constitute at least 51% of the then outstanding Shares (the "Minimum
Condition"), or (ii) at any time on or after the date of the Merger Agreement
and prior to the acceptance for payment of Shares, any of the following
conditions occurs or has occurred:
(a) there shall have been any (i) action, proceeding, application, claim
or suit, (ii) order or preliminary or permanent injunction, or (iii)
statute, rule, regulation, legislation, interpretation, judgment or order
instituted, pending, enacted, entered, enforced, promulgated, amended,
issued and continuing and applicable to Purchaser, the Company or any
subsidiary or affiliate of Purchaser or the Company or the Offer, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency which would reasonably be expected to have
the effect of, directly or indirectly: (1) making illegal, or otherwise
directly or indirectly restraining or prohibiting or making materially more
expensive the making of the Offer, the acceptance for payment of, or
payment for the Shares by Purchaser or the consummation of any of the
transactions contemplated by the Merger Agreement; (2) prohibiting or
affecting the ownership or operation by the Company or any of its
subsidiaries or Purchaser or any of its affiliates of all or any material
portion of the business or assets of the Company or any of its
subsidiaries, taken as a whole, or any of its affiliates or compelling
Purchaser or any of its affiliates to dispose of or hold separate all or
any material portion of the business or assets of the Company or any of
their respective subsidiaries or Purchaser, or any of its affiliates, as a
result of the transactions contemplated by the Offer, the Merger or the
Merger Agreement; (3) imposing or confirming limitations on the ability of
Purchaser or any of its affiliates effectively to acquire or hold or to
exercise full rights of ownership of Shares, including without limitation
the right to vote any Shares acquired or owned by Purchaser or any of its
affiliates on all matters properly presented to the Stockholders, including
without limitation the adoption and approval of the Merger Agreement and
the Merger or the right to vote any shares of capital stock of any
subsidiary directly or indirectly owned by the Company; (4) requiring
divestiture by Purchaser of any Shares; or (5) otherwise resulting in a
Material Adverse Effect on the Company;
(b) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market, including
The Nasdaq National Market System, in the United States, (ii) a material
adverse change in or material disruption of conditions in the market for
syndicated bank credit facilities or the financial, banking or capital
markets generally, including without limitation, a decline of at least 10%
in either the Dow Jones Average of Industrial Stocks or the Standard &
Poor's 500 index from May 12, 2000, (iii) a commencement and continuation
of a war or armed hostilities or other national or international calamity
directly or indirectly involving the United States, or (iv) in the case of
any of the foregoing existing at the time of commencement of the Offer, a
material acceleration or worsening thereof;
(c) (i) it shall have been publicly disclosed or Purchaser shall have
otherwise learned that beneficial ownership (determined for the purposes of
this paragraph as set forth in Rule 13d-3 promulgated under the Exchange
Act) of more than 5% of the outstanding Shares has been acquired by any
corporation (including the Company or any of its subsidiaries or
affiliates), partnership, person or other entity or group (as defined in
Section 13(d)(3) of the Exchange Act), other than Purchaser or its
affiliates, or the Management Group
40
<PAGE>
or any of their respective affiliates (but only with respect to the Shares
that they beneficially own on the date hereof), or (ii) (A) the Company
Board or any committee thereof shall have withdrawn or modified in a manner
adverse to Purchaser (including by amendment of the Schedule 14D-9) the
approval or recommendation of the Offer, the Merger or the Merger
Agreement, or approved or recommended any Takeover Proposal or any other
acquisition of Shares other than the Offer or the Merger or shall have
resolved to do any of the foregoing, (B) any corporation, partnership,
person or other entity or group shall have entered into a definitive
agreement or an agreement in principle with the Company with respect to an
acquisition transaction pursuant to a Takeover Proposal (as defined in the
Merger Agreement), or (C) the Company Board or any committee thereof shall
have resolved to do any of the foregoing;
(d) any of the representations and warranties of the Company set forth in
the Merger Agreement shall not be true and correct, except (i) those
representations and warranties that address matters only as of a particular
date are true and correct as of such date, and (ii) where the failure of
such representations and warranties to be true and correct (without giving
effect to any limitation as to "materiality" or "material adverse effect"
set forth therein), does not have, and is not likely to have, individually
or in the aggregate, a Material Adverse Effect on the Company;
(e) the Company shall have failed to perform in any material respect any
obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Merger Agreement;
(f) the Merger Agreement shall have been terminated in accordance with
its terms or the Offer shall have been terminated with the consent of the
Company;
(g) any waiting periods under the HSR Act applicable to the purchase of
Shares pursuant to the Offer shall not have expired or been terminated, or
any material approval, permit, authorization or consent of any domestic or
foreign governmental, administrative or regulatory agency (federal, state,
local, provincial or otherwise) shall not have been obtained on terms
satisfactory to the Purchaser in its reasonable discretion; or
(h) there shall have occurred any change, condition, event or development
that has a Material Adverse Effect on the Company.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances giving rise to any such
conditions and may be waived by Purchaser in whole or in part at any time and
from time to time in their reasonable discretion, in each case, subject to the
terms of the Merger Agreement. The failure by Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of such
right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
For purposes of this Section 10, "Material Adverse Effect" shall mean any
change or effect that would be materially adverse to the assets, liabilities,
business, prospects, operations or condition (financial or otherwise) of the
Company and its subsidiaries, taken as a whole, or the ability of the Company
to perform its obligations under the Merger Agreement or to consummate the
transaction contemplated thereby.
11. Certain Legal Matters; Regulatory Approvals.
General. Except as otherwise disclosed herein, Purchaser is not aware of (i)
any license or regulatory permit that appears to be material to the business
of the Company and its subsidiaries, taken as a whole, that might be adversely
affected by the acquisition of Shares by Purchaser pursuant to the Offer or
the Merger or otherwise or (ii) any approval or other action by any
governmental, administrative or regulatory agency or authority, domestic or
foreign, that would be required for the acquisition or ownership of Shares by
Purchaser as contemplated herein. Should any such approval or other action be
required, Purchaser currently contemplates that it would seek such approval or
action. Purchaser's obligation under the Offer to accept for payment and pay
for Shares is subject to certain conditions. See "--Conditions of the Offer."
While, except as described in this
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<PAGE>
Offer to Purchase, Purchaser does not currently intend to delay the acceptance
for payment of Shares tendered pursuant to the Offer pending the outcome of
any such matter, there can be no assurance that any such approval or action,
if needed, would be obtained or would be obtained without substantial
conditions, that adverse consequences might not result to the business of the
Company or Purchaser or that certain parts of the businesses of the Company or
Purchaser might not have to be disposed of in the event that such approvals
were not obtained or any other actions were not taken.
State Takeover Laws. The Company is incorporated under the laws of the State
of Delaware. In general, Section 203 of the DGCL prevents an "interested
stockholder" (generally a person who owns or has the right to acquire 15% or
more of a corporation's outstanding voting stock, or an affiliate or associate
thereof) from engaging in a "business combination" (defined to include mergers
and certain other transactions) with a Delaware corporation for a period of
three years following the date such person became an interested stockholder
unless, among other things, prior to the date the interested stockholder
became an interested stockholder, the board of directors of the corporation
approved either the business combination or the transaction in which the
interested stockholder became an interested stockholder. The Company has
represented to Purchaser in the Merger Agreement that the Board of Directors
has taken all necessary action so that the restrictions contained in Section
203 of the DGCL applicable to a "business combination" will not apply to the
execution, delivery or performance of the Merger Agreement, the Offer, the
Merger or the transactions contemplated thereby.
A number of other states have adopted laws and regulations applicable to
attempts to acquire securities of corporations which are incorporated, or have
substantial assets, stockholders, principal executive offices or principal
places of business, or whose business operations otherwise have substantial
economic effects, in such states. In Edgar v. Mite Corp., the Supreme Court of
the United States invalidated on constitutional grounds the Illinois Business
Takeover Statute, which, as a matter of state securities law, made takeovers
of corporations meeting certain requirements more difficult. However, in 1987,
in CTS Corp. v. Dynamics Corp. of America, the Supreme Court held that the
State of Indiana may, as a matter of corporate law and, in particular, with
respect to those aspects of corporate law concerning corporate governance,
constitutionally disqualify a potential acquirer from voting on the affairs of
a target corporation without the prior approval of the remaining stockholders.
The state law before the Supreme Court was by its terms applicable only to
corporations that had a substantial number of holders in the state and were
incorporated there.
The Company, directly or through subsidiaries, conducts business in a number
of states throughout the United States, some of which have enacted takeover
laws. Purchaser does not believe that any state takeover statutes apply to the
Offer. Neither Purchaser nor the Management Group has currently complied with
any state takeover statute or regulation. Purchaser reserves the right to
challenge the applicability or validity of any state law purportedly
applicable to the Offer or the Merger and nothing in this Offer to Purchase or
any action taken in connection with the Offer or the Merger is intended as a
waiver of such right. In the event it is asserted that one or more state
takeover laws is applicable to the Offer or the Merger, and an appropriate
court does not determine that it is inapplicable or invalid as applied to the
Offer or the Merger, Purchaser may be required to file certain information
with, or receive approvals from, the relevant state authorities. In addition,
if enjoined, Purchaser might be unable to accept for payment any Shares
tendered pursuant to the Offer or be delayed in continuing or consummating the
Offer and the Merger. In such case, Purchaser may not be obligated to accept
for payment any Shares tendered. See "--Conditions of the Offer."
Antitrust. Under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules that have been promulgated thereunder by the Federal
Trade Commission (the "FTC"), certain transactions may not be consummated
unless certain information has been furnished to the Antitrust Division of the
Department of Justice and the FTC and certain waiting period requirements have
been satisfied. The acquisition of shares of Common Stock by the Purchaser
pursuant to the Offer is subject to the HSR Act requirements. Such purchase
may not be made until the expiration of the waiting period following the
required filing of a Notification and Report Form under the HSR Act by
Purchaser, which Purchaser will submit shortly after the commencement of the
Offer. The waiting period will expire fifteen calendar days from the date
Purchaser's Notification and Report Form is filed, unless early termination of
the waiting period is granted or Purchaser receives a request for
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additional information or documentary material prior thereto. If either the
FTC or the Antitrust Division were to request additional information or
documentary material from Purchaser prior to the expiration of the fifteen-day
waiting period, the waiting period would be extended and would expire at 11:59
p.m., New York City time, on the tenth calendar day after the date of
substantial compliance by Purchaser with such request. Thereafter, the waiting
period could be extended only by court order or by consent of Purchaser. If
the acquisition of Shares is delayed pursuant to a request by the FTC or the
Antitrust Division for additional information or documentary material pursuant
to the HSR Act, the purchase of and payment for shares of Common Stock
pursuant to the Offer will be deferred until ten days after the request is
substantially complied with unless the waiting period is terminated sooner by
the FTC or the Antitrust Division (and assuming all of the other Offer
conditions have been satisfied or waived). See "THE TENDER OFFER--Acceptance
for Payment and Payment for Shares." Only one extension of such waiting period
pursuant to a request for additional information or documentary material is
authorized by the rules promulgated under the HSR Act, except by court order
or by consent. Although the Company may be required to file certain
information and documentary material with the Antitrust Division and the FTC
in connection with the Offer during the ten-day waiting period, neither the
Company's failure to make such filings nor a request of the Company from the
Antitrust Division or the FTC for additional information or documentary
material will extend the waiting period. However, if the Antitrust Division or
the FTC raises substantive issues in connection with a proposed transaction,
the parties frequently engage in negotiations with the relevant governmental
agency concerning possible means of addressing these issues and may agree to
delay consummation of the transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the proposed acquisition of Shares
by the Purchaser pursuant to the Offer. At any time before or after the
Purchaser's purchase of Shares either the Antitrust Division or the FTC could
take such action under the antitrust laws as it deems necessary or desirable
in the public interest, including seeking to enjoin the acquisition of Shares
pursuant to the Offer or seeking divestiture of Shares acquired by the
Purchaser or divestiture of substantial assets of Purchaser, the Company or
any of their respective subsidiaries. State attorneys general may also bring
legal action under the antitrust laws, and private parties may bring such
action under certain circumstances. Purchaser believes that its acquisition of
Shares will not violate the antitrust laws. Nevertheless, there can be no
assurance that a challenge to the Offer on antitrust grounds will not be made
or, if a challenge is made, what the result will be. See "THE TENDER OFFER--
Conditions of the Offer" for certain conditions to the Offer, including
conditions with respect to certain governmental actions.
Other Matters. On April 8, 1999, Sand v. Coinmach Laundry Corporation, et.
al., a purported class action securities fraud lawsuit, was filed in the
Federal District Court for the Eastern District of New York (the "Federal
Securities Action") naming the Company and certain of its executive officers
as defendants. The Federal Securities Action was purportedly brought on behalf
of all Stockholders who purchased or otherwise acquired the Company's Common
Stock during the period August 6, 1997 to September 29, 1998. The complaint in
the Federal Securities Action alleges violations of various federal securities
laws, including misrepresentations of certain information about the Company.
The complaint in the Federal Securities Action seeks damages in unspecified
amounts. Since the filing of the complaint, the parties have entered into a
stipulation adjourning Defendants time to answer indefinitely. Although the
outcome of this proceeding cannot be predicted, based on the allegations
contained in the complaint, the Company has advised Purchaser that it believes
that the Federal Securities Action will not have a material adverse effect on
the financial condition, results of operations or cash flows of the Company.
On November 18, 1999, a class action lawsuit was filed in the Court of
Chancery of the State of Delaware naming the Company, GTCR Fund IV, GTCR
Golder Rauner, L.L.C. and certain officers and directors of the Company as
defendants, and alleging that the $13 Offer was inadequate and that any
agreement between GRKC and the Company to consummate an offer at that price
would constitute a breach of the fiduciary duties owed by the defendants to
the minority Stockholders.
The Company is also a party in various legal proceedings arising in the
ordinary course of business. Although the ultimate disposition of such
proceedings is not presently determinable, the Company has advised
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Purchaser that it does not believe that adverse determinations in any or all
such proceedings would have a material adverse effect upon the financial
condition, results of operations or cash flows of the Company.
12. Fees and Expenses.
Jefferies is acting as the Dealer Manager in connection with the tender
offer and has provided certain financial advisory services to GRKC and the
Purchaser in connection with the Offer and the Merger. We will pay Jefferies a
customary transaction fee for its services and will reimburse Jefferies for
reasonable out-of-pocket expenses. We have agreed to indemnify Jefferies and
its affiliates and certain other persons against certain liabilities and
expenses in connection with their services as the Dealer Manager and
investment banker, including liabilities under the United States federal
securities laws. At any time, Jefferies and its affiliates may actively trade
Company shares for their own account or for the accounts of customers, and,
accordingly, may at any time hold a long or short position in Common Stock of
the Company.
We have retained MacKenzie Partners as Information Agent in connection with
the Offer. The Information Agent may contact Stockholders by mail, telephone,
telex, telegraph and personal interview and may request brokers, dealers and
other nominee Stockholders to forward material relating to the Offer to
beneficial owners of the Company's Common Stock. We will pay the Information
Agent reasonable and customary compensation for these services in addition to
reimbursing the Information Agent for its reasonable out-of-pocket expenses.
We have agreed to indemnify the Information Agent against certain liabilities
and expenses in connection with the tender offer, including certain
liabilities under the United States federal securities laws.
The following is an estimate of expenses to be incurred in connection with
the Offer and the Merger. The fees and expenses of Lazard Freres are also
discussed in "SPECIAL FACTORS--Opinion of the Special Committee's Investment
Banker." The Merger Agreement provides that all costs and expenses incurred in
connection with the Offer and the Merger will be paid by the party incurring
such costs and expenses, except in certain circumstances where Purchaser or
the Company is required to reimburse the other party for its out-of-pocket
expenses. See "SPECIAL FACTORS--The Merger Agreement--Termination Fees and
Expenses."
The following table presents the estimated fees and expenses to be incurred
in connection with the Offer and the Merger:
<TABLE>
<S> <C>
Dealer Manager and Investment Banker Fees...................... $5,700,000
Legal Fees and Expenses........................................ $1,800,000
Printing and Mailing .......................................... $ 110,000
Filing Fee..................................................... $ 35,688
Depositary Fees................................................ $ 5,000
Information Agent.............................................. $ 7,000
Special Committee Fees and Expenses............................ $ 50,000
Miscellaneous.................................................. $ 125,000
----------
Total........................................................ $7,832,688
==========
</TABLE>
Except as set forth in this Offer to Purchase, Purchaser will not pay any
fees or expenses to any broker, dealer or other person for soliciting tenders
of Shares pursuant to the Offer.
Purchaser has also retained First Union National Bank as the Depositary. The
Depositary has not been retained to make solicitations or recommendations in
its role as Depositary. The Depositary will receive reasonable and customary
compensation for its services, will be reimbursed for certain reasonable out-
of-pocket expenses and will be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities under the
United States federal securities laws.
Brokers, dealers, commercial banks and trust companies will be reimbursed by
Purchaser for customary mailing and handling expenses incurred by them in
forwarding offering material to their customers.
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<PAGE>
13. Miscellaneous.
Purchaser is not aware of any jurisdiction where the making of the Offer is
prohibited by any administrative or judicial action pursuant to any valid
state statute. If Purchaser becomes aware of any valid state statute
prohibiting the making of the Offer or the acceptance of Shares pursuant
thereto, Purchaser will make a good faith effort to comply with such state
statute or seek to have such statute declared inapplicable to the Offer. If,
after such good faith effort, Purchaser cannot comply with any such state
statute, the Offer will not be made to (and tenders will not be accepted from
or on behalf of) the Stockholders in such state. In any jurisdiction where the
securities, blue sky or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser
by one or more registered brokers or dealers which are licensed under the laws
of such jurisdiction.
No person has been authorized to give any information or make any
representation on behalf of Purchaser not contained in this Offer to Purchase
or in the Letter of Transmittal and, if given or made, such information or
representation must not be relied upon as having been authorized. Purchaser
has filed with the SEC the Schedule TO, together with exhibits, pursuant to
Sections 13(e) and 14(d)(1) of the Exchange Act and Rules 13e-3 and 14d-3
promulgated thereunder, furnishing certain additional information with respect
to the Offer, and may file amendments thereto. The Schedule TO and any
amendments thereto, including exhibits, may be inspected at, and copies may be
obtained from, the same places and in the manner set forth in "--Certain
Information Concerning the Company--Additional Information" (except that they
will not be available at the regional offices of the SEC).
45
<PAGE>
May 26, 2000
SCHEDULE I
INFORMATION CONCERNING
THE DIRECTORS AND EXECUTIVE OFFICERS OF
CLC ACQUISITION CORPORATION
AND ALL PERSONS CONTROLLING IT
Directors and Executive Officers of CLC Acquisition Corporation:
Set forth below is the name, present principal occupation or employment and
material occupations, positions, offices or employment for the past five years
of each director and executive officer of Purchaser. Each person identified
below has held his position since the formation of Purchaser on May 10, 2000.
The principal address of Purchaser and, unless indicated below, the current
business address for each individual listed below is c/o GTCR Golder Rauner,
LLC, 6100 Sears Tower, Chicago, Illinois 60606, Telephone: (312) 382-2200.
Unless otherwise noted, each individual listed below is a citizen of the
United States.
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Bruce V. Rauner...................... 43 Director; President and Treasurer
Vincent J. Hemmer.................... 31 Vice President and Secretary
</TABLE>
Bruce V. Rauner. Mr. Rauner has been a director of the Company since April
1995. Mr. Rauner was a director of Coinmach Corporation, a wholly owned
subsidiary of the Company, from November 1995 to November 1996 and a director
of The Coinmach Corporation from January 1995 to November 1995. Mr. Rauner has
been a Principal and General Partner with GTCR Fund IV since 1984, where he is
responsible for originating and making new investments, monitoring portfolio
companies and recruiting and training associates. Mr. Rauner serves as a
director of Metamor Worldwide, Inc., Esquire Communications Ltd., Lason
Systems, Inc., Polymer Group, Inc., Province Healthcare Company and
AnswerThink Consulting Group, Inc.
Vincent J. Hemmer. Prior to joining GTCR, Mr. Hemmer worked as a Consultant
with The Monitor Company. Mr. Hemmer is responsible for originating and making
new investments, monitoring portfolio companies and recruiting and training
associates. Mr. Hemmer is a director of Alliant Resources Group, Global
Passenger Services, Hawkeye Communications, Health!Quest Global Communication
Partners and Synagro Technologies, and he works extensively with Province
Healthcare.
Controlling Persons of CLC Acquisition Corporation:
Set forth below is certain information concerning the individuals and
entities deemed to control Purchaser (the "Control Persons").
Unless otherwise noted, (i) during the past five years, none of the Control
Persons has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), (ii) during the past five years, none of
the Control Persons was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activity subject to, federal or
state securities laws or finding any violation with respect to such laws,
(iii) the address of the principal business and principal office for the
Control Persons is 6100 Sears Tower, Chicago, IL 60606, and the business
telephone number is (312) 382-2200.
All of the individuals listed below are citizens of the United States.
Controlling Entities
GTCR-CLC, LLC ("GTCR-CLC")--GTCR-CLC is a Delaware limited liability
company. Prior to the Merger, GTCR-CLC will be the beneficial owner of a
majority of the outstanding equity interests of Purchaser. The principal
business of GTCR-CLC is to make investments in common and preferred stock and
other interests in business organizations, domestic or foreign, with the
principal objective of appreciation of capital invested.
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<PAGE>
GTCR Fund VII, L.P. ("Fund VII")--Fund VII is a Delaware limited
partnership. Prior to the Merger, Fund VII will be the beneficial owner of 99%
of the outstanding equity interests of GTCR-CLC. The principal business of
Fund VII is to make investments in common and preferred stock and other
interests in business organizations, domestic or foreign, with the principal
objective of appreciation of capital invested.
Golder, Thoma, Cressey, Rauner Fund IV, L.P. ("Fund IV")--Fund IV is a
Delaware limited partnership. Fund IV is the managing member of GTCR-CLC and,
prior to the Merger, will be the beneficial owner of approximately 1% of the
outstanding equity interests of GTCR-CLC. The principal business of Fund IV is
to make investments in common and preferred stock and other interests in
business organizations, domestic or foreign, with the principal objective of
appreciation of capital invested.
Golder, Thoma, Cressey, Rauner, Inc. ("Golder Thoma Inc.")--Golder Thoma
Inc. is a Delaware corporation. Golder Thoma Inc. is the indirect general
partner of Fund IV. The principal business of Golder Thoma Inc. is to make
investments in common and preferred stock and other interests in business
organizations, domestic or foreign, with the principal objective of
appreciation of capital invested.
GTCR Golder Rauner, L.L.C. ("GTCR Golder Rauner")--GTCR Golder Rauner is a
Delaware limited liability company. GTCR Golder Rauner is the indirect general
partner of Fund VII. The principal business of GTCR Golder Rauner is to make
investments in common and preferred stock and other interests in business
organizations, domestic or foreign, with the principal objective of
appreciation of capital invested.
Controlling Individuals
Philip A. Canfield--Principal and Member of GTCR Golder Rauner. Prior to
joining GTCR, Mr. Canfield worked in the corporate finance department of
Kidder, Peabody & Co. Mr. Canfield is responsible for originating and making
new investments, monitoring portfolio companies and recruiting and training
associates. Mr. Canfield is a director of AETEA Information Technology, Inc.,
AppNet Systems, Inc., Argent Healthcare Services, Inc., FutureNext Consulting,
Inc., Metamor Software Solutions, NetASPx, Risk Management Alternatives, Inc.,
Vista Information Technologies, Inc. and Zefer Corp.
Bryan C. Cressey--Principal of Golder Thoma Inc. Mr. Cressey is currently a
partner with Thoma Cressey Equity Partners, a private equity firm which he co-
founded in 1998. From 1995 to 1998, Mr. Cressey was a principal of Golder
Thoma Inc. As a principal of Golder Thoma Inc., Mr. Cressey was responsible
for originating and making new investments, monitoring portfolio companies and
recruiting and training associates. The address of the principal business and
principal office for Mr. Cressey is 4400 Sears Tower, Chicago, IL 60606, and
the business telephone number is (312) 777-4444.
David A. Donnini--Principal and Member of GTCR Golder Rauner and Principal
of Golder Thoma Inc. Prior to joining GTCR, Mr. Donnini worked as an associate
consultant with Bain & Company. Mr. Donnini is responsible for originating and
making new investments, monitoring portfolio companies and recruiting and
training associates. Mr. Donnini is a director of American Sanitary, Cardinal
Logistics Management, Coinmach Corporation, International Computer Graphics,
Keystone Group Holdings, NSC Communications, Polymer Group, U.S. Aggregates,
Envision Financial Technologies, Inc., U.S. Fleet Services, BeneSource Corp.
and FutureNext Consulting, Inc.
I-2
<PAGE>
Donald J. Edwards--Principal and Member of GTCR Golder Rauner and Principal
of Golder Thoma Inc. Prior to joining GTCR, Mr. Edwards was with Lazard Freres
& Co. in New York where he specialized in mergers and acquisitions. Mr.
Edwards is responsible for originating and making new investments, monitoring
portfolio companies and recruiting and training associates. Mr. Edwards serves
on the board of directors of Select Medical, American Habilitation Services,
Dynacare, American Medical Laboratories, CompDent Corporation, Metamor
Worldwide, Inc., LifeCare Management Services, Park City Solutions, Inc.,
AccounTEC Inc., and Wallace Theater Corporation.
Edgar D. Jannotta, Jr.--Principal and Member of GTCR Golder Rauner. Mr.
Jannotta rejoined GTCR in April 1998 after spending over 9 years with William
Blair Capital Partners where he was a managing director. Mr. Jannotta is
responsible for originating and making new investments, monitoring portfolio
companies and recruiting and training associates. He is a director of
Lighthouse Holdings, Inc., Trans Healthcare, Inc. and Frontline Group, Inc.
William C. Kessinger--Principal and Member of GTCR Golder Rauner. William C.
Kessinger served as an associate with Prudential Asset Management Asia and was
a principal with the Parthenon Group. Mr. Kessinger is responsible for
originating and making new investments, monitoring portfolio companies and
recruiting and training associates. Mr. Kessinger is a director of Global
Imaging, Excaliber Tubular, Envision Financial Technologies, AnswerThink
Consulting Group, National Equipment Services, and National Computer Print.
Joseph P. Nolan--Principal and Member of GTCR Golder Rauner and Principal of
Golder Thoma Inc. Mr. Nolan was a vice president in mergers and acquisitions
with Dean Witter Reynolds Inc. and an associate at Coopers & Lybrand. Mr.
Nolan is responsible for originating and making new investments, monitoring
portfolio companies and recruiting and training associates. Mr. Nolan is
currently a director of Excaliber Tubular, DeLite Outdoor Advertising,
Province Healthcare, Esquire Communications, Lason and Global Passenger
Services.
Bruce V. Rauner--Principal and Member of GTCR Golder Rauner and Principal of
Golder Thoma Inc. See above for additional information.
Carl D. Thoma--Principal of Golder Thoma Inc. Mr. Thoma is currently a
partner with Thoma Cressey Equity Partners, a private equity firm which he co-
founded in 1998. From 1995 to 1998, Mr. Thoma was a principal of Golder Thoma
Inc. As a principal of Golder Thoma Inc., Mr. Thoma was responsible for
originating and making new investments, monitoring portfolio companies and
recruiting and training associates. The address of the principal business and
principal office for Mr. Thoma is 4400 Sears Tower, Chicago, IL 60606, and the
business telephone number is (312) 777-4444.
I-3
<PAGE>
ANNEX A
SECTION 262 OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
SECTION 262. APPRAISAL RIGHTS
(a) Any stockholder of a corporation of this State who holds shares of stock
on the date of the making of a demand pursuant to subsection (d) of this
section with respect to such shares, who continuously holds such shares
through the effective date of the merger or consolidation, who has otherwise
complied with subsection (d) of this section and who has neither voted in
favor of the merger or consolidation nor consented thereto in writing pursuant
to (S)228 of this title shall be entitled to an appraisal by the Court of
Chancery of the fair value of the stockholder's shares of stock under the
circumstances described in subsections (b) and (c) of this section. As used in
this section, the word "stockholder" means a holder of record of stock in a
stock corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant by those
words and also membership or membership interest of a member of a nonstock
corporation; and the words "depository receipt" mean a receipt or other
instrument issued by a depository representing an interest in one or more
shares, or fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or consolidation to
be effected pursuant to (S) 251 (other than a merger effected pursuant to
(S)251(g) of this title), (S)252, (S)254, (S)257, (S)258, (S)263 or (S)264 of
this title:
(1) Provided, however, that no appraisal rights under this section shall
be available for the shares of any class or series of stock, which stock,
or depository receipts in respect thereof, at the record date fixed to
determine the stockholders entitled to receive notice of and to vote at the
meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of (S)251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal rights
under this section shall be available for the shares of any class or series
of stock of a constituent corporation if the holders thereof are required
by the terms of an agreement of merger or consolidation pursuant to
(S)(S)251, 252, 254, 257, 258, 263 and 264 of this title to accept for such
stock anything except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository receipts
in respect thereof, which shares of stock (or depository receipts in
respect thereof) or depository receipts at the effective date of the
merger or consolidation will be either listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of Securities
Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts and
cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this
paragraph.
A-1
<PAGE>
(3) In the event all of the stock of a subsidiary Delaware corporation
party to a merger effected under (S)253 of this title is not owned by the
parent corporation immediately prior to the merger, appraisal rights shall
be available for the shares of the subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares of any
class or series of its stock as a result of an amendment to its certificate of
incorporation, any merger or consolidation in which the corporation is a
constituent corporation or the sale of all or substantially all of the assets
of the corporation. If the certificate of incorporation contains such a
provision, the procedures of this section, including those set forth in
subsections (d) and (e) of this section, shall apply as nearly as is
practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights are
provided under this section is to be submitted for approval at a meeting of
stockholders, the corporation, not less than 20 days prior to the meeting,
shall notify each of its stockholders who was such on the record date for
such meeting with respect to shares for which appraisal rights are
available pursuant to subsection (b) or (c) hereof that appraisal rights
are available for any or all of the shares of the constituent corporations,
and shall include in such notice a copy of this section. Each stockholder
electing to demand the appraisal of such stockholder's shares shall deliver
to the corporation, before the taking of the vote on the merger or
consolidation, a written demand for appraisal of such stockholder's shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of such stockholder's shares. A proxy or vote against
the merger or consolidation shall not constitute such a demand. A
stockholder electing to take such action must do so by a separate written
demand as herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation shall
notify each stockholder of each constituent corporation who has complied
with this subsection and has not voted in favor of or consented to the
merger or consolidation of the date that the merger or consolidation has
become effective; or
(2) If the merger or consolidation was approved pursuant to (S)228 or
(S)253 of this title, each constituent corporation, either before the
effective date of the merger or consolidation or within ten days
thereafter, shall notify each of the holders of any class or series of
stock of such constituent corporation who are entitled to appraisal rights
of the approval of the merger or consolidation and that appraisal rights
are available for any or all shares of such class or series of stock of
such constituent corporation, and shall include in such notice a copy of
this section; provided that, if the notice is given on or after the
effective date of the merger or consolidation, such notice shall be given
by the surviving or resulting corporation to all such holders of any class
or series of stock of a constituent corporation that are entitled to
appraisal rights. Such notice may, and, if given on or after the effective
date of the merger or consolidation, shall, also notify such stockholders
of the effective date of the merger or consolidation. Any stockholder
entitled to appraisal rights may, within 20 days after the date of mailing
of such notice, demand in writing from the surviving or resulting
corporation the appraisal of such holder's shares. Such demand will be
sufficient if it reasonably informs the corporation of the identity of the
stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or of
the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders
A-2
<PAGE>
entitled to receive either notice, each constituent corporation may fix, in
advance, a record date that shall be not more than 10 days prior to the
date the notice is given, provided, that if the notice is given on or after
the effective date of the merger or consolidation, the record date shall be
such effective date. If no record date is fixed and the notice is given
prior to the effective date, the record date shall be the close of business
on the day next preceding the day on which the notice is given.
(e) Within 120 days after the effective date of the merger or consolidation,
the surviving or resulting corporation or any stockholder who has complied
with subsections (a) and (d) hereof and who is otherwise entitled to appraisal
rights, may file a petition in the Court of Chancery demanding a determination
of the value of the stock of all such stockholders. Notwithstanding the
foregoing, at any time within 60 days after the effective date of the merger
or consolidation, any stockholder shall have the right to withdraw such
stockholder's demand for appraisal and to accept the terms offered upon the
merger or consolidation. Within 120 days after the effective date of the
merger or consolidation, any stockholder who has complied with the
requirements of subsections (a) and (d) hereof, upon written request, shall be
entitled to receive from the corporation surviving the merger or resulting
from the consolidation a statement setting forth the aggregate number of
shares not voted in favor of the merger or consolidation and with respect to
which demands for appraisal have been received and the aggregate number of
holders of such shares. Such written statement shall be mailed to the
stockholder within 10 days after such stockholder's written request for such a
statement is received by the surviving or resulting corporation or within 10
days after expiration of the period for delivery of demands for appraisal
under subsection (d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a copy
thereof shall be made upon the surviving or resulting corporation, which shall
within 20 days after such service file in the office of the Register in
Chancery in which the petition was filed a duly verified list containing the
names and addresses of all stockholders who have demanded payment for their
shares and with whom agreements as to the value of their shares have not been
reached by the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery, if so
ordered by the Court, shall give notice of the time and place fixed for the
hearing of such petition by registered or certified mail to the surviving or
resulting corporation and to the stockholders shown on the list at the
addresses therein stated. Such notice shall also be given by 1 or more
publications at least 1 week before the day of the hearing, in a newspaper of
general circulation published in the City of Wilmington, Delaware or such
publication as the Court deems advisable. The forms of the notices by mail and
by publication shall be approved by the Court, and the costs thereof shall be
borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become entitled
to appraisal rights. The Court may require the stockholders who have demanded
an appraisal for their shares and who hold stock represented by certificates
to submit their certificates of stock to the Register in Chancery for notation
thereon of the pendency of the appraisal proceedings; and if any stockholder
fails to comply with such direction, the Court may dismiss the proceedings as
to such stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of any
element of value arising from the accomplishment or expectation of the merger
or consolidation, together with a fair rate of interest, if any, to be paid
upon the amount determined to be the fair value. In determining such fair
value, the Court shall take into account all relevant factors. In determining
the fair rate of interest, the Court may consider all relevant factors,
including the rate of interest which the surviving or resulting corporation
would have had to pay to borrow money during the pendency of the proceeding.
Upon application by the surviving or resulting corporation or by any
stockholder entitled to participate in the appraisal proceeding, the Court
may, in its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination of the
stockholder entitled to an appraisal. Any stockholder whose name appears on
the list filed by the surviving or resulting corporation pursuant to
subsection (f) of this section and who has submitted such stockholder's
certificates of
A-3
<PAGE>
stock to the Register in Chancery, if such is required, may participate fully
in all proceedings until it is finally determined that such stockholder is not
entitled to appraisal rights under this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting corporation to
the stockholders entitled thereto. Interest may be simple or compound, as the
Court may direct. Payment shall be so made to each such stockholder, in the
case of holders uncertificated stock forthwith, and the case of holders of
shares represented by certificates upon the surrender to the corporation of
the certificates representing such stock. The Court's decree may be enforced
as other decrees in the Court of Chancery may be enforced, whether such
surviving or resulting corporation be a corporation of this State or of any
state.
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances. Upon
application of a stockholder, the Court may order all or a portion of the
expenses incurred by any stockholder in connection with the appraisal
proceeding, including, without limitation, reasonable attorney's fees and the
fees and expenses of experts, to be charged pro rata against the value of all
the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded appraisal rights as provided in subsection (d) of
this section shall be entitled to vote such stock for any purpose or to
receive payment of dividends or other distributions on the stock (except
dividends or other distributions payable to stockholders of record at a date
which is prior to the effective date of the merger or consolidation);
provided, however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such stockholder
shall deliver to the surviving or resulting corporation a written withdrawal
of such stockholder's demand for an appraisal and an acceptance of the merger
or consolidation, either within 60 days after the effective date of the merger
or consolidation as provided in subsection (e) of this section or thereafter
with the written approval of the corporation, then the right of such
stockholder to an appraisal shall cease. Notwithstanding the foregoing, no
appraisal proceeding in the Court of Chancery shall be dismissed as to any
stockholder without the approval of the Court, and such approval may be
conditioned upon such terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the shares
of such objecting stockholders would have been converted had they assented to
the merger or consolidation shall have the status of authorized and unissued
shares of the surviving or resulting corporation. (Last amended by Ch. 339, L.
98, eff. 7-1-98.)
A-4
<PAGE>
Manually signed copies of the Letters of Transmittal, properly completed and
duly signed, will be accepted. The Letter of Transmittal and certificates for
Shares and any other required documents should be sent by each stockholder or
such stockholder's broker, dealer, commercial bank, trust company or other
nominee to the Depositary at the address set forth below:
The Depositary for the Offer is:
First Union National Bank
By Mail: By Facsimile Transmission: By Hand or Overnight
(704) 590-7599 Courier:
Equity Services Equity Services
1525 West W.T. Harris For Information by Telephone: 1525 West W.T. Harris
Boulevard, 3C3 Boulevard, 3C3
Charlotte, NC 28262-1153 (704) 427-0292 Charlotte, NC 28262-1153
Questions and requests for assistance may be directed to the Company at the
address and telephone number set forth below. Additional copies of this Offer
to Purchase, the Letter of Transmittal, or other related tender offer
materials may be obtained from the Company or from brokers, dealers,
commercial banks or trust companies.
The Information Agent for the Offer is:
156 Fifth Avenue
New York, NY 10010
(212) 929-5500 (Call Collect)
(800) 322-2885 (Call Toll-Free)
The Dealer Manager for the Offer is:
Jefferies & Company, Inc.
11100 Santa Monica Boulevard
Los Angeles, CA 90025
(310) 575-5200 (Call Collect)
(800) 933-6656 (Call Toll-Free)
<PAGE>
Exhibit(a)(1)(ii)
LETTER OF TRANSMITTAL
To Tender Shares of Common Stock
of
Coinmach Laundry Corporation
Pursuant to the Offer to Purchase Dated May 26, 2000
by
CLC Acquisition Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
First Union National Bank
<TABLE>
<S> <C> <C>
By Mail: By Facsimile Transmission: By Hand or Overnight Courier:
First Union National Bank (704) 590-7599 First Union National Bank
Equity Services Equity Services
1525 West W.T. Harris Boulevard, 1525 West W.T. Harris Boulevard, 3C3
3C3 Charlotte, NC 28262-1153
Charlotte, NC 28262-1153
</TABLE>
DESCRIPTION OF SHARES TENDERED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Share Certificate(s) and Shares(s)
Name(s) & Address(es) of Registered Holders(s) Tendered
Please fill in, if blank, exactly as name(s) (Attach additional signed list if
appear(s) on certificate(s) necessary)
- ------------------------------------------------------------------------------------------
Total Number
Share of Shares Number
Certificate Represented by of Shares
Number(s)* Certificate(s)* Tendered**
--------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
--------------------------------------------------
Total Shares
</TABLE>
- --------------------------------------------------------------------------------
* Need not be completed by Book-Entry Stockholders.
** Unless otherwise indicated, all Shares represented by certificates
delivered to the Depositary will be deemed to have been tendered. See
Instruction 4.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE
DEPOSITARY. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE
PROVIDED BELOW AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.
THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
<PAGE>
This Letter of Transmittal is to be completed by stockholders of Coinmach
Laundry Corporation, if either certificates evidencing Shares (as defined
below) ("Certificates") are to be forwarded with this Letter of Transmittal
or, unless an Agent's Message (as defined in the Offer to Purchase (as defined
below)) is utilized, if delivery of Shares is to be made by book-entry
transfer to an account maintained by the Depositary at the Book-Entry Transfer
Facility (as defined under "THE TENDER OFFER--Acceptance for Payment and
Payment for Shares" of the Offer to Purchase) pursuant to the procedures set
forth under "THE TENDER OFFER--Procedures for Tendering Shares" of the Offer
to Purchase. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES
NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
Stockholders whose Certificates are not immediately available or who cannot
deliver their Certificates and all other required documents to the Depositary
prior to the Expiration Date (as defined under "THE TENDER OFFER--Terms of the
Offer" of the Offer to Purchase), or who cannot complete the procedures for
book-entry transfer on a timely basis and who wish to tender their shares,
must tender their Shares according to the guaranteed delivery procedures set
forth under "THE TENDER OFFER--Procedures for Tendering Shares" of the Offer
to Purchase. See Instruction 2.
[_]CHECK HERE IF CERTIFICATES HAVE BEEN LOST OR MUTILATED. SEE INSTRUCTION 12.
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE
BOOK-ENTRY TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):
Name of Tendering Institution:
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING. PLEASE ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY.
Name(s) of Registered Stockholder(s): ______________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
2
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to CLC Acquisition Corporation, a Delaware
corporation ("Purchaser"), the above-described shares of Common Stock, par
value $0.01 per share (the "Shares"), of Coinmach Laundry Corporation, a
Delaware corporation (the "Company"), pursuant to Purchaser's offer to
purchase any and all of the outstanding Shares at a purchase price of $14.25
per Share, net to the seller in cash, without interest thereon (less any
required withholding taxes), upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated May 26, 2000 (the "Offer to Purchase"),
receipt of which is hereby acknowledged, and in this Letter of Transmittal
(which, as amended from time to time, together with the Offer to Purchase
collectively constitute the "Offer"). The Offer is being made pursuant to an
Agreement and Plan of Merger, dated as of May 12, 2000 (the "Merger
Agreement"), between Purchaser and the Company. The undersigned understands
that Purchaser reserves the right to assign its right to purchase all or any
portion of the Shares tendered pursuant to the Offer to a wholly owned
subsidiary of Purchaser, but any such assignment will not relieve Purchaser of
its obligations under the Offer or prejudice the rights of the tendering
stockholders to receive payment for Shares validly tendered and accepted for
payment pursuant to the Offer.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith, the undersigned hereby sells, assigns and transfers to, or
upon the order of, Purchaser, all right, title and interest in and to all the
Shares that are being tendered hereby (and any and all other shares or other
securities issued or issuable in respect of such Shares on or after the date
of the Offer to Purchase) and all dividends, distributions and rights
declared, paid or distributed in respect of such Shares on or after May 26,
2000 (collectively, "Distributions") and irrevocably appoints First Union
National Bank (the "Depositary") the true and lawful agent and attorney-in-
fact of the undersigned with respect to such Shares and Distributions (and
such other shares or securities), with full power of substitution (such power
of attorney being deemed to be an irrevocable power coupled with an interest),
to (a) deliver certificates for such Shares and Distributions (and such other
shares or securities), or transfer ownership of such Shares and Distributions
(and such other Shares or securities) on the account books maintained by the
Book-Entry Transfer Facility, together, in any such case, with all
accompanying evidences of transfer and authenticity, to or upon the order of
the Purchaser, (b) present such Shares and Distributions (and such other
shares or securities) for transfer on the books of the Company and (c) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
Shares and Distributions (and such other shares or securities), all in
accordance with the terms and subject to the conditions of the Offer.
The undersigned hereby irrevocably appoints each designee of Purchaser as
the attorney-in-fact and proxy of the undersigned, each with full power of
substitution, to the full extent of the rights of the undersigned with respect
to the Shares tendered herewith and accepted for payment by Purchaser prior to
the time of any vote or other action (and any and all other shares or other
securities issued or issuable in respect of such Shares on or after the date
of the Offer to Purchase). All such powers of attorney and proxies shall be
considered irrevocable and coupled with an interest. Such appointment will be
effective when, and only to the extent that, Purchaser accepts such Shares for
payment. Upon such acceptance for payment, all prior powers of attorney and
proxies given by the stockholder with respect to such Shares (and such other
shares and securities) will, without further action, be revoked and no
subsequent powers of attorney and proxies may be given nor any subsequent
written consents executed (and, if given or executed, will not be deemed
effective). The designees of Purchaser will, with respect to the Shares (and
such other shares and securities) for which such appointment is effective, be
empowered to exercise all voting and other rights of such stockholder as they
in their sole discretion may deem proper at any annual or special meeting of
the Company's stockholders, or any adjournment or postponement thereof, by
written consent in lieu of any such meeting or otherwise. Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon Purchaser's payment for such Shares, Purchaser must be able
to exercise full voting and other rights with respect to such Shares (and such
other shares and securities), including voting at any meeting of stockholders
then scheduled.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the Shares tendered
hereby and all Distributions (and any and all other shares or other
3
<PAGE>
securities issued or issuable in respect of such Shares on or after the date
of the Offer to Purchase) and that when the same are accepted for payment by
Purchaser, Purchaser will acquire good and unencumbered title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claim. The undersigned, upon request, will execute and deliver
any additional documents deemed by the Depositary or Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the Shares
tendered hereby and all Distributions (and such other shares or securities).
In addition, the undersigned shall remit and transfer promptly to the
Depositary for the account of Purchaser all Distributions in respect of the
Shares tendered hereby, accompanied by appropriate documentation of transfer,
and pending such remittance and transfer or appropriate assurance thereof,
Purchaser shall be entitled to all rights and privileges as owner of each such
Distribution and may withhold the entire purchase price of the Shares tendered
hereby, or deduct from such purchase price, the amount of value of such
Distribution as determined by Purchaser in its sole discretion.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, personal representatives,
successors and assigns of the undersigned. Except as stated in the Offer, this
tender is irrevocable.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described under "THE TENDER OFFER--Procedures for Tendering
Shares" of the Offer to Purchase and in the instructions hereto will
constitute a binding agreement between the undersigned and Purchaser upon the
terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, Purchaser may not be required to accept for payment any
of the Shares tendered hereby.
Unless otherwise indicated in this Letter of Transmittal under "Special
Payment Instructions," please issue the check for the purchase price and
return any Shares not tendered or not purchased in the name(s) of the
undersigned. Similarly, unless otherwise indicated under "Special Delivery
Instructions," please mail the check for the purchase price and return any
Certificates not tendered or not purchased (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s). In the event that both "Special Payment Instructions" and
"Special Delivery Instructions" are completed, please issue the check for the
purchase price and return any Shares not tendered or not purchased in the
name(s) of, and mail such check and any certificates to, the person(s) so
indicated. Unless otherwise indicated under "Special Payment Instructions," in
the case of book-entry delivery of Shares, please credit the account
maintained at the Book-Entry Transfer Facility with respect to any Shares not
accepted for payment. The undersigned recognizes that Purchaser has no
obligation, pursuant to the "Special Payment Instructions," to transfer any
Shares from the name of the registered holder(s) thereof if Purchaser does not
accept for payment any of the Shares so tendered.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if
certificate(s) for Shares not
tendered or not accepted for
payment and/or the check for the
purchase price of Shares accepted
for payment are to be issued in
the name of someone other than the
undersigned.
Issue [_] check[_] certificates
to:
Name ______________________________
(Please Print)
Address ___________________________
-----------------------------------
-----------------------------------
(Include Zip Code)
-----------------------------------
(Tax ID, or Social Security No.)
(See Substitute Form W-9 on the
reverse side)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if
certificate(s) for Shares not
tendered or not accepted for
payment and/or the check for the
purchase price of Shares accepted
for payment are to be sent to
someone other than the undersigned
at an address other than that
shown above.
Mail [_] check[_] certificates
to:
Name ______________________________
(Please Print)
Address ___________________________
-----------------------------------
-----------------------------------
(Include Zip Code)
-----------------------------------
5
<PAGE>
SIGN HERE
AND COMPLETE SUBSTITUTE FORM W-9
X ____________________________________________________________________________
X ____________________________________________________________________________
(Signature(s) of Holder(s))
Date: _________________________ , 2000
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on
Share Certificate(s) or a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by trustee, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others acting in a
fiduciary or representative capacity, please provide the following
information and see Instruction 5.)
(Name (s) ____________________________________________________________________
------------------------------------------------------------------------------
(Please Print)
Capacity (full title) ________________________________________________________
Address ______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number _______________________________________________
Tax Identification or
Social Security No. __________________________________________________________
COMPLETE SUBSTITUTE FORM W-9 ON REVERSE
Guarantee of Signature(s)
(See Instructions 1 and 5)
Authorized Signature _________________________________________________________
Name _________________________________________________________________________
Name of Firm _________________________________________________________________
(Please Print)
Address ______________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number _______________________________________________
Dated: ________________________ , 2000
6
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
To complete the Letter of Transmittal, you must do the following:
. Fill in the box entitled "Description of Shares Tendered."
. Sign and date the Letter of Transmittal in the box entitled "Sign Here."
. Fill in and sign in the box entitled "Substitute Form W-9."
In completing the Letter of Transmittal, you may (but are not required to)
also do the following:
. If you want the payment for any Shares purchased issued in the name of
another person, complete the box entitled "Special Payment
Instructions."
. If you want any certificate for Shares not tendered or Shares not
purchased issued in the name of another person, complete the box
entitled "Special Payment Instructions."
. If you want any payment for Shares or certificate for Shares not
tendered or purchased delivered to an address other than that appearing
under your signature, complete the box entitled "Special Delivery
Instructions."
1. Guarantee of Signatures. Except as otherwise provided below, signatures
on Letters of Transmittal must be guaranteed by a member in good standing of
the Securities Transfer Agents Medallion Program, or by any other firm which
is a bank, broker, dealer, credit union or savings association (each of the
foregoing being referred to as an "Eligible Institution" and, collectively, as
"Eligible Institutions"), except in cases where Shares are tendered (a) by a
registered holder of Shares who has not completed either the box labeled
"Special Delivery Instructions" or the box labeled "Special Payment
Instructions" on the Letter of Transmittal or (b) for the account of any
Eligible Institution. See Instruction 5. If the Certificates are registered in
the name of a person other than the signer of this Letter of Transmittal, or
if payment is to be made, or Certificates not accepted for payment or not
tendered are to be returned, to a person other than the registered holder,
then the Certificates must be endorsed or accompanied by duly executed stock
powers, in either case, signed exactly as the name of the registered holder
appears on such Certificates, with the signatures on such Certificates or
stock powers guaranteed by an Eligible Institution as provided herein. See
Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be used if
either Certificates are to be forwarded herewith or, unless an Agent's Message
is utilized, if the delivery of Shares is to be made by book-entry transfer
pursuant to the procedures set forth under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase. Certificates for all physically
delivered Shares, or a confirmation of a book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility of all Shares
delivered electronically, as well as a properly completed and duly executed
Letter of Transmittal (or a manually signed facsimile thereof) and any other
documents required by this Letter of Transmittal or an Agent's Message (as
defined in the Offer to Purchase) in the case of a book-entry delivery, must
be received by the Depositary at one of its addresses set forth on the front
page of this Letter of Transmittal by the Expiration Date (as defined in the
Offer to Purchase). Stockholders who cannot deliver their Shares and all other
required documents to the Depositary by the Expiration Date must tender their
Shares pursuant to the guaranteed delivery procedures set forth under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase.
Pursuant to such procedures, (a) such tender must be made by or through an
Eligible Institution; (b) a properly completed and duly executed Notice of
Guaranteed Delivery, substantially in the form provided by Purchaser, must be
received by the Depositary prior to the Expiration Date; and (c) the
Certificates for all tendered Shares, in proper form for transfer (or a Book-
Entry Confirmation (as defined in the Offer to Purchase)), together with a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof), and any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by this Letter of Transmittal must be received by the Depositary
within three trading days after the date of execution of such Notice of
Guaranteed Delivery, all as provided under "THE TENDER OFFER--Procedures for
Tendering Shares" of the Offer to Purchase. The term "trading day" is any day
on which the Nasdaq National Market is open for business.
7
<PAGE>
The method of delivery of shares, the Letter of Transmittal and all other
required documents, including delivery through the book-entry transfer
facility, is at the option and risk of the tendering stockholder. If delivery
is by mail, registered mail with return receipt requested, properly insured,
is recommended.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be purchased. By executing this Letter of Transmittal
(or a manually signed facsimile thereof), the tendering stockholder waives any
right to receive any notice of the acceptance for payment of the Shares.
3. Inadequate Space. If the space provided in this Letter of Transmittal is
inadequate, the information required under "Description of Shares Tendered"
should be listed on a separate schedule attached hereto.
4. Partial Tenders (Not Applicable to Stockholders Who Tender by Book-Entry
Transfer). If fewer than all the Shares represented by any Certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In
such case, a new Certificate for the remainder of the Shares represented by
the old Certificate(s) will be sent to the person(s) signing this Letter of
Transmittal unless otherwise provided in the appropriate box on this Letter of
Transmittal, as promptly as practicable after the Expiration Date. All Shares
represented by Certificate(s) delivered to the Depositary will be deemed to
have been tendered unless otherwise indicated.
5. Signatures on Letter of Transmittal; Instruments of Transfer and
Endorsements. If this Letter of Transmittal is signed by the registered
holder(s) of the Shares tendered hereby, the signature(s) must correspond with
the name(s) as written on the face of the Certificates without alteration,
enlargement or any change whatsoever.
If any of the Shares tendered hereby are held of record by two or more
persons, all such persons must sign this Letter of Transmittal.
If any of the Shares tendered hereby are registered in different names on
different Certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
Certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, no endorsements of Certificates or separate stock
powers are required unless payment of the purchase price is to be made, or
Shares not tendered or not purchased are to be returned, in the name of any
person other than the registered holder(s), in which case, the Certificate(s)
for such Shares tendered hereby must be endorsed, or accompanied by
appropriate stock powers, in either case, signed exactly as the name(s) of the
registered holder(s) appears(s) on the Certificate(s) for such Shares.
Signatures on any such Certificates or stock powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the Shares tendered hereby, the Certificate must be
endorsed or accompanied by appropriate stock powers, in either case, signed
exactly as the name(s) of the registered holder(s) appear(s) on the
Certificates for such Shares. Signature(s) on any such Certificates or stock
powers must be guaranteed by an Eligible Institution. If this Letter of
Transmittal or any Certificate or stock power is signed by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation
or other person acting in a fiduciary or representative capacity, such person
should so indicate when signing, and proper evidence satisfactory to Purchaser
of the authority of such person so to act must be submitted.
6. Stock Transfer Taxes. Except as set forth in this Instruction 6,
Purchaser will pay any stock transfer taxes with respect to the sale and
transfer of any Shares to it or its order pursuant to the Offer. If, however,
payment of the purchase price is to be made to, or Shares not tendered or not
purchased are to be returned in the name of, any person other than the
registered holder(s), then the amount of any stock transfer taxes (whether
imposed on the registered holder(s), such other person or otherwise) payable
on account of the transfer to such person will be deducted from the purchase
price unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted.
Except as provided in this instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this letter of
transmittal.
8
<PAGE>
7. Special Payment and Delivery Instructions. If the check for the purchase
price of any Shares purchased is to be issued, or any Shares not tendered or
not purchased are to be returned, in the name of a person other than the
person(s) signing this Letter of Transmittal or if the check or any
Certificates not tendered or not purchased are to be mailed to someone other
than the person(s) signing this Letter of Transmittal or to the person(s)
signing this Letter of Transmittal at an address other than that shown above,
the appropriate boxes on this Letter of Transmittal should be completed.
Stockholders tendering Shares by book-entry transfer may request that Shares
not purchased be credited to an account maintained at the Book-Entry Transfer
Facility as such stockholder may designate under "Special Payment
Instructions." If no such instructions are given, any such Shares not
purchased will be credited to an account maintained at the Book-Entry Transfer
Facility.
8. Substitute Form W-9. Each tendering stockholder is required to provide
the Depositary with a correct Taxpayer Identification Number ("TIN") on
Substitute Form W-9, which is provided under "Important Tax Information" below
and to certify that the stockholder is not subject to backup withholding.
Failure to provide the information on the Substitute Form W-9 may subject the
tendering stockholder to a penalty and 31% federal income tax backup
withholding on the payment of the purchase price for the Shares. If the
tendering stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future, the tendering stockholder
should follow the instructions set forth in the Substitute Form W-9 and sign
and date both the Substitute Form W-9 and the "Certification of Awaiting
Taxpayer Identification Number." If the stockholder has indicated in the
Substitute Form W-9 that a TIN has been applied for and the Depositary is not
provided with a TIN by the time of payment, the Depositary will withhold 31%
of all payments of the purchase price, if any, made thereafter pursuant to the
Offer until a TIN is provided to the Depositary. Such amounts, however, will
be refunded if a TIN is provided to the Depositary within 60 days.
9. Foreign Holders. Foreign holders must submit a completed IRS Form W-8 to
avoid 31% backup withholding. IRS Form W-8 may be obtained by contacting the
Depositary at the address on the face of this Letter of Transmittal.
10. Requests for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offer to Purchase and this Letter of Transmittal may
be obtained from the Information Agent: MacKenzie Partners, Inc., 156 Fifth
Avenue, New York, NY 10010, Telephone: (212) 929-5500, Attention: Mark
Harnett.
11. Waiver of Conditions. The conditions of the Offer may be waived by
Purchaser, in whole or in part, at any time or from time to time, in
Purchaser's sole discretion, as set forth in the Offer to Purchase.
12. Lost or Destroyed Certificates. If any Certificate(s) representing
Shares has been lost or destroyed, the holders should promptly notify the
Depositary, which also acts as the Company's transfer agent. The holders will
then be instructed as to the procedure to be followed in order to replace the
Certificate(s). This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost or destroyed Certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE COPY
HEREOF (TOGETHER WITH CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY
TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A NOTICE OF GUARANTEED
DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION
DATE.
9
<PAGE>
PAYER'S NAME: First Union National Bank
- --------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR
TIN IN THE BOX AT RIGHT AND ----------------------
CERTIFY BY SIGNING AND Social Security Number
DATING BELOW.
SUBSTITUTE OR
Form W-9
Department of ----------------------
the Treasury Employer Identification
Internal Number
Revenue ----------------------------------------------------------
Service Part 2--Certification-- Part 3--Awaiting
Under the penalties of TIN [_]
perjury, I certify that:
Payer's (1) The number shown on ----------------------
Request for this form is my correct
Taxpayer Taxpayer Identification
Identification Number (or I am waiting
Number ("TIN") for a number to be
issued to me), and
----------------------------------------------------------
(2) I am not subject to
backup withholding
because (a) I am exempt
from backup
withholding, or (b) I
have not been notified
by the Internal Revenue
Service (the "IRS")
that I am subject to
backup withholding as a
result of a failure to
report all interest or
dividends, or (c) the
IRS has notified me
that I am no longer
subject to backup
withholding.
Sign Here Certification Instructions--You must cross out item
(right arrow) (2) above if you have been notified by the IRS that
you are currently subject to backup withholding
because of under-reporting interest or dividends on
your tax return. However, if after being notified by
the IRS that you were subject to backup withholding
you received another notification from the IRS that
you are no longer subject to backup withholding, do
not cross out such item (2).
----------------------------------------------------------
Signature ____________________ Date ___________, 2000
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF
THE SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration office or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number by the time of payment, 31% of all reportable cash
payments made to me thereafter will be withheld until I provide a taxpayer
identification number.
Signature: ____________________________________ Date: ________, 2000
10
<PAGE>
IMPORTANT TAX INFORMATION
Under federal income tax law, a stockholder whose tendered Shares are
accepted for payment is required to provide the Depositary (as payer) with
such stockholder's correct TIN on the Substitute Form W-9. If such stockholder
is an individual, the TIN is such stockholder's social security number. If the
Depositary is not provided with the correct TIN, the stockholder may be
subject to a $50 penalty imposed by the IRS. In addition, payments that are
made to such stockholder with respect to Shares purchased pursuant to the
Offer may be subject to backup withholding.
Certain stockholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements and should indicate their status by writing "EXEMPT" in response
to Part 2 of the Substitute Form W-9, and by signing and dating, the
substitute Form W-9. In order for a foreign individual to qualify as an exempt
recipient, that stockholder must submit a statement, signed under penalties of
perjury, attesting to that individual's exempt status. Such statements may be
obtained from the Depositary. All exempt recipients (including foreign persons
wishing to qualify as exempt recipients) should see the enclosed Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9 for
additional instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any payments made to the stockholder. Backup withholding is not an additional
tax. Rather, the tax liability of persons subject to backup withholding will
be reduced by the amount of tax withheld. If backup withholding results in an
overpayment of taxes, a refund may be obtained from the IRS.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup federal income tax withholding on payments that are made
to a stockholder with respect to Shares purchased pursuant to the Offer, the
stockholder is required to notify the Depositary of such stockholder's correct
TIN by completing the form certifying that the TIN provided on the Substitute
Form W-9 is correct.
WHAT NUMBER TO GIVE THE DEPOSITARY
The stockholder is required to give the Depositary the social security
number or employer identification number of the record owner of the Shares. If
the Shares are registered in more than one name or are not in the name of the
actual owner, consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 for additional guidelines on
which number to report.
MANUALLY SIGNED FACSIMILE COPIES OF THE LETTER OF TRANSMITTAL, PROPERLY
COMPLETED AND DULY EXECUTED, WILL BE ACCEPTED. THE LETTER OF TRANSMITTAL,
CERTIFICATES FOR SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE SENT OR
DELIVERED BY EACH STOCKHOLDER OF THE COMPANY OR HIS BROKER, DEALER, COMMERCIAL
BANK, TRUST COMPANY OR OTHER NOMINEE TO THE DEPOSITARY AT ITS ADDRESS SET
FORTH ON THE FIRST PAGE OF THIS LETTER OF TRANSMITTAL.
Questions and requests for assistance may be directed to the MacKenzie
Partners, Inc., 156 Fifth Avenue, New York, NY 10010, Telephone: (212) 929-
5500, Attention: Mark Harnett. Additional copies of the Offer to Purchase, the
Letter of Transmittal and other tender offer materials may be obtained from
the Company as set forth below, and will be promptly furnished at the
Purchaser's expense. You may also contact your broker, dealer, commercial
bank, trust company or other nominee for assistance concerning the Offer.
11
<PAGE>
Exhibit (a)(1)(iii)
NOTICE OF GUARANTEED DELIVERY
For Tender of Shares of Common Stock
of
Coinmach Laundry Corporation
This form, or one substantially equivalent hereto, must be used to accept
the Offer (as defined below) if certificates for shares of Common Stock, par
value $0.01 per share (the "Shares"), of Coinmach Laundry Corporation, a
Delaware corporation, are not immediately available or the procedure for book-
entry transfer cannot be completed on a timely basis or time will not permit
all required documents to reach the Depositary prior to the Expiration Date
(as defined in the Offer to Purchase, dated May 26, 2000 (the "Offer to
Purchase")). This Notice of Guaranteed Delivery may be delivered by hand,
facsimile transmission or mailed to First Union National Bank (the
"Depositary"). See "THE TENDER OFFER--Procedures for Tendering Shares" of the
Offer to Purchase.
The Depositary for the Offer is:
First Union National Bank
<TABLE>
<S> <C> <C>
By Mail By Facsimile Transmission: By Hand or Overnight Courier
First Union National Bank (704) 590-0292 First Union National Bank
Equity Services Equity Services
1525 West W.T. Harris Boulevard,
3C3 1525 West W.T. Harris Boulevard, 3C3
Charlotte, NC 28262-1153 Charlotte, NC 28262-1153
</TABLE>
Confirm by Telephone:
(704) 590-7599
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS, OR
TRANSMISSION OF INSTRUMENTS VIA FACSIMILE TRANSMISSION, OTHER THAN AS SET
FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY.
This Notice of Guaranteed Delivery is not to be used to guarantee
signatures. If a signature on a Letter of Transmittal is required to be
guaranteed by an "Eligible Institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
The Eligible Institution that completes this form must communicate the
guarantee to the Depositary and must deliver the Letter of Transmittal or an
Agent's Message (as defined in the Offer to Purchase) and certificates for
Shares to the Depositary within the time period shown herein. Failure to do so
could result in a financial loss to such Eligible Institution.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to CLC Acquisition Corporation, upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, collectively constitute the "Offer"), receipt of each of
which is hereby acknowledged, the number of Shares indicated below, pursuant
to the guaranteed delivery procedure set forth under "THE TENDER OFFER--
Procedures for Tendering Shares" of the Offer to Purchase.
Signature(s): ______________________ Address(es) __________________________
Name(s) of Record Holders --------------------------------------
Zip Code
------------------------------------
Please Type or Print Area Code and Tel. No.(s) ____________
Number of Shares ___________________ (Check the box below if Shares will
be tendered by book-entry transfer)
Certificate Nos. (If Available)
[_] The Depositary Trust Company
------------------------------------
Account Number _______________________
------------------------------------
Dated_________________________, 2000
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of the Securities Transfer
Agents Medallion Program, (a) represents that the above named person(s)
"own(s)" the Shares tendered hereby within the meaning of Rule 14e-4 under
the Securities Exchange Act of 1934, as amended ("Rule 14e-4"), (b)
represents that such tender of Shares complies with Rule 14e-4, and (c)
guarantees to deliver to the Depositary either the certificates evidencing
all tendered Shares, in proper form for transfer, or to deliver Shares
pursuant to the procedure for book-entry transfer into the Depositary's
account at the Depository Trust Company (the "Book-Entry Transfer Facility"),
in either case together with the Letter of Transmittal (or a facsimile
thereof), properly completed and duly executed, with any required signature
guarantees or an Agent's Message (as defined in the Offer to Purchase) in the
case of a book-entry delivery, and any other required documents, all within
three Nasdaq National Market trading days after the date hereof.
------------------------------------ --------------------------------------
Name of Firm Authorized Signature
------------------------------------ --------------------------------------
Address Please Type or Print
------------------------------------ Title: _______________________________
Zip Code
Dated __________________________, 2000
Area Code and Tel. No. _____________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES MUST
BE SENT WITH YOUR LETTER OF TRANSMITTAL.
2
<PAGE>
Exhibit (a)(1)(iv)
Offer to Purchase for Cash
Any and All of the Outstanding Shares of Common Stock
of
Coinmach Laundry Corporation
at
$14.25 Net Per Share
by
CLC Acquisition Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
May 26, 2000
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We are writing to you in connection with the offer by CLC Acquisition
Corporation, a Delaware corporation ("Purchaser"), to purchase any and all
outstanding shares of Common Stock, par value $0.01 per share (the "Shares"),
of Coinmach Laundry Corporation, a Delaware corporation (the "Company"), at a
price of $14.25 per Share, net to the seller in cash, without interest thereon
(less any required withholding taxes), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 26, 2000 (the "Offer
to Purchase"), and in the related Letter of Transmittal (which, together with
any amendments or supplements thereto, collectively constitute the "Offer")
enclosed herewith. The Offer is being made in connection with the Agreement
and Plan of Merger, dated as of May 12, 2000 (the "Merger Agreement"), between
Purchaser and the Company. Holders of Shares whose certificates for such
Shares (the "Certificates") are not immediately available or who cannot
deliver their Certificates and all other required documents to First Union
National Bank (the "Depositary") or complete the procedures for book-entry
transfer prior to the Expiration Date (as defined under "THE TENDER OFFER--
Terms of the Offer" of the Offer to Purchase) must tender their Shares
according to the guaranteed delivery procedures set forth under "THE TENDER
OFFER--Procedures for Tendering Shares" of the Offer to Purchase.
Please furnish copies of the enclosed materials to those of your clients for
whose accounts you hold Shares in your name or in the name of your nominee.
Enclosed herewith for your information and for forwarding to your clients
are copies of the following documents:
1. The Offer to Purchase, dated May 26, 2000.
2. The Letter of Transmittal to tender Shares for your use and for the
information of your clients. Facsimile copies of the Letter of Transmittal
may be used to tender Shares.
3. A letter to stockholders of the Company from Stephen R. Kerrigan,
Chairman of the Board of Directors, together with a
Solicitation/Recommendation Statement on Schedule 14D-9 filed by the
Company with the Securities and Exchange Commission and mailed to the
stockholders of the Company.
4. The Notice of Guaranteed Delivery for Tender of Shares to be used to
accept the Offer if the guaranteed delivery procedures set forth under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase are
to be followed.
1
<PAGE>
5. A printed form of a letter which may be sent to your clients for whose
accounts you hold Shares registered in your name, with space provided for
obtaining such clients' instructions with regard to the Offer.
6. Guidelines of the Internal Revenue Service for Certification of
Taxpayer Identification Number on Substitute Form W-9.
7. A return envelope addressed to the Depositary.
YOUR PROMPT ACTION IS REQUESTED. WE URGE YOU TO CONTACT YOUR CLIENTS AS
PROMPTLY AS POSSIBLE. PLEASE NOTE THAT THE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON JULY 3, 2000, UNLESS THE OFFER IS
EXTENDED.
Please note the following:
1. The tender price is $14.25 per Share, net to the seller in cash,
without interest.
2. The Offer is being made for any and all of the outstanding Shares,
subject to the conditions set forth in the Offer to Purchase.
3. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer. However, federal income tax backup withholding at a rate of 31% may
be required unless an exemption is available or unless the required
taxpayer identification information is provided. See "Important Tax
Information" of the Letter of Transmittal.
4. The Board of Directors of the Company (the "Board") by unanimous vote
of all directors present at a meeting held on May 12, 2000, based on, among
other things, the recommendation of a special committee of the Board
comprised of two independent directors, (i) determined that the Merger is
advisable and that the terms of the Offer and Merger (as defined in the
Offer to Purchase) are fair to and in the best interests of the Company and
its stockholders, (ii) approved the Offer and the Merger and adopted and
approved the Merger Agreement and (iii) recommended that the Company's
stockholders tender their shares pursuant to the Offer and, if approval is
required by applicable law, approve the Merger and approve and adopt the
Merger Agreement.
5. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) Certificates pursuant to the
procedures set forth under "THE TENDER OFFER--Procedures for Tendering
Shares" of the Offer to Purchase or a timely Book-Entry Confirmation (as
defined in the Offer to Purchase) with respect to such Shares, (b) a
properly completed and duly executed Letter of Transmittal (or a manually
signed facsimile thereof) with any required signature guarantees or an
Agent's Message (as defined in the Offer to Purchase) in connection with a
book-entry delivery of Shares, and (c) any other documents required by the
Letter of Transmittal. Accordingly, tendering stockholders may be paid at
different times depending upon when Certificates for Shares or Book-Entry
Confirmations are actually received by the Depositary.
In order to take advantage of the Offer, (i) a properly completed and duly
executed Letter of Transmittal (or a manually signed facsimile thereof) with
any required signature guarantees or an Agent's Message in connection with a
book-entry delivery of Shares, and any other documents required by the Letter
of Transmittal should be sent to the Depositary and (ii) Certificates
representing the tendered Shares or a timely Book-Entry Confirmation should be
delivered to the Depositary in accordance with the instructions set forth in
the Letter of Transmittal and the Offer to Purchase.
If holders of Shares wish to tender, but it is impracticable for them to
forward their Certificates or other required documents or complete the
procedures for book-entry transfer prior to the Expiration Date, a tender may
be effected by following the guaranteed delivery procedures specified under
"THE TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase.
None of Purchaser or any officer, director, agent or other representative of
Purchaser will pay any fees or commissions to any broker, dealer or other
person (other than the Depositary as described in the Offer to Purchase) for
soliciting tenders of Shares pursuant to the Offer. Purchaser will, however,
upon request, reimburse you for customary mailing and handling expenses
incurred by you in forwarding any of the enclosed materials to your clients.
Purchaser will pay or cause to be paid any transfer taxes payable on the
transfer of Shares to it, except as otherwise provided in Instruction 6 of the
Letter of Transmittal.
2
<PAGE>
Any inquiries you may have with respect to the Offer should be addressed to
the Information Agent: MacKenzie Partners, Inc., 156 Fifth Avenue, New York,
NY 10010, Telephone: (212) 929-5500, Attention: Mark Harnett.
Additional copies of the enclosed materials may be obtained from the
Information Agent.
Very truly yours,
CLC Acquisition Corporation
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF PURCHASER, THE DEPOSITARY, OR ANY AFFILIATE
OF ANY OF THEM, OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENT OR
USE ANY DOCUMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE ENCLOSED DOCUMENTS AND THE STATEMENTS CONTAINED THEREIN.
3
<PAGE>
Exhibit (a)(1)(v)
OFFER TO PURCHASE FOR CASH
Any and All of the Outstanding Shares of Common Stock
of
Coinmach Laundry Corporation
at
$14.25 Net Per Share
by
CLC Acquisition Corporation
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON
JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
May 26, 2000
To Our Clients:
Enclosed for your consideration are the Offer to Purchase, dated May 26,
2000 (the "Offer to Purchase"), and the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to an offer by CLC Acquisition Corporation, a Delaware
corporation ("Purchaser"), to purchase any and all outstanding shares of
Common Stock, par value $0.01 per share (the "Shares"), of Coinmach Laundry
Corporation, a Delaware corporation (the "Company"), at a price of $14.25 per
Share, net to the seller in cash, without interest thereon (less any required
withholding taxes), upon the terms and subject to the conditions set forth in
the Offer. The Offer is being made in connection with the Agreement and Plan
of Merger, dated as of May 12, 2000 (the "Merger Agreement"), between
Purchaser and the Company. This material is being forwarded to you as the
beneficial owner of Shares carried by us in your account but not registered in
your name.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF SHARES HELD BY US FOR
YOUR ACCOUNT. A TENDER OF SUCH SHARES CAN BE MADE ONLY BY US AS THE HOLDER OF
RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS
FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER
SHARES HELD BY US FOR YOUR ACCOUNT.
Accordingly, we request instructions as to whether you wish to have us
tender any or all of the Shares held by us for your account pursuant to the
terms and conditions set forth in the Offer.
Please note the following:
1. The tender price is $14.25 per Share, net to the seller in cash,
without interest (less any required withholding taxes).
2. The Offer is being made for all of the outstanding Shares, subject to
the conditions set forth in the Offer to Purchase.
3. Tendering stockholders will not be obligated to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the transfer of Shares pursuant to the
Offer. However, federal income tax backup withholding at a rate of 31% may
be required, unless an exemption is available or unless the required
taxpayer identification information is provided. See "Important Tax
Information" of the Letter of Transmittal.
1
<PAGE>
4. The Board of Directors of the Company (the "Board") by unanimous vote
of all directors present at a meeting held on May 12, 2000, based on, among
other things, the recommendation of a special committee of the Board
comprised of two independent directors, (i) determined that the Merger is
advisable and that the terms of the Offer and Merger (as defined in the
Offer to Purchase) are fair to and in the best interests of the Company and
its stockholders, (ii) approved the Offer and the Merger and adopted and
approved the Merger Agreement and (iii) recommended that the Company's
stockholders tender their shares pursuant to the Offer and, if approval is
required by applicable law, approve the Merger and approve and adopt the
Merger Agreement.
5. Notwithstanding any other provision of the Offer, payment for Shares
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by First Union National Bank (the "Depositary") of
(a) certificates for Shares pursuant to the procedures set forth under "THE
TENDER OFFER--Procedures for Tendering Shares" of the Offer to Purchase or
a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to such Shares, (b) a properly completed and duly executed Letter
of Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees or an Agent's Message (as defined in the Offer to
Purchase) in connection with a book-entry delivery of Shares, and (c) any
other documents required by the Letter of Transmittal. Accordingly,
tendering stockholders may be paid at different times depending upon when
certificates for Shares or Book-Entry Confirmations are actually received
by the Depositary.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON July 3, 2000, UNLESS THE OFFER IS EXTENDED.
If you wish to have us tender any or all of the Shares held by us for your
account, please so instruct us by completing, executing, detaching and
returning to us the instruction form set forth below. If you authorize the
tender of your Shares, all such Shares will be tendered unless otherwise
indicated in such instruction form. An envelope to return your instruction to
us is enclosed. PLEASE FORWARD YOUR INSTRUCTIONS TO US AS SOON AS POSSIBLE TO
ALLOW US AMPLE TIME TO TENDER YOUR SHARES ON YOUR BEHALF PRIOR TO THE
EXPIRATION OF THE OFFER.
The Offer is not being made to, nor will tenders be accepted from or on
behalf of, holders of Shares residing in any jurisdiction in which the making
of the Offer or acceptance thereof would not be in compliance with the
securities laws of such jurisdiction. However, Purchaser may, in its
discretion, take such action as it may deem necessary to make the Offer in any
jurisdiction and extend the Offer to holders of Shares in such jurisdiction.
In any jurisdiction where the securities, blue sky or other laws require the
Offer to be made by a licensed broker or dealer, the Offer will be deemed to
be made on behalf of Purchaser by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
2
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE FOR CASH
ALL OUTSTANDING SHARES OF COMMON STOCK
of
Coinmach Laundry Corporation
The undersigned acknowledge(s) receipt of your letter and the enclosing
Offer to Purchase, dated May 26, 2000 (the "Offer to Purchase"), and the
related Letter of Transmittal pursuant to an offer by CLC Acquisition
Corporation, a Delaware corporation to purchase all outstanding shares of
Common Stock, $0.01 par value per share (the "Shares"), of Coinmach Laundry
Corporation, a Delaware corporation.
This will instruct you to tender the number of Shares indicated below (or if
no number is indicated below, all Shares) which are held by you for the
account of the undersigned, upon the terms and subject to the conditions set
forth in the Offer to Purchase and in the related Letter of Transmittal
furnished to the undersigned.
Number of Shares to be Tendered*
_____________________________________________________________________ Shares
Dated _______________________________________________________________ , 2000
SIGN HERE
------------------------------------------------------------------------------
Signatures (s)
------------------------------------------------------------------------------
Please print name (s)
------------------------------------------------------------------------------
Address
------------------------------------------------------------------------------
Area Code and Telephone Number
------------------------------------------------------------------------------
Tax Identification or Social Security Number
- -------
* Unless otherwise indicated, it will be assumed that all of your Shares held
by us for your account are to be tendered.
3
<PAGE>
EXHIBIT (a)(1)(vi)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer. -- Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e., 00-0000000. The table below will help determine the
number to give the payer.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the
For this type of account: SOCIAL SECURITY
number of --
- --------------------------------------------------------
<C> <S> <C>
1. An individual's account The individual
2. Two or more individuals the The actual owner
actual owner (joint of the account
account) or, if combined
funds, any one
of the
individuals.(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint
funds, either
person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only
contributor, the
minor(1)
6. Account in the name of the The ward, minor,
ward, minor, guardian or or incompetent
committee for a designated person(3)
ward, minor, or incompetent
person
7. a. The usual revocable sav- The grantor-
ings trust account trustee(1)
(grantor is also trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship account The owner(4)
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Give the EMPLOYER
For this type of account: IDENTIFICATION
number of --
- ------------------------------------------------------------------------------
<S> <C>
9. A valid trust, estate, or pension trust The legal entity
(Do not furnish
the identifying
number of the
personal
representative
or trustee
unless the legal
entity itself is
not designated
in the account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or educational organization The organization
account
12. Partnership account held in the name of the business The partnership
13. Association, club, or other tax-exempt organization The organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department of Agriculture in the name The public
of a public entity (such as a State or local government, entity
school district, or prison) that receives agricultural
program payments.
</TABLE>
- -------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) You must show your individual name, but you may also enter business or
"doing business as" name. You may use either you SSN or EIN (if you have
one).
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a taxpayer identification number or you do not know your
number, obtain Form SS-5, Application for a Social Security Number Card (for
individuals), or Form SS-4, Application for Employer Identification Number
(for businesses and all other entities), at the local office of the Social Se-
curity Administration or the Internal Revenue Service and apply for a number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a), or an individual re-
tirement plan, or a custodial account under Section 403(b)(7). The United
States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of 1940.
. A foreign central bank of issue.
Payments Exempt from Backup Withholding
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
. Payments of patronage dividends not paid in money.
. Payments made by certain foreign corporations.
. Payments to nonresident aliens subject to withholding under section 1441.
Section 404(k) payments made by an ESOP.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by indi- viduals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not pro-
vided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens. Payments on
tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Exempt payees described above should file a Substitute Form W-9 to avoid pos-
sible erroneous backup withholding.
FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER,
WRITE "EXEMPT" ON THE FACE OF THE FORM. SIGN AND DATE THE FORM AND RETURN IT
TO THE PAYER. IF YOU ARE NOT A NON-RESIDENT OR FOREIGN ENTITY NOT SUBJECT TO
BACKUP WITHHOLDING, FILE WITH PAYER A COMPLETED INTERNAL REVENUE FORM W-8
(CERTIFICATE OF FOREIGN STATUS).
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see sections 6041, 6041A(a), 6042, 6044, 6045, 6049,
6050A, and 6050N, and the regulations under those sections.
Privacy Act Notice.-- Section 6109 requires most recipients of dividend, in-
terest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes and to help verify the accuracy of tax returns. Payers must be given
the numbers whether or not recipients are required to file a tax return. Pay-
ers must generally withhold 31% of taxable interest, dividend, and certain
other payments to a payee who does not furnish a taxpayer identification num-
ber to a payer. Certain penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish Taxpayer Identification Number.--If you
fail to furnish your taxpayer identification number to a payer, you are sub-
ject to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Civil Penalty for False Information With Respect to Withholding.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(3) Criminal Penalty for Falsifying Information.--Willfully falsifying certi-
fications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE
Unless otherwise noted herein, all references to section numbers or
regulations are references to the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder.
<PAGE>
Exhibit (a)(1)(vii)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below)Simon CoopeFinancial Printing GroupThis
announcement is neither an offer to purchase nor a solicitation of an offer to
sell Shares (as defined below). The Offer (as defined below) is made solely
through the Offer to Purchase, dated May 26, 2000, and the related Letter of
Transmittal and any amendments or supplements thereto, and is being made to all
holders of Shares. The Offer, however, is not being made to, nor will tenders be
accepted from or on behalf of, holders of Shares in any jurisdiction in which
the making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. Purchaser (as defined below) may in its
discretion, however, take such action as it may deem necessary to make the Offer
in any jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. In jurisdictions whose laws require that the Offer be made by a
licensed broker or dealer, the Offer shall be deemed to be made on Purchaser's
behalf by one or more registered brokers or dealers licensed under the laws of
such jurisdiction.
Notice of Offer to Purchase for Cash
All of the Outstanding Shares of Common Stock
of
Coinmach Laundry Corporation
at
$14.25 Net Per Share
by
CLC Acquisition Corporation
CLC Acquisition Corporation, a Delaware corporation ("Purchaser") formed by
affiliates of GTCR Golder Rauner, L.L.C., is offering to purchase all of the
outstanding shares of common stock, par value $0.01 per share (the "Shares"), of
Coinmach Laundry Corporation (the "Company") at a price of $14.25 per Share, net
to the selling stockholders in cash, without interest thereon (the "Purchase
Price"), upon the terms and subject to the conditions set forth in the Offer to
Purchase dated May 26, 2000 (the "Offer to Purchase") and in the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"). Stockholders of record who tender directly
to the Depositary (as defined below) will not be obligated to pay brokerage fees
or commissions or, subject to Instruction 6 of the Letter of Transmittal, stock
transfer taxes, if any, on the purchase of Shares by Purchaser pursuant to the
Offer. Stockholders who hold their Shares through a broker or bank should
consult such institution as to whether it charges any service fees. Purchaser
will pay all charges and expenses of First Union National Bank, which is acting
as depositary (the "Depositary"), and MacKenzie Partners, Inc., which is acting
as information agent (the "Information Agent"), in each case, incurred in
connection with the Offer.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
MONDAY, JULY 3, 2000, UNLESS THE OFFER IS EXTENDED.
The Offer is conditioned upon, among other things, (1) there being validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Shares which, when combined with the Shares owned by Purchaser, would result in
Purchaser owning at least 51% of the Shares on the date of purchase, and (2) the
expiration or termination of any and all waiting periods under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, and the regulations
thereunder. For a complete description of all of the conditions to which the
Offer is subject, see "THE TENDER OFFER--Section 10" of the Offer to Purchase.
The Offer is not conditioned upon Purchaser obtaining financing.
The Offer is being made pursuant to an Agreement and Plan of Merger, dated as of
May 12, 2000 (the "Merger Agreement"), between Purchaser and the Company. The
Merger Agreement provides, among other things, that, following the completion of
the Offer and the satisfaction or waiver, if permissible, of all conditions set
forth in the Merger Agreement and in accordance with the General Corporation Law
of the State of Delaware (the "DGCL"), Purchaser will be merged with and into
<PAGE>
the Company (the "Merger"), with the Company continuing as the surviving
corporation. At the effective time of the Merger (the "Effective Time"), except
for Shares held by stockholders exercising their rights to dissent in accordance
with the DGCL and certain other parties described in the Offer to Purchase, each
outstanding Share will, by virtue of the Merger and without any action on the
part of the stockholders, be canceled and converted into the right to receive an
amount per Share equal to the Purchase Price, without interest (the "Merger
Consideration"). The terms and conditions of the Merger Agreement are more fully
described in "SPECIAL FACTORS--Section 6" of the Offer to Purchase.
At a meeting of the board of directors of the Company on May 12, 2000, the
board, by unanimous vote of all of the directors, based on, among other things,
the unanimous recommendation of a special committee formed to consider the Offer
and Merger (the "Special Committee"), (1) determined that the Merger is
advisable and that the terms of the Offer and the Merger are fair to and in the
best interests of the Company and its stockholders, (2) approved the Offer and
the Merger and approved and adopted the Merger Agreement, and (3) recommended
that the stockholders of the Company accept the Offer and, if approval is
required by applicable law, approve the Merger and approve and adopt the Merger
Agreement.
For purposes of the Offer, Purchaser will be deemed to have accepted for payment
(and thereby purchased) Shares validly tendered and not properly withdrawn as
and when Purchaser gives oral or written notice to the Depositary of Purchaser's
acceptance for payment of such Shares. Upon the terms and subject to the
conditions of the Offer, payment for Shares accepted pursuant to the Offer will
be made by deposit of the purchase price therefor with the Depositary, which
will act as agent for tendering stockholders for the purpose of receiving
payments from Purchaser and transmitting payments to such tendering stockholders
whose Shares have been accepted for payment. Under no circumstances will
interest on the Purchase Price for Shares be paid by Purchaser, regardless of
any delay in making such payment or extension of the Expiration Date. If any
validly tendered Shares are not accepted for payment for any reason pursuant to
the terms and conditions of the Offer, or if certificates are submitted
evidencing more Shares than are tendered, certificates evidencing Shares not
purchased will be returned, without expense, to the tendering stockholder (or,
in the case of Shares tendered by book-entry transfer into the Depositary's
account at The Depository Trust Company (the "Book-Entry Transfer Facility")
pursuant to the procedure set forth in "THE TENDER OFFER--Section 3" of the
Offer to Purchase, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer.
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of the Offer as so
extended or amended), Purchaser, as promptly as practicable after the Expiration
Date (as defined below), will purchase, by accepting for payment, and will pay
for, all Shares validly tendered prior to the Expiration Date (and not properly
withdrawn in accordance with "THE TENDER OFFER--Section 4" of the Offer to
Purchase). Subject to applicable rules of the Securities and Exchange Commission
(the "SEC") and the terms of the Merger Agreement, Purchaser expressly reserves
the right, in its discretion, to delay acceptance for payment of, or payment
for, Shares in order to comply, in whole or in part, with any applicable law.
See "THE TENDER OFFER--Section 1," and "THE TENDER OFFER--Section 11" of the
Offer to Purchase. The reservation by Purchaser of the right to delay the
acceptance or purchase of, or payment for, the Shares is subject to the
provisions of Rule 14e-1(c) under the Securities Exchange Act of 1934 (the
"Exchange Act"), which requires the Purchaser to pay the consideration offered
or to return the Shares deposited by, or on behalf of, stockholders, promptly
after the termination or withdrawal of the Offer. In all cases, payment for
Shares purchased pursuant to
<PAGE>
the Offer will be made only after timely receipt by the Depositary of (1) the
certificates evidencing such Shares (the "Certificates") or timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Shares into the
Depositary's account at the Book-Entry Transfer Facility, pursuant to the
procedures set forth in "THE TENDER OFFER--Section 3", (2) the Letter of
Transmittal (or a manually signed facsimile thereof), properly completed and
duly executed with any required signature guarantees, or an Agent's Message (as
defined in the Offer to Purchase) in connection with a book-entry transfer and
(3) any other documents required to be included with the Letter of Transmittal
under the terms and subject to the conditions thereof and of the Offer to
Purchase.
The term "Expiration Date" means 5:00 p.m., New York City time, on July 3, 2000
unless and until Purchaser, in its sole discretion (but subject to the terms of
the Merger Agreement), shall have extended the period of time during which the
Offer is open, in which event the term "Expiration Date" shall mean the latest
time and date at which the Offer, as so extended by Purchaser, shall expire.
Subject to the terms of the Merger Agreement, the applicable rules and
regulations of the SEC and applicable law, Purchaser expressly reserves the
right, in its sole discretion, at any time and from time to time, to waive any
Offer Condition (as defined in the Offer to Purchase) or otherwise amend the
Offer in any respect by giving oral or written notice of such waiver or
amendment to the Depositary. The Merger Agreement provides that, if the Offer
Conditions are not satisfied or waived by the Purchaser as of the Expiration
Date, Purchaser may extend the Offer from time to time for the shortest time
periods permitted by law and to the extent Purchaser reasonably believes such
extensions are necessary until the consummation of the Offer (it being
understood that, notwithstanding the satisfaction of the Offer Conditions, the
Purchaser shall have the right, but not the obligation, to extend the Offer
until August 10, 2000). During any such extension, all Shares previously
tendered and not withdrawn will remain subject to the Offer. Tendering
stockholders will continue to have the right to withdraw any tendered Shares
during such extension. See "THE TENDER OFFER--Section 4" of the Offer to
Purchase. Any such extension, delay, termination, waiver or amendment will be
followed, as promptly as practicable, by public announcement thereof, with such
announcement in the case of an extension to be made no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of Rule
14e-1 of the Exchange Act. Subject to applicable law (including Rules 14d-4(c),
14d-6(d) and 14e-1 under the Exchange Act, which require that material changes
be promptly disseminated to stockholders in a manner reasonably designed to
inform them of such changes) and without limiting the manner in which Purchaser
may choose to make any public announcement, Purchaser will have no obligation to
publish, advertise or otherwise communicate any such public announcement other
than by issuing a press release to the public or as otherwise may be required by
applicable law. If Purchaser makes a material change in the terms of the Offer
or the information concerning the Offer, or if it waives a material Offer
Condition, Purchaser will extend the Offer to the extent required by Rules 14d-
4(c), 14d-6(d) and 14e-1 under the Exchange Act. The minimum period during which
an offer must remain open following material changes in the terms of the Offer
or information concerning the Offer, other than a change in price or a change in
the percentage of securities sought, will depend upon the facts and
circumstances then existing, including the relative materiality of the changed
terms or information. With respect to a change in price or a change in the
percentage of securities sought, a minimum period of ten business days is
generally required to allow for adequate dissemination to stockholders and
investor response.
<PAGE>
If, prior to the Expiration Date, Purchaser increases the consideration to be
paid per Share pursuant to the Offer, Purchaser will pay such increased
consideration for all such Shares purchased pursuant to the Offer, whether or
not such Shares were tendered prior to such increase in consideration. Purchaser
reserves the right to assign to any other direct or indirect wholly owned
subsidiary of Purchaser, the right to purchase all or any portion of the Shares
tendered pursuant to the Offer, but any such assignment will not relieve
Purchaser of its obligations under the Offer and will in no way prejudice the
rights of tendering stockholders to receive payment for Shares validly tendered
and accepted for payment pursuant to the Offer.
Pursuant to Rule 14d-11 under the Exchange Act, Purchaser may, subject to
certain conditions, include a subsequent offering period following the
expiration of the Offer on the Expiration Date (the "Subsequent Offering
Period"). Rule 14d-11 provides that Purchaser may include a Subsequent Offering
Period so long as, among other things, (1) the Offer remained open for a minimum
of 20 business days and has expired, (2) the Offer was for all outstanding
Shares, (3) Purchaser accepts and promptly pays for all Shares tendered during
the Offer, (4) Purchaser announces its decision to provide a Subsequent Offering
Period at least five business days prior to the Expiration Date and announces
the results of the Offer, including the approximate number and percentage of
Shares deposited, no later than 9:00 a.m., New York City time, on the next
business day after the Expiration Date and immediately begins the Subsequent
Offering Period, (5) Purchaser immediately accepts and promptly pays for Shares
as they are tendered in the Subsequent Offering Period and (6) Purchaser pays
the Purchase Price for all Shares tendered during the Subsequent Offering
Period. Purchaser will be able to include a Subsequent Offering Period if it
satisfies the conditions above.
Tenders of Shares made pursuant to the Offer are irrevocable, except that Shares
tendered pursuant to the Offer may be withdrawn at any time prior to the
Expiration Date and, unless theretofore accepted for payment by the Purchaser
pursuant to the Offer, may also be withdrawn at any time after July 25, 2000. If
Purchaser extends the Offer, is delayed in its acceptance for payment of Shares
or is unable to purchase Shares validly tendered pursuant to the Offer for any
reason, then, without prejudice to Purchaser's rights under the Offer, the
Depositary may, nevertheless, on behalf of Purchaser, retain tendered Shares and
such Shares may not be withdrawn except to the extent that tendering
stockholders are entitled to withdrawal rights as described in "THE TENDER
OFFER--Section 4" of the Offer to Purchase. Any such delay in acceptance for
payment will be accomplished by an extension of the Offer to the extent required
by law. For a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission notice of withdrawal must be timely received by the
Depositary at one of its addresses set forth on the back cover of the Offer to
Purchase. Any notice of withdrawal must specify the name of the person who
tendered the Shares to be withdrawn, the number of Shares to be withdrawn, and
the name of the registered holder of such Shares, if different from that of the
person who tendered such Shares. If Certificates evidencing Shares to be
withdrawn have been delivered or otherwise identified to the Depositary, then,
prior to the physical release of such Certificates, the serial numbers shown on
such Certificates must be submitted to the Depositary and the signature(s) on
the notice of withdrawal must be guaranteed by an Eligible Institution (as
defined in the Offer to Purchase), unless such Shares have been tendered for the
account of an Eligible Institution. Shares tendered pursuant to the procedures
for book-entry transfer may be withdrawn only by means of the withdrawal
procedures made available by the Book-Entry Transfer Facility, must specify the
name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Shares and must otherwise comply with the Book-Entry
Transfer Facility's procedures. However, withdrawn Shares may be re-tendered at
<PAGE>
any time prior to the Expiration Date by following one of the procedures
described in "THE TENDER OFFER--Section 3" of the Offer to Purchase. Withdrawals
of tendered Shares may not be rescinded without Purchaser's consent. Any Shares
properly withdrawn will thereafter be deemed not validly tendered for purposes
of the Offer.
The receipt of cash in exchange for Shares pursuant to the Offer (or the Merger)
will be a taxable transaction for U.S. federal income tax purposes and may also
be a taxable transaction under applicable state, local or foreign tax laws. See
"SPECIAL FACTORS--Section 6" of the Offer of Purchase. The information required
to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and
Regulations under the Exchange Act is contained in the Offer to Purchase and is
incorporated herein by reference. In connection with the Offer, the Company has
provided Purchaser with the names and addresses of all record holders of Shares
and security position listings of Shares held in stock depositories. The Offer
to Purchase, the related Letter of Transmittal and other related materials will
be mailed to registered holders of Shares and will be furnished to brokers,
dealers, commercial banks, trust companies and similar persons whose names, or
the names of whose nominees, appear on the Company's stockholder list or, if
applicable, who are listed as participants in a clearing agency's security
position listing for subsequent transmittal to beneficial owners of Shares.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read carefully before any decision is made with
respect to the Offer.
Questions or requests for assistance or for additional copies of the Offer to
Purchase, related Letter of Transmittal and other related tender offer materials
may be directed to the Information Agent or the Dealer Manager at their
respective addresses and telephone numbers set forth below, and copies will be
furnished promptly at Purchaser's expense. Purchaser will not pay any fees or
commissions to any broker or dealer or any other person (other than the Dealer
Manager, the Depositary and the Information Agent) in connection with the
solicitation of tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
[Mackenzie Logo]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (Call Collect)
or
CALL TOLL-FREE (800) 322-2885
The Dealer Manager for the Offer is:
Jefferies & Company, Inc.
11100 Santa Monica Boulevard
Los Angeles, CA 90025
(310) 575-5200 (call collect)
(800) 933-6656 (call Toll-Free)
May 26, 2000
<PAGE>
Exhibit (a)(1)(viii)
CONTACT:
- --------
Stephen M. Banker; (212) 735-2760
May 15, 2000
COINMACH LAUNDRY CORPORATION ACCEPTS
$14.25 PER SHARE ACQUISITION PROPOSAL
NEW YORK, NEW YORK, May 15, 2000 -- Coinmach Laundry Corporation announced today
that it has entered into a definitive agreement and plan of merger with CLC
Acquisition Corporation, an affiliate of GTCR Golder Rauner, LLC. Pursuant to
the definitive agreement, CLC will acquire all of Coinmach's outstanding common
stock for $14.25 per share in cash, representing a premium of approximately 78%
over Coinmach's last reported trading price. Coinmach's board of directors has
unanimously approved the transaction.
The definitive agreement contemplates that CLC will commence a tender offer to
purchase all of Coinmach's outstanding common stock within the next ten business
days. The transaction is subject to certain customary terms and conditions,
including the valid tender of at least a majority of Coinmach's outstanding
shares. Receipt of financing by CLC is not a condition to closing. Any shares
not purchased in the tender will be acquired for the same price in cash in a
second step merger, except for certain shares held by members of Coinmach's
senior management who are required to maintain an investment in Coinmach as a
condition to the offer. The transaction is expected to close in early July.
Affiliates of GTCR Golder Rauner, LLC, who own approximately 23% of Coinmach's
issued and outstanding common stock, intend to tender their shares in the
transaction. Jefferies & Company, Inc. is acting as dealer manager in
connection with the tender offer.
This release is for informational purposes only, is not an offer to buy or a
solicitation of an offer to sell any shares of Coinmach common stock, and is not
a solicitation of a proxy. The solicitation of offers to purchase shares of
Coinmach common stock will only be made pursuant to the offer to purchase and
related materials that CLC will be mailing to Coinmach's stockholders, and that
will be filed with the Securities and Exchange Commission ("SEC") as part of the
tender offer statement. Investors and security holders are strongly advised to
read both the tender offer statement and the solicitation/recommendation
statement regarding the tender offer referred to in this release when they
become available, because they will contain important information. Stockholders
may obtain a free copy of these statements (when available) and other documents
filed by CLC and Coinmach at the SEC's web site at http://www.sec.gov. The
tender offer statement and related materials may be obtained for free by
directing such requests to CLC. The solicitation/recommendation statement and
such other documents may be obtained for free by directing such requests to
Coinmach.
Certain statements in this release that are not historical in nature are
forward-looking statements. Although Coinmach believes that its expectations are
based upon reasonable assumptions, there
<PAGE>
can be no assurance that such expectations will be realized. In addition, such
forward looking statements are subject to known and unknown risks or
uncertainties that may cause actual results in the future to differ materially
from forecasted results. Among the key factors that could cause results to
differ materially are: (i) the inability of the parties to the definitive
agreement to complete the proposed acquisition; (ii) actions by customers,
shareholders, regulators and others following the announcement of the proposed
transaction; (iii) stock market and financing market conditions; (iv) business
and economic conditions in the United States market in which Coinmach operates;
and (v) other risks more fully described in Coinmach's filings with the SEC.
Coinmach does not undertake any obligation to update the information contained
herein, which speaks only as of the date of this release.
Coinmach Laundry Corporation [NASDAQ: WDRY], through its wholly-owned
subsidiaries, is the leading supplier of outsourced laundry equipment services
for multi-family properties in the United States.
<PAGE>
Exhibit (a)(5)(i)
AGREEMENT AND PLAN OF MERGER
BETWEEN
CLC ACQUISITION CORPORATION
AND
COINMACH LAUNDRY CORPORATION
DATED AS OF
MAY 12, 2000
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------
ARTICLE I
THE OFFER
<S> <C>
SECTION 1.01 The Offer...................................................................2
SECTION 1.02 Company Actions.............................................................3
SECTION 1.03 Directors...................................................................5
SECTION 1.04 Termination of Voting Agreement.............................................5
SECTION 1.05 Company Board Approval Under Section 203 of the GCL.........................5
ARTICLE II
THE MERGER
SECTION 2.01 The Merger..................................................................5
SECTION 2.02 Effective Time; Closing.....................................................6
SECTION 2.03 Effects of the Merger.......................................................6
SECTION 2.04 Certificate of Incorporation and By-Laws of the Surviving Corporation.......6
SECTION 2.05 Directors...................................................................6
SECTION 2.06 Officers....................................................................6
SECTION 2.07 Conversion of Common Shares.................................................7
SECTION 2.08 Conversion of Purchaser Common Stock........................................7
SECTION 2.09 Company Options.............................................................7
SECTION 2.10 Stockholders Meeting........................................................7
SECTION 2.11 Merger Without Meeting of Stockholders......................................8
ARTICLE III
DISSENTING SHARES; PAYMENT FOR COMMON SHARES
SECTION 3.01 Dissenting Shares...........................................................8
SECTION 3.02 Payment for Common Shares...................................................9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 4.01 Organization and Qualification; Subsidiaries...............................11
SECTION 4.02 Certificate of Incorporation and By-Laws...................................11
SECTION 4.03 Capitalization.............................................................12
SECTION 4.04 Authority Relative to this Agreement.......................................12
SECTION 4.05 No Conflict; Required Filings and Consents.................................13
SECTION 4.06 SEC Reports and Financial Statements.......................................14
SECTION 4.07 Information................................................................15
SECTION 4.08 Litigation.................................................................15
SECTION 4.09 Compliance with Applicable Laws............................................15
SECTION 4.10 Taxes......................................................................16
SECTION 4.11 Material Adverse Change....................................................16
SECTION 4.12 Opinion of Financial Advisor...............................................16
SECTION 4.13 Brokers....................................................................17
SECTION 4.14 Insurance..................................................................17
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
SECTION 5.01 Organization and Qualification.............................................17
SECTION 5.02 Authority Relative to this Agreement.......................................18
SECTION 5.03 No Conflict; Required Filings and Consents.................................18
SECTION 5.04 Information................................................................18
SECTION 5.05 Financing..................................................................19
SECTION 5.06 Brokers....................................................................19
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company.........................................19
SECTION 6.02 Access to Information......................................................22
SECTION 6.03 Efforts....................................................................23
SECTION 6.04 Consents...................................................................24
SECTION 6.05 Maintenance of Insurance...................................................24
SECTION 6.06 Public Announcements.......................................................24
SECTION 6.07 Continuance of Existing Indemnification Rights.............................25
SECTION 6.08 No Solicitation............................................................26
SECTION 6.09 Notification of Certain Matters............................................28
SECTION 6.10 Special Meeting............................................................28
SECTION 6.11 Disposition of Litigation..................................................28
SECTION 6.12 State Takeover Laws........................................................29
SECTION 6.13 Certain Agreements with Management.........................................29
</TABLE>
-ii-
<PAGE>
<TABLE>
<CAPTION>
ARTICLE VIII
TERMINATION; AMENDMENTS; WAIVER
<S> <C>
SECTION 8.01 Termination................................................................30
SECTION 8.02 Effect of Termination......................................................31
SECTION 8.03 Fees and Expenses..........................................................32
SECTION 8.04 Assumption of Certain Obligations by the Company...........................32
SECTION 8.05 Amendment..................................................................32
SECTION 8.06 Extension; Waiver..........................................................32
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Non-Survival of Representations and Warranties.............................33
SECTION 9.02 Limitation on Warranties...................................................33
SECTION 9.03 Company Disclosure Statement...............................................33
SECTION 9.04 Entire Agreement; Assignment...............................................34
SECTION 9.05 Binding Agreement..........................................................34
SECTION 9.06 Severability...............................................................34
SECTION 9.07 Notices....................................................................34
SECTION 9.08 Governing Law; Jurisdiction................................................36
SECTION 9.09 Waiver of Jury Trial.......................................................36
SECTION 9.10 Descriptive Headings.......................................................37
SECTION 9.11 Construction...............................................................37
SECTION 9.12 Counterparts...............................................................37
SECTION 9.13 Parties in Interest........................................................37
SECTION 9.14 Certain Definitions........................................................37
SECTION 9.15 Specific Performance.......................................................38
SECTION 9.16 Company Actions............................................................38
</TABLE>
-iii-
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement"), dated as of May 12, 2000,
---------
between CLC Acquisition Corporation, a Delaware corporation (the "Purchaser"),
---------
and Coinmach Laundry Corporation, a Delaware corporation (the "Company").
-------
WHEREAS, each of the Board of Directors of Purchaser (the "Purchaser
---------
Board") and the Board of Directors of the Company (the "Company Board") have
-------------
approved the acquisition of the Company by Purchaser on the terms and subject to
the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, Purchaser proposes to make a
tender offer (as it may be amended from time to time as permitted under this
Agreement, the "Offer") to purchase up to 100% of all of the shares of issued
-----
and outstanding Class A common stock, par value $.01 per share (the "Class A
-------
Common Stock") and up to 100% of all the shares of issued and outstanding Class
- ------------
B common stock, par value $.01 per share (the "Class B Common Stock," and,
--------------------
together with the Class A Common Stock, the "Common Shares"), on the date
-------------
hereof, at a price per share of $14.25 (the "Share Offer Price"), net to the
-----------------
selling stockholders in cash without interest thereon, less any requested
withholding taxes, upon the terms and subject to the conditions set forth in
this Agreement;
WHEREAS, pursuant to the Merger (as defined), Purchaser shall pay and cash
out all vested and unvested options outstanding on the date hereof issued and
exercisable at a price per option net to the selling stockholder in cash equal
to the difference between the Share Offer Price and the exercise price of such
options (the "Option Offer Price");
------------------
WHEREAS, the Company Board has approved the Offer upon the terms and
subject to the conditions set forth in this Agreement and resolved and agreed to
recommend that stockholders of the Company accept the Offer;
WHEREAS, the Purchaser Board and the Company Board have, subject to the
conditions contained herein, approved the merger of the Purchaser with and into
the Company (the "Merger"), as set forth below, in accordance with the General
------
Corporation Law of the State of Delaware (the "GCL") and upon the terms and
---
subject to the conditions set forth in this Agreement, whereby all issued and
outstanding Common Shares not owned directly or indirectly by the Company or the
Principal Holders (as defined) will be converted into the right to receive the
Share Offer Price in cash;
WHEREAS, concurrently with the execution and delivery of this Agreement,
Purchaser and certain executive officers of the Company (the "Principal
---------
Holders"), have entered into a Rollover Agreement, dated as of the date hereof,
in the form of Exhibit A hereto (the "Rollover Agreement"); and
---------- ------------------
WHEREAS, Purchaser and the Company desire to make certain representations,
warranties, covenants and agreements in connection with the Offer and the
Merger.
<PAGE>
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
Purchaser and the Company agree as follows:
ARTICLE I
THE OFFER
SECTION 1.01 The Offer.
---------
(a) So long as this Agreement shall not have been terminated in accordance
with Section 8.01 and none of the events set forth in Annex I hereto (as
------------ -------
hereinafter provided) shall have occurred, Purchaser shall commence the Offer
(within the meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) as promptly as practicable after the date hereof,
------------
but in any event not later than the tenth business day following the date
hereof. The obligation of the Purchaser to accept for payment and pay for
Common Shares tendered pursuant to the Offer shall be subject to the Minimum
Condition and to the satisfaction or waiver (to the extent permitted by this
Agreement) of the other conditions set forth in Annex I hereto (the "Offer
------- -----
Conditions"). The Share Offer Price shall, subject to applicable withholding of
- ----------
taxes, be net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Subject to the terms of the Offer and this Agreement
and the satisfaction or waiver (to the extent permitted by this Agreement) of
all the conditions of the Offer set forth in Annex I hereto as of the Initial
-------
Expiration Date or any expiration date permitted by the Agreement, Purchaser
will accept for payment and pay for all Common Shares validly tendered and not
withdrawn pursuant to the Offer as soon as practicable after such expiration
date of the Offer. The initial expiration date for the Offer shall be the
twenty-fifth business day from and after the date the Offer is commenced,
including the date of commencement as the first business day in accordance with
Rule 14d-2 under the Exchange Act (the "Initial Expiration Date"). Subject to
-----------------------
Section 8.01, if the conditions set forth in Annex I hereto are not satisfied
- ------------ -------
or, to the extent permitted by this Agreement, waived by the Purchaser, as of
the Initial Expiration Date (or any subsequently scheduled expiration date),
Purchaser may extend the Offer from time to time for the shortest time periods
permitted by law and to the extent Purchaser reasonably believes such extensions
are necessary until the consummation of the Offer (it being understood that,
notwithstanding the satisfaction of the Offer Conditions, the Purchaser shall
have the right, but not the obligation, to extend the Offer until the Outside
Offer Date).
(b) As promptly as reasonably practicable, on the commencement date of the
Offer, the Purchaser shall file with the Securities and Exchange Commission (the
"SEC") a combined Tender Offer Statement and a Schedule 13e-3 Transaction
---
Statement on Schedule TO, including all exhibits thereto (together with any
supplements or amendments thereto, the "Schedule TO"), with respect to the
-----------
Offer, the Merger and the other transactions contemplated thereby. The Schedule
TO shall contain (as an exhibit thereto) the Purchaser's Offer to Purchase (the
"Offer to Purchase") and the forms of the related letter of transmittal and any
-----------------
related documents (the Schedule TO, the Offer to Purchase and any supplements or
amendments thereto, collectively,
-2-
<PAGE>
the "Offer Documents"). The Company and its counsel shall be given an
---------------
opportunity to review and comment upon the Offer Documents prior to the filing
thereof with the SEC, and Purchaser shall consider such comments in good faith.
Purchaser agrees to provide to the Company and its counsel any comments which
Purchaser or its counsel may receive from the Staff of the SEC with respect to
the Offer Documents promptly after receipt thereof.
(c) Purchaser shall use its reasonable good faith efforts to ensure that
the Offer Documents (i) will comply in all material respects with the provisions
of applicable federal securities laws, and (ii) on the date filed with the SEC
and on the date first published, sent or given to the Company's stockholders,
shall not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, except that no representation is made by Purchaser with
respect to information supplied by the Company for inclusion in the Offer
Documents. Purchaser agrees to correct promptly, and the Company agrees to
notify Purchaser promptly as to, any information provided by it for use in the
Offer Documents, if and to the extent that such information shall have become
false or misleading in any material respect, and the Purchaser further agrees to
take all steps reasonably necessary to cause the Offer Documents as so corrected
to be filed with the SEC and to be disseminated to stockholders of the Company,
in each case as and to the extent required by applicable federal securities
laws.
SECTION 1.02 Company Actions.
---------------
(a) Concurrently with commencement of the Offer, the Company shall file
with the SEC and mail to the stockholders of the Company a
Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the
Offer (together with any amendments or supplements thereto, the "Schedule 14D-
------------
9").
(b) The Company hereby represents and warrants that (i) a special committee
of two independent directors of the Company Board (the "Special Committee") has
-----------------
recommended that the Company Board approve the Offer and the Merger, and approve
and authorize this Agreement, the Rollover Agreement and the other transactions
contemplated hereby, and (ii) the Company Board, at a meeting duly called and
held, has, based on the recommendation of the Special Committee described in the
preceding clause (i), duly adopted resolutions: (A) approving the Offer and the
Merger and approving and adopting this Agreement and the Rollover Agreement, (B)
determining that the Merger is advisable and that the terms of the Offer and the
Merger are fair to, and in the best interests of, the Company and the Company's
stockholders, and (C) recommending that the Company's stockholders accept the
Offer and, if approval is required by applicable law, approve the Merger and
approve and adopt this Agreement. The Company hereby consents to the inclusion
in the Offer Documents of the recommendation of the Company Board and the
recommendation of the Special Committee described in the first sentence of this
Section 1.02(b). The Company shall provide for inclusion in the Offer Documents
any information reasonably requested by Purchaser, and to the extent requested
by Purchaser, the Company shall cooperate in the preparation of the Offer
Documents. The Company further represents and warrants that the Special
Committee has been duly authorized
-3-
<PAGE>
and constituted, and at a meeting thereof duly called, determined that this
Agreement, the Merger and the Offer are fair to and in the best interests of the
stockholders of the Company (other than the Purchaser and its stockholders).
(c) The Company hereby further represents and warrants that Lazard Freres
& Co., LLC (the "Financial Advisor") has delivered to the Company Board its
-----------------
written opinion that, as of the date hereof, the Share Offer Price to be
received by the holders of the Common Shares pursuant to each of the Offer and
the Merger (other than Purchaser or the stockholders of Purchaser) is fair to
such holders from a financial point of view. The Company hereby consents to the
inclusion in the Offer Documents of the recommendations of the Company Board
described in this Section 1.02(a).
---------------
(d) To the extent practicable, the Company shall cooperate with Purchaser
in mailing or otherwise disseminating the Schedule 14D-9 with the appropriate
Offer Documents to the Company's stockholders. Purchaser and its counsel shall
be given an opportunity to review and comment upon the Schedule 14D-9 prior to
the filing thereof with the SEC. The Company shall use its reasonable good
faith efforts to ensure that the Schedule 14D-9 will comply in all material
respects with the provisions of applicable federal securities laws. On the date
filed with the SEC and on the date first published, sent or given to the
Company's stockholders, the Schedule 14D-9 shall not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to information supplied by
Purchaser for inclusion in the Schedule 14D-9. The Company agrees to correct
promptly, and Purchaser agrees to notify the Company promptly as to, any
information provided by it for use in the Schedule 14D-9, if and to the extent
such information shall have become false or misleading in any material respect,
and the Company further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with the SEC and to be disseminated to all of
the holders of Common Shares, in each case as and to the extent required by
applicable federal securities laws. The Company agrees to provide Purchaser and
its counsel in writing any comments the Company or its counsel may receive from
the SEC or its staff with respect to the Schedule 14D-9 promptly after the
receipt of such comments. The Company agrees to use its reasonable best
efforts, after consultation with Purchaser, to respond promptly to all such
comments of and requests by the SEC.
(e) In connection with the Offer, the Company will, at its sole cost and
expense, if reasonably requested by Purchaser, promptly furnish Purchaser with
mailing labels, security position listings, any non-objecting beneficial owner
lists and any available listings or computer files containing the names and
addresses of the record holders of Common Shares, each as of a recent date, and
shall promptly furnish Purchaser with such additional information (including,
but not limited to, updated lists of stockholders, mailing labels, security
position listings and non-objecting beneficial owner lists) and any other
assistance as Purchaser or its agents or representatives may reasonably request
in connection with communicating the Offer and the Merger to the record and
beneficial holders of the Common Shares.
-4-
<PAGE>
SECTION 1.03 Directors. Subject to compliance with applicable laws,
---------
promptly upon Purchaser's payment for the Common Shares pursuant to the Offer
equal to a majority of all Common Shares, and from time to time thereafter
through the Effective Time, Purchaser shall be entitled to designate all of the
individuals who shall serve as directors on the Company Board, and the Company
shall promptly take all actions necessary to cause Purchaser's designees to be
so elected, including, seeking the resignations of Mr. Steven G. Cerri, Dr.
Arthur B. Laffer or any other present director or increasing the size of the
Company Board or both.
SECTION 1.04 Termination of Voting Agreement. Purchaser and the Company
-------------------------------
agree to the termination, and agree to use their reasonable good faith efforts
to cause the other parties thereto to terminate, as of the date Purchaser
acquires at least a majority of the outstanding Common Shares, that certain
Voting Agreement, dated July 23, 1996, among the Company and certain other
parties (the "Voting Agreement").
----------------
SECTION 1.05 Company Board Approval Under Section 203 of the GCL. On or
---------------------------------------------------
prior to the date hereof, the Company Board and the Special Committee shall have
approved each of this Agreement and the Rollover Agreement and taken all other
necessary actions under Section 203 of the GCL to cause the transactions
contemplated hereby and thereby, and any subsequent transactions of the Company
with Purchaser or any of its affiliates and associates (based only on
information supplied by Purchaser in writing to the Company or to its counsel in
connection with this Agreement or the transactions contemplated hereby), not to
be governed by such Section 203 of the GCL or subject thereto.
ARTICLE II
THE MERGER
SECTION 2.01 The Merger. Upon the terms and subject to the satisfaction
----------
or waiver of the conditions contained herein, and in accordance with the
applicable provisions of this Agreement and the GCL, at the Effective Time (as
defined in Section 2.02) the Purchaser shall be merged with and into the
------------
Company. Following the Merger, the separate corporate existence of the
Purchaser shall cease, and the Company shall continue as the surviving
corporation (the "Surviving Corporation"). At Purchaser's election, any
---------------------
affiliate or direct or indirect subsidiary of Purchaser may be merged with and
into the Company instead of Purchaser. In the event of such an election, the
parties agree to execute an appropriate amendment to this Agreement in order to
reflect such an election.
SECTION 2.02 Effective Time; Closing. As soon as practicable after the
-----------------------
satisfaction or waiver of the conditions set forth in Sections 7.01(a) and (b),
---------------- ---
but subject to Sections 2.11 and 7.01(c), the Company shall execute in the
-------------------------
manner required by the GCL and deliver to the Secretary of State of the State of
Delaware a duly executed and verified certificate of merger, and the parties
shall take such other and further actions as may be required by law to make the
Merger effective. The Merger shall become effective at such time as such
certificate of merger or a certificate of ownership and merger under Section 253
of the GCL is duly filed with the
-5-
<PAGE>
Secretary of State of the State of Delaware, or such later time as Purchaser and
the Company may agree and specify in such certificate (the "Effective Time").
The closing of the Merger (the "Closing") shall take place at the offices of
Mayer, Brown & Platt, 1675 Broadway, New York, New York at 10:00 a.m. New York
City time on a date as soon as practicable following the date on which the
conditions to the Closing (other than those that, by their terms, are to be
satisfied at the Closing) have been satisfied or waived, or at such other place,
time and date as the parties hereto may agree.
SECTION 2.03 Effects of the Merger. The Merger shall have the effects set
---------------------
forth in the GCL.
SECTION 2.04 Certificate of Incorporation and By-Laws of the Surviving
---------------------------------------------------------
Corporation.
- -----------
(a) The amended and restated certificate of incorporation of the Surviving
Corporation shall be amended at the Effective Time to conform to the certificate
of incorporation of Purchaser, as in effect at the Effective Time, except (1)
the name of the Surviving Corporation will remain Coinmach Laundry Corporation,
(2) any provisions in the certificate of incorporation of Purchaser naming the
incorporator and/or the initial directors shall not become part of the
certificate of incorporation of the Surviving Corporation and (3) as otherwise
prohibited by applicable Delaware law.
(b) Subject to the provisions of Section 6.01 of this Agreement, the by-
------------
laws of the Purchaser in effect at the Effective Time shall be the by-laws of
the Surviving Corporation, until thereafter amended in accordance with the terms
thereof, the terms of the Surviving Corporation's certificate of incorporation
and applicable Delaware law, except that the name of the Surviving Corporation
shall remain Coinmach Laundry Corporation.
SECTION 2.05 Directors. Subject to applicable law, the directors of the
---------
Purchaser immediately prior to the Effective Time shall be the initial directors
of the Surviving Corporation and shall hold office until their respective
successors are duly elected and qualified, or their earlier death, resignation
or removal, in accordance with applicable law and the Surviving Corporation's
certificate of incorporation and bylaws.
SECTION 2.06 Officers. The officers of the Company immediately prior to
--------
the Effective Time shall be the initial officers of the Surviving Corporation
and shall hold office until their respective successors are duly elected and
qualified, or their earlier death, resignation or removal.
SECTION 2.07 Conversion of Common Shares. At the Effective Time, by
---------------------------
virtue of the Merger and without any action on the part of the stockholders of
the Company, each Common Share issued and outstanding immediately prior to the
Effective Time (other than any Common Shares held by Purchaser or any wholly-
owned subsidiary of Purchaser or held in the treasury of the Company or by any
wholly-owned subsidiary of the Company, which Common Shares, by virtue of the
Merger and without any action on the part of the holder thereof, shall be
cancelled
-6-
<PAGE>
and retired and shall cease to exist with no payment being made with respect
thereto, and other than Dissenting Shares (as defined in Section 3.01)) shall be
------------
converted into the right to receive in cash the Share Offer Price (the "Merger
------
Price") payable to the holder thereof, and in the case of the Options, net of
- -----
taxes required by law to be withheld with respect thereto and without interest
thereon, upon surrender of the certificate formerly representing such Common
Share.
SECTION 2.08 Conversion of Purchaser Common Stock. At the Effective Time,
------------------------------------
each share of common stock, par value $0.01 per share, of the Purchaser issued
and outstanding immediately prior to the Effective Time shall, by virtue of the
Merger and without any action on the part of the holder thereof, be converted
into and become one validly issued, fully paid and nonassessable share of common
stock, par value $0.01 per share, of the Surviving Corporation.
SECTION 2.09 Company Options. Purchaser and the Company shall take all
---------------
actions necessary so that, immediately prior to the Effective Time, (A) each
outstanding option to purchase Common Shares (collectively, the "Options"),
-------
including options granted under the Company's Third Amended and Restated Stock
Option Plan, as amended (the "Option Plan"), whether or not then exercisable or
-----------
vested, shall become fully exercisable and fully vested, (B) each Option which
is then outstanding shall be cancelled, and (C) in consideration of such
cancellation, and except to the extent that Purchaser and the holder of any such
Option otherwise agree, immediately following the Effective Time, the Company
shall pay to such holders of Options an amount in respect thereof equal to the
product of (1) the excess of the Merger Price over the applicable exercise price
thereof and (2) the number of Common Shares subject thereto (such payment to be
net of taxes required by law to be withheld with respect thereto). The
Surviving Corporation shall be entitled to deduct and withhold from the
consideration otherwise payable to any holder of Options pursuant to this
Agreement such amounts as may be required to be deducted and withheld with
respect to the making of such payment under the Internal Revenue Code of 1986,
as amended, and the rules and regulations promulgated thereunder (the "Code"),
----
or under any provision of state, local or foreign tax law.
SECTION 2.10 Stockholders' Meeting.
---------------------
(a) If required by the Company's certificate of incorporation and/or
applicable law in order to consummate the Merger, the Company, acting through
and at the direction of the Company Board, shall, in accordance with applicable
law:
(i) duly call, give notice of, convene and hold a special meeting of
its stockholders (the "Special Meeting") as soon as practicable following
---------------
the acceptance for payment of and payment for Common Shares by the
Purchaser pursuant to the Offer for the purpose of considering and taking
action under this Agreement;
(ii) prepare and file with and use its reasonable best efforts to have
cleared by the SEC a preliminary proxy statement relating to the Merger and
this Agreement and use its reasonable best efforts (x) to obtain and
furnish the information required to be included by the SEC in the Proxy
Statement (as hereinafter defined) and, after consultation with Purchaser,
to respond promptly to any comments made by the SEC with respect to the
-7-
<PAGE>
preliminary proxy statement and cause a definitive proxy statement (the
"Proxy Statement") to be mailed to its stockholders and (y) to obtain the
----------------
necessary approvals of the Merger and this Agreement by its stockholders;
and
(iii)subject to the fiduciary obligations of the Company Board under
applicable law as determined in good faith by a majority of the Company
Board based on the advice of independent outside legal counsel, (A)
include in the Proxy Statement the recommendation of the Board that
stockholders of the Company vote in favor of the approval of the Merger and
the adoption of this Agreement and the written opinion of the Financial
Advisor that the consideration to be received by the stockholders of the
Company pursuant to the Offer and the Merger is fair from a financial point
of view to such stockholders and (B) use its reasonable best efforts to
obtain the necessary adoption of this Agreement.
(b) Purchaser agrees that it will vote, or cause to be voted, all of the
Common Shares then owned by it or any of its subsidiaries or affiliates in favor
of the approval of the Merger and the adoption of this Agreement.
SECTION 2.11 Merger Without Meeting of Stockholders. Notwithstanding
--------------------------------------
Section 2.10, in the event that Purchaser shall acquire at least 90% of the
- ------------
outstanding shares of each outstanding class of capital stock of the Company
pursuant to the transactions contemplated hereby, the parties hereto agree to
take all necessary and appropriate action to cause the Merger to become
effective as soon as practicable after the acceptance for payment of and payment
for Common Shares by the Purchaser pursuant to the Offer without a meeting of
stockholders of the Company, in accordance with Section 253 of the GCL.
ARTICLE III
DISSENTING SHARES; PAYMENT FOR COMMON SHARES
SECTION 3.01 Dissenting Shares. Notwithstanding anything in this
-----------------
Agreement to the contrary, Common Shares outstanding immediately prior to the
Effective Time and held by a holder of Common Shares who has not voted in favor
of the Merger or consented thereto in writing and who demands in writing an
appraisal for such Common Shares in accordance with Section 262 of the GCL, if
such Section 262 provides for appraisal rights for such Common Shares in the
Merger ("Dissenting Shares"), shall not be converted into the right to receive
-----------------
the Merger Price as provided in Section 2.07 but shall be entitled to receive
------------
the consideration as shall be determined pursuant to Section 262 of GCL, unless
and until such holder fails to perfect or withdraws or otherwise loses his right
to appraisal and payment under the GCL. If, after the Effective Time, any such
holder fails to perfect or withdraws or loses his right to appraisal, such
Dissenting Shares shall thereupon be treated as if they had been converted as of
the Effective Time into the right to receive the Merger Price, if any, to which
such holder is entitled, without interest or dividends thereon. The Company
shall give Purchaser prompt notice of any demands received by the Company for
appraisal of Common Shares, withdrawals of such demands and
-8-
<PAGE>
any other instruments served pursuant to the GCL and received by the Company
and, prior to the Effective Time, Purchaser shall have the right to direct all
negotiations and proceedings with respect to such demands. Prior to the
Effective Time, the Company shall not, except with the prior written consent of
Purchaser, make any payment with respect to, or settle or offer to settle, any
such demands.
SECTION 3.02 Payment for Common Shares.
-------------------------
(a) From and after the Effective Time, a bank or trust company designated
by Purchaser shall act as paying agent (the "Paying Agent") in effecting the
------------
payment of the Merger Price in respect of certificates (the "Share
-----
Certificates") that, prior to the Effective Time, represented Common Shares
entitled to payment of the Merger Price pursuant to Section 2.07. At the
------------
Effective Time, Purchaser shall deposit, or cause to be deposited, in trust with
the Paying Agent the aggregate Merger Price to which holders of Common Shares
shall be entitled at the Effective Time pursuant to Section 2.07.
-------------
(b) Promptly after the Effective Time, the Paying Agent shall mail to each
record holder of Share Certificates that, immediately prior to the Effective
Time, represented Common Shares (other than Share Certificates representing
Dissenting Shares and Share Certificates representing Common Shares held by
Purchaser or any wholly-owned subsidiary of Purchaser, in the treasury of the
Company or by any wholly-owned subsidiary of the Company) (i) a form of letter
of transmittal which shall specify that delivery shall be effected, and risk of
loss and title to the Share Certificates shall pass, only upon proper delivery
of the Share Certificates to the Paying Agent and which shall be in such form
and have such other provisions as Purchaser may reasonably specify and (ii)
instructions for use in surrendering such Share Certificates and receiving the
aggregate Merger Price in respect thereof. Upon surrender of each such Share
Certificate together with such letter of transmittal duly completed and validly
executed in accordance with the instructions thereto, the Paying Agent shall pay
the holder of such Share Certificate the Merger Price multiplied by the number
of Common Shares formerly represented by such Share Certificate in consideration
therefor, and such Share Certificate shall forthwith be cancelled. Until so
surrendered, each such Share Certificate (other than Share Certificates
representing Dissenting Shares and Share Certificates representing Common Shares
held by Purchaser, any wholly-owned subsidiary of Purchaser, in the treasury of
the Company or by any wholly-owned subsidiary of the Company) shall represent
solely the right to receive the aggregate Merger Price relating thereto. No
interest or dividends shall be paid or accrued on the Merger Price. If the
Merger Price (or any portion thereof) is to be delivered to any person other
than the person in whose name the Share Certificate formerly representing Common
Shares surrendered therefor is registered, it shall be a condition to such right
to receive such Merger Price, that the Share Certificate so surrendered shall be
properly endorsed, with signature guaranteed, or otherwise be in proper form for
transfer and that the person surrendering such Share Certificates shall pay to
the Paying Agent any transfer or other taxes required by reason of the payment
of the Merger Price, to a person other than the registered holder of the Share
Certificate surrendered, or shall establish to the satisfaction of the Paying
Agent that such tax has been paid or is not applicable.
-9-
<PAGE>
(c) Promptly following the date that is six months after the Effective
Time, the Paying Agent shall deliver to the Surviving Corporation all cash,
Share Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Paying Agent's duties shall
terminate. Thereafter, each holder of a Share Certificate formerly representing
a Common Share shall thereafter look only to the Surviving Corporation (as a
general creditor thereof) for payment of its claim for the Merger Price (without
any interest or dividends thereon).
(d) No Liability. To the extent permitted by applicable law, none of
------------
Purchaser, the Company or the Paying Agent shall be liable to any person in
respect of any cash delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Investment of Merger Price. The Paying Agent shall invest the Merger
--------------------------
Price as directed by the Surviving Corporation (within guidelines approved by
the Company prior to the Closing Date, which approval shall not be unreasonably
withheld). Any interest resulting from such investment shall be paid to the
Surviving Corporation.
(f) Transfer of Common Shares. After the Effective Time, there shall be no
-------------------------
registrations of transfers on the stock transfer books of the Surviving
Corporation of any Common Shares which were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates formerly
representing Common Shares are presented to the Surviving Corporation or the
Paying Agent, they shall be surrendered and cancelled in consideration for the
payment of the aggregate Merger Price relating thereto, as provided in this
Article III.
- -----------
(g) No Further Ownership Rights in Common Shares Exchanged For Cash. All
---------------------------------------------------------------
cash paid upon the surrender for exchange of Certificates representing Common
Shares in accordance with the terms of this Article III shall be deemed to have
been issued (and paid) in full satisfaction of all rights pertaining to the
Common Shares exchanged for cash theretofore represented by such Certificates in
accordance with the GCL.
(h) Lost Certificates. If any Certificate shall have been lost, stolen or
-----------------
destroyed, upon the making of an affidavit of that fact by the person claiming
such Certificate to be lost, stolen or destroyed and, if required by the
Surviving Corporation, the posting by such person of a bond in such amount as
the Surviving Corporation may direct as indemnity against any claim that may be
made against it with respect to the Certificate, the Paying Agent shall deliver
in exchange for such lost, stolen or destroyed Certificate the applicable Merger
Price with respect thereto.
(i) Withholding of Tax. Purchaser or any of its affiliates shall be
------------------
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any former holder of Common Shares such amounts as
Purchaser (or any affiliate thereof) is required to deduct and withhold with
respect to the making of such payment under the Code, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by
Purchaser and paid by Purchaser to the applicable taxing authority, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the former holder of Common Shares in respect of which such
deduction and withholding was made by Purchaser.
-10-
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Purchaser that, except as set forth
in the Company's Form 10-K for the year ended March 31, 1999 and the Company's
Form 10-Qs for each of the quarters ended June 30, 1999, September 30, 1999 and
December 31, 1999 (collectively, the "Recent SEC Reports") filed with the SEC
------------------
and except as set forth in the Company Disclosure Statement delivered to
Purchaser prior to the execution of this Agreement (the "Company Disclosure
------------------
Statement"):
- ---------
SECTION 4.01 Organization and Qualification; Subsidiaries. The Company is
--------------------------------------------
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of the Company's subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation. The Company and each of the
subsidiaries has the requisite corporate power and authority to own, operate or
lease its properties and to carry on its business as it is now being conducted,
and is duly qualified or licensed to do business, and is in good standing, in
each jurisdiction in which the nature of its business or the properties owned,
operated or leased by it makes such qualification, licensing or good standing
necessary; except where the failure to have such power or authority, or the
failure to be so qualified, licensed or in good standing, would not reasonably
be expected to have a Material Adverse Effect on the Company. As used in this
Agreement, the term "Material Adverse Effect on the Company" means any change or
--------------------------------------
effect that would be materially adverse to the assets, liabilities, business,
prospects, operations or condition (financial or otherwise) of the Company and
its subsidiaries, taken as a whole, or the ability of the Company to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby.
SECTION 4.02 Certificate of Incorporation and By-Laws. The Company has
----------------------------------------
heretofore made available to Purchaser a complete and correct copy of the
certificate of incorporation and the by-laws, each as amended to the date
hereof, of the Company and its subsidiaries. Such articles of incorporation and
by-laws are in full force and effect, and no other organizational documents are
applicable to or binding upon the Company or any of its subsidiaries. Neither
the Company nor any of its subsidiaries is in violation of any of the provisions
of its certificate of incorporation or by-laws.
SECTION 4.03 Capitalization. The authorized capital stock of the Company
--------------
consists of 35,000,000 shares of Class A Common Stock, 10,000,000 shares of
Class B Common Stock and 20,000,000 shares of Preferred Stock, par value $0.01
per share (the "Preferred Stock"). As of the date of this Agreement, the
---------------
Company had 12,927,459 shares of Class A Common Stock outstanding and 240,324
shares of Class B Common Stock and no shares of Preferred Stock issued or
outstanding. The Company has no shares of capital stock reserved for issuance,
except that, as of the date of this Agreement, there were 2,181,971 shares of
Class A Common Stock reserved for issuance pursuant to the exercise of Options
(of which Options to purchase 1,821,068 shares of Class A Common Stock are
outstanding). All the outstanding shares of
-11-
<PAGE>
Class A Common Stock and Class B Common Stock are, and all shares of Class A
Common Stock which may be issued pursuant to the exercise of outstanding Options
will be, when issued in accordance with the respective terms thereof, duly
authorized, validly issued, fully paid and nonassessable and free of preemptive
(or similar) rights. As of the date hereof, there are no treasury shares, and
there are no stock appreciation rights. There are no bonds, debentures, notes or
other evidences of indebtedness having general voting rights (or convertible
into securities having such rights) ("Voting Debt") of the Company or any of its
-----------
subsidiaries issued and outstanding. Except as contemplated by (i) this
Agreement and (ii) the Company's obligations under the Options, there are no
outstanding contractual obligations of the Company or any of its subsidiaries to
repurchase, redeem, or otherwise acquire any Common Shares or the capital stock
of the Company or any of its subsidiaries or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in any
such subsidiary or any other entity. Each of the outstanding shares of capital
stock of each of the Company's subsidiaries is duly authorized, validly issued,
fully paid and nonassessable, and except for security interests arising under
the Second Amended and Restated Credit Agreement, dated as of March 2, 1998, as
amended to date, among the Company, Bankers Trust Company, as Administrative
Agent, First Union National Bank, as Syndication Agent, and the banks named
therein (the "Credit Agreement"), all such shares of the Company's subsidiaries
----------------
are owned by the Company or by another wholly owned subsidiary of the Company
and owned in each case free and clear of any lien, claim, option, charge,
security interest, limitation, encumbrance and restriction of any kind (any of
the foregoing being a "Lien"). Except for the Voting Agreement, there are no
----
voting trusts or other agreements or understandings to which the Company or any
of its subsidiaries is a party with respect to the voting of the capital stock
of the Company or any of its subsidiaries. None of the Company or its
subsidiaries is required to redeem, repurchase or otherwise acquire shares of
capital stock of the Company, or any of its subsidiaries, respectively, as a
result of the transactions contemplated by this Agreement.
SECTION 4.04 Authority Relative to this Agreement. The Company has all
------------------------------------
necessary corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Company and the consummation by the Company of
the transactions contemplated hereby have been duly and validly authorized and
approved by the Company Board and no other corporate proceedings on the part of
the Company are necessary to authorize or approve this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of the Merger and this Agreement by holders of
the Common Shares to the extent required by the Company's certificate of
incorporation and by applicable law and the filing of appropriate merger
documents as required by the GCL). This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due and valid
authorization, execution and delivery of this Agreement by Purchaser,
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except that such enforceability (i)
may be limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity. Pursuant to the GCL and the
Company's certificate of incorporation and bylaws, the Shares purchased in
satisfaction of the Minimum Condition are
-12-
<PAGE>
sufficient to provide the stockholder vote required to consummate the Merger in
accordance with the Company's certificate of incorporation and bylaws and
Section 251 of the GCL.
SECTION 4.05 No Conflict; Required Filings and Consents.
------------------------------------------
(a) None of the execution, delivery of and performance of this Agreement
by the Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will (i)
conflict with or result in a violation of any provision of the certificate of
incorporation or by-laws of the Company, as amended, or the applicable
organizational documents of any of its subsidiaries, (ii) conflict with or
violate any law, rule, regulation, order, judgment, writ or decree of any
governmental authority applicable to the Company or any of its subsidiaries, or
by which any of them or any of their respective properties or assets may be
bound or affected, or (iii) result in a violation or breach of or constitute a
default (or an event which with notice or lapse of time or both would become a
default) under (any of the foregoing referred to in clause (ii) or this clause
----------- ------
(iii) being a "Violation"), any loan and credit agreement, note, bond, mortgage,
- ----- ---------
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or any of their
respective properties may be bound or affected, except, in the case of clauses
-------
(ii) and (iii), for any such Violations which would not reasonably be expected
- --------------
to have a Material Adverse Effect on the Company.
(b) None of the execution, delivery and performance of this Agreement by
the Company, the consummation by the Company of the transactions contemplated
hereby or compliance by the Company with any of the provisions hereof will
require any consent, waiver, approval, authorization or permit of, or
registration or filing with or notification to (any of the foregoing being a
"Consent"), any government or subdivision thereof, or any administrative,
- --------
governmental or regulatory authority, agency, court, commission, tribunal or
body, domestic, foreign or supranational (a "Governmental Entity"), except for
-------------------
(i) compliance with any applicable requirements of the Exchange Act, (ii) the
filing of a certificate of merger, or, if permitted, a certificate of ownership
and merger, pursuant to the GCL, (iii) applicable state takeover statutes, (iv)
compliance with the Hart-Scott-Rodino Anti-Trust Improvements Act of 1976, as
amended (the "HSR Act") and any requirements of any foreign or supranational
-------
anti-trust laws (as hereinafter defined), and (iv) Consents, the failure of
which to obtain or make would not reasonably be expected to have a Material
Adverse Effect on the Company.
SECTION 4.06 SEC Reports and Financial Statements.
------------------------------------
(a) The Company has filed with the SEC all forms, reports, schedules,
registration statements and definitive proxy statements (the "SEC Reports")
-----------
required to be filed with the SEC since the date the Company became subject to
reporting requirements under the Exchange Act. As of their respective dates,
the SEC Reports complied in all material respects with the requirements of the
Exchange Act or the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder applicable, as the case may be, to
such SEC Reports, and none of the SEC Reports (including, but not limited to,
any financial statements or
-13-
<PAGE>
schedules included or incorporated by reference therein) contained when filed
(except to the extent revised or superseded by a subsequent filing with the SEC)
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
(b) The consolidated balance sheets as of March 31, 1999 and 1998 and the
related consolidated statements of income, common stockholders' equity and cash
flows for each of the three years in the period ended March 31, 1999 (including
the related notes and schedules thereto) of the Company contained in the
Company's Form 10-K for the year ended March 31, 1999 included in the SEC
Reports present fairly, in all material respects, the consolidated financial
position and the consolidated results of operations and cash flows of the
Company and its consolidated subsidiaries as of the dates or for the periods
presented therein in conformity with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis during the periods involved
----
except as otherwise noted therein, including the related notes.
(c) The consolidated balance sheets and the related statements of income
and cash flows (including in each case the related notes thereto) of the Company
contained in the Forms 10-Q for the periods ended June 30, 1999, September 30,
1999 and December 31, 1999 included in the SEC Reports (collectively, the
"Quarterly Financial Statements") have been prepared in accordance with the
- -------------------------------
requirements for interim financial statements contained in Regulation S-X. The
Quarterly Financial Statements present fairly, in all material respects, the
consolidated financial position and consolidated results of operations and cash
flows of the Company and its consolidated subsidiaries as of the dates and for
the periods presented therein in conformity with GAAP applied on a consistent
basis during the periods involved, except as otherwise noted therein, including
the related notes, provided, that the Quarterly Financial Statements do not
reflect full year end adjustments, accruals, reserves and footnotes.
(d) There are no liabilities of the Company or any of its subsidiaries of
any kind whatsoever, whether or not accrued and whether or not contingent or
absolute, that are material to the Company and its subsidiaries, taken as a
whole, other than (i) liabilities disclosed or provided for in the consolidated
balance sheet of the Company and its subsidiaries at March 31, 1999, including
the notes thereto, (ii) liabilities disclosed in the Quarterly Financial
Statements, (iii) liabilities incurred in the ordinary course of business
consistent with past practice since December 31, 1999, and (iv) other
liabilities, none of which (without giving effect to the materiality qualifier
contained in this Section 2.06(d)) would reasonably be expected to have a
---------------
Material Adverse Effect on the Company.
(e) The Company has heretofore furnished or made available to Purchaser a
complete and correct copy of any amendments or modifications which have not yet
been filed with the SEC to agreements, documents or other instruments which
previously had been filed by the Company with the SEC pursuant to the Securities
Act and the rules and regulations promulgated thereunder or the Exchange Act and
the rules and regulations promulgated thereunder.
-14-
<PAGE>
SECTION 4.07 Information. None of the Schedule 14D-9, the Proxy Statement
-----------
(except for any information concerning Purchaser and supplied by Purchaser
specifically for inclusion therein) nor any of the information concerning the
Company supplied by the Company specifically for inclusion or incorporation by
reference in (i) the Offer Documents, or (ii) any other document to be filed
with the SEC or any other Governmental Entity in connection with the
transactions contemplated by this Agreement and any amendment or supplement to
any of the above (the "Other Filings") will, at the respective times filed with
-------------
the SEC or other Governmental Entity or first published and, in addition, in the
case of the Proxy Statement, at the date it or any amendment or supplement is
mailed to stockholders and at the time of the Special Meeting (as herein
defined), contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
SECTION 4.08 Litigation. The Company Disclosure Statement sets forth each
----------
instance in which any of the Company and its subsidiaries or any of their
respective properties (a) is subject to any judgment, order, decree,
stipulation, injunction, or charge or (b) is a party to or the subject of any
material charge, complaint, action, suit, proceeding, hearing, or investigation
of or in any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction, or to the Knowledge of the Company, is
threatened to be a party to or the subject of any such action, except, in each
case, where the judgment, order, decree, stipulation, injunction, charge,
complaint, action, suit, proceeding, hearing, or investigation (i) is disclosed
in the Company's public filings with the SEC or (ii) would not reasonably be
expected to have a Material Adverse Effect on the Company.
SECTION 4.09 Compliance with Applicable Laws. Neither the Company nor any
-------------------------------
of its subsidiaries is in conflict with or in default or violation of (i) any
laws, regulations, rules, orders, judgment or decree of any Governmental Entity
applicable to it, such subsidiaries or any of their respective properties or
(ii) any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which the Company or any
of its subsidiaries is a party or by which the Company or any of its
subsidiaries or its or any of their respective properties are bound or affected,
except for any such conflicts, defaults or violations which would not reasonably
be expected to have a Material Adverse Effect on the Company. The Company and
its subsidiaries have all permits, licenses, authorizations, consents, approvals
and franchises from governmental agencies required to conduct their businesses
as now being conducted, except for such permits, licenses, authorizations,
consents, approvals, and franchises the absence of which would not reasonably be
expected to have a Material Adverse Effect on the Company. The business
operations of the Company and its subsidiaries are not being conducted in
violation of any law, ordinance or regulation of any Governmental Entity, except
for possible violations which would not reasonably be expected to have a
Material Adverse Effect on the Company.
SECTION 4.10 Taxes. The Company has timely filed (or caused to be timely
-----
filed) all Federal, state, local and foreign income and other tax returns
regarding the Company or its subsidiaries required by law to be filed prior to
the date of this Agreement, which tax returns are correct and complete in all
material respects. The Company and its subsidiaries have paid all
-15-
<PAGE>
Federal, state, local or foreign income and other taxes that are due and payable
(including any interest, penalties or additions to tax that are due with respect
thereto) other than taxes that are being contested in good faith and which have
been reserved for in accordance with GAAP. No tax return of the Company or its
subsidiaries is currently under audit by any taxing authority and no deficiency
in the payment of any taxes by the Company or any subsidiary of the Company has
been assessed, asserted or, to the Knowledge of the Company, threatened against
the Company or any subsidiary of the Company that remains unsettled as of the
date of this Agreement. There are currently no outstanding waivers of statutes
of limitations with any taxing authority by the Company or the subsidiaries. The
Company has not at any time filed a consolidated or combined tax return as a
member of an affiliated group (within the meaning of Section 1504 of the Code)
other than as a group of which the Company was the parent.
SECTION 4.11 Material Adverse Change. Since December 31, 1999, except as
-----------------------
contemplated by this Agreement, the Company and its subsidiaries, taken as a
whole, have conducted their businesses only in the ordinary course and in a
manner consistent with past practice and, since such date, there has not been:
(i) any change in the assets, liabilities, results of operation, financial
condition or business of the Company or any of its subsidiaries that would
reasonably be expected to have a Material Adverse Effect on the Company; (ii)
any condition, event or occurrence which would reasonably be expected to have a
Material Adverse Effect on the Company; or (iii) any other action which, if it
had been taken after the date hereof, would have required the consent of
Purchaser under Section 4.01.
------------
SECTION 4.12 Opinion of Financial Advisor. The Company has received the
----------------------------
written opinion of the Financial Advisor to the effect that, as of such date,
the Share Offer Price to be received by holders of Common Shares pursuant to the
Offer is fair to such holders (other than Purchaser or the stockholders of
Purchaser) from a financial point of view, a copy of which opinion is attached
hereto as Exhibit B. The Company has been authorized by the Financial Advisor
---------
to permit the inclusion of such fairness opinion in the Schedule 14D-9 and the
Proxy Statement, as necessary or desirable.
SECTION 4.13 Brokers. Except for the engagement of the Financial Advisor,
-------
none of the Company, any of its subsidiaries, or any of their respective
officers, directors or employees has employed any broker or finder or incurred
any liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated by this Agreement. True and correct copies
of the Company's agreements with the Financial Advisor have been provided to
Purchaser prior to the date of this Agreement.
SECTION 4.14 Insurance. The Company and its subsidiaries maintain
---------
policies of fire and casualty, liability, workmen's compensation and other forms
of insurance in such amounts, with such deductibles and against such risks and
losses as are in the Company's judgment, reasonable for the assets and
properties of the Company and its subsidiaries and as are customary in the
Company's industry, and, as of the date of this Agreement, except as would not
have, individually or in the aggregate, a Material Adverse Effect on the
Company, all such policies are in full force and effect, all premiums due and
payable thereon have been paid, and no notice of cancellation or termination has
been received with respect to any such policy.
-16-
<PAGE>
SECTION 4.15 Certain Approvals; Take-Over Laws. The Company Board has
---------------------------------
taken appropriate action such that, assuming the accuracy of information
provided by Purchaser in writing to the Company or to its counsel in connection
with this Agreement and the transactions contemplated hereby, the provisions of
Section 203 of the GCL will not apply to any of the transactions contemplated by
this Agreement or the Rollover Agreement. No foreign or state takeover law is
applicable to the transactions contemplated by this Agreement, including the
Offer and the Merger.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
The Purchaser represents and warrants to the Company as follows:
SECTION 5.01 Organization and Qualification. Purchaser is a corporation
------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Purchaser has the requisite power and authority to own,
operate or lease its properties and to carry on its business as it is now being
conducted, and is duly qualified or licensed to do business, and is in good
standing, in each jurisdiction in which the nature of its business or the
properties owned, operated or leased by it makes such qualification, licensing
or good standing necessary, except where the failure to have such power or
authority, or the failure to be so qualified, licensed or in good standing,
would not reasonably be expected to have a Material Adverse Effect on Purchaser.
The term "Material Adverse Effect on Purchaser", as used in this Agreement,
------------------------------------
means any change in or effect on the assets, liabilities, business, prospects,
operations or condition (financial or otherwise) of Purchaser or any of its
subsidiaries that would reasonably be expected to prevent or materially delay
consummation of the Offer or the Merger.
SECTION 5.02 Authority Relative to this Agreement. Purchaser has all
------------------------------------
necessary corporate power and authority to execute and deliver this Agreement
and the Rollover Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement by Purchaser and the
Rollover Agreement and the consummation by it of the transactions contemplated
hereby have been duly and validly authorized and approved by the Purchaser Board
and no other proceedings on the part of Purchaser are necessary to authorize or
approve this Agreement or the Rollover Agreement or to consummate the
transactions contemplated hereby. This Agreement and the Rollover Agreement has
been duly executed and delivered by each Purchaser and, assuming the due and
valid authorization, execution and delivery by the Company and the other parties
thereto (other than Purchaser), constitutes a valid and binding obligation of
Purchaser enforceable against Purchaser in accordance with its terms, except
that such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to the enforcement of
creditors' rights generally and (ii) is subject to general principles of equity.
SECTION 5.03 No Conflict; Required Filings and Consents.
------------------------------------------
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<PAGE>
(a) None of the execution and delivery by Purchaser of this Agreement and
the Rollover Agreement, the consummation by Purchaser of the transactions
contemplated hereby or compliance by Purchaser with any of the provisions
contained in this Agreement and the Rollover Agreement will (i) conflict with or
violate the organizational documents of Purchaser, (ii) conflict with or violate
any law, regulation or order applicable to Purchaser or by which any of its
properties or assets may be bound or affected , or (iii) result in a violation
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which Purchaser
is a party or by which any of its properties may be bound or affected, except in
the case of the foregoing clause (ii) or (iii), for any such violations which
----------- ------
would not have a Material Adverse Effect on Purchaser.
(b) None of the execution and delivery by Purchaser of this Agreement or
the Rollover Agreement, the consummation by Purchaser of the transactions
contemplated hereby or compliance by Purchaser with any of the provisions hereof
will require any Consent of any Governmental Entity, except for (i) compliance
with any applicable requirements of the Exchange Act, (ii) the filing of a
certificate of merger, or, if permitted, a certificate of ownership and merger,
pursuant to the GCL, (iii) applicable state takeover and environmental statutes,
(iv) compliance with the HSR Act and any requirements of any foreign or
supranational anti-trust laws, and (v) Consents the failure of which to obtain
or make would not reasonably be expected to have a Material Adverse Effect on
Purchaser.
SECTION 5.04 Information. Neither the Offer Documents, the Schedule TO
-----------
(except, in each case, for any information concerning the Company and supplied
by the Company specifically for inclusion therein) nor any of the information
concerning Purchaser and supplied or to be supplied by Purchaser specifically
for inclusion in (i) the Schedule 14D-9 or (ii) the Proxy Statement, will, at
the respective times filed with the SEC or other Governmental Entity and, in
addition, in the case of the Proxy Statement, at the date it or any amendment or
supplement is mailed to stockholders and at the time of the Special Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.
SECTION 5.05 Financing. Purchaser has received and obtained a commitment
---------
letter from GTCR Fund VII, L.P., a true and complete copy of which is attached
hereto as Exhibit C, providing for equity capital and sufficient funds to
---------
consummate the Offer, the Merger and the transactions contemplated hereby (the
"Commitment Letter").
- ------------------
SECTION 5.06 Brokers. Except for Jefferies & Company, Inc., which has
-------
been engaged by Purchaser pursuant to that certain engagement letter between
Purchaser and Jefferies & Company, Inc. (the "Jefferies Engagement Letter"), a
---------------------------
true and complete copy of which is attached hereto as Exhibit D, none of
---------
Purchaser or any of its subsidiaries, officers, directors or employees has
employed any broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated by
this Agreement for or with respect to which the Company is or might be liable.
-18-
<PAGE>
ARTICLE VI
COVENANTS
SECTION 6.01 Conduct of Business of the Company. Except as expressly
----------------------------------
contemplated by this Agreement, or with the prior written consent of Purchaser,
or as specified in the Company Disclosure Statement, during the period from the
date of this Agreement to the termination of the Offer, the Company will, and
will cause each of its subsidiaries to, conduct its operations only in and the
Company and its subsidiaries shall not take any action other than in the
ordinary course of business consistent with past practice and in compliance with
applicable laws (including, but not limited to, Environmental Laws) and will use
commercially reasonable efforts, and will cause each of its subsidiaries to use
commercially reasonable efforts, to preserve intact the business organization of
the Company and each of its subsidiaries, to keep available the services of its
and their present officers and key employees, and to preserve the present
relationships of the Company and its subsidiaries with customers, suppliers,
creditors, business partners and other persons with which the Company or any of
its subsidiaries has significant business relations. Without limiting the
generality of the foregoing and except as otherwise expressly contemplated by
this Agreement or the Company Disclosure Statement, the Company will not, and
will not permit any of its subsidiaries to, prior to the termination of the
Offer, without the prior written consent of Purchaser (which will not be
unreasonably withheld or delayed):
(a) adopt any amendment to its charter or by-laws or comparable
organizational documents;
(b) except for issuances of capital stock of the Company's
subsidiaries to the Company or a wholly-owned subsidiary of the Company,
issue, reissue, sell, pledge, dispose of or encumber or authorize the
issuance, reissuance, sale, pledge, disposition or encumbrance of (i)
additional shares of capital stock of any class, or securities convertible
into capital stock of any class, or any rights, warrants or options or
other rights of any kind to acquire any convertible securities or capital
stock or any other ownership interest (including, but not limited to, stock
appreciation rights or phantom stock) of the Company or any of its
subsidiaries, other than the issuance of shares of Class A Common Stock
pursuant to the exercise of Options outstanding on the date hereof or (ii)
any other securities in respect of, in lieu of, or in substitution for,
Common Shares outstanding on the date hereof;
(c) declare, set aside or pay any dividend or other distribution
(whether in cash, securities or property or any combination thereof) in
respect of any class or series of its capital stock other than between any
of the Company and any of its wholly owned subsidiaries;
(d) split, combine, subdivide, reclassify or redeem, purchase or
otherwise acquire, or propose to redeem or purchase or otherwise acquire,
any shares of its capital stock, or any of its other securities;
-19-
<PAGE>
(e) except for (i) increases in salary, wages and benefits of
officers or employees of the Company or its subsidiaries in the ordinary
course of business and in accordance with past practice, (ii) increases in
salary, wages and benefits granted to officers and employees of the Company
or its subsidiaries in conjunction with new hires, promotions or other
changes in job status in the ordinary course of business for officers and
employees whose aggregate cash compensation is equal to or less than
$75,000 per annum or (iii) increases in salary, wages and benefits to
employees of the Company pursuant to collective bargaining agreements
entered into in the ordinary course of business consistent with past
practice, increase the compensation or fringe benefits payable or to become
payable to its directors, officers or key employees (whether from the
Company or any of its subsidiaries), or pay any benefit not required by any
existing plan or arrangement (including, without limitation, the granting
of stock options, stock appreciation rights, shares of restricted stock or
performance units) or grant any severance or termination pay to (except
pursuant to existing agreements, plans or policies), or enter into any
employment or severance agreement with, any director, officer or other key
employee of the Company or any of its subsidiaries or establish, adopt,
enter into, or amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
savings, welfare, deferred compensation, employment, termination, severance
or other employee benefit plan, agreement, trust, fund, policy or
arrangement for the benefit or welfare of any directors, officers or
current or former employees (any of the foregoing being an "Employee
--------
Benefit Arrangement"), except in each case to the extent as required by
-------------------
applicable law or regulation;
(f) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or
division thereof or any material assets, (ii) except for borrowings under
existing lines of credit in the ordinary course of business, incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse, or otherwise as an accommodation become responsible
for, the obligations of any person, or make any loans, advances or capital
contributions to, or investments in, any other person, except for bonuses,
advances, capital contributions or investments between any wholly owned
subsidiary of the Company and the Company or another wholly owned
subsidiary of the Company, (iii) make or start any bid or proposal, or
enter into, renew or amend any contract or agreement that could result in a
loss or would involve aggregate consideration in excess of $250,000, (iv)
authorize any single capital expenditure which is in excess of $250,000 or
capital expenditures which are, in the aggregate, in excess of $500,000 for
the Company and its subsidiaries taken as a whole, (v) enter into any
transaction, contract or commitment with any affiliate of the Company,
except as contemplated by this Agreement, (vi) sell, lease, license to
others or dispose of any assets outside the ordinary course of business
consistent with past practice which individually or in the aggregate are
material to the Company or (vii) modify, amend or terminate its material
Company Agreements or waive, release, or assign any material rights or
claims;
-20-
<PAGE>
(g) except as may be required as a result of a change in law or in
generally accepted accounting principles, change any of the accounting
practices or principles used by it;
(h) make or change any tax election, make or change any method of
accounting with respect to taxes, file any amended tax return or settle or
compromise any material tax liability;
(i) settle or compromise any pending or threatened suit, action or
claim which is material or which relates to the transactions contemplated
hereby;
(j) make any change in the key management structure of the Company or
any of its subsidiaries, including, without limitation, the hiring of
additional officers or the termination of existing officers;
(k) transfer or grant any rights under, or enter into any settlement
regarding, the breach or infringement of, any Company Intellectual Property
Rights, or modify any existing rights with respect thereto;
(l) take any action, including, but not limited to, introducing a new
product, reasonably likely to expose the Company to any claim that the
Company has violated applicable laws, rules or regulations or any rights of
any other person in any material respect;
(m) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of its subsidiaries not constituting
an inactive subsidiary (other than any transaction specifically
contemplated by this Agreement);
(n) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other
than the payment, discharge or satisfaction in the ordinary course of
business and consistent with past practice of liabilities reflected or
reserved against in the financial statements of the Company or incurred in
the ordinary course of business and consistent with past practice;
(o) enter into any collective bargaining agreement or any successor
collective bargaining agreement to any collective bargaining agreement; or
(p) take, or offer or propose to take, or agree to take in writing or
otherwise, any of the actions described in Sections 6.01(a) through 6.01(o)
---------------- -------
or any action which would make any of the representations or warranties of
the Company contained in this Agreement untrue and incorrect as of the date
when made in any material respect if such action had then been taken, or
would result in any of the conditions set forth in Annex I not being
satisfied.
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<PAGE>
SECTION 6.02 Access to Information. From the date hereof until the
---------------------
termination or the consummation of the Offer, the Company will, and will cause
its subsidiaries, and each of their respective officers, directors, employees,
counsel, advisors, representatives and financing sources (collectively, the
"Company Representatives"), to provide Purchaser and its officers, employees,
- ------------------------
counsel, advisors, representatives and financing sources (collectively, the
"Purchaser Representatives") reasonable access (subject, however, to existing
- --------------------------
confidentiality and similar non-disclosure obligations and the preservation of
attorney-client and work product privileges), during normal business hours and
upon reasonable notice, to its officers and employees and to its offices and
other facilities and to the books and records of the Company and its
subsidiaries, and will permit Purchaser to make inspections of such as Purchaser
may reasonably require, and will cause the Company Representatives and the
Company's subsidiaries to furnish Purchaser and the Purchaser Representatives to
the extent available with such other financial and operating data and other
information with respect to the business and operations of the Company and its
subsidiaries as Purchaser may from time to time reasonably request. Unless
otherwise required by law, Purchaser will, and will cause the Purchaser
Representatives to, hold any such information in confidence until such time as
such information otherwise becomes publicly available through no wrongful act of
Purchaser or the Purchaser Representatives. No investigation pursuant to this
Section 6.02 shall affect any representations or warranties of the parties
- ------------
herein or the conditions to the obligations of the parties hereto. In the event
of termination of this Agreement for any reason, Purchaser will, and will cause
the Purchaser Representatives to, return to the Company or destroy all copies of
written information furnished by the Company or any of the Company
Representatives to Purchaser or the Purchaser Representatives and destroy such
portion of all memoranda, notes and other writings prepared by Purchaser or the
Purchaser Representatives based upon or including the information furnished by
the Company or any of the Company Representatives to the Purchaser or the
Purchaser Representatives (and Purchaser will certify to the Company that such
destruction has occurred).
SECTION 6.03 Efforts.
-------
(a) Subject to the terms and conditions hereof, each party hereto shall
use their reasonable good faith efforts to ensure that the conditions set forth
in Annex I are satisfied and to consummate and make effective the transactions
-------
contemplated by the Offer and this Agreement as promptly as practicable in
accordance with this Agreement.
(b) The Company agrees to provide, and will cause its subsidiaries and its
and their respective officers, employees, advisers and lenders to provide, all
reasonable cooperation in connection with the arrangement of any financing
contemplated by the Commitment Letter to be consummated contemporaneous with the
Closing in respect of the transactions contemplated by this Agreement, including
without limitation, participation in meetings, due diligence sessions, road
shows, the preparation of offering memoranda, private placement memoranda,
prospectuses and similar documents, and taking such other action as otherwise
reasonably requested by Purchaser. The Company will also provide commercially
reasonable assistance to the Purchaser in connection with the execution and
delivery of any other documentation, as may be requested by Purchaser, necessary
to give effect to the transactions contemplated by this Agreement.
-22-
<PAGE>
(c) The Company and the Purchaser will as promptly as practicable file
with the Federal Trade Commission and the Department of Justice the notification
and report forms required for the transactions contemplated hereby and any
supplemental information that may be reasonably requested in connection
therewith pursuant to the HSR Act, which notification and report forms and
supplemental information will comply in all material respects with the
requirements of the HSR Act. The Company shall pay all filing fees required
with respect to the notification, report and other requirements of the HSR Act.
(d) If at any time prior to the Effective Time any event or circumstance
relating to either the Company or Purchaser or any of their respective
subsidiaries, should be discovered by the Company or Purchaser, as the case may
be, and which should be set forth in an amendment to the Offer Documents, the
Schedule TO, or the Schedule 14D-9, the discovering parties will promptly inform
the other party of such event or circumstance. If at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, including the execution of additional documents,
assignments and other instruments, the proper officers and directors of each
party to this Agreement shall take all such necessary action.
(e) Each of the parties agrees to cooperate with each other in taking, or
causing to be taken, all actions necessary to delist the Common Shares from the
NASDAQ National Market System if the listing requirements would no longer be
satisfied after the Effective Time; provided, that such delisting shall not be
--------
effective until after the Effective Time.
(f) Purchaser agrees to use commercially reasonable efforts to promptly
satisfy any conditions in the Commitment Letter, and not to waive or amend, or
provide any waivers, in respect of the Commitment Letter in a manner which would
adversely affect the consummation of the Offer in accordance with this
Agreement, including its timing thereof.
SECTION 6.04 Consents.
--------
(a) Each of the parties will as promptly as practicable (i) make the
required filings with, and take all reasonable steps to obtain the required
authorizations, approvals, consents and other actions of, any Governmental
Entity, (ii) take all reasonable steps (not including the expenditure of money
or the payment or delivery of other consideration) to obtain the required
consents of other persons with respect to the transactions contemplated hereby
and the Rollover Agreement and (iii) use its commercially reasonable efforts to
obtain waivers of any breaches, defaults or violations that may be caused by the
consummation of the Offer and other transactions contemplated by the Offer, the
Rollover Agreement and this Agreement.
(b) Any party hereto shall promptly inform the others of any material
communication from the United States Federal Trade Commission, the Department of
Justice or any other domestic or foreign government or governmental or
multinational authority regarding any of the transactions contemplated by this
Agreement. If any party or any affiliate thereof receives a request for
additional information or documentary material from any such government or
authority with respect to the transactions contemplated by this Agreement, then
such party will endeavor in good faith to make, or cause to be made, as soon as
reasonably practicable and after
-23-
<PAGE>
consultation with the other party, an appropriate response in compliance with
such request. Purchaser will advise the Company promptly in respect of any
understandings, undertakings or agreements (oral or written) which Purchaser
proposes to make or enter into with the Federal Trade Commission, the Department
of Justice or any other domestic or foreign government or governmental or
multinational authority in connection with the transactions contemplated by this
Agreement.
SECTION 6.05 Maintenance of Insurance. Each of the Company and its
------------------------
subsidiaries will continue to carry its existing insurance, including, but not
limited to, directors and officers insurance, through the Effective Time, and
shall not allow any breach, default or cancellation (other than expiration and
replacement of policies in the ordinary course of business) of such insurance
policies or agreements to occur or exist that would reasonably be expected to
have a Material Adverse Effect on the Company.
SECTION 6.06 Public Announcements. So long as this Agreement is in
--------------------
effect, Purchaser and the Company agree to consult with each other before
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated by this Agreement and shall not issue any such
press release or make any such public statement prior to such consultation,
except as may be required by law or any listing agreement with any securities
exchange.
SECTION 6.07 Continuance of Existing Indemnification Rights.
----------------------------------------------
(a) The Company will, and after the Effective Time, Purchaser agrees that
it will cause the Surviving Corporation to, until the expiration of any
applicable statutes of limitation, (i) indemnify and hold harmless each present
and former director, officer and employee of the Company (collectively, the
"Company Indemnified Parties") against any costs or expenses (including
- ----------------------------
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") (but only to the extent such Costs are not
-----
otherwise covered by insurance and paid) incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative (collectively, "Claims"), arising out of or
------
pertaining to matters existing or occurring at or prior to the Effective Time,
including, in any event, in connection with the Offer, the Merger and this
Agreement, whether asserted or claimed prior to, at or after the Effective Time,
to the fullest extent permitted under applicable law, and (ii) keep in effect
the provisions in its articles of incorporation and bylaws containing the
provisions with respect to exculpation of director and officer liability and
indemnification set forth in the articles of incorporation and bylaws of the
Company on the date of this Agreement to the fullest extent permitted under
applicable law, which provisions shall not be amended, repealed or otherwise
modified in any manner adverse to the Company Indemnified Parties, without the
prior written consent of such persons, except as required by applicable law.
(b) The Company will, and after the Effective time, Purchaser agrees that
it will cause the Surviving Corporation to, use its reasonable best efforts to
cause to be maintained in effect for a period of not less than six years from
the Effective Time policies of directors' and officers' liability insurance
maintained by the Company with respect to matters occurring prior
-24-
<PAGE>
to the Effective Time and providing coverage and containing terms and conditions
which are no less advantageous than those currently in place, provided, that the
--------
Surviving Corporation shall not at any time be required to pay an annual premium
in excess of 150% of the last annual premium paid by the Company prior to the
date hereof (it being understood that if the Surviving Corporation is unable to
obtain the insurance required by this Section 6.07(b), it shall obtain as much
----------------
comparable insurance as possible for an annual premium equal to such maximum
amount).
(c) Any Company Indemnified Party wishing to claim indemnification under
this Section 6.07 after the Effective Time, upon learning of any such claim,
------------
action, suit, proceeding or investigation, shall promptly notify the Surviving
Corporation thereof, but the failure to so notify shall not relieve the
Surviving Corporation of any liability it may have to such Company Indemnified
Party if such failure does not significantly prejudice the Surviving
Corporation. In the event of any such claim, action, suit, proceeding or
investigation (whether arising before or after the Effective Time), (i) the
Surviving Corporation shall have the right to assume the defense thereof and the
Surviving Corporation shall not be liable to such Company Indemnified Parties
for any legal expenses of other counsel or any other expenses subsequently
incurred by such Company Indemnified Parties in connection with the defense
thereof, except that if the Surviving Corporation elects not to assume such
defense, or counsel for the Company Indemnified Parties advises the Surviving
Corporation in writing that there are issues which raise conflicts of interest
between the Surviving Corporation and the Company Indemnified Parties, the
Company Indemnified Parties may retain counsel reasonably satisfactory to them,
and the Surviving Corporation shall pay all reasonable fees and expenses of such
counsel for the Company Indemnified Parties promptly as statements therefor are
received; provided, however, that (i) the Surviving Corporation shall be
-------- -------
obligated pursuant to this paragraph (c) to pay for only one counsel for all
Company Indemnified Parties, (ii) the Company Indemnified Parties will cooperate
in the defense of any such matter and (iii) the Surviving Corporation shall not
be liable for any settlement effected without its prior written consent, which
will not be unreasonably withheld; and provided, further, that the Surviving
-------- -------
Corporation shall not have any obligation hereunder to any Company Indemnified
Party if and when a court of competent jurisdiction shall ultimately determine
that the indemnification of such Company Indemnified Party in the manner
contemplated hereby is prohibited by applicable law.
(d) Notwithstanding anything to the contrary in this Section 6.07, at any
------------
time that Purchaser and its affiliates (i) cease to control at least a majority
of the issued and outstanding Common Shares entitled to be voted at a meeting of
stockholders of the Company for the election of directors, and (ii) less than a
majority of the Company Board consists of persons designated by Purchaser or its
affiliates, the obligations of Purchaser under this Section 6.07 shall
------------
terminate.
(e) This Section 6.07 is intended to be for the benefit of, and shall be
------------
enforceable by, each of the Company Indemnified Parties and their respective
heirs and successors. The indemnification provided for herein shall not be
deemed exclusive of any other rights to which a Company Indemnified Party is
entitled, whether pursuant to law, contract or otherwise. The Company shall pay
all expenses, including reasonable attorneys' fees, that are incurred by any
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<PAGE>
Company Indemnified Party which is the prevailing party in any action or
proceeding to enforce the indemnity and other obligations provided for in this
Section 6.07.
- ------------
(f) In the event that the Surviving Corporation or any of its controlling
persons or successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or conveys all or substantially
all of its properties and assets to any person, then, and in each such case, to
the extent necessary to effectuate the purpose of this Section 6.07, proper
------------
provision shall be made so that the successors and assigns of the Surviving
Corporation or such controlling persons shall succeed to the obligations set
forth in this Section 6.07 and none of the actions described in clauses (i) or
------------
(ii) shall be taken until such provision is made.
SECTION 6.08 No Solicitation. The Company agrees that it shall not (and
---------------
shall not authorize any of its subsidiaries or any of the officers and directors
of it or its subsidiaries or its and its subsidiaries' directors, officers,
employees, affiliates, agents, advisors and representatives to), directly or
indirectly, (a) solicit, initiate or encourage, or take any other action to
facilitate (including by way of furnishing information) any Takeover Proposal
(as defined herein) or take any other action which may be reasonably expected to
lead to any Takeover Proposal, other than the transactions contemplated by this
Agreement and the Rollover Agreement, or any other transaction the consummation
of which would reasonably be expected to impede, interfere with, prevent or
delay the Offer or the Merger or which would reasonably be expected to adversely
affect the benefits to Purchaser of the transactions contemplated hereby, (b)
negotiate, explore or otherwise participate in discussions with any person
(other than Purchaser or its directors, members, officers, employees, agents and
representatives, as applicable), and including any parties with which the
Company has previously engaged in discussions or negotiations with respect to
any Takeover Proposal or potential Takeover Proposal, or furnish to any person
(other than Purchaser or its directors, members, officers, employees, agents and
representatives, as applicable) any information with respect to its business,
properties or assets or any of the foregoing, or otherwise cooperate in any way
with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other person (other than Purchaser or its directors, members,
officers, employees, agents and representatives, as applicable) to do or seek
any of the foregoing or (c) enter into any agreement, arrangement or
understanding with respect to, or endorse, any Takeover Proposal; provided,
--------
however, that the foregoing shall not prohibit the Company from (i) prior to the
- -------
consummation of the Offer (A) furnishing information pursuant to a
confidentiality agreement (provided for informational purposes to Purchaser), on
terms and conditions customary for similar transactions, concerning the Company
and its businesses, properties or assets to a third party who has made an
unsolicited bona fide written Takeover Proposal, or (B) engaging in discussions
or negotiations with such a third party who has made an unsolicited bona fide
written Takeover Proposal which did not otherwise result from a breach of this
Section 6.08 or (ii) following receipt of an unsolicited bona fide written
- ------------
Takeover Proposal, but prior to consummation of the Offer, failing to make or
withdrawing or modifying its recommendation referred to in Section 1.02(a), but,
---------------
in each case referred to in the foregoing clauses (i)(B) or (ii), only to the
----------------------
extent that the Company Board shall have concluded in good faith, on the basis
of advice from outside legal counsel and the Company's financial advisors, that
(A) such Takeover Proposal is more favorable to the stockholders of the Company
than the
-26-
<PAGE>
transactions contemplated by the Offer and this Agreement (taking into
account all legal, financial, regulatory and other aspects of the proposal and
the person making the proposal), (B) such Takeover Proposal is not conditioned
on obtaining financing (and with respect to which Purchaser has received written
evidence, in form and substance reasonably acceptable to Purchaser, of such
third party's ability to fully finance its Takeover Proposal) and provides for
consideration to stockholders of the Company payable in cash or shares of
capital stock that for a period of at least two consecutive years immediately
preceding the effective time of the closing of such Takeover Proposal was
continuously registered pursuant to an effective registration statement under
the Act and listed on a national securities exchange or quoted on the Nasdaq
National Market (any such capital stock, "Public Stock") or any combination of
------------
cash and Public Stock, (C) such Takeover Proposal is for 100% of the Common
Shares, and (D) the Company Board's fiduciary duties, as they would exist in the
absence of any limitation in this Agreement, would require the Company Board to
take such action (any Takeover Proposal satisfying each of the immediately
preceding clauses (A), (B), (C) and (D), hereinafter referred to as a "Superior
--------
Proposal"); provided, further, that the Company Board shall not take any of the
- -------- -------- -------
foregoing actions referred to in clauses (i) and (ii) until after prior written
----------- ----
notice to Purchaser with respect to such action. After taking any such action,
the Company Board shall promptly advise Purchaser with respect to the status
thereof as developments arise or as requested by Purchaser. Nothing herein
shall prevent the Company Board from taking, and disclosing to the Company's
stockholders, a position contemplated by Rules 14D-9 and 14e-2 promulgated under
the Exchange Act with regard to any tender offer. In addition, if the Company
Board receives an unsolicited Takeover Proposal or any inquiry with respect to
or which could lead to any Takeover Proposal, then the Company shall immediately
inform Purchaser orally and in writing of the terms and conditions of such
Takeover Proposal and the identity of the person making it and if any Takeover
Proposal is in writing, the Company shall immediately deliver a copy thereof to
Purchaser. The Company agrees that it will use reasonable best efforts to
promptly inform its directors, officers, key employees, agents and
representatives of the obligations undertaken in this Section 6.08. As used in
------------
this Agreement, "Takeover Proposal" means any proposal or offer from any person
-----------------
relating to any acquisition or purchase of assets of, or any equity interest
(other than the exercise of outstanding options) in, the Company or any of its
subsidiaries, or any tender offer (including a self tender offer) or exchange
offer, merger, reorganization, consolidation, business combination,
recapitalization, restructuring, spin-off, liquidation, dissolution or similar
transaction involving, directly or indirectly, the Company or any of its
subsidiaries.
SECTION 6.09 Notification of Certain Matters. Purchaser and the Company
-------------------------------
shall promptly notify each other of (a) the occurrence or non-occurrence of any
fact or event which would be reasonably likely (i) to cause any representation
or warranty contained in this Agreement to be untrue or inaccurate at any time
from the date hereof to the Effective Time or (ii) to cause any covenant,
condition or agreement hereunder not to be complied with or satisfied, and (b)
any failure of the Company or Purchaser, as the case may be, to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder, including, but not limited to the Company's obligation to inform
the Purchaser of receipt of an unsolicited Takeover Proposal or inquiry pursuant
to Section 6.08 hereof; provided, however, that no such notification shall
------------ -------- -------
affect the representations or warranties of any party or the
-27-
<PAGE>
conditions to the obligations of any party hereunder, nor shall it limit or
otherwise affect the remedies available hereunder to the party receiving such
notice.
SECTION 6.10 Special Meeting. The Company shall take no action to call a
---------------
special meeting of stockholders of the Company without the prior consent of
Purchaser unless compelled by legal process, except in accordance with this
Agreement unless and until this Agreement has been terminated in accordance with
its terms.
SECTION 6.11 Disposition of Litigation.
-------------------------
(a) The Company agrees that it will not settle any litigation currently
pending, or commenced after the date hereof, against the Company or any of its
directors by any stockholder of the Company relating to the Offer or this
Agreement, without the prior written consent of Purchaser.
(b) The Company will not voluntarily cooperate with any third party which
has sought or may hereafter seek to restrain or prohibit or otherwise oppose the
Offer or the Merger and will cooperate with Purchaser to resist any such effort
to restrain or prohibit or otherwise oppose the Offer or the Merger, subject, in
each case, to the fiduciary duties of the Board of Directors of the Company.
SECTION 6.12 State Takeover Laws. The Company shall, upon the request of
-------------------
the Purchaser, take all reasonable steps to assist in any challenge by the
Purchaser to the validity or applicability to the transactions contemplated by
this Agreement, including the Offer, the Merger and the Rollover Agreement, of
any state or foreign takeover law.
SECTION 6.13 Certain Agreements with Management. Neither Purchaser nor
----------------------------------
any of its affiliates shall enter into any agreement, arrangement or
understanding that would have the effect of (i) prohibiting any officer of the
Company from participating in discussions with any third party at any time
during which the Company is permitted to engage (and is so engaging) in such
discussions with such third party pursuant to Section 6.08, or (ii) prohibiting
------------
or preventing any person, at any time after any termination of this Agreement in
accordance with its terms, from participating in (as a shareholder, employee, or
both) a Superior Proposal.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
SECTION 7.01 Conditions. The respective obligations of Purchaser and the
----------
Company to consummate the Merger are subject to the satisfaction, at or before
the Effective Time, of each of the following conditions:
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<PAGE>
(a) Stockholder Approval. If required by the GCL, this Agreement
--------------------
and the transactions contemplated hereby shall have been approved and
adopted by the affirmative vote of a majority of the Common Shares
outstanding pursuant to the requirements of the Company's certificate of
incorporation and applicable law.
(b) Purchase of Common Shares. The Purchaser shall have accepted for
-------------------------
payment and paid for Common Shares pursuant to the Offer in accordance with
the terms hereof.
(c) Injunctions; Illegality. The consummation of the Merger shall
-----------------------
not be restrained, enjoined or prohibited by any law, legal requirement,
order, judgment, decree, injunction or ruling of a court of competent
jurisdiction or any Governmental Entity and there shall not have been any
statute, rule or regulation enacted, promulgated or deemed applicable to
the Merger by any Governmental Entity which prevents the consummation of
the Merger; provided that the party invoking this condition shall have used
--------
their reasonable best efforts to prevent the entry of such order, judgment,
decree, injunction or ruling and to appeal as promptly as practicable any
such order, judgment, decree, injunction or ruling.
ARTICLE VII
TERMINATION; AMENDMENTS; WAIVER
SECTION 8.01 Termination. This Agreement may be terminated and the Offer
-----------
and Merger contemplated hereby may be abandoned at any time, notwithstanding
approval thereof by the stockholders of the Company:
(a) by the mutual written consent of Purchaser and the Company;
(b) by Purchaser or the Company, if there shall be any statute, law,
rule or regulation that makes consummation of the Offer or the Merger
illegal or prohibited or if any court or other Governmental Entity of
competent jurisdiction or located or having jurisdiction within the United
States or any country or economic region in which either the Company or the
Purchaser, directly or indirectly, has material assets or operations shall
have issued, enacted, entered, promulgated or enforced any final order,
judgment, decree, injunction, or ruling or taken any other action
restraining, enjoining or otherwise prohibiting the Offer or the Merger and
such order, judgment, decree, injunction or ruling shall have become
nonappealable;
(c) by the Purchaser or the Company, if (i) the Offer is terminated
or withdrawn pursuant to its terms without any Common Shares being
purchased thereunder; or (ii) Purchaser shall have failed to pay for Common
Shares pursuant to the Offer within 90 days following the date hereof (the
"Outside Offer Date"); provided, however, that neither Purchaser nor the
------------------ -------- -------
Company, as the case may be, may terminate the Agreement pursuant to this
Section 8.01(c) if such termination or withdrawal of the Offer or failure
---------------
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<PAGE>
to pay for Common Shares pursuant to the Offer has been caused by or
results from the failure of such party seeking to terminate the Agreement
to perform any of its covenants or agreements contained in this Agreement
or a breach of such party's representations and warranties contained in
this Agreement;
(d) by the Company, if (i) the Offer shall not be commenced upon the
tenth business day immediately following the day specified in Section 1.01,
------------
provided, that the failure to so commence has not been caused by and does
--------
not result from the failure of the Company to perform any of its
representations, warranties, covenants or agreements contained in this
Agreement, (ii) Purchaser shall have breached any representation,
warranty, covenant or agreement contained in this Agreement, which breach
materially adversely affects Purchaser's ability to consummate the Offer,
and, with respect to any such breach that is reasonably capable of being
cured, which shall not have been cured prior to the earlier of (A) 10
business days following notice of such breach and (B) two business days
prior to the date on which the Offer expires, (iii) Purchaser shall have
terminated the Offer, or (iv) prior to the purchase of Common Shares
pursuant to the Offer, any person shall have made a bona fide Takeover
Proposal that is a Superior Proposal (after taking into account any revised
proposal made by Purchaser during the Three-Day Period (as defined in this
Section 8.01)); provided, however, that (1) such Superior Proposal did not
------------ -------- -------
result from a breach of Section 6.08 above, (2) on the basis of advice from
------------
outside legal counsel and the Company's financial advisors and acting in
good faith, the Company Board or the Special Committee shall have withdrawn
its recommendation to the stockholders that the Offer and the Merger is
fair and advisable and in the best interests of the Company, and (3) prior
to such termination by the Company, the Company Board shall, if requested
by Purchaser in connection with a revised proposal made by Purchaser,
negotiate in good faith with Purchaser in respect of such revised proposal
for not less than three (3) business days (the "Three Day Period"); and
----------------
provided, further, that such termination under this clause (d)(iv) shall
-------- ------- --------------
not be effective until the Company has reimbursed Purchaser for all of its
fees and expenses as required by Section 8.03(b) hereof; or
---------------
(e) By Purchaser prior to the purchase of Common Shares pursuant to
the Offer, if (i) there shall have been a breach of any representation or
warranty on the part of the Company contained in this Agreement which would
reasonably be expected to have a Material Adverse Effect on the Company or
which would materially adversely affect (or materially delay) the
commencement or consummation of the Offer, (ii) there shall have been a
breach of any covenant or agreement on the part of the Company contained in
this Agreement which would reasonably be expected to have a Material
Adverse Effect on the Company or which would materially adversely affect
(or materially delay) the commencement or consummation of the Offer or the
Merger, which, in the case of clause (i) or (ii), if such breach is
---------- ----
reasonably capable of being cured, such breach shall not have been cured
prior to the earlier of (A) 10 business days following notice of such
breach and (B) two business days prior to the date on which the Offer
expires, (iii) the Company shall effect, or enter into any agreement with
respect to, a transaction with any person pursuant to any Takeover Proposal
(other than Purchaser) or the Company Board
-30-
<PAGE>
has resolved to do so, (iv) the Company Board shall have withdrawn or
modified (including by amendment of the Schedule 14D-9) in a manner adverse
to Purchaser its approval or recommendation of the Offer or this Agreement
or shall have recommended another offer or transaction, or shall have
resolved to effect any of the foregoing or (v) the Minimum Condition (as
defined in Annex I hereto) shall not have been satisfied by the expiration
date of the Offer; or
(f) by the Company, if the Company enters into a written agreement
with respect to a Superior Proposal in accordance with the terms of this
Agreement, including, without limitation, payment of all fees and expenses
pursuant to Section 8.03 hereof.
------------
SECTION 8.02 Effect of Termination. In the event of the termination of
---------------------
this Agreement pursuant to Section 8.01, this Agreement shall forthwith become
------------
void and have no effect, without any liability on the part of any party or its
directors, officers or stockholders, other than the last two sentences of
Section 6.02, the provisions of Section 6.08, this Section 8.02, Section 8.03
- ------------ ------------ ------------ ------------
and Section 8.04, which shall survive any such termination. Nothing contained
------------
in this Section 8.02 shall relieve any party from liability for any breach of
------------
this Agreement.
SECTION 8.03 Fees and Expenses.
-----------------
(a) In addition to any amounts payable to the Purchaser pursuant to
Section 8.03(b) below, all Expenses (as hereinafter defined) incurred by the
- ---------------
parties hereto shall be borne solely and entirely by the Company, and the
Company shall without exception, at the request of Purchaser, whether or not the
Offer has been withdrawn, terminated or consummated, promptly (but not later
than three business days after receipt of written invoices from Purchaser
evidencing such Expenses) reimburse Purchaser for all such Expenses; provided
that, if the Offer is not consummated, the Company's obligation to reimburse
Purchaser's Expenses shall be limited to $1,500,000. As used in this Section
-------
8.03, the term "Expenses" means all out-of-pocket fees and expenses actually
- ---- --------
incurred by Purchaser, whether before or after the execution and delivery of
this Agreement, in connection with the transactions contemplated by this
Agreement and the Rollover Agreement, including, without limitation, reasonable
fees and expenses payable to all banks, investors, investment banking firms and
other financial institutions, and their respective agents and counsel, all fees
and reasonable expenses of counsel, accountants, experts and consultants to
Purchaser and its investors, and, further, including without limitation fees and
reasonable expenses of, or incurred in connection with, any litigation or other
proceedings to collect the Fee (as hereinafter defined) or any of the fees,
costs and expenses described in this sentence.
(b) In addition to any amounts payable to Purchaser pursuant to Section
-------
8.03(a) above, if (i) this Agreement is terminated by the Company pursuant to
- -------
Section 8.01(d)(iv) or by Purchaser pursuant to Section 8.01(e) (i), (ii), (iii)
- ------------------- --------------------------------
or (iv),or (ii) the transactions contemplated by this Agreement are not
----
consummated through no fault of Purchaser, and the Company, within one (1) year
of the termination of this Agreement, enters into a transaction with another
person which is the result of a Takeover Proposal (the "Alternate Transaction"),
---------------------
then the Company shall pay to Purchaser a fee (the "Fee") in an amount equal to
---
$8,000,000 in cash and in immediately
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<PAGE>
available funds, (A) in the case of clause (i) above, prior to any such
termination of this Agreement or (B) in the case of clause (ii) above, upon the
consummation of such Alternate Transaction.
SECTION 8.04 Assumption of Certain Obligations by the Company.
------------------------------------------------
Effective as of the consummation of the Offer, the Company hereby agrees to
assume each and every of Purchaser's indemnification obligations under the
Jefferies Engagement Letter.
SECTION 8.05 Amendment. This Agreement may be amended by the Company and
---------
Purchaser at any time before or after approval of the Merger by the stockholders
of the Company, if such approval is required by applicable law, but, after any
such approval, no amendment shall be made that requires the approval of the
Company's stockholders without obtaining such approval. This Agreement may not
be amended except by an instrument in writing signed on behalf of each of the
parties hereto.
SECTION 8.06 Extension; Waiver. At any time prior to the Effective Time,
-----------------
the parties hereto may (i) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (ii) waive any inaccuracies
in the representations and warranties contained herein by any other party or in
any document, certificate or writing delivered pursuant hereto by any other
party or (iii) waive compliance with any of the agreements of any other party or
with any conditions to its own obligations. Any agreement on the part of any
party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such party.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Non-Survival of Representations and Warranties. The
----------------------------------------------
representations and warranties made in this Agreement shall not survive the
termination of this Agreement or beyond the consummation of the Offer. This
Section 9.01 shall not limit any covenant or agreement of the parties which by
- ------------
its terms contemplates performance after the Effective Time.
SECTION 9.02 Limitation on Warranties. The Company makes no
------------------------
representations or warranties with respect to any projections, forecasts or
forward-looking information provided to Purchaser. There is no assurance that
any projected or forecasted results will be achieved. The Company makes no
representations and warranties except for those matters covered by the
representations and warranties in Article IV. Purchaser acknowledges that
neither the Company, any subsidiary of the Company nor any other person has made
any representation or warranty, express or implied, as to the accuracy or
completeness of any information which is not included in this Agreement.
Without limitation of the foregoing, to the extent that any memoranda or
summaries prepared by the Company, any subsidiary of the Company or by any of
their respective advisors or representatives regarding the Company, such
subsidiaries, or their respective businesses are or have been provided to
Purchaser, Purchaser acknowledges and
-32-
<PAGE>
agrees that no representation or warranty is made to Purchaser or any affiliate
thereof or any other person as to the completeness or accuracy of such memoranda
or summaries.
SECTION 9.03 Company Disclosure Statement. No representation or warranty
----------------------------
hereunder shall be deemed to be inaccurate if the actual situation is explicitly
disclosed in the specifically referenced section or cross-section of the Company
Disclosure Statement. Neither the specification of any dollar amount in any
representation, warranty or covenant contained in this Agreement nor the
inclusion of any specific item in the Company Disclosure Statement hereto is
intended to imply that such amount, or higher or lower amounts, or the item so
included or other items, are or are not material, and no party shall use the
fact of the setting forth of any such amount or the inclusion of any such item
in any dispute or controversy between the parties as to whether any obligation,
item or matter not described herein or included in the Company Disclosure
Statement is or is not material for purposes of this Agreement.
SECTION 9.04 Entire Agreement; Assignment.
----------------------------
(a) The Exhibits and Schedules identified in this Agreement are
incorporated herein by reference and made a part hereof. This Agreement, the
Rollover Agreement (including the documents and the instruments referred to
herein and therein), constitute the entire agreement and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and thereof.
(b) Neither this Agreement, the Rollover Agreement nor any of the rights,
interests or obligations hereunder or thereunder will be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Purchaser may assign all or any
of its rights to affiliates with the permission of the Company, which will not
be unreasonably withheld; provided, that no such assignment shall relieve the
--------
assigning party of its obligations hereunder.
SECTION 9.05 Binding Agreement. This Agreement and the Rollover Agreement
-----------------
shall be binding upon and inure to the benefit of the parties hereto and thereto
and their respective successors and permitted assigns, provided, that, except as
--------
provided in Section 9.04(b), no party may assign its rights and obligations
---------------
under this Agreement without the prior written consent of the other parties.
SECTION 9.06 Severability. Any term or provision of this Agreement that
------------
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity of enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or provision in
any other situation or in any other situation or in any other jurisdiction. If
the final judgment of a court of competent jurisdiction declares that any term
or provision hereof is invalid or unenforceable, the parties agree that the
court making the determination of invalidity or unenforceability shall have the
power to reduce the scope, duration, or area of the term or provision, to delete
specific words or phrases, or to replace any invalid or unenforceable term or
provision with a term or provision that is valid and enforceable and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement
-33-
<PAGE>
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
SECTION 9.07 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered in person, by overnight courier or facsimile to the
respective parties as follows:
If to the Purchaser:
CLC Acquisition Corporation
6100 Sears Tower
Chicago, Illinois 60606
Attention: Bruce V. Rauner
Facsimile: (312) 382-2200
with a copy to:
Mayer, Brown & Platt
1675 Broadway
New York, NY 10019
Attention: Ronald S. Brody, Esq.
Facsimile: (212) 849-5600
and
GTCR Golder Rauner, LLC
6100 Sears Tower
Chicago, IL 60606
Attention: David A. Donnini
Facsimile: (312) 382-2201
and
Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Attention: Stephen L. Ritchie
Facsimile: (312) 861-2200
If to the Company:
Coinmach Laundry Corporation
55 Lumber Road
Roslyn, NY 11576
Attention: Robert M. Doyle
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<PAGE>
Facsimile: (516) 484-1812
with a copy to:
Stephen G. Cerri
7607 Nogales Road
Scottsdale, AZ 85258
Facsimile: (480) 607-7454
and
Skadden, Arps, Slate, Meagher & Flom
Four Times Square
New York, NY 10036
Attention: Stephen M. Banker, Esq.
Facsimile: (917) 777-2760
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).
SECTION 9.08 Governing Law; Jurisdiction.
---------------------------
(a) This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Delaware, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.
(b) In addition, each of the parties hereto (i) consents to submit itself
to the personal jurisdiction of any federal court located in the State of New
York or any New York state court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement, (ii) agrees
that it will not attempt to deny or defeat such personal jurisdiction by motion
or other request for leave from any such court and (iii) agrees that it will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a federal or state court sitting in
the State of New York.
SECTION 9.09 Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES
--------------------
THAT ANY CONTROVERSY OR DISPUTE THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO
INVOLVE COMPLICATED AND DIFFICULT ISSUES AND THEREFORE EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY
CERTIFIES AND ACKNOWLEDGES THAT (i) NO
-35-
<PAGE>
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH SUCH PARTY MAKES THIS
WAIVER VOLUNTARILY, AND (iv) EACH SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 9.09. ------------
SECTION 9.10 Descriptive Headings. The descriptive headings herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
SECTION 9.11 Construction. The language used in this Agreement will be
------------
deemed to be the language chosen by the parties to express their mutual intent,
and no rule of strict construction shall be applied against any party. Any
reference to any federal, state or local law shall be deemed also to refer to
all rules and regulations promulgated thereunder, unless the context requires
otherwise.
SECTION 9.12 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
SECTION 9.13 Parties in Interest. This Agreement shall be binding upon
-------------------
and inure solely to the benefit of each party hereto, and, except with respect
to Section 6.07 and Section 8.03, nothing in this Agreement, express or implied,
------------ ------------
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.14 Certain Definitions. As used in this Agreement:
-------------------
(a) the term "affiliate", as applied to any person, shall mean any
other person directly or indirectly controlling, controlled by, or under
common control with, that person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any person,
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that person, whether
through the ownership of voting securities, by contract or otherwise;
(b) the term "Knowledge" means the actual knowledge, after reasonable
inquiry, of the executive officers of the Company, including, without
limitation, Mitchell Blatt and Robert M. Doyle;
(c) the term "person" shall include individuals, corporations,
partnerships, trusts, other entities and groups (which term shall include a
"group" as such term is defined in Section 13(d)(3) of the Exchange Act);
and
-36-
<PAGE>
(d) the term "subsidiary" or "subsidiaries" means, with respect to
any person, any corporation, partnership, joint venture or other legal
entity of which such person (either alone or through or together with any
other subsidiary), owns, directly or indirectly, stock or other equity
interests the holders of which are generally entitled to more than 50% of
the vote for the election of the board of directors or other governing body
of such corporation or other legal entity.
SECTION 9.15 Specific Performance. The parties hereto agree that
--------------------
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
remedy to which they are entitled at law or in equity.
SECTION 9.16 Company Actions. Any amendment to, or waiver of, any of the
---------------
provisions of this Agreement, and any other provision hereof which requires the
consent or approval of the Company, shall be effective only if approved by an
independent committee of the Company Board.
* * * * * *
-37-
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its respective officer thereunto duly authorized, all
as of the day and year first above written.
COINMACH LAUNDRY CORPORATION
By: /s/ Mitchell Blatt
-----------------------
Name: Mitchell Blatt
Title: President
CLC ACQUISITION CORPORATION
By: /s/ Bruce V. Rauner
------------------------
Name: Bruce V. Rauner
Title: President
-38-
<PAGE>
ANNEX I
-------
Offer Conditions
----------------
Notwithstanding any other provision of the Offer, Purchaser shall not be
required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including Rule 14e-l(c) under the Exchange Act (relating
to Purchaser's obligation to pay for or return tendered Common Shares promptly
after termination or withdrawal of the Offer), pay for any Common Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Common Shares
tendered pursuant to the Offer, and may amend or terminate the Offer (whether or
not any Common Shares have theretofore been purchased or paid for) to the extent
permitted by this Agreement if, (i) there shall not have been tendered and not
properly withdrawn prior to expiration of the Offer at least the number of
Common Shares that when combined with the Common Shares already owned by
Purchaser shall constitute 51% of the then outstanding Common Shares (the
"Minimum Condition"), or (ii) at any time on or after the date of this Agreement
- ------------------
and prior to the acceptance for payment of Common Shares, any of the following
conditions occurs or has occurred:
(a) there shall have been any (i) action, proceeding, application,
claim or suit, (ii) order or preliminary or permanent injunction, or (iii)
statute, rule, regulation, legislation, interpretation, judgment or order
instituted, pending, enacted, entered, enforced, promulgated, amended,
issued and continuing and applicable to Purchaser, the Company or any
subsidiary or affiliate of Purchaser or the Company or the Offer, by any
legislative body, court, government or governmental, administrative or
regulatory authority or agency which would reasonably be expected to have
the effect of, directly or indirectly: (1) making illegal, or otherwise
directly or indirectly restraining or prohibiting or making materially more
expensive the making of the Offer, the acceptance for payment of, or
payment for the Common Shares by Purchaser or the consummation of any of
the transactions contemplated by the Acquisition Agreement; (2) prohibiting
or affecting the ownership or operation by the Company or any of its
subsidiaries or Purchaser or any of its affiliates of all or any material
portion of the business or assets of the Company or any of its
subsidiaries, taken as a whole, or any of its affiliates or compelling
Purchaser or any of its affiliates to dispose of or hold separate all or
any material portion of the business or assets of the Company or any of
their respective subsidiaries or Purchaser, or any of its affiliates, as a
result of the transactions contemplated by the Offer, the Merger or the
Acquisition Agreement; (3) imposing or confirming limitations on the
ability of Purchaser or any of its affiliates effectively to acquire or
hold or to exercise full rights of ownership of Common Shares, including
without limitation the right to vote any Common Shares acquired or owned by
Purchaser or any of its affiliates on all matters properly presented to the
stockholders of the Company, including without limitation the adoption and
approval of the Acquisition Agreement and the Merger or the right to vote
any shares of capital stock of any subsidiary directly or indirectly owned
by the Company; (4) requiring divestiture by Purchaser of any Common
Shares; or (5) otherwise resulting in a Material Adverse Effect on the
Company;
1
<PAGE>
(b) there shall have occurred and be continuing (i) any general
suspension of trading in, or limitation on prices for, securities on any
national securities exchange or in the over-the-counter market, including
the Nasdaq National Market System, in the United States, (ii) a material
adverse change in or material disruption of conditions in the market for
syndicated bank credit facilities or the financial, banking or capital
markets generally, including without limitation, a decline of at least 10%
in either the Dow Jones Average of Industrial Stocks or the Standard &
Poor's 500 index from the date hereof, (iii) a commencement and
continuation of a war or armed hostilities or other national or
international calamity directly or indirectly involving the United States,
or (iv) in the case of any of the foregoing existing at the time of
commencement of the Offer, a material acceleration or worsening thereof;
(c) (i) it shall have been publicly disclosed or Purchaser shall
have otherwise learned that beneficial ownership (determined for the
purposes of this paragraph as set forth in Rule 13d-3 promulgated under the
Exchange Act) of more than 5% of the outstanding Common Shares has been
acquired by any corporation (including the Company or any of its
subsidiaries or affiliates), partnership, person or other entity or group
(as defined in Section 13(d)(3) of the Exchange Act), other than Purchaser
or its affiliates, or the Principal Holders or any of their respective
affiliates (but only with respect to the Common Shares that they
beneficially own on the date hereof), or (ii) (A) the Company Board or any
committee thereof shall have withdrawn or modified in a manner adverse to
Purchaser (including by amendment of the Schedule 14D-9) the approval or
recommendation of the Offer, the Merger or the Acquisition Agreement, or
approved or recommended any Takeover Proposal or any other acquisition of
Common Shares other than the Offer or the Merger or shall have resolved to
do any of the foregoing, (B) any corporation, partnership, person or other
entity or group shall have entered into a definitive agreement or an
agreement in principle with the Company with respect to an acquisition
transaction pursuant to a Takeover Proposal, or (C) the Company Board or
any committee thereof shall have resolved to do any of the foregoing;
(d) any of the representations and warranties of the Company set forth
in the Acquisition Agreement shall not be true and correct, except (i)
those representations and warranties that address matters only as of a
particular date are true and correct as of such date, and (ii) where the
failure of such representations and warranties to be true and correct
(without giving effect to any limitation as to "materiality" or "material
adverse effect" set forth therein), does not have, and is not likely to
have, individually or in the aggregate, a Material Adverse Effect on the
Company;
(e) the Company shall have failed to perform in any material respect
any obligation or to comply in any material respect with any agreement or
covenant of the Company to be performed or complied with by it under the
Acquisition Agreement;
(f) the Acquisition Agreement shall have been terminated in
accordance with its terms or the Offer shall have been terminated with the
consent of the Company;
-2-
<PAGE>
(g) any waiting periods under the HSR Act applicable to the purchase
of Common Shares pursuant to the Offer shall not have expired or been
terminated, or any material approval, permit, authorization or consent of
any domestic or foreign governmental, administrative or regulatory agency
(federal, state, local, provincial or otherwise) shall not have been
obtained on terms satisfactory to the Purchaser in its reasonable
discretion; or
(h) there shall have occurred any change, condition, event or
development that has a Material Adverse Effect on the Company.
The foregoing conditions are for the sole benefit of Purchaser and may be
asserted by Purchaser regardless of the circumstances giving rise to any such
conditions and may be waived by Purchaser in whole or in part at any time and
from time to time in their reasonable discretion, in each case, subject to the
terms of the Acquisition Agreement. The failure by Purchaser at any time to
exercise any of the foregoing rights shall not be deemed a waiver of such right
and each such right shall be deemed an ongoing right which may be asserted at
any time and from time to time.
The capitalized terms used in this Annex I shall have the meanings set
-------
forth in the Agreement to which it is annexed, except that the term "Acquisition
-----------
Agreement" shall be deemed to refer to the Agreement to which this Annex I is
- --------- -------
appended.
-3-
<PAGE>
COMPANY DISCLOSURE STATEMENT
This is the Company Disclosure Statement referred to in that certain
Agreement and Plan of Merger, dated May 12, 2000, between Coinmach Laundry
Corporation and CLC Acquisition Corporation (the "Agreement"). Section
references in this schedule correspond to the sections of the Agreement.
Capitalized terms used herein have the meanings given to such terms in the
Agreement.
Section
- -------
4.08 No disclosure.
-4-
<PAGE>
Exhibit (d)
ROLLOVER AGREEMENT
THIS ROLLOVER AGREEMENT (this "Agreement"), dated as of May 12, 2000, by
---------
and among CLC ACQUISITION CORPORATION, a Delaware corporation ("Purchaser"), and
---------
the other parties signatory hereto (each, a "Stockholder").
-----------
RECITALS
Each Stockholder owns, beneficially and of record, shares of common stock,
par value $.01 per share (the "Common Stock"), of Coinmach Laundry Corporation,
------------
a Delaware corporation (the "Company"), and options to acquire Common Stock (the
-------
"Stock Options") in the amounts set forth on Annex A hereto.
------------- -------
The Company and Purchaser have entered into an Agreement and Plan of
Merger, dated the date hereof (the "Acquisition Agreement"), pursuant to which,
---------------------
among other things, subject to the terms and conditions set forth therein,
Purchaser has agreed to make a tender offer (the "Offer") to purchase up to 100%
-----
of the outstanding shares of Common Stock, at a price of $14.25 per share, net
to the selling Stockholders in cash.
Subject to the terms and conditions set forth herein, each Stockholder has
agreed, among other things, with respect to the number of shares of Common Stock
set forth on Annex A hereto, together with any additional shares of Common Stock
-------
when and if they are acquired by Stockholder on or prior to the date of
consummation of the Offer, including, without limitation, Common Stock acquired
pursuant to the exercise of any Stock Option (such shares being collectively
referred to herein as the "Shares"), to contribute its Shares to CLC
------
Acquisition.
AGREEMENT
To implement the foregoing and in consideration of the mutual agreements
contained herein, the parties agree as follows:
1. Agreement to Contribute. Each Stockholder hereby agrees subject to the
-----------------------
terms and conditions set forth herein, to contribute (the "Contribution") such
Stockholder's Shares to CLC Acquisition Corporation ("CLC Acquisition") in
exchange for equity interests of CLC Acquisition having designations, powers,
preferences and relative and other special rights, qualifications, limitations
and restrictions no less favorable than those contained in the equity interests
issued to GTCR Fund VII, L.P. and/or its affiliates in connection with the
transactions contemplated by the Acquisition Agreement. Each Stockholder hereby
acknowledges that such Stockholder shall not receive cash in exchange for such
Stockholder's Shares in the Offer and hereby agrees not to elect, or assert a
claim that such Stockholder has a right to receive any cash or any securities
other than securities of CLC Acquisition. Each Stockholder hereby permits the
Purchaser to publish and disclose in the Offer Documents and the Schedule 14d-9
(as such terms are defined in the Acquisition Agreement) and, if approval of the
Company's stockholders is required under applicable law, the Proxy Statement (as
defined in the Acquisition Agreement), including all documents and schedules
filed with the Securities and Exchange Commission in
<PAGE>
respect of any of the foregoing, such Stockholder's identity and Contribution
and the nature of such Stockholder's commitments, arrangements and
understandings under this Agreement.
2. Representations and Warranties.
------------------------------
2.1 Representations and Warranties of Purchaser. Purchaser hereby
-------------------------------------------
represents and warrants to each Stockholder as follows:
(a) Due Authorization. The execution and delivery of this Agreement
-----------------
and the consummation of the transactions contemplated hereby have been duly
and validly authorized by the Board of Directors of Purchaser, and no other
corporate proceedings on the part of Purchaser are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Purchaser
and, assuming due and valid execution and delivery hereof by each of the
other parties hereto, constitutes a valid and binding agreement of
Purchaser, enforceable against it in accordance with its terms, except that
such enforceability (i) may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) is subject to general principles of
equity.
(b) No Conflicts. Except for (i) filings under the Hart-Scott-Rodino
------------
Anti-Trust Improvements Act of 1976, as amended (the "HSR Act"), if
-------
applicable, (ii) the applicable requirements of the Exchange Act, and the
Securities Act of 1933, as amended (the "Securities Act"), and (iii) the
--------------
applicable requirements of state securities, takeover or blue sky laws, (A)
no filing with, and no permit, authorization, consent or approval of, any
state, federal or foreign public body or authority is necessary for the
execution of this Agreement by Purchaser and the consummation of the
transactions contemplated hereby, and (B) neither the execution and
delivery of this Agreement by Purchaser, nor the consummation by it of the
transactions contemplated hereby, nor compliance by it with any of the
provisions hereof, shall (1) conflict with or result in any breach of any
provision of its certificate of incorporation or by-laws, (2) result in a
violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation
to which it is a party or by which it or any of its properties or assets
may be bound, or (3) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to it or any of its properties or assets,
except, in the case of the immediately preceding clauses (2) or (3), for
violations, breaches or defaults which would not in the aggregate
materially impair the ability of Purchaser to perform its obligations
hereunder or under the Acquisition Agreement.
2.2 Representations and Warranties of Stockholder. Each Stockholder
---------------------------------------------
hereby severally represents and warrants to Purchaser as follows:
-2-
<PAGE>
(a) Ownership of Shares. Stockholder (or accounts or trusts
-------------------
controlled or beneficially owned by Stockholder) is the owner of the Shares
set forth on Annex A hereto and has the power to vote and dispose of such
-------
Shares. To the best of Stockholder's knowledge, such Shares are, or upon
issuance will be, validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. Stockholder has, or
upon issuance will have, good title to the Shares, free and clear of any
voting, stockholder or similar agreement, liens, charges, security
interests, adverse claims or encumbrances of any kind whatsoever with
respect to the ownership of or the right to vote such Shares, except that
Stockholder is a party to that certain Voting Agreement, dated July 23,
1996, by and among Stockholder, the Company and certain other stockholders
of the Company named therein (the "Voting Agreement").
(b) Power; Binding Agreement. Stockholder has the legal capacity,
------------------------
power and authority to enter into and perform all of its obligations under
this Agreement. The execution, delivery and performance of this Agreement
by Stockholder will not violate any other agreement to which Stockholder is
a party. This Agreement has been duly and validly authorized, executed and
delivered by Stockholder and, assuming due and valid execution and delivery
hereof by each of the other parties hereto, constitutes a valid and binding
agreement of Stockholder, enforceable against Stockholder in accordance
with its terms, except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting or
relating to enforcement of creditors' rights generally and (ii) is subject
to general principles of equity.
(c) No Conflicts. Except for (i) filings under the HSR Act, if
------------
applicable, (ii) the applicable requirements of the Exchange Act and the
Securities Act, and (iii) the applicable requirements of state securities,
takeover or blue sky laws, (A) no filing with, and no permit,
authorization, consent or approval of, any state, federal or foreign public
body or authority is necessary for the execution of this Agreement by
Stockholder and the consummation by Stockholder of the transactions
contemplated hereby, and (B) neither the execution and delivery of this
Agreement by Stockholder nor the consummation by Stockholder of the
transactions contemplated hereby, nor compliance by Stockholder with any of
the provisions hereof, shall (1) conflict with or result in any breach or
any provision of the certificate of incorporation, by-laws, trust or
charitable instruments (or similar documents) of Stockholder, (2) result in
a violation or breach of, or constitute (with or without notice or lapse of
time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation
to which such Stockholder is a party or by which Stockholder or any of
Stockholder's properties or assets may be bound, or (3) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to
Stockholder or any of Stockholder's properties or assets, except, in the
case of the immediately preceding clauses (2) or (3), for violations,
breaches or defaults which would not in the aggregate materially impair the
ability of Stockholder to perform Stockholder's obligations hereunder.
-3-
<PAGE>
3. Certain Covenants of each Stockholder. Each Stockholder hereby
-------------------------------------
severally covenants and agrees as follows:
3.1 No Solicitation. Other than solely with respect to the Offer, neither
---------------
Stockholder nor any officer, director, affiliate, employee, representative or
agent of Stockholder shall, directly or indirectly, solicit, facilitate,
participate in, or initiate any inquiries or the making of any proposal by any
person or entity (other than Purchaser or any affiliate of Purchaser) which
constitutes, or may reasonably be expected to lead to, (a) any sale of the
Shares or (b) any takeover proposal, acquisition, or other transaction with
respect to the Company or the Shares, the consummation of which would reasonably
be expected to impede, interfere with, prevent or delay the Offer or which would
reasonably be expected to adversely affect the benefits to Purchaser of the
transaction contemplated by the Acquisition Agreement. If Stockholder, or any
officer, director, partner, affiliate, employee, representative or agent of
Stockholder, receives an inquiry or proposal with respect to the sale of Shares,
then Stockholder shall promptly inform Purchaser of the terms and conditions, if
any, of such inquiry or proposal and the identity of the person making it. This
Section 3.1 will not bind or apply to any person in their capacity as director
- -----------
of the Company.
3.2 Restriction on Transfer, Proxies and Non-Interference. Stockholder
-----------------------------------------------------
hereby agrees, while this Agreement is in effect, and except as contemplated
hereby or otherwise consented to by Purchaser in writing, not to (a) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to the sale,
transfer, pledge, encumbrance, assignment or other disposition of, any of the
Shares or (b) grant any proxies, deposit any Shares into a voting trust or enter
into a voting agreement with respect to any Shares or (c) take any action that
would make any representation or warranty of such Stockholder contained herein
untrue or incorrect or have the effect of preventing or disabling such
Stockholder from performing his obligations under this Agreement.
3.3 Stop Transfer Order. In furtherance of this Agreement, concurrently
-------------------
herewith, Stockholder shall and hereby does authorize the Company's counsel to
notify the Company's transfer agent that, except as set forth herein, there is a
stop transfer order with respect to all of the Shares, and that this Agreement
places limits on the voting and transfer of such Shares.
4. Further Assurances. From time to time, at the other party's request
------------------
and without further consideration, each party hereto shall execute and deliver
such additional documents and take all such further action as may be necessary
or desirable to consummate the transactions contemplated by this Agreement,
including, without limitation, to vest in Purchaser good title to any Shares
purchased hereunder.
5. Adjustments to Prevent Dilution, Etc. In the event of a stock dividend
------------------------------------
or distribution, or any change in the Company's Common Stock by reason of any
stock dividend, split-up, reclassification, recapitalization, combination or the
exchange of shares, the term "Shares" shall be deemed to refer to and include
------
the Shares as well as all such stock dividends and distributions
-4-
<PAGE>
and any shares into which or for which any or all of the Shares may be changed
or exchanged. In such event, the amount to be paid per share by Purchaser shall
be proportionately adjusted.
6. Miscellaneous.
-------------
6.1 Entire Agreement; Assignment. This Agreement (i) constitutes the
----------------------------
entire agreement among the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof and (ii) shall not
be assigned by operation of law or otherwise by Stockholder without the prior
written consent of Purchaser.
6.2 Amendments. This Agreement may not be modified, amended, altered or
----------
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
6.3 Notices. All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery or telecopy, or
by mail (registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express, providing proof
of delivery. All communications hereunder shall be delivered to the respective
parties at the following addresses:
If to Stockholder: c/o Coinmach Laundry Corporation
55 Lumber Road
Roslyn, New York 11576
copy to: Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Facsimile No.: (212) 262-1910
Attention: Ronald S. Brody, Esq.
If to Purchaser: CLC Acquisition Corporation
6100 Sears Tower
Chicago, Illinois 60606
Facsimile No.: (312) 382-2201
Attention: Bruce V. Rauner
copy to: Kirkland & Ellis
Chicago, Illinois 60601
Facsimile No.: (312) 861-2200
Attention: Stephen L. Ritchie
-5-
<PAGE>
and
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Facsimile No.: (212) 262-1910
Attention: Ronald S. Brody, Esq.
or to such other address as the person or entity to whom notice is given may
have previously furnished to the others in writing in the manner set forth
above.
6.4 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws thereof.
6.5 Cooperation as to Regulatory Matters. If so requested by Purchaser,
------------------------------------
promptly after the date hereof, each Stockholder will use its best efforts to
make, and to cause such Stockholder and the Company (if required) to make all
filings which are required under the HSR Act and applicable requirements and to
seek all regulatory approvals required in connection with the transactions
contemplated hereby. The parties shall furnish to each other such necessary
information and reasonable assistance as may be requested in connection with the
preparation of filings and submissions to any governmental agency, including,
without limitation, filings under the provisions of the HSR Act. Each
Stockholder shall also use its best efforts to cause the Company to supply
Purchaser with copies of all correspondence, filings or communications (or
memoranda setting forth the substance thereof) between the Company and its
representatives and the Federal Trade Commission, the Department of Justice and
any other governmental agency or authority and members of their respective
staffs with respect to this Agreement and the transactions contemplated hereby.
6.6 Termination. This Agreement shall terminate upon the termination of
-----------
the Offer in accordance with its terms.
6.7 Specific Performance. Each of the parties hereto recognizes and
--------------------
acknowledges that a breach by such party of any covenants or agreements
contained in this Agreement will cause the other party to sustain damages for
which it would not have an adequate remedy at law for money damages, and
therefore, each of the parties hereto agrees that in the event of any such
breach the aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which such party may be entitled, at
law or in equity.
6.8 Counterparts. This Agreement may be executed in counterparts, each of
------------
which shall be deemed to be an original, but both of which shall constitute one
and the same Agreement.
-6-
<PAGE>
6.9 Descriptive Headings. The descriptive headings used herein are
--------------------
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
6.10 Severability. Whenever possible, each provision or portion of any
------------
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
* * * * *
-7-
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto, all as of the date first above written.
CLC ACQUISITION CORPORATION
By: /s/ Bruce V. Rauner
-------------------------
Name: Bruce V. Rauner
Title: President
/s/ Stephen R. Kerrigan
------------------------
Stephen R. Kerrigan
/s/ Mitchell Blatt
------------------------
Mitchell Blatt
/s/ Robert M. Doyle
------------------------
Robert M. Doyle
/s/ Michael E. Stanky
------------------------
Michael E. Stanky
-8-
<PAGE>
ANNEX A
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of
Common Stock Common Stock
Number of Shares Underlying Subject to Rollover
Stockholder Name of Common Stock Stock Options Agreement
- ---------------------- ---------------- ------------------- --------------------
<S> <C> <C> <C>
Stephen R. Kerrigan 329,369 408,098 265,369
Mitchell Blatt 298,845 260,000 298,845
Robert M. Doyle 75,467 211,890 59,467
Michael E. Stanky 23,746 173,521 23,746
</TABLE>
-9-
<PAGE>
EXHIBIT 1
JOINT FILING AGREEMENT
The undersigned hereby agree as follows:
(i) Each of them is individually eligible to use the Schedule 13D/A to
which this Ezxhibit is attached, and such Schedule 13D/A is filed on behalf of
each of them; and
(ii) Each of them is responsible for the timely filing for the timely
filing of such Schedule 13D/A and any amendments thereto, and for the
completeness and accuracy of the information concerning such person contained
therein; but none of them is responsible for the completeness or accuracy of the
information concerning the other persons making the filing, unless such person
knows or has reason to believe that such information is inaccurate.
Dated: May 26, 2000
GOLDER, THOMA, CRESSEY, RAUNER FUND IV, L.P.
By: GTCR IV, L.P., its General Partner
By: GOLDER, THOMA, CRESSEY, RAUNER, INC.,
its General Partner
By: /s/ Bruce V. Rauner
--------------------------------
Name: Bruce V. Rauner
Title: Principal
GTCR FUND VII, L.P.
By: GTCR PARTNERS VII, L.P., its General Partner
By: GTCR GOLDER RAUNER, L.L.C., its General Partner
By: /s/ Bruce V. Rauner
--------------------------------------
Name: Bruce V. Rauner
Title: Principal
GTCR-CLC, LLC
By: /s/ Vincent J. Hemmer
--------------------------------------
Name: Vincent J. Hemmer
Title: Vice President
/s/ Stephen R. Kerrigan
------------------------------------------
Stephen R. Kerrigan
/s/ Mitchell Blatt
------------------------------------------
Mitchell Blatt
/s/ Robert M. Doyle
------------------------------------------
Robert M. Doyle
/s/ Michael E. Stanky
------------------------------------------
Michael E. Stanky
/s/ James N. Chapman
------------------------------------------
James N. Chapman
